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Proc-Type: 2001,MIC-CLEAR
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As filed with the Securities and Exchange Commission on October 10, 2002.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
CenturyTel, Inc.
(Exact name of registrant as specified in
its charter)
Louisiana
(State or other jurisdiction of
incorporation or organization)
72-0651161
(I.R.S. Employer
Identification No.)
100 CenturyTel Drive
Monroe, Louisiana 71203
(318) 388-9000
(Address, including zip code, and telephone
number,
including area code, of registrants principal
executive offices)
&nb
sp;
Harvey P. Perry
Executive Vice President,
Chief Administrative Officer and General Counsel
CenturyTel, Inc.
100 CenturyTel Drive
Monroe, Louisiana 71203
(318) 388-9000
(Name, address, including zip code,
and telephone number, including
area code, of agent for service)
Copy to:
Kenneth J. Najder
Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P.
201 St. Charles Avenue, 51st Floor
New Orleans, Louisiana 70170-5100
(504) 582-8000
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO THE PUBLIC:
As soon as practicable after the effective date of this registration statement.
If the only securities being registered on this form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box. 9
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. :
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. 9
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. 9
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. 9
CALCULATION OF REGISTRATION FEE
Title of each class of
securities to be registered
Amount to
be registered
Proposed maximum
offering price
per security
Proposed maximum aggregate
offering price
Amount of registration fee
4.75% Convertible Senior
Debentures, Series K, due 2032
$165,000,000(1)
104.75%(2)(3)
$172,837,500
$15,902
Common Stock, par value
$1.00 per share(4)
4,078,602(5)
--
--
(6)
______________
(1)
Represents the aggregate principal amount of debentures originally issued in
August and September 2002.
(3)
Exclusive of accrued interest. (4) (5) (6)
The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment that specifically states that this registration statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act or until this registration statement shall become effective on
such date as the Securities and Exchange Commission, acting pursuant to Section
8(a), may determine.
The information in
this prospectus is not complete and may be changed. The selling securityholders
may not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an
offer to sell the securities and we are not soliciting offers to buy these
securities in any state where the offer or sale is not permitted.
Subject to
Completion, Dated October 10, 2002 PROSPECTUS
$165,000,000
[CenturyTel Inc.'s Logo Here]
4.75% Convertible Senior Debentures, Series K,
due 2032
and Shares of Common Stock Issuable upon
Conversion of the Debentures
We issued the debentures in a private placement
in the third quarter of 2002 at an issue price of $1,000 per debenture. Under
this prospectus, the selling securityholders named herein or in any supplements
hereto may offer and sell their debentures and the shares of common stock
issuable upon conversion of their debentures.
The debentures will mature on
August 1, 2032. We will pay interest at a rate
of 4.75% per year on the principal amount of the debentures payable
semi-annually in arrears on February 1 and August 1 of each year, beginning
February 1, 2003. We may redeem for cash some or all of the debentures at any
time on or after August 5, 2006 at redemption prices set forth under
Description of Debentures
- Optional Redemption.
Holders may convert their debentures prior to
maturity into 24.7188 shares of our common stock for each $1,000 principal
amount of debentures (equivalent to an initial conversion price of $40.455 per
share based on the principal amount of the debentures) under any of the
circumstances set forth under Description of Debentures Conversion Rights.
The conversion rate may be adjusted as described in this prospectus. Our common
stock is listed on the New York Stock Exchange under the symbol CTL. On October 8, 2002, the last reported sale price of our
common stock was $24.13.
We will pay contingent interest to the holders of
debentures during any six-month period from August 1 to January 31 and from
February 1 to July 31, commencing with the six-month period beginning August 1,
2006, if the average price of a debenture for the period described herein equals
120% or more of the principal amount of such debentures. The amount of
contingent interest payable per debenture in respect of any six-month period
will equal the greater of (i) the cash dividends paid by us per share on our
common stock during that six-month period multiplied by the number of shares of
common stock issuable upon conversion of a debenture and (ii) .125% of the
average price of a debenture for the related five trading day reference period.
For a discussion of the special regulations governing contingent payment debt
instruments, see Certain United States Federal Income Tax Consequences.
Holders have the right to require us to purchase
all or a portion of the debentures on
August 1, 2006, August 1, 2010 and August 1, 2017. In each case, the purchase
price payable will be equal to 100% of the principal amount of the debentures to
be purchased plus any accrued and unpaid interest to the purchase date. We will
pay cash for all debentures so purchased on August 1, 2006. For any such
purchases on or after August 1, 2010, we may choose to pay the purchase price in
cash or shares of our common stock valued at their market price (as defined in
this prospectus), or any combination thereof, except that we will pay any
accrued and unpaid interest in cash.
If we undergo a change of control, holders may
require us to purchase for cash all or a portion of their debentures at a
purchase price equal to 100% of the principal amount of the debentures to be
purchased plus accrued and unpaid interest to the purchase date.
The debentures are our senior unsecured
obligations. The debentures rank senior to any of our future subordinated debt
and equally in right of payment with all of our existing and future unsecured
and unsubordinated debt.
Investing
in our debentures or shares of our common stock involves risks. See Risk
Factors beginning on page 9 of this prospectus.
We will not receive any of the proceeds from the
sale by any of the selling securityholders of the debentures or the shares of
our common stock. The debentures and the shares of our common stock may be
offered in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices. The timing and amount of any sale are
within the sole discretion of the selling securityholders. In addition, our
common stock may be offered from time to time through ordinary brokerage
transactions on the New York Stock Exchange. See Plan of Distribution. The
selling securityholders may be deemed to be underwriters as defined in the
Securities Act of 1933. Any profits realized by the selling securityholders may
be deemed to be underwriting commissions. If the selling securityholders use
any broker-dealers, any commission paid to broker-dealers and, if broker-dealers
purchase any debentures or shares of common stock as principals, any profits
received by such broker-dealers on the resale of the debentures or shares of
common stock may be deemed to be underwriting discounts or commissions under the
Securities Act.
Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of these
securities or determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal offense. The date of this
prospectus is , 2002
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY
CENTURYTEL. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF CENTURYTEL SINCE THE DATE HEREOF. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THOSE SPECIFICALLY OFFERED HEREBY OR ANY SECURITIES IN ANY
JURISDICTION WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH OFFER
OR SOLICITATION. YOU SHOULD ASSUME THAT THE INFORMATION CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS IS ACCURATE ONLY AS OF THE DATE ON
THE FRONT COVER OF THOSE DOCUMENTS. TABLE OF
CONTENTS
FORWARD-LOOKING STATEMENTS 1
WHERE YOU CAN FIND MORE INFORMATION 1
PROSPECTUS SUMMARY
3
RISK FACTORS
9
USE OF PROCEEDS
13
EARNING RATIOS
13
PRICE RANGE AND DIVIDENDS OF COMMON STOCK
14
CAPITALIZATION
15
DESCRIPTION OF DEBENTURES
17
DESCRIPTION OF COMMON STOCK
33
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
36
SELLING SECURITYHOLDERS
41
PLAN OF DISTRIBUTION
42
LEGAL MATTERS
44
EXPERTS
44
Certain statements contained or incorporated by reference in this prospectus
that are not historical facts are intended to be forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
These forward-looking statements are based on current expectations only, and are
subject to a number of risks, uncertainties and assumptions, many of which are
beyond our control. Our actual results may differ materially from those
anticipated, estimated or projected if one or more of these risks or
uncertainties materialize, or if underlying assumptions prove incorrect. Factors
that could affect actual results include but are not limited to:
These factors, and others, are described in greater detail in
Item 1 of our Annual Report on Form 10-K for the year ended December 31, 2001,
which is incorporated by reference in this prospectus. You are cautioned not to
place undue reliance on our forward-looking statements, which speak only as of
the date of the document in which they appear. Except for our obligations to
disclose material information under the federal securities laws, we undertake no
obligation to update any of our forward-looking statements for any reason.
WHERE YOU CAN FIND
MORE INFORMATION
We file annual, quarterly and current reports, proxy statements and other
information with the SEC. You can read and copy that information at the public
reference room of the SEC at 450 Fifth Street, NW, Washington,
D.C.
20549. You may call the SEC at 1-800-SEC-0330 for more information about the
public reference room. The SEC also maintains an Internet site that contains
reports, proxy and information statements and other information regarding
registrants, like us, that file reports with the SEC electronically. The SECs
Internet address is http://www.sec.gov. You may also obtain certain information
about us at the offices of the New York Stock Exchange at 20 Broad Street,
New York,
New York 10005.
We have filed a shelf
registration statement on Form S-3 and related exhibits with the SEC under the
Securities Act. The shelf registration statement may contain additional
information that may be important to you. You may obtain a copy of the shelf
registration statement and exhibits from the SEC as indicated above.
In this document, we incorporate by reference certain information that we file
with the SEC, which means that we can disclose important information to you by
referring to that information. You will be deemed to have notice of all
information incorporated by reference in this prospectus as if that information
was included in this prospectus. You should therefore read the information
incorporated by reference in this prospectus with the same care you use when
reading this prospectus. Certain information that we file later with the SEC
will automatically update and supersede information incorporated by reference in
this prospectus and information contained in this prospectus.
We incorporate by reference
the following documents that we have filed with the SEC pursuant to the
Securities Exchange Act of 1934, as amended (the Exchange Act):
At your request, we will provide you with a free copy of any of these filings
(except for exhibits, unless the exhibits are specifically incorporated by
reference into the filing). You may request copies by writing us at 100
CenturyTel Drive,
Monroe,
Louisiana 71203,
Attention: Harvey P. Perry, or by telephoning us at (318) 388-9000. In addition,
so long as any debentures remain outstanding as restricted securities within
the meaning of Rule 144 under the Securities Act, we will make available to any
holder of debentures, upon request, at the same address and phone number,
information as is necessary to permit sales pursuant to Rule 144 and Rule 144A
under the Securities Act during any period in which we are not subject to
Section 13 or 15(d) of the Exchange Act.
This summary highlights
selected information from the prospectus and is not intended to contain
all of the information that may be important to you. You should read the
entire prospectus and the documents to which we have referred you. As
used in this prospectus, the terms CenturyTel, we, our, and us
refer to CenturyTel, Inc., and not any of its subsidiaries (unless the
context requires and except under the heading CenturyTel immediately
below, where such terms refer to the consolidated operations of
CenturyTel, Inc. and its subsidiaries).
CenturyTel
We are a regional integrated communications company. We are primarily
engaged in providing local telephone communications services in 22 states.
We also provide long distance, Internet, competitive local exchange,
broadband data, security monitoring, and other communications and business
information services. As described further below, we recently sold our
wireless communications business. For the year ended December 31, 2001,
local telephone services provided 90% of our consolidated revenues from
continuing operations.
Our principal offices are located at 100 CenturyTel Drive, Monroe,
Louisiana 71203, telephone number: (318) 388-9000.
Operations
Telephone operations.
Based on published sources, we believe that we are currently the eighth
largest local exchange telephone company in the United States, measured by
the number of telephone access lines served. At August 31, 2002, our
telephone subsidiaries served approximately 2.4 million access lines in 22
states, primarily in rural, suburban and small urban communities. All of
our access lines are served by digital switching technology, which in
conjunction with other technologies allows us to offer additional premium
services to our customers, including call forwarding, conference calling,
caller identification, selective call ringing and call waiting.
The following table sets forth
information with respect to our access lines as of August 31, 2002: Nevada
506
(1) Approximately 62,020 of these
lines are owned and operated by CenturyTels 89%-owned affiliate.
(2) Approximately 130,995 of these
lines are owned and operated by CenturyTels 75.7%-owned affiliate.
(3) Represents less than 1%.
Our telephone subsidiaries are installing fiber optic cable in certain of
our high traffic markets and have provided alternative routing of
telephone service over fiber optic cable networks in several strategic
operating areas. At August 31, 2002, our telephone subsidiaries had
approximately 13,800 miles of fiber optic cable in use.
Other operations.
We also provide long distance, Internet, competitive local exchange,
broadband data, and security monitoring in certain local and regional
markets, as well as certain printing and related business information
services. At August 31, 2002, our long distance business served
approximately 572,100 customers in certain of our markets, and we provided
Internet access services to a total of approximately 167,200 customers,
128,900 of which received traditional dial-up Internet service and 38,300
of which received retail DSL services.
In late 2000, we began offering competitive local exchange telephone
services, coupled with long distance, Internet access and other services,
to small to medium-sized businesses in Monroe and Shreveport,
Louisiana,
and in late 2001, we began offering similar services in
Grand Rapids and Lansing,
Michigan.
Acquisitions and Dispositions
Wireline acquisitions.
On July 1, 2002, we
completed the purchase of assets comprising all of the local exchange
telephone operations of Verizon Communications, Inc. (Verizon) in the
state of Alabama for approximately $1.020 billion in cash. The assets
purchased include (i) all telephone access lines (which numbered nearly
300,000 at the time of purchase) and related property and equipment
comprising Verizons local exchange operations in 90 exchanges in
predominantly rural markets throughout Alabama, (ii) Verizons assets used
to provide DSL and other high speed data services within the purchased
exchanges and (iii) approximately 1,400 route miles of fiber optic cable
within the purchased exchanges. The acquired assets do not include
Verizons wireless, long distance, dial-up Internet, or directory
publishing operations, or rights under various Verizon contracts,
including those relating to customer premise equipment. We did not assume
any liabilities of Verizon other than (i) those associated with contracts,
facilities and certain other assets transferred in connection with the
purchase and (ii) certain employee-related liabilities, including
liabilities for postretirement health benefits.
On August 31, 2002, we completed the purchase of assets comprising all of
Verizons local exchange telephone operations in the state of
Missouri
for approximately $1.177 billion in cash. The assets purchased include (i)
all telephone access lines (which numbered approximately 354,000 at the
time of purchase) and related property and equipment comprising Verizons
local exchange operations in 98 exchanges in predominantly rural and
suburban markets throughout Missouri, several of which are adjacent to
properties that we have owned and operated since 2000, (ii) Verizons
assets used to provide DSL and other high speed data services within the
purchased exchanges in Missouri and (iii) an aggregate of approximately
1,400 route miles of fiber optic cable within the purchased exchanges in
Missouri. Our agreement with Verizon relating to assets retained by
Verizon and liabilities assumed by us in the transaction are the same as
those described above for the
Alabama purchase.
Wireless operations divestiture.
On August 1, 2002, we
completed the sale of substantially all of our wireless operations to an
affiliate of ALLTEL Corporation (Alltel). We agreed on March 19, 2002 to
sell our wireless operations to Alltel for $1.65 billion in cash. Due to a
cross-ownership restriction that precluded the sale of one minority-owned
market, we received approximately $1.593 billion in connection with the
transaction (which we expect to be $1.268 billion after tax). Alltel has
agreed to purchase this minority interest from us for approximately $68
million, if, among other things, the FCC waives the cross-ownership
restriction prior to February 1, 2003. No assurance can be given that this
sale will occur.
In connection with this transaction, we divested our (i) interests in our
majority-owned and operated cellular systems, which at June 30, 2002
served approximately 783,000 customers and had access to approximately 7.8
million pops, (ii) minority cellular equity interests representing
approximately 1.8 million pops at June 30, 2002, and (iii) licenses to
provide Personal Communications Services covering approximately 1.3
million pops in Wisconsin and Iowa.
Pro Forma Information.
For more information
on our recent acquisitions and divestiture, we refer you to the unaudited
pro forma consolidated condensed financial information incorporated by
reference herein from our current report on Form 8-K dated August 31, 2002
and filed with the SEC on October 8, 2002.
Future acquisitions.
We continually
evaluate the possibility of acquiring additional communications assets in
exchange for cash, securities or both, and at any given time may be
engaged in discussions or negotiations regarding additional acquisitions.
We generally do not announce our acquisitions until we have entered into a
preliminary or definitive agreement. Over the past few years, the number
and size of communications properties on the market has increased
substantially. Although our primary focus will continue to be on acquiring
interests near our properties or that serve a customer base large enough
for us to operate efficiently, we may also acquire other communications
interests and these acquisitions could have a material impact upon
CenturyTel.
Funding Commitments
On October 15, 2002, we are committed to
redeem $400 million principal amount of our remarketable debt securities
at par value, plus an associated premium payment of approximately $71.1
and accrued interest. We are also
committed in December 2002 to pay taxes estimated at $325 million
resulting from the sale of our wireless operations. We plan to fund these
redemption and tax payments by using cash on hand and borrowings under our
$800 million of existing credit facilities.
When
used in this prospectus, (1) the term FCC means the Federal
Communications Commission, (2) the term DSL means digital subscriber
lines, through which we provide high-speed Internet service, and (3) the
term pops, whenever used with respect to wireless operations, means the
population of licensed markets (based on independent third-party
population estimates) multiplied by Hour proportionate equity interests in
the licensed operators of those markets.
The Debentures
Debentures Covered
by this Prospectus
$165 million
aggregate principal amount of 4.75% Convertible Senior Debentures, Series K,
due 2032 of CenturyTel.
Maturity
August 1, 2032.
Ranking
The debentures are
our senior unsecured obligations. The debentures rank senior to any of our
future subordinated debt and rank equally in right of payment with all of
our existing and future unsecured and unsubordinated debt. As of June 30,
2002, we had approximately $2.7 billion of unsecured and unsubordinated debt
that would have ranked equally with the debentures. However, we are a
holding company and, therefore, the debentures will be effectively
subordinated to all existing and future obligations of our subsidiaries. As
of June 30, 2002, the long-term debt of our subsidiaries was $523.5 million.
Interest
4.75% per year on
the principal amount payable semi-annually in arrears on February 1 and
August 1 of each year, beginning on February 1, 2003. We will pay contingent
interest if it becomes payable as described below and elsewhere in this
prospectus.
Contingent
Interest
We will pay
contingent interest to the holders of debentures during any six-month period
from August 1 to January 31 and from February 1 to July 31, commencing with
the six-month period beginning August 1, 2006, if the average Debenture
Price for the Applicable Five Trading Day Period (each as defined in
Description of Debentures Contingent Interest) equals 120% or more of
the principal amount of such debentures. The amount of contingent interest
payable per debenture in respect of any six-month period will equal the
greater of (1) the cash dividends paid by us per share on our common stock
during that six-month period multiplied by the number of shares of common
stock issuable upon conversion of a debenture and (2) .125% of the average
Debenture Price for the Applicable Five Trading Day Period.
Conversion Rights
Holders may
convert their debentures prior to maturity, in multiples of $1,000 principal
amount, under any of the following circumstances:
at any time at the option of the
holder if the average sale price (as defined under Description of
Debentures Conversion Rights) of our common stock for the last 20 trading
days in the preceding calendar quarter is greater than or equal to 120% of
the conversion price;
if the credit rating assigned to
the debentures is reduced to Ba2 or lower by Moodys Investors Service Inc.
(Moodys) or BB+ or lower by Standard and Poors Ratings Group (S&P);
if we call the debentures for
redemption as described in this prospectus; or
upon the occurrence of
specified corporate transactions described under Description of Debentures
Conversion Rights Conversion Upon Specified Corporate Transactions.
For each debenture
surrendered for conversion, a holder will receive 24.7188 shares of our
common stock. This represents an initial conversion price of $40.455 per
share of our common stock based on the issue price of the debentures. As
described in this prospectus, the conversion rate may be adjusted under
certain circumstances.
Optional
Redemption
On or after August
5, 2006, we may redeem for cash all or part of the debentures at any time at
the redemption prices set forth under Description of Debentures Optional
Redemption.
Purchase of
Debentures by
CenturyTel at the
Option of
the Holder
Holders will have the right to require us to purchase all or
a portion of the debentures on August 1, 2006, August 1, 2010 and August 1,
2017. In each case, the purchase price payable will be equal to 100% of the
principal amount of the debentures to be purchased plus any accrued and
unpaid interest to the purchase date. We will pay cash for all debentures so
purchased on August 1, 2006. For any such purchases on or after August 1,
2010, we may choose to pay the purchase price in cash or shares of our
common stock valued at their market price (as defined under Description of
Debentures Purchase of Debentures by CenturyTel at the Option of the
Holder), or any combination thereof, except that we will pay any accrued
and unpaid interest in cash.
Change in Control
If we undergo a
change in control, holders will have the right, at their option, to require
us to purchase for cash all or any portion of their debentures not
previously called for redemption. We will pay a purchase price equal to 100%
of the principal amount of the debentures to be purchased plus any accrued
and unpaid interest to the purchase date.
Tax Matters
We and each holder
of debentures agreed in the supplemental indenture described herein to treat
the debentures as contingent payment debt instruments for United States
federal income tax purposes. Holders of debentures are required to accrue
original issue discount on a constant yield to maturity basis at the rate at
which we would borrow in a noncontingent, nonconvertible borrowing, 8.97%
(which we refer to as the comparable yield), even though the debentures
have a stated yield to maturity that is significantly lower than the
comparable yield. Holders will therefore recognize taxable income
significantly in excess of cash received while the debentures are
outstanding. Additionally, holders will generally be required to recognize
ordinary income on the gain, if any, realized (including the fair market
value of the common stock received) on a sale, exchange, conversion or
redemption of the debentures. See Certain United States Federal Income Tax
Consequences. No ruling will be obtained from the Internal Revenue Service
concerning the application of the contingent payment debt rules to the
debentures. You should consult your own tax advisor concerning the tax
consequences of an investment in the debentures.
Use of Proceeds
We will not
receive any proceeds from sales of any of the securities covered by this
prospectus by the selling securityholders.
Book-Entry Form
The debentures are represented by two, permanent global
debentures in definitive, fully-registered form without interest coupons.
The global debentures have been deposited with the trustee as custodian for
The Depository Trust Company (DTC) and registered in the name of a nominee of DTC in New York, New York
for the accounts of participants in DTC. Beneficial interests in any of the
debentures will be shown on, and transfers will be effected only through,
records maintained by DTC or its nominee and any such interest may not be
exchanged for certificated securities, except in limited circumstances
described in this prospectus.
Trading
The debentures are currently eligible for trading in the
Portal Market. However, debentures sold using this prospectus will no
longer be eligible for trading in the Portal Market. Our shares of
common stock are traded on the New York Stock Exchange under the symbol CTL.
Risk Factors
You should carefully consider all of
the information contained or incorporated by reference in this prospectus as
well as the specific factors under Risk Factors beginning on page 9.
Before purchasing any of our securities offered by this
prospectus, you should carefully consider the following risk factors, as well as
the other information contained or incorporated by reference in this prospectus.
Risk Factors Relating to CenturyTel
We have a substantial amount of
indebtedness.
Principally, as a result of our recent acquisitions, we have a substantial
amount of indebtedness. See Capitalization. This could hinder our ability to
adjust to changing market and economic conditions, as well as our ability to
access the capital markets to refinance maturing debt in the ordinary course. In
connection with executing our business strategies, we are continuously
evaluating the possibility of acquiring additional communications assets, and we
may elect to finance acquisitions by incurring additional indebtedness. If we
incur significant additional indebtedness, our credit ratings could be adversely
affected. As a result, our borrowing costs could increase, our access to capital
may be adversely affected and our ability to satisfy our obligations under the
debentures or our other indebtedness could be adversely affected.
Our operations have
undergone material changes, and our actual operating results will differ
from the results indicated in our historical and pro forma financial
statements.
As a result of our
recently completed Verizon acquisitions and wireless divestiture, our mix of
operating assets differs materially from those operations upon which our
historical financial statements are based. Consequently, our historical
financial statements may not be reliable as an indicator of future results.
Moreover, the pro forma financial information incorporated by reference in this
prospectus, while helpful in illustrating certain effects of our recently
completed transactions and related financings, does not attempt to predict or
suggest future operating results. The pro forma information is presented for
illustrative purposes only and is not necessarily indicative of the operating
results or financial position that would have occurred if such transactions had
been consummated on the dates and in accordance with the assumptions described
in such information, nor is it necessarily indicative of our future operating
results or financial position.
In particular, you
should be aware that the pro forma information incorporated by reference in this
prospectus reflects our preliminary allocations of the aggregate purchase price
paid in the Verizon acquisitions to the Verizon assets acquired. Such
preliminary allocations include the assumption that the fair value of property,
plant and equipment will approximate the carrying value thereof on the
applicable dates of acquisition. The preliminary estimates of the fair value of
the noncurrent assets and liabilities are subject to change upon completion of
our valuation analysis. To the extent that final allocations of the purchase
price cause our annual depreciation and amortization expense to differ from that
presented in the pro forma information, annual earnings per share will be
affected by $.01 per share for every $2.4 million difference in annual
depreciation and amortization expense. Thus, for example, if we ultimately
allocate an additional $95.7 million of the aggregate purchase price to
property, plant and equipment (representing a 15% increase in the amount that we
have preliminarily allocated to such assets), our annual depreciation and
amortization expense would increase by approximately $9.6 million (assuming a
composite depreciation rate of 10%) and our annual earnings per share would
decrease by approximately $.04 per share from the amounts presented in the pro
forma information. For more information, see the notes to the pro forma
information incorporated by reference herein.
Our future results will
suffer if we do not effectively manage our growth.
We expect our future growth to come from acquiring additional telephone
properties, expanding into new markets, providing service to new customers,
increasing network usage and providing additional products and services. Our
future growth depends, in part, upon our ability to:
upgrade our billing and
other information systems
retain and attract
technological, managerial and other key personnel to work at our Monroe, Louisiana
headquarters and regional offices
effectively manage our
day to day operations while attempting to execute our business strategy of
expanding our wireline operations and our emerging businesses
realize the projected
growth and revenue targets developed by management for our newly acquired
and emerging businesses, and
continue to identify new
acquisition opportunities that we can finance, complete and operate on
attractive terms.
Our rapid growth
poses substantial challenges for us to integrate new operations into our
existing business, to successfully monitor our operations, costs, regulatory
compliance and service quality, and to maintain other necessary internal
controls. If we are not able to meet these challenges effectively, our results
of operations may be harmed.
Our industry is highly
regulated, and continues to undergo various fundamental regulatory changes.
As a diversified full service incumbent local exchange carrier, or ILEC, we have
traditionally been subject to significant regulation from federal, state and
local authorities. This regulation restricts our ability to raise our rates and
to compete, and imposes substantial compliance costs on us. In recent years, the
communications industry has undergone various fundamental regulatory changes
that have generally reduced the regulation of telephone companies and permitted
competition in each segment of the telephone industry. These and subsequent
changes could adversely affect us by reducing the fees that we are permitted to
charge, altering our tariff structures, or otherwise changing the nature of our
operations and competition in our industry. We are unable to predict the future
actions of the various regulatory bodies that govern us, but such actions could
materially affect our business.
We face competition,
which could adversely affect us.
As a result of various technological, regulatory and other changes, the
telecommunications industry has become increasingly competitive, and we expect
these trends to continue. The number of companies that have requested
authorization to provide local exchange service in our markets has increased in
recent years, and we anticipate that others will take similar action in the
future. As an ILEC, our competitors include competitive local exchange carriers,
or CLECs, and other providers (or potential providers) of communications
services, such as Internet service providers, wireless telephone companies,
satellite companies, alternate access providers, neighboring ILECs, long
distance companies and cable companies that may provide services competitive
with ours or services that we intend to introduce. We cannot assure you that we
will be able to compete effectively with all of these industry participants.
We expect competition to intensify as a result of new competitors and the
development of new technologies, products and services. We cannot predict which
future technologies, products or services will be important to maintain our
competitive position or what funding will be required to develop and provide
these technologies, products or services. Our ability to compete successfully
will depend on how well we market our products and services, and on our ability
to anticipate and respond to various competitive factors affecting the industry,
including a changing regulatory environment that may affect us differently from
our competitors, new services that may be introduced, changes in consumer
preferences, demographic trends, economic conditions and discount pricing
strategies by competitors.
Many of our current
and potential competitors have market presence, engineering, technical and
marketing capabilities and financial, personnel and other resources
substantially greater than ours. In addition, some of our competitors can raise
capital at a lower cost than we can, and have substantially stronger brand
names. Consequently, some competitors may be able to charge lower prices for
their products and services, to develop and expand their communications and
network infrastructures more quickly, to adapt more swiftly to new or emerging
technologies and changes in customer requirements, and to devote greater
resources to the marketing and sale of their products and services than we can.
While we expect our telephone revenues to grow as the economy improves, our
internal telephone revenue growth rate has
slowed in recent years and may continue to slow during upcoming periods.
We could be harmed by
the recent adverse developments affecting other communications companies.
Recently, WorldCom, Inc. and several other large communications companies have
declared bankruptcy or suffered financial difficulties. Consequently, we
recorded a provision for uncollectible receivables, primarily related to the
bankruptcy of WorldCom, Inc., in the amount of $15.0 million in the second
quarter of 2002. Continued weakness in the communications industry could have
additional future adverse effects on us, including reducing our ability to
collect receivables and to access the capital markets on favorable terms.
Our agreements and organizational documents and applicable
law could limit another partys ability to acquire us at a premium.
Under our articles of incorporation, each share of common stock that has been
beneficially owned by the same person or entity continually since May 30, 1987
generally entitles the holder to ten votes on all matters duly submitted to a
vote of shareholders. As of March 20, 2002, the holders of our ten-vote shares
held approximately 43.5% of our total voting power. In addition, a number of
other provisions in our agreements and organizational documents, including our
shareholder rights plan, and various provisions of applicable law may delay,
defer or prevent a future takeover of CenturyTel unless the takeover is approved
by our board of directors. This could deprive you of any related takeover
premium for any common stock that you might receive in the future upon a
conversion of the debentures. See Description of Common Stock Certain
Provisions Affecting Takeovers.
Risk Factors Relating to the Debentures
The debentures are effectively subordinated to the debt of
our subsidiaries.
As a holding company, substantially all of our income and operating cash flow is
dependent upon the earnings of our subsidiaries and the distribution of those
earnings to, or upon loans or other payments of funds by those subsidiaries to,
us. As a result, we rely upon our subsidiaries to generate the funds necessary
to meet our obligations, including the payment of amounts owed under the
debentures. Our subsidiaries are separate and distinct legal entities and have
no obligation to pay any amounts due pursuant to the debentures or, subject to
limited exceptions for tax-sharing purposes, to make any funds available to us
to repay our obligations, whether by dividends, loans or other payments. Certain
of our subsidiaries loan agreements contain various restrictions on the
transfer of funds to us, including certain provisions that restrict the amount
of dividends that may be paid to us. As of December 31, 2001, the amount of
retained earnings of our subsidiaries not subject to dividend restrictions was
approximately $1.8 billion. Moreover, our rights to receive assets of any
subsidiary upon its liquidation or reorganization (and the ability of holders of
debentures to benefit indirectly therefrom) will be effectively subordinated to
the claims of creditors of that subsidiary, including trade creditors. As of
June 30, 2002, the long-term debt of our subsidiaries was $523.5 million.
An active trading market for the debentures may not develop.
The debentures are a new issue of securities for which there currently is no
active trading market. We cannot assure you that an active trading market for
the debentures will develop or as to the liquidity or sustainability of any such
market, the ability of the holders to sell their debentures or the price at
which holders of the debentures will be able to sell their debentures. Future
trading prices of the debentures will also depend on many other factors,
including, among other things, prevailing interest rates, the market for similar
securities, our performance and other factors. We do not intend to apply for
listing of the debentures on any securities exchange or any automated quotation
system.
Investment in the debentures will result in the yearly
inclusion in your taxable income of amounts significantly in excess of cash
received while the debentures are outstanding.
We and, by purchasing debentures, each holder agreed in the supplemental
indenture to treat the debentures as contingent payment debt instruments subject
to the contingent payment debt regulations. As a result, if you invest in the
debentures, you will be required to include amounts in income, as original issue
discount, in advance of the cash you receive on the debentures. The rate at
which you will accrue such original issue discount will be the comparable
yield, which is the rate at which we would borrow in a noncontingent,
nonconvertible borrowing, even though the debentures have a significantly lower
stated yield to maturity. You will therefore recognize taxable income
significantly in excess of cash received while the debentures are outstanding.
In addition, you will recognize taxable income upon the conversion of the
debentures equal to the difference between the fair market value of the common
stock received and your adjusted tax basis in the debentures. Gain or loss
recognized upon a sale, exchange or conversion generally will be ordinary in
nature. To the extent that any such loss may be capital in nature, the
deductibility of such loss will be subject to limitations. See Certain United
States Federal Income Tax Consequences.
Your rights to require us to purchase your debentures may not
adequately protect you.
On August 1, 2006, August 1, 2010 and August 1, 2017, and upon the occurrence of
a change in control of CenturyTel, holders of the debentures may require us to
purchase their debentures. A purchase at the option of the holder of debentures
on August 1, 2006, or upon the occurrence of a change of control, will be
required to be paid in cash. However, it is possible that we would not have
sufficient funds at those times to make the required purchase of debentures.
Failure by us to repurchase the debentures when required under the indenture
will result in an event of default with respect to the debentures. In addition,
certain important corporate events, such as leveraged recapitalizations that
would increase the level of our indebtedness, may not constitute a change in
control under the indenture. We have incurred, and may in the future incur,
other indebtedness with similar change in control provisions permitting our
holders to accelerate or to require us to purchase our indebtedness upon the
occurrence of similar events or on some specified dates. See Description of
Debentures Purchase of Debentures by CenturyTel at the Option of the Holder
and Change in Control.
The price of our common stock, changes in our credit rating
or changes in the credit markets could adversely affect the market price of
the debentures.
The market price for the debentures
will be based on a number of factors, including:
the market price
of our common stock, which may result in greater volatility in the trading
value of the debentures than would be expected for nonconvertible debt
securities; our
ratings with major credit rating agencies; the
prevailing interest rates being paid by other companies similar to us; and the overall
condition of the financial markets.
The condition of the
credit markets and prevailing interest rates have fluctuated in the past and are
likely to fluctuate in the future. Fluctuations in these factors could have an
adverse effect on the price and liquidity of the debentures.
In addition, credit
rating agencies continually revise their ratings for the companies that they
follow, including us. The credit rating agencies also evaluate the
communications industry as a whole and may change their credit rating for us
based on their overall view of our industry. See Risk Factors Relating to
CenturyTel We could be harmed by the recent adverse developments affecting
other communications companies. We cannot be sure that credit rating agencies
will maintain their current ratings on the debentures. A negative change in our
ratings could have an adverse effect on the price of the debentures.
We will not receive any of the proceeds from sales of any of the securities
covered by this prospectus by the selling securityholders.
Our unaudited ratio of earnings to fixed charges and preferred stock dividends
was as indicated below for the periods indicated.
Year Ended December 31,
Six Months ended
June 30, 2002 1997 1998 1999 2000 2001 2002 Ratio of earnings to fixed charges and preferred stock
dividends(1)
7.80
3.25
3.75
3.07
3.40
3.06 Ratio of earnings, excluding non-recurring items (2), to fixed charges
and preferred stock dividends
4.87
2.95
3.45
3.01
2.57
3.20 Ratio of earnings from continuing operations
to fixed charges and preferred stock dividends(1)
5.91
2.18
2.45
2.07
2.00
2.19 Ratio of earnings from continuing operations, excluding
non-recurring items (2), to fixed charges and preferred stock
dividends
2.98
2.01
2.39
2.12
1.89
2.33 (1) For purposes of the chart above,
earnings consist of income (or income from continuing operations, as
applicable) before income taxes and fixed charges, and fixed charges
include interest expense, including amortized debt issuance costs and
preferred stock dividend costs of CenturyTel and its subsidiaries. No
interest expense was allocated to discontinued operations for the
computation of the ratios from continuing operations. We have assumed that
our consolidated preferred stock dividend requirements were equal to the
pre-tax earnings that would be required to cover those dividend
requirements. We computed those pre-tax earnings using actual tax rates for
each period. The ratio of earnings to fixed charges and preferred stock
dividends does not differ materially from the ratio of earnings to fixed
charges for the periods indicated in the table above. (2)
Non-recurring
items during the periods presented above primarily relate to gains on sales
of assets and other non-recurring charges and credits, including, but not
limited to, (i) the write-down in the value of certain nonoperating assets
or investments, (ii) costs to defend an unsolicited takeover proposal, (iii)
costs to settle interest rate hedge contracts and (iv) costs relating to an
ice storm in early 2001.
PRICE
RANGE AND DIVIDENDS OF COMMON STOCK
Our common stock is listed on the New York
Stock Exchange and is traded under the symbol CTL. The following table sets
forth the high and low sale prices, along with the quarterly dividends paid, for
each of the quarters indicated:
Sales Prices
Dividend Paid
per
High
Low
Common Share
2002
First quarter
$ 35.50
$ 28.80
$ .0525
Second quarter
34.45
27.00
.0525
Third quarter
30.60
21.13
.0525
Fourth quarter (through
October 8, 2002)
25.70
22.35
.0525(1)
2001
First quarter
$ 39.88
$ 25.45
$ .0500
Second
quarter
30.42
26.90
.0500
Third quarter
36.50
28.30
.0500
Fourth quarter
35.79
30.25
.0500
2000
First quarter
$ 47.31
$ 32.31
$ .0475
Second quarter
40.38
24.44
.0475
Third quarter
32.38
25.25
.0475
Fourth quarter
38.50
26.81
.0475
(1)
Anticipated to be paid in November 2002,
subject to declaration by our board of directors.
On October 8, 2002, the last reported sale price of our common stock on the New
York Stock Exchange was $24.13
per share.
Purchasers of the debentures will not be entitled to receive any quarterly
dividends with a record date prior to a conversion date. Future dividends will
depend upon our future earnings, financial condition and other factors affecting
our dividend policy. See Description of Common Stock General Dividends.
(Dollars in thousands)
The following table sets forth the following information as of June 30, 2002:
our actual consolidated
capitalization
our pro forma
consolidated capitalization after giving effect to our recent Verizon
acquisitions, wireless operations divestiture and sale of debt securities.
For additional information regarding these transactions, see Prospectus Summary
CenturyTel Acquisitions and Dispositions. You should read the following
table in conjunction with our consolidated financial statements and unaudited
pro forma consolidated condensed financial information, and the notes thereto,
incorporated by reference into this prospectus.
Adjustments
As of
June 30,
2002
Purchase of
Alabama
Properties(1)
Divestiture of
Wireless
Operations(2)
Sale of
Debt
Securities(3)
Purchase of
Missouri
Properties(4)
Pro Forma
for
Adjustments
Cash and cash equivalents
$ 302,070
$ (288,000)
$ 687,625
$ 665,000
$ (1,177,000)
$ 189,695
Short-term debt
$
--
$ 432,000
$ (432,000)
$
--
Long-term debt
CenturyTel, Inc.
4.85% note, due
through 2002.
173,375
(173,375)
--
Senior credit facility,
due through 2002
300,000
(300,000)
-- Senior notes and
debentures 7.75% Series A,
due 2004
50,000
50,000 8.25% Series B, due 2024
100,000
100,000 6.55% Series C, due 2005
50,000
50,000 7.20% Series D, due 2025
100,000
100,000 6.15% Series E, due 2005
100,000
100,000 6.30% Series F, due 2008
240,000
240,000 6.875% Series G, due 2028
425,000
425,000 8.375% Series H,
due 2010
500,000
500,000
7.75% Series I,
remarketable 2002
400,000
400,000 6.02% Series J, due 2007
500,000
500,000 4.75% Series K, due 2032
--
165,000
165,000
9.38% notes, due through
2003
7,975
7,975
6.84%(5) Employee Stock
Ownership Plan
commitment, due in
installments through
2004
2,000
2,000
Net unamortized premium
and discounts 10,
548
10,548
Other 161
Less: Current maturities
432,397
432,397
Total long-term debt
excluding
current maturities
2,750,188
300,000
(473,375)
665,000
3,241,813
Adjustments
As of
June 30,
2002
Purchase of
Alabama
Properties(1)
Divestiture of Wireless Operations(2)
Sale of
Debt Securities(3)
Purchase of
Missouri Properties(4)
Pro Forma
for Adjustments
Stockholders equity
Common stock, $1.00 par
value, 350,000,000 shares
authorized, 141,660,660
shares issued and
outstanding
141,661
141,661
Paid-in capital
509,939
509,939
Retained earnings
1,800,514
578,154
2,378,668
Unearned ESOP shares
(2,000)
(2,000)
Preferred
stock-non-redeemable
7,975
7,975
Total stockholders equity
2,458,089
--
578,154
--
--
3,036,243
Total capitalization
$ 5,640,674
$ 732,000
$ (327,221)
$665,000
--
$ 6,710,453 (1)
Reflects the $1.020 billion purchase of our Alabama
properties from Verizon on July 1, 2002, using cash on hand and borrowings
under credit facilities. (2)
Reflects (i) the reduction in debt utilizing cash proceeds
received from the sale of our wireless operations on August 1, 2002 and (ii)
the estimated gain on the sale of such operations. (3)
Reflects our concurrent sale in the third quarter of 2002 of
$165 million of debentures and $500 million of senior notes.
(4)
Reflects the $1.177 billion purchase of Missouri properties
from Verizon on August 31, 2002, using cash on hand. (5)
Weighted average interest rate at June 30, 2002.
DESCRIPTION OF DEBENTURES
The debentures were issued as a separate series of senior debt
securities under an indenture, dated as of March 31, 1994, between us and
Regions Bank (successor-in-interest to First American Bank and Trust of
Louisiana and Regions Bank of Louisiana), as trustee, and a supplemental
indenture relating to the debentures (collectively, the indenture).
The following summary does not purport to be complete, and is subject to, and is
qualified in its entirety by reference to, all of the provisions of the
debentures and the indenture. We urge you to read the indenture and the form of
the debentures, which we have filed with the SEC as exhibits to the shelf
registration statement of which this prospectus forms a part, because they, and
not this description, define your rights as holders of the debentures.
General
The debentures are limited to an aggregate principal amount of $165 million. The
debentures will mature on August 1, 2032.
The debentures were
initially offered at a price to investors of $1,000 per debenture. The
debentures accrue interest at a rate of 4.75% per year from August 26, 2002 or
from the most recent interest payment date to which interest has been paid or
duly provided, payable semi-annually in arrears on February 1 and August 1 of
each year, beginning February 1, 2003. In addition, we will pay contingent
interest if it becomes payable as described in this prospectus. The debentures
are issued only in denominations of $1,000 principal amount and multiples of
$1,000 principal amount. See Interest and Contingent Interest.
You may have the
option to convert your debentures into shares of our common stock at a
conversion rate of 24.7188 shares of common stock per debenture, upon the
occurrence of certain events described in this prospectus. This is equivalent to
an initial conversion price of $40.455 per share of our common stock based on
the issue price of the debentures. The conversion rate is subject to adjustment
upon the occurrence of certain events described below. See Conversion
Rights.
If any interest
payment date, maturity date, redemption date or purchase date of a debenture
falls on a day that is not a business day, the required payment of principal,
premium, if any, and interest will be made on the next succeeding business day
as if made on the date that the payment was due and no interest will accrue on
that payment for the period from and after the interest payment date, maturity
date, redemption date or purchase date, as the case may be, to the date of that
payment on the next succeeding business day.
Ranking
The debentures are our senior unsecured obligations. The debentures rank senior
to any of our future subordinated debt and rank equally in right of payment with
all of our existing and future unsecured and unsubordinated debt. The indenture
does not limit the aggregate principal amount of senior debt securities that we
may issue thereunder. As of June 30, 2002, we had approximately $2.7 billion of
unsecured and unsubordinated debt that would have ranked equally with the
debentures, including approximately $2.5 billion aggregate principal amount of
senior debt securities issued under the indenture.
As a holding company,
substantially all of our income and operating cash flow is dependent upon the
earnings of our subsidiaries and the distribution of those earnings to, or upon
loans or other payments of funds by those subsidiaries to, us. As a result, we
rely upon our subsidiaries to generate the funds necessary to meet our
obligations, including the payment of amounts owed under the debentures. Our
subsidiaries are separate and distinct legal entities and have no obligation to
pay any amounts due pursuant to the debentures or, subject to limited exceptions
for tax sharing purposes, to make any funds available to us to repay our
obligations, whether by dividends, loans or other payments. Certain of our
subsidiaries loan agreements contain various restrictions on the transfer of
funds to us, including certain provisions that restrict the amount of dividends
that may be paid to us. At December 31, 2001, the amount of retained earnings of
our subsidiaries not subject to dividend restrictions was approximately $1.8
billion. Moreover, our rights to receive assets of any subsidiary upon its
liquidation or reorganization (and the ability of holders of debentures to
benefit indirectly therefrom) will be effectively subordinated to the claims of
creditors of that subsidiary, including trade creditors. As of June 30, 2002,
the long-term debt of our subsidiaries was $523.5 million.
Interest
We will pay interest on the debentures at a rate of 4.75% per year. In addition,
we will pay contingent interest if it becomes payable as described below.
Interest will be based on a 360-day year comprised of twelve 30-day months, and
will be payable semi-annually on February 1 and August 1, beginning on February
1, 2003. The record date for the payment of interest to holders will be January
15 and July 15 of each year. We will pay interest on the debentures by wire
transfer or by check mailed to the address of the registered holders of the
debentures as of the record date relating to each interest payment date.
You should be aware
that, notwithstanding the foregoing, you will be required to include amounts in
income, as original issue discount, in excess of the cash you receive on the
debentures. The rate at which you will accrue such original issue discount will
be the comparable yield, which is the rate at which we would borrow in a noncontingent, nonconvertible borrowing. You will therefore recognize taxable
income significantly in excess of cash received while the debentures are
outstanding. For more information, see the discussion below in the section
captioned Certain United States Federal Income Tax Consequences.
Contingent Interest
Subject to the accrual and record date provisions described below, we will pay
contingent interest to the holders of debentures during any six-month period
from August 1 to January 31 and from February 1 to July 31, commencing with the
six-month period beginning August 1, 2006, if the average Debenture Price (as
defined below) for the Applicable Five Trading Day Period (as defined below)
equals 120% or more of the principal amount of such debentures. We will pay
contingent interest only in cash. Applicable Five Trading Day Period means the
five trading days ending on the second trading day immediately preceding the
first day of the relevant six-month period, unless we declare a dividend for
which the record date falls prior to the first day of a six-month period but the
payment date falls within such six-month period, in which case the Applicable
Five Trading Day Period means the five trading days ending on the second
trading day immediately preceding such record date.
The amount of
contingent interest payable per debenture in respect of any six-month period
will equal the greater of (1) cash dividends paid by us per share on our common
stock during that six-month period multiplied by the number of shares of our
common stock issuable upon conversion of debentures at the then applicable
conversion rate and (2) .125% of the average Debenture Price for the Applicable
Five Trading Day Period.
Contingent interest,
if any, will accrue and be payable to holders of debentures as of the record
date for the related common stock dividend or, if no cash dividend is paid by us
during a quarter within the relevant six-month period, to holders of debentures
as of the fifteenth day preceding the last day of the relevant six-month period.
Such payments will be paid on the payment date of the related common stock
dividend or, if no cash dividend is paid by us during a quarter within the
relevant six-month period, on the last day of the relevant six-month period. For
information on your obligation to accrue original issue discount on your
debentures, see Certain United States Federal Income Tax Consequences.
For financial
accounting purposes, our obligation to pay contingent interest on the debentures
will constitute an embedded derivative, the initial value of which is not
material to our consolidated financial position. Any material changes in its
value will be reflected in our future income statements in accordance with
Statement of Financial Account Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities.
Cash dividends means
all cash dividends on our common stock (whether regular, periodic,
extraordinary, special, nonrecurring or otherwise) as declared by our board of
directors.
Trading day means a
day on which our common stock:
is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business, and
has traded at least once
on the national or regional securities exchange or association or
over-the-counter market that is the primary market for the trading of the
common stock.
The Debenture Price on any date of determination means the average of the
secondary market bid quotations per debenture obtained by the bid solicitation
agent for $10 million principal amount of debentures at approximately 4:00 p.m.,
New York City time, on such determination date from three unaffiliated
securities dealers we select, provided that if:
then the Debenture Price will equal (a) the then applicable
conversion rate of the debentures multiplied by (b) the average sale price (as
defined under Conversion Rights) of our common stock for the last five
trading days ending on such determination date.
The bid solicitation agent is initially the trustee. We may change the bid
solicitation agent, but the bid solicitation agent may not be our affiliate. The
bid solicitation agent will solicit bids from securities dealers that are
believed by us to be willing to bid for the debentures.
Upon determination
that holders will be entitled to receive contingent interest which may become
payable during a relevant six-month period, on or prior to the start of such
six-month period, we will disseminate a press release through Dow Jones &
Company, Inc. or Bloomberg Business News containing this information or publish
the information on our Web site or through such other public medium as we may
use at that time.
Optional Redemption
No sinking fund is provided for the debentures. Prior to August 5, 2006, the
debentures are not redeemable. On or after August 5, 2006, at our option, we may
redeem the debentures for cash at any time in whole, or from time to time in
part, upon not less than 30 nor more than 60 days notice by mail, at the
following redemption prices (expressed as percentages of the principal amount
thereof) if redeemed during the 12-month period beginning on August 5 of each
year indicated, plus accrued and unpaid interest to the redemption date:
Year
Redemption
Price
2006
102.85%
2007
102.38%
2008
101.90%
2009
101.43%
2010
100.95%
2011
100.48%
2012 and thereafter
100.00%
If we decide to redeem fewer than
all of the outstanding debentures, the trustee will select the debentures to be
redeemed by lot, on a pro rata basis or by another method the trustee considers
fair and appropriate.
If the trustee selects
a portion of your debentures for partial redemption and you convert a portion of
the same debentures, the converted portion will be deemed to be from the portion
selected for redemption.
In the event of any
redemption in part, we will not be required to:
Conversion Rights
Subject to the conditions described below, holders may
convert each of their debentures into shares of our common stock at a conversion
rate of 24.7188 shares of our common stock per $1,000 principal amount of
debentures (equivalent to an initial conversion price of $40.455 per share of
common stock based on the issue price of the debentures). The conversion rate
and the equivalent conversion price in effect at any given time are referred to
in this prospectus as the applicable conversion rate and the applicable
conversion price, respectively, and will be subject to adjustment as described
below. A holder may convert fewer than all of such holders debentures so long
as the debentures converted are an integral multiple of $1,000 principal amount.
Conversion Events. Holders may surrender their debentures for conversion into shares of our common
stock prior to stated maturity if any of the following conditions is satisfied:
all of which are described further
immediately below.
Conversion upon satisfaction of sale price condition.
A holder may surrender any of its debentures for conversion into shares of our
common stock at any time at the option of the holder if the average sale price
of our common stock for the last 20 trading days in the preceding calendar
quarter is greater than or equal to 120% of the applicable conversion price. The
sale price of our common stock on any date means the closing per share sale
price (or if no closing sale price is reported, the average of the bid and ask
prices or, if more than one in either case, the average of the average bid and
the average asked prices) on that date as reported in composite transactions for
the principal U.S. securities exchange on which our common stock is traded or,
if our common stock is not listed on a U.S. national or regional securities
exchange, as reported on the Nasdaq Stock Market or, if our common stock is not
so reported, the last quoted bid price for our common stock in the
over-the-counter market as reported by the National Quotation Bureau or similar
organization. If the bid price is not available, the closing price means the
market value of our common stock on the date of determination as determined by a
nationally recognized independent investment banking firm retained by us for
this purpose. The trustee, which is Regions Bank, will on our behalf determine
at the end of each quarter if the debentures are convertible and notify us.
Conversion upon credit rating event.
Even if the debentures are not otherwise convertible at such time, holders may
surrender their debentures for conversion at any time after the credit rating
assigned to the debentures is reduced to Ba2 or lower by Moodys or BB+ or lower
by S&P.
Conversion upon redemption.
Even if the debentures are not otherwise convertible at such time, a
holder may surrender for conversion any of the debentures called for redemption
at any time prior to the close of business two business days immediately prior
to the redemption date. If a holder has already delivered a purchase notice or a
change in control purchase notice with respect to a debenture, however, the
holder may not surrender that debenture for conversion until the holder has
withdrawn the notice in accordance with the indenture.
Conversion upon specified corporate
transactions. Even if the debentures are not otherwise convertible at such time, if we
elect to:
then we must notify the holders of the
debentures at least 20 days prior to the ex-dividend date for any such
distribution.
Once we have given such notice, holders may surrender their
debentures for conversion at any time until the earlier of the close of business
on the business day prior to the ex-dividend date or our announcement that such
distribution will not take place, provided that a holder may not convert if the
holder will or may otherwise participate in the distribution without conversion.
In addition, if we are
party to a consolidation, merger or binding share exchange pursuant to which our
common stock would be converted into cash, securities or other property, a
holder may surrender debentures for conversion at any time from and after the
date which is 15 days prior to the anticipated effective date of the transaction
until 15 days after the actual date of such transaction. If we are a party to a
consolidation, merger or binding share exchange pursuant to which our common
stock is converted into cash, securities or other property, then at the
effective time of the transaction, the right to convert a debenture into common
stock will be changed into a right to convert it into the kind and amount of
cash, securities or other property which the holder would have received if the
holder had converted its debentures immediately prior to the transaction. If the
transaction also constitutes a Change in Control, as defined below, a holder
can require us to purchase all or a portion of its debentures as described below
under Change in Control.
Conversion Procedures.
The initial conversion rate is 24.7188 shares of common stock for each $1,000
principal amount of debentures. This is equivalent to an initial conversion
price of $40.455 per share of common stock based on the issue price of the
debentures. You will not receive any cash payment representing accrued and
unpaid interest upon conversion of a debenture. Instead, upon conversion we will
deliver to you a fixed number of shares of our common stock and any cash payment
to account for fractional shares. The cash payment for fractional shares will be
based on the sale price of our common stock on the trading day immediately prior
to the conversion date. Delivery of shares of common stock will be deemed to
satisfy our obligation to pay the principal amount of the debentures, including
accrued interest. Accrued and unpaid interest will be deemed paid in full rather
than canceled, extinguished or forfeited. We will not adjust the conversion rate
to account for the accrued interest. If debentures not called for redemption are
converted after a record date for the payment of interest and prior to the next
succeeding interest payment date, such debenture must be accompanied by funds
equal to the interest payable on such succeeding interest payment date on the
principal amount so converted.
If you wish to
exercise your conversion right, you must deliver an irrevocable conversion
notice, together, if the debentures are in certificated form, with the
certificated security, to the conversion agent who will, on your behalf, convert
the debentures into shares of our common stock. You may obtain copies of the
required form of the conversion notice from the conversion agent. Beneficial
owners of interests in a global note may exercise their right of conversion by
delivering to DTC the appropriate instruction form for conversion pursuant to
DTCs conversion program.
Based on our treatment
of the debentures for United States federal income tax purposes, as discussed
further herein, a holder would be required to recognize ordinary income upon a
conversion of a debenture into our common stock equal to the excess, if any,
between the fair market value of the common stock received on the conversion
and the holders adjusted tax basis in the debentures. For a more detailed
discussion, see Certain United States Federal Income Tax Consequences.
Adjustments to Conversion Rate.
The conversion rate will be subject to adjustment upon the following events:
In the event we elect to make a distribution described in the second or fourth
bullet above which, in the case of the fourth bullet, has a per share value
equal to more than 10% of the sale price of our shares of common stock on the
day preceding the declaration date for such distribution, we will be required to
give notice to the holders of the debentures at least 20 days prior to the
ex-dividend date for such distribution and, upon the giving of such notice, the
debentures may be surrendered for conversion at any time until the close of
business on the business day prior to the ex-dividend date or until we announce
that such distribution will not take place. No adjustment to the conversion rate
or the ability of a holder of a debenture to convert will be made if the holder
will or may otherwise participate in the distribution without conversion or in
certain other cases.
We may increase the conversion rate as
permitted by law for at least 20 days, so long as the increase is irrevocable
during the period. If any action would require adjustment of the conversion rate
under more than one of the provisions described above, only one adjustment will
be made and that adjustment will be the amount of adjustment that has the
highest absolute value to the holders of the debentures. No adjustment in the
applicable conversion price will be required unless the adjustment would require
an increase or decrease of at least 1% of the applicable conversion price. If
the adjustment is not made because the adjustment does not change the applicable
conversion price by more than 1%, then the adjustment that is not made will be
carried forward and taken into account in any future adjustment.
Except as specifically described above, the
applicable conversion price will not be subject to adjustment in the case of the
issuance of any of our common stock, or securities convertible into or
exchangeable for our common stock.
Purchase of Debentures by CenturyTel at the
Option of the Holder
Holders will have the right to require us to
purchase the debentures on August 1, 2006, August 1, 2010 and August 1, 2017. We
will be required to purchase any outstanding debentures for which a holder
delivers a written purchase notice to the trustee. This notice must be delivered
at any time during the period beginning at the opening of business on the date
that is 20 business days prior to the relevant purchase date and ending on the
close of business on the last day prior to the purchase date. If the purchase
notice is given and withdrawn during the period, we will not be obligated to
purchase the related debentures. Our purchase obligation will be subject to some
additional conditions described in the indenture. Also, there is no assurance
that we will have enough funds on the dates listed above to purchase the
debentures. See Risk Factors.
The purchase price payable pursuant to the
option described above will be equal to 100% of the principal amount of the
debentures to be purchased plus any accrued and unpaid interest to the purchase
date.
We will pay cash for all debentures
purchased pursuant to the option described above on August 1, 2006. For such
purchases on or after August 1, 2010, we may choose to pay the purchase price in
cash or shares of our common stock or any combination of cash and shares of our
common stock, provided that we will pay any accrued cash interest in cash. For a
discussion of the United States federal income tax treatment of a holder
receiving cash, shares of common stock or any combination thereof, see Certain
United States Federal Income Tax Consequences.
For any purchases on or after August 1,
2010, if we choose to pay the purchase price in whole or in part in shares of
our common stock or any combination of cash and shares of our common stock, we
will be required, as a condition thereof, to give notice on a date not less than
10 business days prior to each purchase date to all holders at their addresses
shown in the register of the registrar, and to beneficial owners as required by
applicable law, stating, among other things:
(2)
If the holder fails to indicate the holders
choice with respect to the election described in the final bullet point above,
the holder will be deemed to have elected to receive cash in respect of the
entire purchase price for all debentures subject to the purchase notice in these
circumstances. For a discussion of the United States federal income tax
treatment of a holder receiving cash instead of shares of our common stock, see
Certain United States Federal Income Tax Consequences.
A holder may withdraw any
purchase notice by a written notice of withdrawal delivered to the paying agent
prior to the close of business on the last day prior to the purchase date. The
notice of withdrawal must state:
If, for any purchases on or
after August 1, 2010, we elect to pay the purchase price, in whole or in part,
in shares of our common stock, the number of shares to be delivered by us will
be equal to the portion of the purchase price to be paid in shares of our common
stock divided by the market price of one share of our common stock. We will pay
cash based on the market price for all fractional shares.
The market price means the average of the
sale prices of our common stock for the five trading day period ending on the
third business day prior to the applicable purchase date (if the third business
day prior to the applicable purchase date is a trading day, or if not, then on
the last trading day prior to the third business day), appropriately adjusted to
take into account the occurrence, during the period commencing on the first of
the trading days during such five trading day period and ending on such date, of
certain events that would result in an adjustment of the conversion rate with
respect to our common stock.
Because the market price of
our common stock is determined prior to the applicable purchase date, holders of
the debentures bear the market risk with respect to the value of our common
stock to be received from the date the market price is determined to the
purchase date. We may pay the purchase price or any portion of the purchase
price in shares of our common stock for purchases on or after August 1, 2010,
only if the information necessary to calculate the market price is published in
a daily newspaper of national circulation or is otherwise readily available.
Upon determination of the actual number of
shares of our common stock to be paid upon repurchase of the debentures, we will
disseminate a press release through Dow Jones & Company, Inc. or Bloomberg
Business News containing this information or publish the information on our Web
site or through such other public medium as we may use at that time.
A holder must either effect book-entry
transfer or deliver the debentures, together with necessary endorsements, to the
office of the paying agent after delivery of the purchase notice to receive
payment of the purchase price. You will receive payment on the purchase date or
the time of book-entry transfer or the delivery of the debentures. If the paying
agent holds money or securities sufficient to pay the purchase price of the
debentures on the business day following the purchase date, then:
This will be the case whether or not book-entry transfer of the debentures is
made or whether or not the debentures are delivered to the paying agent.
We will comply with the provisions of Rule 13e-4 and any other tender offer
rules under the Exchange Act which may be applicable at the time. We will file
Schedule TO or any other schedule required in connection with any offer by us to
purchase the debentures at your option.
Change in Control
If a Change in Control as defined below occurs, a holder of debentures will have
the right, at its option, to require us to purchase for cash all of its
debentures not previously called for redemption, or any portion of the principal
amount thereof, that is equal to $1,000 or an integral multiple of $1,000. The
price we are required to pay will be equal to 100% of the principal amount of
the debentures to be purchased plus any accrued and unpaid interest to the
purchase date.
Within 30 days after the occurrence of a Change in Control, we are obligated to
give to the holders of the debentures notice of the Change in Control and of the
purchase right arising as a result of the Change in Control. We must also
deliver a copy of this notice to the trustee. To exercise the purchase right, a
holder of the debentures must deliver on or before the 30th day after the date
of our notice irrevocable written notice to the trustee of the holders exercise
of its purchase right, together with the debentures with respect to which the
right is being exercised. We are required to purchase the debentures on the date
that is 45 days after the date of our notice.
A Change in Control will be deemed to have occurred at the time after the
debentures are originally issued that any of the following occurs: (1) (2)
However, a Change in Control will not be
deemed to have occurred if either: (A) (B)
For purposes of these provisions:
Rule 13e-4 under the Exchange Act requires the dissemination of prescribed
information to security holders in the event of an issuer tender offer and may
apply in the event that the purchase option becomes available to the holders of
debentures. We will comply with this rule to the extent it applies at that time.
The definition of Change in Control includes a phrase relating to the
conveyance, transfer, sale or lease or of all or substantially all of our
assets. There is no precise, established definition of the phrase substantially
all under applicable law. Accordingly, the ability of a holder of the
debentures to require us to purchase its debentures as a result of the
conveyance, transfer, sale or lease of less than all of our assets may be
uncertain.
The foregoing provisions would not necessarily provide the holders of the
debentures with protection if we are involved in a highly leveraged or other
transaction that may adversely affect the holders.
If a Change in Control were to occur, we may not have enough funds to pay the
Change in Control purchase price. In addition, we have incurred, and may in the
future incur, other indebtedness with similar change in control provisions
permitting our holders to accelerate or to require us to purchase our
indebtedness upon the occurrence of similar events or on some specified dates.
If we fail to purchase the debentures when required following a Change in
Control, we will be in default under the indenture. See Risk Factors.
Merger and
Consolidation
We may not consolidate or merge with or into, or sell or otherwise dispose of
all or substantially all of our assets to, another corporation, unless (1) we
agree to obtain a supplemental indenture pursuant to which the surviving entity
or transferee agrees to assume our obligations under all outstanding senior debt
securities, including the debentures, issued under the indenture and (2) the
surviving entity or transferee is organized under the laws of the United States,
any state thereof or the District of Columbia.
Although these transactions are permitted under the indenture, certain of the
foregoing transactions would constitute a Change in Control (as defined herein)
permitting each holder to require us to purchase the debentures of such holder
as described herein.
Limitations on Liens
The indenture provides that CenturyTel will not, while any of the senior debt
securities under the indenture remain outstanding (including the debentures),
create or suffer to exist any mortgage, lien, pledge, security interest or other
encumbrance (which we collectively refer to below as liens) upon our property,
whether now owned or hereafter acquired, unless we shall secure the senior debt
securities then outstanding, including the debentures, by such lien equally and
ratably with all obligations and indebtedness thereby secured so long as such
obligations and indebtedness remain so secured. Notwithstanding the foregoing,
the indenture will not restrict us from creating or suffering to exist various
types of liens permitted in the indenture, including the following:
liens upon property
hereafter acquired by us or liens on such property at the time of the
acquisition thereof, or conditional sales agreements or title retention
agreements with respect to any such property;
liens on the stock of a
corporation that, when such liens arise, concurrently becomes our
subsidiary, or liens on all or substantially all of the assets of a
corporation arising in connection with our purchase thereof;
liens for taxes and
similar levies, deposits to secure performance or obligations under certain
specified circumstances and laws, mechanics liens and similar liens arising
in the ordinary course of business, liens created by or resulting from legal
proceedings being contested in good faith, certain specified zoning
restrictions and other restrictions on the use of real property, interests
of lessors in property subject to any capitalized lease, and certain other
similar liens generally arising in the ordinary course of business;
liens existing on the date of the indenture; and
liens that replace, extend or renew any lien otherwise
permitted under the indenture.
The restrictions in the indenture described above would not protect the
debenture holders in the event of a highly leveraged transaction in which
unsecured indebtedness was incurred or in which the liens arising in connection
therewith were freely permitted under the indenture, nor would it afford
protection in the event of one or more highly leveraged transactions in which
secured indebtedness was incurred by our subsidiaries. In the event of one or
more highly leveraged transactions in which we incurred secured indebtedness,
however, these provisions would require the debentures to be secured equally and
ratably with such indebtedness, subject to the exceptions described above.
Events of Default
The indenture provides that an Event of Default means that one or more of the
following events has occurred and is continuing with respect to senior debt
securities of a particular series outstanding under the indenture, including the
debentures:
failure for 30 business
days to pay interest on the senior debt securities of that series when due;
failure to pay principal of
(or premium, if any, on) the senior debt securities of that series when due
(whether at maturity, upon redemption, by declaration or otherwise) or to
make any sinking or analogous fund payment with respect to that series
unless caused solely by a wire transfer malfunction or similar problem
outside our control;
failure to observe or
perform any other covenant of that series for 60 days after written notice
with respect thereto; or
certain events relating to bankruptcy, insolvency or
reorganization.
No Event of Default with respect to the
senior debt securities of a particular series necessarily constitutes an Event
of Default with respect to the senior debt securities of any other series
issued under the indenture.
If an Event of Default shall occur and be
continuing with respect to any series and if it is known to the trustee, the
trustee is required to mail to each holder of that series a notice of the
Event of Default within 90 days of such default.
Upon an Event of Default with respect to
any series, the trustee or the holders of not less than 25% in aggregate
outstanding principal amount of that series, by notice in writing to us (and
to the trustee if given by such holders), may declare the principal of all
senior debt securities of that series due and payable immediately, but the
holders of a majority in aggregate outstanding principal amount of such series
may rescind such declaration and waive the default if the default has been
cured and a sum sufficient to pay all matured installments of interest and
principal (and premium, if any) has been deposited with the trustee before any
judgment or decree for such payment has been obtained or entered.
Holders of senior debt securities may not
enforce the indenture except as provided therein. Subject to the provisions of
the indenture relating to the duties of the trustee, if an Event of Default
occurs and is continuing the trustee will be under no obligation to exercise
any of the rights or powers under the indenture at the request or direction of
any holders of the affected series, unless, among other things, the holders
shall have offered the trustee indemnity reasonably satisfactory to it.
Subject to the indemnification provisions and certain limitations contained in
the indenture, the holders of a majority in aggregate principal amount of the
senior debt securities of such series then outstanding will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee or exercising any trust or power conferred on the
trustee with respect to such series. The holders of a majority in aggregate
principal amount of the then outstanding senior debt securities of any series
affected by a default may, in certain cases, waive such default except a
default in payment of principal of, or any premium, if any, or interest on,
the debt securities of that series or a call for redemption of the debt
securities of that series.
We will be required to furnish to the
trustee annually a statement regarding our performance of certain of our
obligations under the indenture.
Discharge and Defeasance
We may discharge our obligations with
respect to any series of our senior debt securities outstanding under the
indenture, including the debentures, subject to certain exceptions, if at any
time: (1)
we deliver to the trustee for cancellation all outstanding
senior debt securities of that series and for which payment in moneys or
U.S. government
obligations has been deposited in trust by us, or (2)
all outstanding senior debt securities of that series not
previously delivered to the trustee for cancellation by us shall have
become due and payable or are to become due and payable or called for
redemption within one year and we have deposited with the trustee the
entire amount in moneys or U.S. government obligations sufficient,
without reinvestment, to pay at maturity or upon redemption the
outstanding senior debt securities, including principal (and premium, if
any) and interest due or to become due to the date of maturity or
redemption, and if we shall also pay or cause to be paid all other sums
payable thereunder with respect to that series.
Modification of the Indenture
The indenture contains provisions
permitting us, when authorized by a board resolution, and the trustee, with
the consent of the holders of not less than a majority in aggregate principal
amount of the senior debt securities of any series at the time outstanding and
affected by such modification, including the debentures, to modify the
indenture or any supplemental indenture affecting that series. However, no
such modification may:
(1)
extend the fixed maturity of any senior debt securities of any
series, reduce the principal amount thereof, reduce the rate or extend the
time of payment of interest thereon or reduce any premium payable upon the
redemption thereof, without the consent of the holder of each debt
security so affected, or (2)
reduce the aforesaid percentage of senior debt securities, the
holders of which are required to consent to any such supplemental
indenture, without the consent of the holder of each senior debt security
then outstanding and affected thereby.
CenturyTel and the trustee may execute,
without the consent of any holder of senior debt securities, including the
debentures, a supplemental indenture for certain other usual purposes,
including the following:
creating a new series of senior debt securities;
evidencing the assumption by any successor to CenturyTel of our
obligations under the indenture;
adding covenants to the indenture for the protection of the
holders of senior debt securities;
curing any ambiguity or inconsistency in the indenture, or
making other provisions as shall not adversely affect the interests of the
holders of the senior debt securities of any series; or
changing or eliminating any provisions of the indenture
provided that there is no outstanding senior debt security of any series
created prior to such change that benefits therefrom.
Calculations in Respect of Debentures
We are responsible for making all
calculations called for under the debentures. These calculations include, but
are not limited to, determinations of the market prices of our common stock
and accrued interest and contingent interest payable on the debentures. We
will make all these calculations in good faith and, absent manifest error, our
calculations will be final and binding on holders of debentures. We will
provide a schedule of our calculations to the trustee, and the trustee is
entitled to rely upon the accuracy of our calculations without independent
verification. The trustee will forward our calculations to any holder of
debentures upon the request of that holder.
Governing Law
The indenture and the debentures are
governed by, and construed in accordance with, the laws of the State of
Louisiana.
Form, Registration and Transfer
The debentures were issued in fully
registered form. The trustee is the registrar of the debentures. No service
charge will be made for any registration of transfer or exchange of
debentures, or issue of new debentures in the event of a partial redemption,
but we may generally require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Payment and Paying Agents
Payment of principal of and interest on
the debentures will be made in U.S. dollars at the principal office of our
paying agent or, at our option, by check in U.S. dollars mailed or delivered
to the person in whose name such debenture is registered. Subject to certain
exceptions provided for in the indenture, payment of any installment of
interest on the debentures will be made to the person in whose name such
debenture is registered at the close of business on the record date
established under the indenture for the payment of interest.
The trustee has been designated as our
sole paying agent and 1500 North 18th Street,
Monroe, Louisiana, has been
designated as the agents office for purposes of payments with respect to the
debentures. We may at any time designate additional paying agents or rescind
the designation of any paying agents or approve a change in the office through
which any paying agent acts, except that we will be required to maintain a
paying agent in the Borough of Manhattan, City and State of New York, or
Monroe, Louisiana.
Any money set aside by us for the payment
of principal of or interest on any debenture that remains unclaimed two years
after such payment has become due and payable will be repaid to us on May 31
following the expiration of the two-year period and the holder of the
debenture may thereafter look only to us for payment thereof.
Replacement of Debentures
We will replace any debenture that becomes
mutilated, destroyed, lost or stolen at the expense of the holder. The holder
should deliver the debenture or satisfactory evidence of the destruction, loss
or theft thereof to us and the trustee. An indemnity satisfactory to us and
the trustee may be required before a replacement security will be issued.
Concerning the Trustee
The trustee, prior to the occurrence of an
Event of Default, undertakes to perform only such duties as are specifically
set forth in the indenture and, after the occurrence of an Event of Default,
shall exercise the same degree of care as a prudent person would exercise in
the conduct of such persons own affairs. Subject to such provision, the
trustee is not required to exercise any of the rights or powers vested in it
by the indenture at the request, order or direction of any debenture holders,
unless offered reasonable security or indemnity by such holders against the
costs, expenses and liabilities which might be incurred thereby. The trustee
is not required to expend or risk its own funds or incur personal financial
liability in the performance of its duties if the trustee reasonably believes
that repayment of such funds or liability or adequate indemnity is not
reasonably assured to it. We will pay the trustee reasonable compensation and
reimburse it for reasonable expenses incurred in accordance with the
indenture.
The trustee may resign with respect to the
debentures and a successor trustee may be appointed to act with respect to the
debentures.
Regions Bank is trustee under the
indenture relating to our Series A, B, C, D, E, F, G, H, I, J, K and L
senior debt securities. Regions Bank also serves as trustee for one of our
employee benefit plans and provides revolving credit and other traditional
banking services to CenturyTel.
Book-Entry; Delivery and Form; Global
Debentures
As of the date of this prospectus, the
debentures are represented by two, permanent global debentures in definitive,
fully-registered form without interest coupons. The global debentures are held
by the trustee as custodian for DTC and registered in the name of a nominee of
DTC in New York, New York for the accounts of participants in DTC.
Except in the limited circumstances
described below, holders of debentures represented by interests in the global
debentures will not be entitled to receive debentures in definitive form.
DTC has advised us as follows: DTC is a
limited purpose trust company organized under the New York Banking law, a
banking organization within the meaning of the New York Banking Law, a
member of the Federal Reserve System, and a clearing corporation within the
meaning of the New York Uniform Commercial Code and a clearing agency
registered pursuant to the provisions of Section 17A of the Exchange Act. DTC
was created to hold securities of institutions that have accounts with DTC
(which we refer to as participants) and to facilitate the clearance and
settlement of securities transactions among its participants in such
securities through electronic bonk-entry changes in accounts of the
participants, thereby eliminating the need for physical movement of securities
certificates. DTCs participants include securities brokers and dealers (which
may include the initial purchasers), banks, trust companies, clearing
corporations and certain other organizations. Access to DTCs book-entry
system is also available to others such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship with a
participant, whether directly or indirectly.
Upon the issuance of the global
debentures, DTC credited, on its book-entry registration and transfer system,
the respective principal amount of the individual beneficial interests
represented by the global debentures to the accounts of participants. The
accounts that were credited were designated by the initial purchasers of such
beneficial interests. Ownership of beneficial interests in the global
debentures was limited to participants or persons that may hold interests
through participants. Ownership of beneficial interests in the global
debentures will be shown on, and the transfer of those ownership interests
will be effected only through, records maintained by DTC (with respect to
participants interests) and such participants (with respect to the owners of
beneficial interests in the global debentures other than participants).
So long as DTC or its nominee is the
registered holder and owner of the global debentures, DTC or such nominee, as
the case may be, will be considered the sole legal owner of the debentures
represented by the global debentures for all purposes under the indenture and
the debentures. Except as set forth below, owners of beneficial interests in
the global debentures will not be entitled to receive debentures in definitive
form and will not be considered to be the owners or holders of any debentures
under the global debentures. We understand that under existing industry
practice, in the event an owner of a beneficial interest in the global
debentures desires to take any actions that DTC, as the holder of the global
debentures, is entitled to take, DTC would authorize the participant to take
such action, and that participant would authorize beneficial owners owning
through such participant to take such action or would otherwise act upon the
instructions of beneficial owners owning through them. No beneficial owner of
an interest in a global debenture will be able to transfer the interest except
in accordance with DTCs applicable procedures, in addition to any provided
for under the indenture.
Payments of the principal of, premium, if
any, and interest and liquidated damages, if any, on the debentures
represented by the global debentures registered in the name of and held by DTC
or its nominee will be made to DTC or its nominee, as the case may be, as the
registered owner and holder of the global debentures.
We expect that DTC or its nominee, upon
receipt of any payment of principal, premium, if any, or interest or
additional interest, if any, in respect of the global debentures, will credit
participants accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of the global
debentures as shown on the records of DTC or its nominee. We also expect that
payments by participants to owners of beneficial interests in the global
debentures held through such participants will be governed by standing
instructions and customary practices as is now the case with securities held
for accounts of customers registered in the names of nominees for such
customers. Such payments, however, will be the responsibility of such
participants and indirect participants, and neither we, the trustee nor any
paying agent will have any responsibility or liability for any aspect of the
records relating to, or payments made on account of, beneficial ownership
interests in the global debentures or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests or for
any other aspect of the relationship between DTC and its participants or the
relationship between such participants and the owners of beneficial interests
in the global debentures.
Unless and until it is exchanged in whole
or in part for debentures in definitive form, the global debentures may not be
transferred except as a whole by DTC to a nominee of DTC or by a nominee of
DTC to DTC or another nominee of DTC.
Transfers between participants in DTC will
be effected in the ordinary way in accordance with DTC rules and will be
settled in same-day funds.
We expect that DTC will take any action
permitted to be taken by a holder of debentures (including the presentation of
debentures for exchange as described below) only at the direction of one or
more participants to whose account the DTC interests in the global debentures
is credited and only in respect of such portion of the aggregate principal
amount of the debentures as to which such participant or participants has or
have given such direction. However, if there is an Event of Default under the
debentures, DTC will exchange the global debentures for debentures in
definitive form, which it will distribute to its participants.
Although we expect that DTC will agree to
the foregoing procedures in order to facilitate transfers of interests in the
global debentures among participants of DTC, DTC is under no obligation to
perform or continue to perform such procedures, and such procedures may be
discontinued at any time. Neither we nor the trustee will have any
responsibility for the performance by DTC or its participants or indirect
participants of its respective obligations under the rules and procedures
governing its operations.
If DTC is at any time unwilling to
continue as a depositary for the global debentures and a successor depositary
is not appointed by us within 90 days, we will issue debentures in fully
registered, definitive form in exchange for the global debentures.
Registration Rights
We entered into a registration rights
agreement with the initial purchasers of the debentures. If you sell the
debentures or shares of common stock issued upon conversion of the debentures
under the shelf registration statement of which this prospectus forms a part,
you generally will be required to be named as a selling securityholder in this
prospectus, deliver this prospectus to purchasers, be subject to certain civil
liability provisions under the Securities Act in connection with such sales
and be bound by applicable provisions of the registration rights agreement,
including certain indemnification provisions. The following summary of
the registration rights agreement does not purport to be complete, and is
subject to, and is qualified in its entirety by reference to, all of the
provisions of the registration rights agreement, which we have filed with the
SEC as an exhibit to the shelf registration statement.
In the registration rights agreement, we
agreed for the benefit of the holders of debentures and shares of common stock
issuable upon conversion of the debentures that we will, subject to certain
rights to suspend use of this prospectus, use our reasonable best efforts to
keep the shelf registration statement effective until the earliest of the time
when the debentures covered by the shelf registration statement may be sold
pursuant to Rule 144 under the Securities Act or the date when all of the
debentures and the shares of our common stock issuable upon conversion of the
debentures registered under the shelf registration statement have been
disposed of in accordance with such registration statement or Rule 144.
We will pay cash liquidated damages to
holders of the debentures or holders of common stock issued upon conversion of
the debentures, subject to certain exceptions, if the shelf registration
statement ceases to be effective or usable (subject to certain exceptions, a
registration default) from and including the date on which any such
registration default shall occur to but excluding the date on which any
registration default has been cured.
Liquidated damages will accrue on the
applicable principal amount of the debentures that remain subject to transfer
restrictions under the Securities Act (restricted securities) and the
applicable conversion price of shares of common stock issuable upon conversion
of restricted securities at the rate of 0.25% per annum for the first 90-day
period immediately following the occurrence of any registration default (and
the rate will increase by an additional 0.25% per annum with respect to each
subsequent 90-day period), until such registration default has been cured, up
to a maximum rate of 0.50% per annum. We will pay any liquidated damages on
regular interest payment dates. The liquidated damages will be in addition to
any interest payable from time to time with respect to the debentures.
We will be permitted to suspend the
effectiveness of the prospectus and the shelf registration statement during
specified periods in specified circumstances, including circumstances relating
to pending corporate developments or public filings with the SEC. If the
suspension exceeds 45 days in any consecutive three-month period or 90 days in
any consecutive 12-month period, we will be obligated to pay liquidated
damages as described above.
All references in this prospectus, in any
context, to any payment of principal, purchase prices in connection with a
purchase of debentures, and interest or any other amount payable on or with
respect to any of the debentures are deemed to include payment of any
liquidated damages pursuant to the registration rights agreement.
The following summary does not purport to
be complete and is subject to, and is qualified in its entirety by reference
to, our articles of incorporation and our bylaws, which are both filed as
exhibits to the shelf registration statement of which this prospectus forms a
part.
Our articles of incorporation authorize us
to issue 350,000,000 shares of common stock, $1.00 par value per share. As of
October 8 , 2002, 142,042,818 shares of common stock were outstanding. The common stock is listed for
trading on the New York Stock Exchange.
General
Voting rights.
Under our articles of incorporation, each share of common stock that has been
beneficially owned by the same person or entity continuously since May 30,
1987 generally entitles the holder to ten votes on all matters duly submitted
to a vote of shareholders. Otherwise, each share entitles the holder thereof
to one vote per share. Accordingly, each share issued in connection with the
conversion of the debentures will entitle the holder to one vote, and, subject
to limited exceptions, each other share of common stock issued by us in the
future will entitle the holder to one vote.
Holders of our 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. Our board of directors is divided
into three classes of directors, with each class serving three-year terms.
Each class is required to be as nearly equal in number as possible.
As of
March 20, 2002, Regions Bank,
the trustee for one of our employee benefit plans, was the record holder of
common stock having approximately 28.1% of the total voting power of all
classes of our capital stock. The trustee votes these shares in accordance
with the instructions of our current and former employees. As of March 20,
2002, the holders of our ten-vote shares held approximately 43.5% of our total
voting power.
Dividends.
Holders of common stock are entitled to receive dividends when, as and if
declared by our board of directors, out of funds legally available therefor,
subject to the preferences applicable to any outstanding preferred stock. Our
ability to pay dividends depends primarily upon the ability of our
subsidiaries to pay dividends or otherwise transfer funds to us. Certain of
our subsidiaries loan agreements contain various restrictions on the transfer
of funds to us, including certain provisions that restrict the amount of
dividends that may be paid to us. At December 31, 2001, the amount of retained
earnings of our subsidiaries not subject to dividend restrictions was
approximately $1.8 billion.
Other rights and provisions. In the event we liquidate, dissolve or wind up our affairs, holders
of common stock are entitled to receive ratably all of our assets remaining
after satisfying the preferences of our creditors and the holders of any
outstanding preferred stock. Our common stock is not redeemable and has no
subscription, conversion or preemptive rights. All of our outstanding shares
of common stock have been fully paid and are non-assessable.
Preference Share Purchase Rights
We have adopted a Rights Agreement that
provides for the issuance of one preference share purchase right for each
outstanding share of common stock. If anyone acquires 15% or more of our
outstanding common stock (which we refer to as an Acquiring Person), each
holder of a right, other than the Acquiring Person, will be entitled to
receive upon exercise of each right additional shares of our common stock
having a current market value of two times the exercise price of $135. In
addition, if we are acquired in a merger or other business combination or 50%
or more of our assets or earning power is sold after there is an Acquiring
Person, each holder of a right will be entitled to buy, at the exercise price,
common stock of the acquirer having a current market value of two times the
exercise price.
At any time before there is an Acquiring
Person, we can redeem the rights in whole, but not in part, for $.01 per
right, or may amend the Rights Agreement in any way without the consent of the
holders of the rights. Prior to an Acquiring Person acquiring 50% or more of
our outstanding common stock, we may exchange the rights, other than rights
held by the Acquiring Person, for common stock at an exchange ratio specified
in the Rights Agreement.
Until a right is exercised, the holder
thereof, as such, will have no rights as a shareholder. There shall not be any
adjustment to the conversion rate of the debentures as a result of the
issuance or redemption of the rights. The rights will expire on November 1,
2006, unless we extend this date or redeem or exchange the rights.
The complete terms of the rights are
contained in our Rights Agreement, as amended. You should refer to our
registration statement relating to our rights, as amended and restated on Form
8-A/A, which is also incorporated by reference herein.
Certain Provisions Affecting Takeovers
Our articles of incorporation and bylaws
contain certain provisions that are intended to enhance the likelihood of
continuity and stability in the composition of our board of directors and that
may have the effect of delaying, deferring or preventing a future takeover or
change in control of CenturyTel unless the takeover or change of control is
approved by our board of directors. Such provisions may also render more
difficult the removal of our directors or officers. Certain of our agreements
and certain provisions of applicable law may have similar effects.
Staggered board.
Under our articles of incorporation, our board of directors is divided into
three classes serving staggered three-year terms. Under our articles,
directors can be removed from office only for cause and generally only by the
affirmative vote of the holders of a majority of the voting power of all
shareholders.
Limits on shareholder actions. Our articles provide that shareholder action may be taken only at
an annual or special meeting of shareholders, and may not be taken by written
consent of the shareholders. This provision prevents consent solicitations by
persons desiring to acquire CenturyTel or change the composition of our board
of directors. In addition, our articles provide that shareholders may call a
special meeting of shareholders only if they hold at least a majority of our
total voting power.
Fair price provisions.
Our articles contain provisions designed to provide safeguards for our
shareholders when certain current or former beneficial holders of our stock
(referred to as related persons) attempt to effect a business combination
with us. In general, subject to various exceptions, a business combination
between CenturyTel and a related person must be approved by:
a majority of our directors
a majority of our continuing directors (as defined in our
articles)
80% of the total voting power of all shareholders, and
two-thirds of the total voting power of shareholders, other
than the related person, present or represented at the shareholders
meeting, voting as a separate group.
Evaluation of tender offers. Our board of directors is required by our articles, and expressly
permitted by Louisiana law, to consider various factors when evaluating a
business combination, tender or exchange offer, or a proposal by another
person to make a tender or exchange offer, including the social and economic
effects of the transaction on CenturyTel and our subsidiaries as well as on
our respective employees, customers, creditors, and other elements of the
communities in which we operate or are located.
Advance Notice.
Our bylaws establish an advance notice procedure with regard to the
nomination, other than by or at the direction of our board of directors, of
candidates for election as directors and with regard to other matters to be
brought before a meeting of our shareholders. In general, notice must be
received by us not more than 180 days and not less than 90 days prior to the
anniversary date of the immediately preceding annual meeting of shareholders
(or, in the event of a special meeting of shareholders or an annual meeting
scheduled to be held either 30 days earlier or later than such anniversary
date, such notice is received by us within 15 days of the earlier of the date
on which we mail notice of such meeting to shareholders or publicly disclose
the meeting date), and must contain certain specified information concerning,
among other things, the person to be nominated or the matter to be brought
before the meeting and concerning the shareholder submitting the proposal.
Amendment of our Articles and Bylaws. Various provisions of our articles, including the classified board
provisions, fair price provisions and those provisions limiting the ability of
shareholders to act by written consent, may not be amended except upon the
affirmative vote of both:
80% of the total voting power of all shareholders
two-thirds of the total voting power of shareholders, other
than a related person, present or represented at a shareholders meeting,
voting as a separate group.
Our bylaws may be adopted, amended, or
repealed and new bylaws may be adopted by either:
a majority of our directors and a majority of our continuing
directors, voting as a separate group, or
the holders of at least 80% of the total voting power of all
shareholders and two-thirds of the total voting power of shareholders,
other than the related person, present or duly represented at a
shareholders meeting, voting as a separate group.
As Indicated above, as of March 20, 2002, 43.5% of our total voting power is
controlled by holders of our ten-vote shares.
Agreements.
In connection with agreeing on March 19, 2002 to purchase our wireless
business, Alltel Corporation agreed on such date to refrain for one year from
taking various actions to acquire control of us. Our Rights Agreement,
discussed above under Preference Share Purchase Rights, could also have
the effect of delaying, deferring or preventing a future takeover or change of
control of CenturyTel.
Other.
For additional information about these and other provisions of our
organizational documents and applicable laws that could have an effect of
delaying, deferring, discouraging or preventing a change in control of
CenturyTel, you should refer to our registration statement relating to our
common stock, as amended and restated on Form 8-A/A, which is incorporated by
reference herein.
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the material United States federal income tax
consequences of the purchase, ownership and disposition of the debentures and
the shares of our common stock into which the debentures may be converted.
This summary deals only with debentures and shares of our common stock held as
capital assets for United States federal income tax purposes by U.S. Holders.
For purposes of this
discussion, a U.S. Holder is a beneficial owner of a debenture or share of
our common stock that for United States federal income tax purposes is: (1)
a citizen or resident of the United States, (2)
a corporation (or an entity treated as a corporation) created
or organized in or under the laws of the United States, any state thereof or
the District of Columbia, (3)
an estate, the income of which is subject to United States
federal income taxation regardless of its source, or (4)
a trust, if a
United States court is able
to exercise primary supervision over the administration of the trust and one
or more United States persons have the authority to control all substantial
decisions of the trust.
If a partnership (including for this purpose any entity treated as a
partnership for United States federal income tax purposes) is a beneficial
owner of debentures or shares of our common stock, the treatment of a partner
in the partnership will generally depend upon the status of the partner and
upon the activities of the partnership. A holder of debentures or shares of
our common stock that is a partnership, and the partners in such partnership,
should consult their tax advisors about the United States federal income tax
consequences of holding and disposing of debentures and shares of our common
stock.
Unless otherwise stated, this summary does not deal with special classes of
holders, such as:
banks
thrifts
real
estate investment trusts
regulated investment companies
insurance companies
dealers in securities or currencies
tax-exempt investors
holders that hold the debentures as part of a hedge, straddle,
synthetic security or other integrated transaction for United States
federal income tax purposes
holders whose functional currency is not the U.S. dollar and
holders that are not U.S. Holders.
Further, this summary does
not include any description of any alternative minimum tax consequences,
United States federal estate or gift tax laws or the tax laws of any state,
local or foreign government that may be applicable to the debentures or the
shares of our common stock.
This summary is based on the Internal Revenue Code of 1986, as amended, the
Treasury regulations promulgated thereunder and administrative and judicial
interpretations thereof, all as of the date hereof, and all of which are
subject to change and differing interpretations, possibly on a retroactive
basis. No statutory or judicial authority directly addresses the treatment of
the debentures or instruments similar to the debentures for United States
federal income tax purposes. The Internal Revenue Service recently issued Rev.
Rul. 2002-31, which addresses certain United States federal income tax
consequences of debt instruments that have terms similar to the debentures.
The discussion in this section of the prospectus is based, in part, on the
conclusions reached by the IRS in Rev. Rul. 2002-31. However, those
conclusions were based on a particular set of facts and assumptions. There can
be no assurance that the IRS will not take the position that the conclusions
reached in Rev. Rul. 2002-31 do not apply to the debentures, and successfully
challenge one or more of the conclusions described in this prospectus.
We urge prospective investors to consult their tax advisors with respect to
the tax consequences to them of the purchase, ownership and disposition of
debentures and shares of our common stock in light of their own particular
circumstances, including the tax consequences under state, local, foreign and
other tax laws and the possible effects of changes in United States federal
and other tax laws.
Classification of the Debentures
Pursuant to the terms of the supplemental indenture, each holder, by
purchasing debentures, agreed to treat the debentures for United States
federal income tax purposes as indebtedness subject to the regulations
governing contingent payment debt instruments, and to be bound by our
application of those regulations to the debentures, including our
determination of the rate at which interest will be deemed to accrue, as
original issue discount, on the debentures. The remainder of this discussion
assumes that the debentures will be treated in accordance with that agreement
and our determinations. However, the proper application of the regulations
governing contingent payment debt instruments to a holder of a debenture is
uncertain in a number of respects, and no assurance can be given that the IRS
will not successfully assert that the debentures should be treated
differently. Such treatment could affect the amount, timing and character of
income, gain or loss in respect of an investment in the debentures. In
particular, it might be determined that a holder should have accrued interest
income at a lower rate, should not have recognized income or gain upon a
conversion of its debentures, or should have recognized capital gain upon a
taxable disposition of its debentures.
Original Issue Discount
Under the rules governing contingent payment debt instruments, a holder will
generally be required to accrue interest income on the debentures as original
issue discount, in the amounts described below, regardless of whether the
holder uses the cash or accrual method of tax accounting. Accordingly, holders
will likely be required to include interest in taxable income in each year in
excess of the accruals on the debentures for non-tax purposes and in excess of
any stated or contingent interest payments actually received in that year.
A holder
must accrue on its debentures an amount of original
issue discount as ordinary income for United States federal income
tax purposes, for each accrual period prior to and including the maturity date
of the debentures, that equals:
the
product of (i) the adjusted issue price (as defined below) of the debentures
as of the beginning of the accrual period and (ii) the comparable yield to
maturity (as defined below) of the debentures, adjusted for the length of the
accrual period,
divided by the number of days in the accrual period, and
multiplied by the number of days during the accrual period that
the holder held the debentures.
The issue price of a debenture is the first price at which a substantial
amount of the debentures is sold to the public, excluding bond houses, brokers
or similar persons or organizations acting in the capacity of underwriters,
placement agents or wholesalers. The adjusted issue price of a debenture is
its issue price, increased by any original issue discount previously accrued,
determined without regard to any adjustments to interest accruals described
below, and decreased by the projected amounts of any payments with respect to
the debentures.
Under the rules
governing contingent payment debt instruments, we are required to establish
the comparable yield for the debentures. We have determined that the
comparable yield for the debentures is the annual yield we would incur, as of
the initial issue date, on a fixed-rate, nonconvertible debt security with no
contingent payments, but with terms and conditions otherwise comparable to
those of the debentures, including the level of subordination, term, timing of
payments and general market conditions, but excluding any adjustments for
liquidity or the risk of any contingencies with respect to the debentures.
Accordingly, we have determined the comparable yield to be 8.97%, compounded
semi-annually.
We are required to provide
to holders, solely for United States federal income tax purposes, a schedule
of the projected amounts of payments on the debentures. This schedule must
produce the comparable yield. Our determination of the projected payment
schedule for the debentures includes estimates for payments of contingent
interest and an estimate for a payment at maturity taking into account the
conversion feature. Holders may obtain the projected payment schedule by
submitting a written request at the address set forth in Where You Can Find
More Information.
THE COMPARABLE YIELD AND
THE SCHEDULE OF PROJECTED PAYMENTS ARE NOT DETERMINED FOR ANY PURPOSE OTHER
THAN FOR THE DETERMINATION OF A HOLDERS ORIGINAL ISSUE DISCOUNT ACCRUALS AND
ADJUSTMENTS THEREOF IN RESPECT OF THE DEBENTURES FOR UNITED STATES FEDERAL
INCOME TAX PURPOSES, AND DO NOT CONSTITUTE A PROJECTION OR REPRESENTATION
REGARDING THE ACTUAL AMOUNTS PAYABLE TO HOLDERS OF THE DEBENTURES.
Adjustments to Original Issue Discount
Accruals on the Debentures
If a holder receives actual payments with respect to the debentures in a
taxable year that in the aggregate exceeded the total amount of projected
payments for that taxable year, the holder will incur a net positive
adjustment equal to the amount of such excess. The holder will treat the net
positive adjustment as additional interest income for the taxable year. For
this purpose, the payments in a taxable year include the fair market value of
property received in that year.
If a holder receives actual
payments with respect to the debentures in a taxable year that in the
aggregate were less than the amount of the projected payments for that taxable
year, the holder will incur a net negative adjustment equal to the amount of
such deficit. This adjustment will (a) reduce the holders interest income on
the debentures for that taxable year, and (b) to the extent of any excess
after the application of (a), give rise to an ordinary loss to the extent of
the holders income on the debentures during prior taxable years, reduced to
the extent such interest was offset by prior net negative adjustments.
Sale, Exchange, Conversion or Redemption
Generally, the sale or exchange of a debenture, or the redemption of a
debenture for cash, will result in taxable gain or loss to a holder. In
addition, as described above, our calculation of the comparable yield and the
schedule of projected payments for the debentures includes the receipt of
common stock upon conversion of a debenture as a contingent payment with
respect to the debentures. Accordingly, we intend to treat the receipt of our
common stock by a holder upon the conversion of a debenture, or upon the
exercise by a holder of its right to require us to purchase debentures where
we elect to pay the purchase price in shares of our common stock, as a
contingent payment. Under this treatment, such a conversion also will result
in taxable gain or loss to the holder. As described above, holders are
generally bound by our determination of the comparable yield and the schedule
of projected payments.
The amount of gain or loss on a taxable sale, exchange, conversion or
redemption will equal the difference between (a) the amount of cash plus the
fair market value of any other property received by the holder, including the
fair market value of any common stock received, and (b) the holders adjusted
tax basis in the debentures. A holders adjusted tax basis in a debenture on
any date generally will equal the holders original purchase price for the
debentures, increased by any original issue discount previously accrued by the
holder (determined without regard to any positive or negative adjustments to
interest accruals described above), and decreased by the amount of any
projected payments on the debentures projected to have been made through that
date. Gain recognized upon a sale, exchange, conversion or redemption of a
debenture generally will be treated as ordinary interest income; any loss will
be ordinary loss to the extent of interest previously included in income, and,
thereafter, as capital loss (which will be long-term if the debenture is held
for more than one year). The deductibility of net capital losses is subject to
limitations.
A holders tax basis in shares of our common stock received upon a conversion
of a debenture, or upon a holders exercise of its right to require us to
purchase debentures where we elect to pay the purchase price in shares of our
common stock, will equal the then current fair market value of such common
stock. The holders holding period for the shares of our common stock received
will commence on the day after the date of conversion or purchase.
Purchasers of Debentures at a Price other
than the Adjusted Issue Price
A holder that purchases debentures in the secondary market for an amount that
differs from the adjusted issue price of the debentures at the time of
purchase will be required to accrue interest income on the debentures in the
same manner as a holder that purchased debentures in the initial offering.
A holder must also reasonably allocate any difference between the adjusted
issue price and the holders tax basis in the debentures to daily portions of
interest or projected payments over the remaining term of the debentures.
If the purchase price of the debentures is greater than the adjusted issue
price, the amount of the difference allocated to a daily portion of interest
or to a projected payment is treated as a negative adjustment on the
day the daily portion accrues or the payment is made, respectively. If
the purchase price of the debentures is less than the adjusted issue price,
the amount of the difference allocated to a daily portion of interest or to a
projected payment is treated as a positive adjustment on the day the daily
portion accrues or the payment is made, respectively. Any such negative or
positive adjustment will decrease or increase, respectively, the holders
adjusted tax basis in the debentures.
Certain holders will
receive Forms 1099-OID that report interest accruals on their debentures.
Those forms will not reflect the effect of any positive or negative
adjustments resulting from the holders purchase of debentures in the
secondary market at a price different from adjusted issue price of the
debentures on the date of purchase. Holders are urged to consult their
tax advisors as to whether, and how, such adjustments should be taken into
account in determining their interest accruals with regard to the debentures.
Distributions on Our Common Stock
Distributions on shares of our common stock that are paid out of our current
or accumulated earnings and profits, as defined for United States federal
income tax purposes, generally will constitute dividends and be includible in
income by a holder and taxable as ordinary income when actually or
constructively received. If a distribution exceeds our current and accumulated
earnings and profits, the excess will be treated first as a tax-free return of
the holders investment, up to the holders basis in the shares of our common
stock. Any remaining excess will be treated as capital gain.
Constructive Dividends
If at any time we make a distribution of property to our stockholders that
would be taxable to the stockholders as a dividend for United States federal
income tax purposes and, in accordance with the anti-dilution provisions of
the debentures, the conversion rate of the debentures is increased, such
increase may be deemed to be the payment of a taxable dividend to holders of
the debentures.
For example, an increase in
the conversion rate in the event of distributions of our evidences of
indebtedness or our assets or an increase in the event of an extraordinary
cash dividend may result in deemed dividend treatment to holders of the
debentures, but an increase in the event of stock dividends or the
distribution of rights to subscribe for our common stock generally will not.
Backup Withholding and Information
Reporting
Payments of interest (including original issue discount) or dividends made by
us on, or the proceeds of the sale or other disposition of, the debentures or
shares of our common stock generally will be subject to information reporting
and may be subject to United States federal backup withholding tax at the rate
of 30% (subject to phased-in reductions). Backup withholding will apply if the
recipient of such payment fails to supply an accurate taxpayer identification
number or otherwise fails to comply with applicable United States information
reporting or certification requirements. Any amount withheld from a payment to
a holder under the backup withholding rules generally is allowable as a credit
against the holders United States federal income tax, provided that the
required information is furnished to the IRS.
Liquidated Damages
Holders should consult their tax advisors about the United States federal
income tax consequences to them of the possible receipt of liquidated damages
upon a registration default described under Description of Debentures
Registration Rights.
THE PROPER TAX TREATMENT OF
A HOLDER OF THE DEBENTURES IS HIGHLY UNCERTAIN IN A NUMBER OF RESPECTS.
HOLDERS SHOULD CONSULT THEIR TAX ADVISORS REGARDING THE UNITED STATES FEDERAL,
STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF AN INVESTMENT IN THE DEBENTURES
AND WHETHER AN INVESTMENT IN THE DEBENTURES IS ADVISABLE IN LIGHT OF THE
AGREED UPON TAX TREATMENT AND THE HOLDERS PARTICULAR TAX SITUATION.
The debentures were originally issued by us and sold by Banc of America
Securities LLC, J.P. Morgan Securities Inc. and Wachovia Securities, Inc. (the
initial purchasers) in transactions exempt from the registration
requirements of the Securities Act to persons reasonably believed by the
initial purchasers to be qualified institutional buyers as defined by Rule
144A under the Securities Act. The selling securityholders may from time
to time offer and sell pursuant to this prospectus any or all of the
debentures listed below and the shares of common stock issued upon conversion
of such debentures. When we refer to the selling securityholders in
this prospectus, we mean those persons listed in the table below, as well as
the assignees, transferees, successors and others who later hold any of the
selling securityholders interests in restricted securities.
The table below sets forth
the name of each selling securityholder, the principal amount of debentures
that each selling securityholder may offer pursuant to this prospectus and the
number of shares of common stock into which such debentures are convertible.
Unless set forth below, to our knowledge, none of the selling securityholders
has, or within the past three years has had, any material relationship with us
or any of our predecessors or affiliates or beneficially owns in excess of 1%
of our outstanding common stock.
The principal amounts of
the debentures provided in the table below is based on information provided to
us by each of the selling securityholders through
, 2002, and the percentages are based on $165 million aggregate principal
amount of debentures outstanding. The number of shares of common stock
that may be sold is based on the current conversion rate of 24.7188 shares of
common stock per $1,000 principal amount of debentures.
Since the date on which
each selling securityholder provided the information below, such selling
securityholder may have sold, transferred or otherwise disposed of all or a
portion or its debentures in a transaction exempt from the registration
requirements of the Securities Act. Information concerning the selling
securityholders may change from time to time. If we are informed of any
changed information, it will be set forth in supplements to this prospectus to
the extent required. In addition, the conversion ratio, and therefore
the number of shares of our common stock issuable upon conversion of the
debentures, is subject to adjustment under the circumstances described in this
prospectus. Accordingly, the number of shares of common stock issuable
upon conversion of the debentures may increase or decrease.
The selling securityholders
may from time to time offer and sell any or all of the securities under this
prospectus. Because the selling securityholders are not obligated to
sell the debentures or shares of common stock issuable upon conversion of the
debentures, we cannot estimate the amount of debentures or common stock that
the selling securityholders will hold upon consummation of any such sales.
Name
Aggregate
Principal Amount of
Debentures that May be Sold
Percentage of
Debentures Outstanding
Number of Shares of Common Stock
Covered by this
Prospectus(1)
Unnamed holders of debentures or any
future transferees, pledges, donees or successors of any such unnamed
holders (2)
$165,000,000
100%
4,078,602
Total:
$165,000,000
100%
4,078,602
______________________
* Less than 1%
(1)
Assumes conversion of all of
the holders debentures at a conversion rate of $40.455 par share of common
stock. However, this conversion rate will be subject to adjustment as
described under Description of Debentures Conversion Rights
-
Adjustments to Conversion Rate. As a result, the amount of common stock issuable upon conversion of the debentures may increase or decrease in the
future. (2)
Specific information about
selling securityholders will be set forth in prospectus supplements or
amendments to this prospectus, if required.
The selling securityholders are the only
persons authorized to offer and sell the securities covered by this
prospectus. We will not receive any of the proceeds from the offering of the
debentures or the common stock by the selling securityholders. In connection
with the initial offering of the debentures, we entered into the registration
rights agreement described under Description of Debentures Registration
Rights. Securities may only be offered or sold under this prospectus pursuant
to the terms of the registration rights agreement. However, selling securityholders may resell all or a portion of the securities in open market
transactions in reliance upon Rule 144 or 144A under the Securities Act,
provided they meet the criteria and conform to the requirements of one of
these rules. We are registering the debentures and shares of our common stock
covered by this prospectus to permit holders to conduct public secondary
trading of these securities from time to time after the date of this
prospectus. We have agreed, among other things, to bear all expenses, other
than underwriting discounts, expenses of each holders counsel, selling
commissions and transfer taxes, in connection with the registration and sale
of the debentures and shares of common stock covered by this prospectus.
We have
been advised by the selling securityholders that the selling securityholders
may sell all or a portion of the
securities offered hereby from time to time:
- directly; or
- through
underwriters, broker-dealers or agents, who may receive compensation in
the form of discounts, commissions or concessions from the selling
securityholders or from the purchasers of the securities for whom they may
act as agent.
The debentures and the shares of our
common stock may be sold from time to time in one or more transactions at:
-
fixed prices, which may be
changed;
-
prevailing market prices at
the time of sale;
These prices will be determined by the
holders of the securities or by agreement between these holders and
underwriters or dealers who may receive fees or commissions in connection with
the sale. The aggregate proceeds to the selling securityholders from the sale
of the securities offered by them hereby will be the purchase price of the
securities less discounts and commissions, if any.
The sales described in the preceding
paragraph may be effected in transactions:
-
on any national securities
exchange or quotation service on which the debentures or shares of our common
stock may be listed or quoted at the time of sale, including the New York
Stock Exchange in the case of our common stock;
-
in the over-the-counter market;
These transactions may include block
transactions or crosses. Crosses are transactions in which the same broker
acts as an agent on both sides of the trade.
In connection with sales of the debentures
and shares of our common stock or otherwise, the selling securityholders may
enter into hedging transactions with broker-dealers. These broker-dealers may
in turn engage in short sales of the securities in the course of hedging their
positions. The selling securityholders may also sell the securities short and
deliver the securities to close out short positions, or loan or pledge the
securities to broker-dealers that in turn may sell the securities.
To our knowledge, there are currently no
plans, arrangements or understandings between any selling securityholders and
any underwriter, broker-dealer or agent regarding the sale of the debentures
or the shares of our common stock covered by this prospectus. Selling
securityholders may sell none, some or all of the securities covered by this
prospectus. In addition, we cannot assure you that a selling securityholder
will not sell, donate or otherwise transfer the debentures or common stock by
other means not described in this prospectus.
The outstanding shares of our common stock
are listed for trading on the New York Stock Exchange.
The selling securityholders and any
broker-dealers, agents or underwriters that participate with the selling
securityholders in the distribution of the debentures or our common stock may
be deemed to be underwriters within the meaning of the Securities Act. In
this case, any commissions received by these broker-dealers, agents or
underwriters and any profit on the resale of the debentures or our common
stock purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act. In addition, any profits realized by the
selling securityholders may be deemed to be underwriting commissions under the
Securities Act. To the extent the selling securityholders may be deemed to be
underwriters, the selling securityholders may be subject to statutory
liabilities, including, but not limited to, liabilities under Sections 11, 12
and 17 of the Securities Act and Rule 10b-5 under the Exchange Act.
The selling securityholders will be
subject to the prospectus delivery requirements of the Securities Act. At any
time a particular offer of the securities is made, we will, if reasonably
requested, prepare a revised prospectus or prospectus supplement, if required,
which discloses information required to be disclosed under the registration
rights agreement including:
-
the name of the selling
securityholders and any participating underwriters, broker-dealers or agents;
-
the aggregate amount and
type of securities being offered;
-
the offering price of the
securities and other material terms of the offering; and
-
any discounts, commissions,
concessions or other items constituting compensation from the selling
securityholders and any discounts, commissions or concessions allowed or
reallowed or paid to dealers.
The prospectus supplement or a
post-effective amendment will be filed with the SEC to reflect the disclosure
of additional information with respect to the distribution of the securities.
We have agreed to indemnify the initial
purchasers and each selling securityholder, and each selling securityholder
has agreed to indemnify us, our directors, our officers who sign the shelf
registration statement to which this prospectus relates and each person, if
any, who controls CenturyTel within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act, against specified
liabilities arising under the Securities Act, the Exchange Act or other
applicable law.
The selling securityholders and any other
person participating in such distribution will be subject to certain
provisions of the Exchange Act. The Exchange Act rules include, without
limitation, Regulation M, which may limit the timing of purchases and sales of
any of the debentures and the underlying shares of our common stock by the
selling securityholders and any such other person. In addition, Regulation M
of the Exchange Act may restrict the ability of any person engaged in the
distribution of the debentures and the underlying shares of our common stock
to engage in market-making activities with respect to the particular
debentures and the underlying shares of our common stock being distributed for
a period of up to five business days prior to the commencement of
distribution. This may affect the marketability of the debentures and the
underlying shares of our common stock and the ability of any person or entity
to engage in market-making activities with respect to the debentures and the
underlying shares of our common stock.
Under the registration rights agreement,
we are obligated to use our reasonable best efforts to keep the shelf
registration statement of which this prospectus forms a part effective until
the earlier of:
-
the time when the holders of
the debentures are able to sell all such debentures pursuant to Rule 144 under
the Securities Act; or
-
the date when all of the
debentures or the shares of our common stock issuable upon conversion of the
debentures registered under the shelf registration statement have been
disposed of in accordance with such registration statement or Rule 144.
Our obligation to keep the shelf
registration statement effective is subject to specified, permitted exceptions
set forth in the registration rights agreement. In these cases, we may
prohibit offers and sales of the debentures and shares of our common stock
pursuant to the shelf registration statement.
We may suspend the use of this prospectus
upon the occurrence or existence of certain specified events or conditions
that, in our sole judgment, make it appropriate for us to take such action.
Each selling securityholder has agreed not to trade securities from the time
the selling securityholder receives notice from us of this type of event or
condition until the selling securityholder receives a prospectus supplement or
amendment, or is advised that this prospectus may be used. See
Description of Debentures Registration Rights.
The validity of the debentures have been
passed upon for CenturyTel by Jones, Walker, Waechter, Poitevent, Carrère &
Denègre, L.L.P., New Orleans, Louisiana.
The consolidated financial statements and
related financial statement schedules of CenturyTel, Inc. and subsidiaries as
of December 31, 2001 and 2000, and for each of the years in the three-year
period ended December 31, 2001, included in CenturyTel, Inc.s current report
on Form 8-K dated March 19, 2002 and filed with the SEC on August 13, 2002,
have been incorporated by reference herein and in the Registration Statement
in reliance upon the reports of KPMG LLP, independent accountants, also
incorporated by reference herein and in the Registration Statement, and upon
the authority of said firm as experts in accounting and auditing.
The special purpose financial statements
of Verizon's Alabama Operations and Verizon's Missouri Operations as of
December 31, 2001, and for year then ended included in CenturyTel, Inc.'s
current report on Form 8-K dated August 1, 2002 filed on August 13, 2002, and
August 31, 2002 and filed with the SEC on October 8, 2002, have been
incorporated by reference herein and in the registration statement in reliance
upon the reports of Ernst & Young LLP, independent accountants, also
incorporated by reference herein and in the registration statement, and upon
the authority of such firm as experts in accounting and auditing.
4.75% Convertible Senior Debentures, Series K, due 2032
and shares of Common Stock Issuable upon Conversion of the Debentures
[CenturyTel, Inc.'s Logo Here]
$165,000,000
PROSPECTUS
October , 2002
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14.
Other Expenses of Issuance and Distribution.
The estimated fees and expenses payable by us in connection with the offering
described in this registration statement are as follows: 16,000 30,000 Item 15. 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 in connection with any action, suit or
proceeding to which he 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
acts on our behalf and he 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 conduct was unlawful. We 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. Article II,
Section 10 of our by-laws (the indemnification by-law) provides for
mandatory indemnification for our current or former directors and officers 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
entered into indemnification contracts providing contracting directors or
officers the procedural and substantive rights to indemnification currently
set forth in the indemnification by-law (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 serves as an officer or director and thereafter for so long as he is
subject to possible personal liability for actions taken in such capacities.
The indemnification contracts also provide that if we do not maintain
comparable insurance, we will hold harmless and indemnify a contracting party
to the full extent of the coverage that would otherwise have been provided for
his benefit. Item 16. Exhibits. The exhibits to
this registration statement are listed in the exhibit index, which appears
elsewhere herein and is incorporated herein by reference. (a) The undersigned
registrant hereby undertakes:
(1)
To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i)
To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii)
To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in this
registration statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the SEC pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the Calculation of Registration Fee table in
the effective registration statement;
(iii)
To include any material information with respect to the plan of
distribution not previously disclosed in this registration statement or
any material change to such information in this registration statement;
Provided, however, that paragraphs
(a)(1)(i) and (a)(1)(ii) do not apply if the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or Section
15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2)
That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment filed for such
purposes shall be deemed to be a new registration statement relating to
the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial
bona fide offering thereof.
(3)
To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering. (b) The undersigned
registrant hereby undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of CenturyTels
annual report pursuant to Section #13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof. (c) Insofar as
indemnification for liabilities arising under the Securities Act of 1933
may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the
registrants have been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the registrants of expenses incurred or paid by a director,
officer, or controlling person of the registrants in the successful
defense of any action, suit, or proceeding) is asserted by such director,
officer, or controlling person in connection with the securities being
registered, the registrants will, unless in the opinion of their counsel
the matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue. (d) The undersigned
registrant hereby undertakes to file an application for the purpose of
determining the eligibility of the trustee under subsection (a) of section
310 of the Trust Indenture Act (Act) in accordance with the rules and
regulations prescribed by the Commission under section 305(b(2) of the
Act.
SIGNATURES
Pursuant to the
requirements of the Securities Act of 1933, CenturyTel, Inc. certifies that it
has reasonable grounds to believe that it meets all of the requirements for
filing on Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Monroe, State of Louisiana, on October 9, 2002. CENTURYTEL, INC. By:
/s/ Glen F. Post,
III
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person
whose signature appears individually below constitutes and appoints Glen F.
Post III, R. Stewart Ewing, Jr. and Harvey P. Perry, or any of them, with full
power of substitution and full power to act without the other, his true and
lawful attorney-in-fact and agent to act for him in his name, place and stead,
in any and all capacities, to sign any and all amendments (including
post-effective amendments) to this registration statement and any related
registration statement filed pursuant to Rule 462(b) under the Securities Act,
and to file this registration statement, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done in order to effectuate the same as fully,
to all intents and purposes, as they or he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, may lawfully do or cause to be done by virtue hereof.
Pursuant to the
requirements of the Securities Act of 1933, this registration statement has
been signed by the following persons in the capacities and on the dates
indicated.
Signature Title Date
/s/
Glen F. Post, III
Glen F. Post, III
Chairman of the Board
of Directors and
Chief Executive Officer
(Principal Executive Officer)
October 9, 2002
/s/
R. Stewart Ewing, Jr.
R. Stewart Ewing, Jr.
Executive Vice President and
Chief Financial Officer
(Principal Financial Officer)
October 9, 2002
/s/
Neil A. Sweasy
Neil A. Sweasy
Vice President and Controller
(Principal Accounting Officer)
October 9, 2002
/s/
Harvey P. Perry
Harvey P. Perry
Director
October 9, 2002
Jim D. Reppond
Director
October 9, 2002
/s/
William R. Boles, Jr.
William R. Boles, Jr.
Director
October 9, 2002
/s/
Ernest Butler, Jr.
Ernest Butler, Jr.
Director
October 9, 2002
/s/
Calvin Czeschin
Calvin Czeschin
Director
October 9, 2002
/s/
James B. Gardner
James B. Gardner
Director
October 9, 2002
/s/
W. Bruce Hanks
W. Bruce Hanks
Director
October 9, 2002
/s/ R.
L. Hargrove, Jr.
R. L. Hargrove, Jr.
Director
October 9, 2002
/s/
Johnny Hebert
Johnny Hebert
Director
October 9, 2002
/s/
F. Earl Hogan
F. Earl Hogan
Director
October 9, 2002
/s/
C. G. Melville, Jr.
C. G. Melville, Jr.
Director
October 9, 2002
Virginia Boulet
Director
October 9, 2002
Exhibit No.
Exhibit 2.1
Asset Purchase Agreement, dated as of October 22, 2001,
between GTE Midwest Incorporated (d/b/a Verizon Midwest) and CenturyTel of
Missouri, LLC (incorporated by reference to Exhibit 2(a) of CenturyTels
Quarterly Report on Form 10-Q for the quarter ended September 30, 2001). 2.2
Asset Purchase Agreement, dated as of October 22, 2001,
between Verizon South, Inc., Contel of the South, Inc. (d/b/a Verizon
Mid-States) and CenturyTel of Alabama, LLC (incorporated by reference to Exhibit
2(b) of CenturyTels Quarterly Report on Form 10-Q for the quarter ended
September 30, 2001). 2.3
Stock Purchase Agreement, dated as of March 19, 2001, between
CenturyTel, Inc. and Alltel Communications, Inc. (incorporated by reference
to Exhibit 2.1 of CenturyTels Current Report on form 8-K filed with the SEC
on March 22, 2002). 3.1
Amended and Restated Articles of Incorporation of CenturyTel,
dated as of May 6, 1999 (incorporated by reference to Exhibit 3(i) to
CenturyTels Quarterly Report on Form 10-Q for the quarter ended June 30,
1999). 3.2
By-laws of CenturyTel as amended through November 18, 1999
(incorporated by reference to Exhibit 3(ii) of CenturyTels Annual Report on
Form 10-K for the year ended December 31, 1999). 4.1
Rights Agreement dated as of August 27, 1996 between
CenturyTel and Harris Trust and Savings Bank (successor-in-interest to
Society National Bank), as Rights Agent (incorporated by reference to
Exhibit 1 to CenturyTels Current Report on Form 8-K filed August 30, 1996),
as amended by Amendment No. 1 to Rights Agreement, dated May 25, 1999
(incorporated by reference to Exhibit 4.2(ii) to CenturyTels Current Report
on Form 8-K dated May 25, 1999) and Amendment No. 2 thereto, dated and
effective as of June 30, 2000, by and between CenturyTel and Computershare Investor Services LLC, as
rights agent (incorporated by reference to Exhibit 4.1 of CenturyTels Quarterly
Report on Form 10‑Q for the quarter ended September 30, 2000). 4.2
Indenture dated as of March 31, 1994 between CenturyTel and
Regions Bank (successor-in-interest to First American Bank & Trust of
Louisiana and Regions Bank of Louisiana), as Trustee (incorporated by
reference to Exhibit 4.1 of CenturyTels registration statement on Form S‑3,
File No. 33-52915).
4.3
Second Supplemental Indenture dated as of August 20, 2002
between CenturyTel and the Trustee designating and authorizing the terms and
conditions of the debentures that may be sold hereunder.*
4.4
Form of the debentures that may be sold hereunder (included
within Exhibit 4.3).* 4.5
Registration Rights Agreement dated as of August 26, 2002 by
and among CenturyTel, Banc of America Securities LLC, J.P. Morgan Securities
Inc. and Wachovia Securities, Inc.* 4.6
Form of common stock (incorporated by reference to Exhibit
4.3 of CenturyTels Annual Report on Form 10-K for the year ended December
31, 2000).
5.1
Opinion of Jones, Walker, Waechter, Poitevent,
Carrère & Denègre, L.L.P.*
8.1
Tax opinion of Jones, Walker, Waechter, Poitevent,
Carrère & Denègre, L.L.P.*
12.1
Statement regarding computation of ratio of earnings to fixed
charges.*
23.1
Consent of KPMG LLP.*
23.2
Consent of Ernst & Young LLP.*
23.3
Consent of Jones Walker, Waechter, Poitevent,
Carrère & Denègre, L.L.P. (included in Exhibit 5.1). 24.1
Power of Attorney with respect to directors of CenturyTel,
Inc. (included on the signature pages of this registration statement filed
on October 10, 2002). 25.1
Statement of Eligibility of Trustee on Form T-1.*
*
Filed herewith.
Exhibit 4.3
Second Supplemental Indenture
Dated
as of August 20, 2002 to Indenture dated March 31, 1994 by and between CenturyTel,
Inc. and Regions Bank, as Trustee 4.75%
Convertible Senior Debentures, Series K, due 2032
TABLE OF
CONTENTS1
Page
ARTICLE 1
4.75% CONVERTIBLE SENIOR DEBENTURES, SERIES K, DUE 2032
Section 1.01
Establishment
1
Section 1.02
Definitions
2
Section 1.03
Stated Maturity Date;
Payment of Principal and Interest; Contingent Interest
5
Section 1.04
Form; Denominations
8
Section 1.05
Global Debentures
8
Section 1.06
Paying Agent; Transfer
Agent; Place of Payment
9
Section 1.07
Restricted Debentures
Legend
9
Section 1.08
No Sinking Fund
10
ARTICLE 2
CONVERSION
Section 2.01
Conversion Privilege
10
Section 2.02
Conversion Procedures
11
Section 2.03
Fractional Shares
12
Section 2.04
Taxes on Conversion
12
Section 2.05
Company to Provide Common
Stock
12
Section 2.06
Adjustment for Change in
Capital Stock
13
Section 2.07
Adjustment for Rights
Issue
13
Section 2.08
Adjustment for Other
Distributions
14
Section 2.09
Adjustment for Self Tender
Offer
16
Section 2.10
Adjustment for Cash
Distribution
17
Section 2.11
When Adjustment May Be
Deferred
17
Section 2.12
When No Adjustment
Required
17
Section 2.13
Notice of Adjustment
18
Section 2.14
Voluntary Increase
18
Section 2.15
Notice of Certain
Transactions
18
Section 2.16
Reorganization of Company;
Special Distributions
19
Section 2.17
Company Determination
Final
19
Section 2.18
Trustee's Adjustment
Disclaimer
20
Section 2.19
Simultaneous Adjustments
20
Section 2.20
Successive Adjustments
20
ARTICLE 3
REDEMPTION AND PURCHASES
Section 3.01
Company's Right to Redeem;
Notice to Trustee
20
Section 3.02
Selection of Debentures to
Be Redeemed
20
Section 3.03
Notice of Redemption
21
Section 3.04
Effect of Notice of
Redemption
22
Section 3.05
Deposit of Redemption
Price
22
Section 3.06
Debentures Redeemed in
Part
22
Section 3.07
Purchase of Debentures by
the Company at Option of the Holder
22
Section 3.08
Purchase of Debentures by
the Company at Option of the Holder upon a Change in Control
28
Section 3.09
Effect of Purchase Notice
or Change in Control Purchase Notice
31
Section 3.10
Deposit of Purchase Price
or Change in Control Purchase Price
32
Section 3.11
Debentures Purchased in
Part
32
Section 3.12
Covenant to Comply With
Securities Laws Upon Purchase of Debentures
33
Section 3.13
Repayment to the Company
33
ARTICLE 4
ADDITIONAL EVENTS OF DEFAULT
Section 4.01
Additional Events of
Default
33
ARTICLE 5
MISCELLANEOUS PROVISIONS
Section 5.01
Recitals by Company
34
Section 5.02
Ratification and
Confirmation of Original Indenture
34
Section 5.03
Executed in Counterparts
34
ARTICLE 6
TAX TREATMENT
Section 6.01
Agreements
34
Exhibit A
A-1
Exhibit B
B-1
THIS SECOND
SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") is made as of the
20th day of August 2002, by and between CENTURYTEL, INC., a Louisiana
corporation, having its principal office at 100 CenturyTel Drive, Monroe,
Louisiana 71203 (the "Company"), and REGIONS BANK (successor-in-interest
to First American Bank & Trust of Louisiana and Regions Bank of Louisiana), an
Alabama state banking corporation, as trustee (herein called the "Trustee"). W I T N E S S E T H : WHEREAS, the Company
has heretofore entered into an Indenture, dated as of March 31, 1994 (the "Original
Indenture"), with the Trustee; WHEREAS, the Original
Indenture is incorporated herein by this reference and the Original Indenture,
as amended and supplemented to the date hereof, including by this Second
Supplemental Indenture, is herein called the "Indenture"; WHEREAS, under
Section 2.01 of the Original Indenture, a new series of unsecured securities,
debentures, notes or other evidence of indebtedness may at any time be
established in accordance with the provisions of the Original Indenture and the
terms of such series may be described in a supplemental indenture executed by
the Company and the Trustee; WHEREAS, the Company
proposes to create under the Original Indenture a new series of unsecured
securities, debentures, notes or other evidence of indebtedness; WHEREAS, additional
unsecured securities, debentures, notes or other evidence of indebtedness of
other series hereafter established, except as may be limited in the Original
Indenture as at the time supplemented and modified, may be issued from time to
time pursuant to the Original Indenture as at the time supplemented and
modified; and WHEREAS, all
conditions necessary to authorize the execution and delivery of this Second
Supplemental Indenture and to make it a valid and binding obligation of the
Company have been done or performed. NOW, THEREFORE, in
consideration of the agreements and obligations set forth herein and for other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
4.75% CONVERTIBLE SENIOR DEBENTURES, SERIES K,
DUE 2032 Section 1.01
Establishment. There is hereby established a new series of unsecured
securities, debentures, notes or other evidence of indebtedness to be issued
under the Original Indenture, to be designated as the Company's 4.75%
Convertible Senior Debentures, Series K, due 2032 (the "Debentures"). There are to be
authenticated and delivered $150,000,000 aggregate principal amount of
Debentures (plus such additional principal amount of Debentures, not exceeding
$15,000,000, if the over-allotment option referred to in the Purchase Agreement
(as defined in Section 1.02) is exercised in whole or in part), and no
additional Debentures shall be authenticated and delivered except as provided by
Sections 2.05, 2.06, 2.07, 3.03 and 9.04 of the Original Indenture. The
Debentures may be issued from time to time pursuant to a written order of the
Company delivered to the Trustee for the authentication and delivery of
Debentures pursuant to Section 2.04 of the Original Indenture. The Debentures
shall be issued in fully registered form without coupons. The Debentures shall
be in substantially the form set out in Exhibit A hereto, and the form of
the Trustee's Certificate of Authentication for the Debentures shall be in
substantially the form set forth in Exhibit B hereto. Each Debenture shall
be dated the date of authentication thereof and shall bear interest from the
Original Issue Date thereof or from the most recent Interest Payment Date to
which interest has been paid or duly provided for. Section 1.02
Definitions. The following defined terms used herein shall, unless the
context otherwise requires, have the meanings specified below. Capitalized
terms used herein for which no definition is provided herein shall have the
meanings set forth in the Original Indenture. (a) The
following terms have the meanings given to them in this Section 1.02(a): "Applicable
Conversion Price" means, as of any date of determination, the aggregate
principal amount per $1,000 principal amount of Debentures as of such date of
determination divided by the Conversion Rate in effect as of such date of
determination. "Applicable Five
Day Trading Period" shall have the meaning set forth in Section 1.03(c). "Average Sale
Price" shall have the meaning set forth in Section 2.08. "Bid Agent"
means a bid solicitation agent appointed by the Company to act in such capacity
for the purposes of Section 1.03(c), provided that such agent shall not be an
Affiliate of the Company. The Bid Agent appointed by the Company shall
initially be the Trustee. "Capital Stock"
for any corporation means any and all shares, interests, rights to purchase,
warrants, options, participations or other equivalents of or interests in
(however designated, whether voting or non-voting) corporate stock or similar
interests issued by that corporation. "Cash Dividends"
shall have the meaning set forth in Section 1.03(c). "Clearing Agency"
means an organization registered as a "Clearing Agency" pursuant to Section 17A
of the Exchange Act that is acting as a depositary with respect to the Global
Debentures and in whose name, or in the name of a nominee of that organization,
shall be registered a global security evidencing the respective rights and
obligations of holders in respect of the Global Debentures and which shall
undertake to effect book entry transfers of the Global Debentures. "Clearing Agency
Participant" means a broker, dealer, bank, other financial institution or
other Person for whom from time to time the Clearing Agency maintains a direct
or indirect custodial relationship or effects book entry transfers of securities
deposited with the Clearing Agency. "Change in Control"
shall have the meaning set forth in Section 3.08(a). "Change in Control
Notice" shall have the meaning set forth in Section 3.08(b). "Change in Control
Purchase Date" shall have the meaning set forth in Section 3.08(a). "Change in Control
Purchase Notice" shall have the meaning set forth in Section 3.08(c). "Change in Control
Purchase Price" shall have the meaning set forth in Section 3.08(a). "Common Stock"
means the common stock, par value $1.00 per share, of the Company existing on
the date of this Indenture or any other Capital Stock of the Company into which
such common stock shall be reclassified or changed. "Company Notice"
shall have the meaning set forth in Section 3.07(e). "Company Notice
Date" shall have the meaning set forth in Section 3.07(e). "Contingent
Interest Period" shall have the meaning set forth in Section 1.03(c). "Contingent
Interest Record Date" shall have the meaning set forth in Section 1.03(c). "Conversion Agent"
means the office or agency designated by the Company where Debentures may be
presented for conversion, which, initially, shall be the Trustee at its
Corporate Trust Office. "Conversion Date"
shall have the meaning set forth in Section 2.02. "Conversion Rate"
shall have the meaning set forth in Section 2.01. "Coupon Rate"
shall have the meaning set forth in Section 1.03(b). "Debentures"
shall have the meaning specified in Section 1.01. "Debenture Price"
shall have the meaning specified in Section 1.03(c). "Expiration Time"
shall have the meaning set forth in Section 2.09. "Exchange Act"
means the Securities Exchange Act of 1934, as amended. "Global Debentures"
shall have the meaning set forth in Section 1.05. "Holder" means
a person in whose name a Debenture is registered on the security registrar's
books kept for that purpose in accordance with the terms of the Indenture. "Interest Payment
Date" shall have the meaning set forth in Section 1.03(b). "Market Price"
shall have the meaning set forth in Section 3.07(d). "NYSE" means
The New York Stock Exchange. "Original Issue
Date" means August 26, 2002. "Paying Agent"
shall have the meaning set forth in Section 1.06. "Purchase
Agreement" means the Purchase Agreement dated August 20, 2002, between the
Company and Banc of America Securities LLC, J.P. Morgan Securities Inc. and
Wachovia Securities, Inc., as the initial purchasers. "Purchase Date"
shall have the meaning set forth in Section 3.07(a). "Purchase Notice"
shall have the meaning set forth in Section 3.07(a). "Purchase Price"
shall have the meaning set forth in Section 3.07(a). "Purchased Shares"
shall have the meaning set forth in Section 2.09. "Redemption Date"
or "redemption date" shall mean the date specified in a notice of
redemption on which the Debentures may be redeemed in accordance with the terms
of the Debentures and this Indenture. "Redemption Price"
or "redemption price" shall have the meaning set forth in the Debentures. "Reference Date"
shall have the meaning set forth in Section 2.10. "Registration
Default Damages" shall have the meaning set forth in Section 1.03(b). "Registration
Rights Agreement" means the Registration Rights Agreement dated as of
August 26, 2002, between the Company and Banc of America Securities LLC, J.P.
Morgan Securities Inc. and Wachovia Securities, Inc., as the initial purchasers
under the Purchase Agreement. "Regular Record
Date" means, with respect to any Interest Payment Date for the Debentures,
the close of business on the fifteenth day of the month immediately preceding
the month in which such Interest Payment Date falls. "Restricted
Debentures Legend" shall have the meaning set forth in Section 1.07. "Sale Price"
of the Common Stock on any date means the closing sale price per share (or, if
no closing sale price is reported, the average of the bid and ask prices or, if
more than one in either case, the average of the average bid prices and the
average ask prices) of the Common Stock on such date as reported in the
composite transactions for the principal United States securities exchange on
which the Common Stock is traded or, if the Common Stock is not listed on a
United States national or regional securities exchange, as reported on the
Nasdaq Stock Market. If the Common Stock is not listed for trading on a United
States national or regional securities exchange and not reported on the Nasdaq
Stock Market on the relevant date, the Sale Price shall be the last quoted bid
price for the Common Stock in the over-the-counter market on the relevant date
as reported by the National Quotation Bureau or similar organization. If the
bid price is not available, the Sale Price shall be the market value for the
Common Stock on the relevant date as determined by a nationally recognized
independent investment banking firm retained by the Company for this purpose. "Securities Act"
means the Securities Act of 1933, as amended. "Stated Maturity
Date" shall have the meaning set forth in Section 1.03(a). "Time of
Determination" means the time and date of the earlier of (i) the
determination of stockholders entitled to receive rights, warrants or options,
or a distribution, in each case, to which Section 2.07 or 2.08 applies and
(ii) the time ("Ex-Dividend Time") immediately prior to the commencement
of "ex-dividend" trading for such rights, warrants or options, or such
distribution, on the NYSE or such other U.S. national or regional exchange or
market on which the shares of Common Stock are then listed or quoted. "Trading Day"
or "trading day" means a day on which the Common Stock (i) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (ii) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of the Common Stock. Section 1.03
Stated Maturity Date; Payment of Principal and Interest; Contingent Interest.
(a) The date upon which the principal of the Debentures shall become due and
payable at final maturity, together with any accrued and unpaid interest, is
August 1, 2032 (the "Stated Maturity Date"). (b) Each
Debenture will bear interest at the rate of 4.75% per annum (the "Coupon Rate")
from the Original Issue Date until the principal thereof is paid or duly made
available for payment and shall bear interest, to the extent permitted by law,
compounded semi-annually, on any overdue principal and premium, if any, and on
any overdue installment of interest at the Coupon Rate, payable semi-annually in
arrears on February 1 and August 1 of each year (each, an "Interest Payment
Date"), commencing on February 1, 2003, to the Person in whose name such
Debenture, or any predecessor Debenture, is registered at the close of business
on the Regular Record Date for such interest installment. If the Company does
not comply with certain of its obligations under the Registration Rights
Agreement, the Debentures shall, in accordance with Section 2(c) of the
Registration Rights Agreement, accrue liquidated damages ("Registration Default
Damages") in addition to interest provided for in the prior sentence of this
Section 1.03(b). For purposes of the Indenture as it relates to the Debentures
and the form of Debentures contained herein, the term "interest" shall be deemed
to include interest provided for in the first sentence of this Section 1.03(b),
contingent interest, if any, as provided in Section 1.03 and Registration
Default Damages, if any. (c)
(i) Subject to the accrual and record date provisions specified in this
Section 1.03(c), the Company shall pay contingent interest in cash to the
Holders during any six-month period (a "Contingent Interest Period") from August
1 to January 31 and from February 1 to July 31, commencing with the six-month
period beginning August 1, 2006, if the average Debenture Price for the
Applicable Five Trading Day Period with respect to such Contingent Interest
Period equals 120% or more of $1,000 principal amount of Debentures. (ii) The
amount of contingent interest payable per $1,000 principal amount of Debentures
in respect of any Contingent Interest Period shall equal the greater of (x) Cash
Dividends paid by the Company per share of Common Stock during that Contingent
Interest Period multiplied by the number of shares of Common Stock into which
$1,000 principal amount of Debentures is convertible pursuant to Article 2 at
the then applicable Conversion Rate as of the record date for such contingent
interest and (y) .125% of the average Debenture Price for the Applicable Five
Day Trading Period with respect to such Contingent Interest Period payable in
the manner and the dates set forth in clause (iv) below. (iii)
Contingent interest, if any, will accrue and be payable to Holders as of the
record date for the related Cash Dividend or, if no Cash Dividend is paid by the
Company during any quarter within a Contingent Interest Period, to Holders as of
the 15th day preceding the last day of the relevant Contingent Interest Period
(each, a "Contingent Interest Record Date"). (iv) Pursuant
to the foregoing provisions, in any Contingent Interest Period in which
contingent interest is payable, the Company shall: (A) upon the first payment
date for a Cash Dividend falling within such Contingent Interest Period, pay the
Cash Dividend paid by the Company per share of Common Stock upon such date
multiplied by the number of shares of Common Stock into which $1,000 principal
amount of Debentures is convertible pursuant to Article 2 at the then applicable
Conversion Rate as of such date; (B) upon any subsequent payment date for a Cash
Dividend falling within such Contingent Interest Period, or if no other
subsequent payment date for a Cash Dividend falls within such Contingent
Interest Period, on the last day of such period, pay the greater of (x) the
subsequent Cash Dividend paid by the Company per share of Common Stock upon such
date multiplied by the number of shares of Common Stock into which $1,000
principal amount of Debentures is convertible pursuant to Article 2 at the then
applicable Conversion Rate as of such date and (y) .125% of the average
Debenture Price for the Applicable Five Day Trading Period with respect to such
Contingent Interest Period minus the amounts previously paid in respect of such
Debentures pursuant to clause (A) during such Contingent Interest Period and (C)
if no payment date for a Cash Dividend falls within such Contingent Interest
Period, on the last date of such period, pay .125% of the average Debenture
Price for the Applicable Five Day Trading Period with respect to such Contingent
Interest Period (each payment date described in clause (A), (B) or (C) an
"Interest Payment Date" with respect to contingent interest). (v) Upon
determination that Holders will be entitled to receive contingent interest which
may become payable during a Contingent Interest Period, on or prior to the first
day of such Contingent Interest Period, the Company shall issue a press release
through Dow Jones & Company, Inc. or Bloomberg Business News information with
respect to the payment of contingent interest or publish such information on its
web site or such other public medium as the Company may use at that time. "Applicable Five Day
Trading Period" means, with respect to any Contingent Interest Period, the five
trading days ending on the second trading day immediately preceding the first
day of such Contingent Interest Period; provided, however, if the Company shall
have declared a Cash Dividend on its Common Stock that is payable during such
Contingent Interest Period for which the record date for determining
stockholders entitled thereto precedes the first day of such Contingent Interest
Period, then "Applicable Five Day Trading Period" means, with respect to such
Contingent Interest Period, the five trading days ending on the second trading
day immediately preceding such record date. "Cash Dividends"
means all cash dividends on the Common Stock (whether regular, periodic,
extraordinary, special, nonrecurring or otherwise) as declared by the Company's
Board of Directors. "Debenture Price"
means, as of any date of determination, the average of the secondary market bid
quotations per $1,000 principal amount of Debentures obtained by the Bid Agent
for $10,000,000 of Debentures at approximately 4:00 p.m. (New York City time) on
such determination date from three unaffiliated recognized securities dealers in
The City of New York (none of which shall be an Affiliate of the Company)
selected by the Company; provided, however, if (a) at least three such bids are
not obtained by the Bid Agent or (b) in the Company's reasonable judgment, the
bid quotations are not indicative of the secondary market value of the
Debentures as of such determination date, then the Debenture Price for such
determination date shall equal (i) the Conversion Rate in effect as of such
determination date multiplied by (ii) the average Sale Price for the five
trading days ending on such determination date, appropriately adjusted to take
into account the occurrence, during the period commencing on the first of such
trading days during such five trading day period and ending on such
determination date, of any event described in Section 2.06, 2.07, 2.08, 2.09 or
2.10 (subject to the conditions set forth in Article 2). (d) The amount
of interest payable for any period will be computed on the basis of a 360-day
year consisting of twelve 30-day months. Except as provided in the following
sentence, the amount of interest or contingent interest payable for any period
shorter than a full semi-annual period for which interest is computed will be
computed on the basis of the actual number of days elapsed in such a 180-day
period. If any Interest Payment Date, the Stated Maturity Date, any Redemption
Date, any Purchase Date or any Change in Control Purchase Date falls on a day
that is not a Business Day, then the required payment of principal, premium, if
any, or interest payable on such date will be made on the next succeeding day
that is a Business Day, without any interest or other payment in respect of such
delay, except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such Interest Payment
Date, Stated Maturity Date, Redemption Date, Purchase Date or Change in Control
Purchase Date. Payment of principal
of, premium, if any, and interest or contingent interest on the Debentures shall
be made in such coin or currency of the United States of America as at the time
of payment is legal tender for payment of public and private debts. Principal of,
premium, if any, and interest or contingent interest on the Debentures will be
payable at the office or agency of the Company maintained for such purpose as
described in Section 1.06 below; provided, however, that payment of interest or
contingent interest may be made at the option of the Company by check mailed to
the address of the Person entitled thereto as such address shall appear in the
security register for the Debentures. Payments of principal
of, premium, if any, and interest or contingent interest on Global Debentures
shall be made by wire transfer of immediately available funds to the Holder of
such Global Debentures; provided that, in the case of payments of principal and
premium, if any, such Global Debentures are first surrendered to the Paying
Agent. Section 1.04
Form; Denominations. Except as provided in Section 1.05, the Debentures
shall be issued in fully registered definitive form without interest coupons,
bearing identical terms. The Debentures shall be issuable in denominations of
$1,000 and integral multiples of $1,000 in excess thereof. Section 1.05
Global Debentures. Except as set forth in this Section 1.05, the Debentures
will be issued in the form of one or more global securities (the "Global
Debentures") registered in the name of the Clearing Agency or its nominee.
Except as set forth in Section 1.07, the Global Debentures (and any shares of
Common Stock issuable upon conversion thereof) shall bear the Restricted
Debentures Legend. Unless and until they are exchanged for Debentures in
definitive registered form as described below, such Global Debentures may be
transferred, in whole but not in part, only to the Clearing Agency or a nominee
of the Clearing Agency, or to a successor Clearing Agency selected or approved
by the Company or to a nominee of such successor Clearing Agency. If at any time (i)
the Clearing Agency notifies the Company that it is unwilling or unable to
continue as a Clearing Agency for the Global Debentures and no successor
Clearing Agency shall have been appointed within 90 days after such
notification, (ii) the Clearing Agency at any time ceases to be a clearing
agency registered under the Exchange Act at any time the Clearing Agency is
required to be so registered to act as such Clearing Agency and no successor
Clearing Agency shall have been appointed within 90 days after the Company
becoming aware of the Clearing Agency ceasing to be so registered, (iii) the
Company, in its sole discretion, determines that the Global Debentures shall be
so exchangeable, or (iv) there is an Event of Default with respect to the
Debentures, the Company will execute, and, subject to Article II of the Original
Indenture, the Trustee, upon receipt of a written order therefor, will
authenticate and deliver the Debentures in definitive registered form without
coupons, in authorized denominations, and in an aggregate principal amount equal
to the principal amount of the Global Debenture or Debentures in exchange for
such Global Debenture or Debentures. Upon exchange of the Global Debenture or
Debentures for such Debentures in definitive registered form without coupons, in
authorized denominations, the Global Debenture or Debentures shall be cancelled
by the Trustee. Such Debentures in definitive registered form issued in
exchange for the Global Debenture or Debentures shall be registered in such
names and in such authorized denominations, and shall contain such restrictive
or other legends pursuant to instructions from its direct or indirect
participants or otherwise, as the Clearing Agency shall instruct the Trustee.
The Trustee shall deliver such Debentures to the Clearing Agency for delivery to
the Persons in whose names such Debentures are so registered. Section 1.06
Paying Agent; Transfer Agent; Place of Payment. (a) The paying agent for
the Debentures shall initially be the Trustee (in such capacity, the "Paying
Agent"), and the place of payment for the Debentures shall initially be the
Corporate Trust Office, which as of the date hereof for such purpose is located
at 1500 North 18th Street, Monroe, Louisiana 71201. Principal of, premium, if
any, and interest or contingent interest with respect to certificated Debentures
will be payable at the office or agency of the Company maintained for such
purpose in the City of Monroe, State of Louisiana or the Borough of Manhattan,
the City and State of New York. The Trustee shall also serve as security
registrar for the purpose of registering Debentures and transfers or exchanges
of Debentures in accordance with the terms of the Indenture. (b) The
Company may from time to time designate one or more additional offices or
agencies where Debentures may be presented or surrendered for payment or may be
surrendered for registration of transfer or exchange in accordance with Section
4.02 of the Original Indenture; provided that the Company shall at all times
maintain a Paying Agent and an office or agency where Debentures may be
surrendered for registration of transfer or exchange or conversion, in each case
in the Borough of Manhattan, the City and State of New York. Section 1.07
Restricted Debentures Legend. Except in connection with an effective shelf
registration statement contemplated by and in accordance with the terms of the
Registration Rights Agreement, if Debentures are issued upon the registration of
transfer, exchange or replacement of Debentures bearing a legend or legends
restricting the transfer of the Debentures, substantially in the form set forth
in Exhibit A hereto (such legend or legends, collectively, a "Restricted
Debentures Legend"), or if a request is made to remove such a Restrictive
Debentures Legend on Debentures, the Debentures so issued shall bear the
Restricted Debentures Legend, or a Restricted Debentures Legend shall not be
removed, as the case may be, unless there is delivered to the Company such
satisfactory evidence, which, in the case of a transfer made pursuant to
Rule 144 under the Securities Act, may include an opinion of counsel, as may be
reasonably required by the Company, that neither the Restricted Debentures
Legend nor the restrictions on transfer set forth therein are required to ensure
that transfers thereof comply with the provisions of Rule 144A under the
Securities Act and that such Debentures are not "restricted" within the meaning
of Rule 144A under the Securities Act. Upon provision to the Company of such
satisfactory evidence, the Trustee or Authenticating Agent, at the written
direction of the Company, shall authenticate and deliver Debentures that do not
bear the legend. Shares of Common Stock issuable upon conversion of the
Debentures pursuant to the terms hereof shall be subject to the transfer
restrictions set forth in the Restricted Debentures Legend. Transfers of
beneficial interests between any Global Debenture containing the Restricted
Debenture Legend and any Global Debenture that does not contain the Restricted
Debenture Legend will be effected pursuant to the terms of the Indenture and the
customary procedures of the Clearing Agency and shall be reflected by
endorsements of the Trustee, as custodian for the Clearing Agency, on the
schedule attached to the applicable Debentures. Section 1.08
No Sinking Fund. The Debentures are not entitled to the benefit of any
sinking fund. ARTICLE 2 CONVERSION Section 2.01
Conversion Privilege. A Holder of a Debenture may convert such Debenture
into shares of Common Stock as set forth in and pursuant to this Supplemental
Indenture and such Debenture at any time on or before noon, New York time, on
the Business Day immediately preceding the Stated Maturity Date if at least one
of the following conditions is satisfied on the Conversion Date irrespective of
whether the Debentures may otherwise be convertible on such date: (a)
at any time at the option of the Holder if
the average Sale Price for the last 20 Trading Days in the preceding calendar
quarter equals or exceeds 120% of the Applicable Conversion Price; (b)
at any time if the credit rating assigned to
the Debentures is reduced to Ba2 or lower by Moody's Investors Service, Inc. or
BB+ or lower by Standard & Poor's Ratings Services; (c)
if the Debentures have been called for
redemption by the Company, at any time prior to the close of business on the
second Business Day immediately prior to the Redemption Date; (d)
the Company becomes a party to a
consolidation, merger or binding share exchange pursuant to which the Common
Stock would be converted into cash, securities or other property, in which case
a Holder may surrender Debentures for conversion at any time from and after the
date which is 15 days prior to the anticipated effective date of the transaction
until 15 days after the actual effective date of such transaction; or (e)
the Company elects to (i) distribute to all
holders of Common Stock rights entitling them to purchase, for a period expiring
within 60 days after the date of such distribution, shares of Common Stock at
less than the Sale Price on the date of such distribution or (ii) distribute to
all holders of Common Stock assets, debt securities or rights to purchase
securities of the Company, which distribution has a per share value as
determined by the Company's Board of Directors exceeding 10% of the Sale Price
on the day preceding the declaration date for such distribution. In the case of
the foregoing clauses (i) and (ii), the Company must notify the Holders of
Debentures at least 20 days prior to the ex-dividend date for such distribution.
Once the Company has given such notice, Holders may surrender their Debentures
for conversion at any time thereafter until the earlier of the close of business
on the Business Day prior to the ex-dividend date or the Company's announcement
that such distribution will not take place; provided, however,
that a Holder of Debentures may not exercise its right to conversion if such
Holder will or may otherwise participate in such distribution without
conversion. The number of shares
of Common Stock issuable upon conversion of a Debenture per $1,000 aggregate
principal amount thereof (the "Conversion Rate") shall be 24.7188,
subject to adjustment as herein set forth. The Company shall notify the Trustee
of the date on which the Debentures first become convertible, in the form of an
Officers' Certificate, which Officers' Certificate shall set forth the
calculations on which such determination was made. A Holder may convert
a portion of the principal amount of a Debenture if the portion converted is in
a $1,000 principal amount or an integral multiple of $1,000. Provisions of this
Indenture that apply to conversion of all of a Debenture also apply to
conversion of a portion of a Debenture. In the event that the
Ex-Dividend Time (or in the case of a subdivision, combination or
reclassification, the effective date with respect thereto) with respect to a
dividend, subdivision, combination or reclassification to which Section 2.06
applies, with respect to rights, warrants or other options to which Section 2.07
applies, or with respect to a distribution to which Section 2.08 applies, occurs
during the period or on the date applicable for calculating the "Sale Price"
or "Average Sale Price," then "Sale Price" or "Average Sale
Price" shall be calculated in a manner determined by the Company's Board of
Directors to reflect the impact of such dividend, subdivision, combination or
reclassification, issuance of rights, warrants or other options or distribution
on the Sale Price of the shares of Common Stock. Section 2.02
Conversion Procedures. To convert a Debenture a Holder must satisfy the
requirements set forth in this Supplemental Indenture and in the Debentures.
The first Business Day on which the Holder satisfies all those requirements and
submits such Holder's Debentures for conversion is the conversion date (the "Conversion
Date"). As soon as
practicable after the Conversion Date, the Company shall deliver to the Holder,
through the Conversion Agent, a certificate for the number of full shares of
Common Stock issuable upon the conversion and cash in lieu of any fractional
share determined pursuant to Section 2.03. The person in whose name the
certificate for the Debentures is registered shall be treated as a shareholder
of record of the Company as of the close of business on the Conversion Date.
Upon conversion of a Debenture in its entirety, such person shall no longer be
a Holder of such Debenture. No payment or
adjustment will be made for dividends on, or other distributions with respect
to, any shares of Common Stock except as provided in this Article 2. Upon
conversion of a Debenture, except as provided below with respect to interest
payable on Debentures or portions thereof converted after a Regular Record Date
and those called for redemption, that portion of accrued and unpaid interest on
the converted Debentures attributable to the period from the most recent
Interest Payment Date through the Conversion Date shall not be cancelled,
extinguished or forfeited, but rather shall be deemed to be paid in full to the
Holder thereof through delivery of the shares of Common Stock (together with the
cash payment, if any, in lieu of fractional shares) for the Debenture being
converted pursuant to the provisions hereof. The Company will not adjust the
Conversion Rate to account for accrued interest, if any. If the Holder converts
more than one Debenture at the same time, the number of shares of Common Stock
issuable upon the conversion shall be based on the aggregate principal amount of
the Debentures converted. The Debentures or
portions thereof surrendered for conversion during the period from the close of
business on any Regular Record Date immediately preceding any Interest Payment
Date to the opening of business on such Interest Payment Date shall (unless such
Debentures or portions thereof have been called for redemption on a Redemption
Date within such period) be accompanied by payment to the Company or its order,
in same day funds or other funds acceptable to the Company, of an amount equal
to the cash interest payable on such Interest Payment Date on the principal
amount of the Debentures or portions thereof being surrendered for conversion. If the last day on
which a Debenture may be converted is not a Business Day, the Debenture may be
surrendered on the next succeeding day that is a Business Day. Upon surrender of a
Debenture that is converted in part, the Company shall execute, and the Trustee
shall authenticate and deliver to the Holder, a new Debenture in an authorized
denomination equal in principal amount to the unconverted portion of the
Debenture surrendered in accordance with the terms of the Indenture. Section 2.03
Fractional Shares. The Company will not issue fractional shares of Common
Stock upon conversion of a Debenture. Instead, the Company will pay cash based
on the current market value for all fractional shares. The current market value
of a fractional share shall be determined, to the nearest 1/1,000th of a share,
by multiplying the Sale Price on the last trading day immediately prior to the
Conversion Date of a full share by the fractional amount and rounding the
product to the nearest whole cent. Section 2.04
Taxes on Conversion. If a Holder submits a Debenture for conversion, the
Company shall pay all stamp and all other duties, if any, which may be imposed
by the United States or any political subdivision thereof or taxing authority
thereof or therein with respect to the issuance of shares of Common Stock upon
the conversion. However, the Holder shall pay any such tax which is due because
the Holder requests the shares to be issued in a name other than the Holder's
name. The Conversion Agent may refuse to deliver the certificates representing
the shares of Common Stock being issued in a name other than the Holder's name
until the Conversion Agent receives a sum sufficient to pay any tax which will
be due because such shares are to be issued in a name other than the Holder's
name. Nothing herein shall preclude any tax withholding required by law or
regulations. Section 2.05
Company to Provide Common Stock. The Company shall, prior to issuance of
any Debentures, and from time to time as may be necessary, reserve out of its
authorized but unissued shares of Common Stock a sufficient number of shares of
Common Stock to permit the conversion of the Debentures. All shares of Common
Stock delivered upon conversion of the Debentures shall be newly issued shares
or treasury shares, shall be duly and validly issued and fully paid and
nonassessable, and shall be free from preemptive rights and free of any lien or
adverse claim. The Company will endeavor promptly to comply with all federal and
state securities laws regulating the offer and delivery of shares of Common
Stock upon conversion of Debentures, if any, and will list or cause to have
quoted such shares of Common Stock on each national securities exchange or in
the over-the-counter market or such other market on which the shares of Common
Stock are then listed or quoted. Section 2.06
Adjustment for Change in Capital Stock. Subject to Section 2.16, if, after
the Original Issue Date, the Company:
(1)
pays a dividend or makes another
distribution on its Common Stock to all holders of its Common Stock payable
exclusively in shares of its Common Stock;
(2)
subdivides the outstanding shares of
its Common Stock into a greater number of shares of Common Stock;
(3)
combines the outstanding shares of
its Common Stock into a smaller number of shares of Common Stock; or
(4)
issues by reclassification of its
Common Stock any shares of Capital Stock, then the conversion
privilege and the Conversion Rate in effect immediately prior to such action
shall be adjusted so that the Holder of a Debenture thereafter converted may
receive the number of shares of Capital Stock of the Company which such Holder
would have owned immediately following such action if such Holder had converted
the Debenture immediately prior to the record date for such action. The adjustment shall
become effective immediately after the record date in the case of a dividend or
distribution and immediately after the effective date in the case of a
subdivision, combination or reclassification, but shall be rescinded if any such
transaction is not consummated. If after an
adjustment a Holder of a Debenture upon conversion of such Debenture may receive
shares of two or more classes of Capital Stock of the Company, the Conversion
Rate shall thereafter be subject to adjustment upon the occurrence of an action
taken with respect to any such class of Capital Stock as is contemplated by this
Article 2 with respect to the shares of Common Stock, on terms comparable to
those applicable to shares of Common Stock in this Article 2. Section 2.07
Adjustment for Rights Issue. If, after the Original Issue Date, the Company
issues rights or warrants to all holders of its Common Stock entitling them to
purchase shares of its Common Stock at a price per share less than the Sale
Price per share of Common Stock at the Time of Determination, unless the Holders
may participate in such transaction on a basis and with notice that the
Company's board of directors determines to be fair and appropriate, the
Conversion Rate in effect immediately prior thereto shall be adjusted to equal a
rate determined by multiplying the Conversion Rate in effect immediately prior
to the date of the issuance of such rights or warrants by a fraction of which
the numerator shall be the number of shares of Common Stock outstanding on the
date of issuance of such rights or warrants plus the number of additional shares
of Common Stock offered for purchase, and of which the denominator shall be the
number of shares of Common Stock outstanding on the date of issuance of such
rights or warrants plus the number of shares which the aggregate offering price
of the total number of shares so offered would purchase at such Sale Price.
Such adjustment shall be made successively whenever any such rights or warrants
are issued, and shall become effective immediately after the opening of business
on the day following the Time of Determination; provided, however, that if such
rights or warrants are not so issued, the Conversion Rate shall again be
adjusted to be the Conversion Rate which would then be in effect if such Time of
Determination had not been fixed. To the extent that shares of Common Stock are
not delivered after the cancellation or expiration of such rights or warrants,
the Conversion Rate shall be readjusted to the Conversion Rate which would then
be in effect had the adjustments made upon the issuance of such rights or
warrants been made on the basis of delivery of only the number of shares of
Common Stock actually delivered. In determining whether any rights or warrants
entitle the stockholders to purchase shares of Common Stock at less than such
Sale Price, and in determining the aggregate offering price of such shares of
Common Stock, there shall be taken into account any consideration received by
the Company for such rights or warrants, the value of such consideration, if
other than cash, to be determined by the Company's Board of Directors.
Section 2.08
Adjustment for Other Distributions.
Except as provided in Section 2.12, if, after the Original Issue Date, the
Company distributes to all holders of its shares of Common Stock any of its
debt, securities or assets or any rights, warrants or options to purchase
securities of the Company (including securities or cash, but excluding
(x) distributions of rights, warrants or options referred to in Section 2.07,
(y) dividends and other distributions paid exclusively in cash and (z) Cash
Dividends or other cash distributions from current or retained earnings unless
the annualized amount thereof per share exceeds 10% of the Sale Price of the
shares of Common Stock on the day preceding the date of the declaration of such
dividend or distribution, and unless the Holders of Debentures may participate
in the distribution without conversion), the Conversion Rate shall be adjusted,
subject to the provisions of the last paragraph of this Section 2.08, in
accordance with the formula: R' = R
x M
(M - F) where: R' = the adjusted
Conversion Rate R = the current
Conversion Rate M = the Average Sale
Price F = the fair market value (on the record date
for the distribution to which this Section 2.08 applies) of the assets,
securities, rights, warrants or options to be distributed in respect of each
share of Common Stock in the distribution to which this Section 2.08 is being
applied (including, in the case of cash dividends or other cash distributions
giving rise to an adjustment, all such cash distributed concurrently). "Average Sale
Price" means the average of the Sale Prices of the shares of Common Stock
for the shorter of: (i)
30 consecutive Trading Days ending on the last full Trading Day prior to the
Time of Determination with respect to the distribution for which an adjustment
is being made under this Section 2.8; (ii) the period (x) commencing on the date next
succeeding the first public announcement of the distribution for which an
adjustment is being made under this Section 2.8 and (y) proceeding through the
last full trading day prior to the Time of Determination with respect to such
distribution (excluding days within such period, if any, which are not Trading
Days); or (iii)
the period, if any, (x) commencing on the date next succeeding the Ex-Dividend
Time with respect to the next preceding (a) issuance of rights, warrants or
options or (b) distribution, in each case, for which an adjustment is required
by the provisions of Section 2.07, 2.08 or 2.09 and (y) proceeding through the
last full trading day prior to the Time of Determination with respect to the
distribution in respect of which the Average Sale Price is being calculated
(excluding days within such period, if any, which are not Trading Days). In the event the
Company distributes shares of Capital Stock of a Subsidiary, the Conversion Rate
will be adjusted, if at all, based on the market value of the Subsidiary stock
so distributed relative to the market value of the Common Stock, as discussed
below. The Board of Directors of the Company shall determine fair market values
for the purposes of this Section 2.08, except that in respect of a dividend or
other distribution of shares of Capital Stock of any class or series, or similar
equity interests, of or relating to a Subsidiary or other business unit of the
Company (a "Spin-off"), the fair market value of the securities to be
distributed shall equal the average of the daily closing sales prices of those
securities for the five consecutive Trading Days commencing on and including the
sixth Trading Day of those securities after the effectiveness of the Spin-off
and the Average Sale Price shall mean the average Sale Prices for the Common
Stock for the same five Trading Days. In the event, however, that an
underwritten initial public offering of the securities in the Spin-off occurs
simultaneously with the Spin-off, fair market value of the securities
distributed in the Spin-off shall mean the initial public offering price of such
securities and the Average Sale Price, for purposes of this sentence, shall mean
the Sale Price for the Common Stock on the same Trading Day. The adjustment shall
become effective immediately after the record date for the determination of
shareholders entitled to receive the distribution to which this Section 2.08
applies, except that an adjustment related to a Spin-off shall become effective
at the earlier to occur of (i) ten Trading Days after the effective date of the
Spin-off and (ii) the initial public offering of the securities distributed in
the Spin-off. If such distribution is not consummated, the Conversion Rate
shall again be adjusted to be the Conversion Rate which would then be in effect
if the foregoing adjustments had not been made. If, upon the date
prior to the Ex-Dividend Time with respect to a cash dividend on the shares of
Common Stock referred to in clause (z) above, the aggregate amount of such cash
dividend gives rise to an adjustment of the Conversion Rate, then such cash
dividend together with all such other cash dividends and distributions shall,
for purposes of applying the formula set forth above in this Section 2.08, cause
the value of "F" to equal (y) the aggregate amount of such cash dividend and
other cash dividends and distributions, minus (z) the aggregate amount of all
cash dividends or other cash distributions during the preceding 365 days for
which an adjustment in the Conversion Rate was previously made. In the event that,
with respect to any distribution to which this Section 2.08 would otherwise
apply, the difference "M-F" as defined in the above formula is less than $1.00
or "F" is equal to or greater than "M", then the adjustment provided by this
Section 2.08 shall not be made and in lieu thereof the provisions of
Section 2.16 shall apply to such distribution. Section 2.09
Adjustment for Self Tender Offer. If, after the Original Issue Date, the
Company or any Subsidiary of the Company pays holders of the Company's Common
Stock in respect of a tender or exchange offer, other than an odd-lot offer, by
the Company or any of its Subsidiaries for the Common Stock consideration per
share of Common Stock having a fair market value, as determined in good faith by
the Board of Directors of the Company, whose determination shall be conclusive
that, combined together with (1) the aggregate of the cash plus the fair market
value, as determined in good faith by the Board of Directors of the Company,
whose determination shall be conclusive, as of the expiration of such tender
offer, of consideration payable in respect of any other tender offers, by the
Company or any of its Subsidiaries for all or any portion of the Common Stock,
expiring within the 12 months preceding the expiration of such tender offer and
in respect of which no adjustment pursuant to this Section 2.09 has been made
and (2) the aggregate amount of any all-cash distributions to all or
substantially all holders of the Common Stock within the 12 months preceding the
expiration of such tender offer and in respect of which no adjustment pursuant
to Section 2.10 has been made, exceeds an amount equal to 10% of the product of
the Sale Price as of the last time (the "Expiration Time") tenders could
have been made pursuant to such tender offer (as it may be amended) times the
number of shares of Common Stock outstanding (including any tendered shares) at
the Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Rate shall be adjusted so that it shall equal the rate determined by
multiplying the Conversion Rate in effect immediately prior to the close of
business on the date of the Expiration Time by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding, including any
Purchased Shares (as defined below), at the Expiration Time multiplied by the
Sale Price of the Common Stock on the trading day next succeeding the Expiration
Time and the denominator shall be the sum of (x) the fair market value
(determined as aforesaid) of the aggregate consideration payable to stockholders
based on the acceptance (up to any maximum specified in the terms of the tender
offer) of all shares validly tendered and not withdrawn as of the Expiration
Time (the shares deemed so accepted, up to any such maximum, being referred to
as the "Purchased Shares") and (y) the product of the number of shares of
Common Stock outstanding, less any Purchased Shares, at the Expiration Time and
the Sale Price of the Common Stock on the Trading Day next succeeding the
Expiration Time, such adjustment (if any) to become effective immediately prior
to the opening of business on the day following the Expiration Time. If the
Company is obligated to purchase shares pursuant to any such tender offer, but
the Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Rate shall again
be adjusted to be the Conversion Rate which would then be in effect if such
tender offer had not been made.
Section 2.10
Adjustment for Cash Distribution.
If the Company shall, by dividend or otherwise, distribute cash to all holders
of its Common Stock in an aggregate amount that, combined together with (1) the
aggregate of any cash plus the fair market value, as determined in good faith by
the Board of Directors of the Company, whose determination shall be conclusive,
of consideration payable in respect of any tender offer by the Company or any of
its Subsidiaries for all or any portion of the Common Stock concluded within the
12 months preceding the date of payment of such distribution, and in respect of
which no adjustment pursuant to Section 2.09 has been made, and (2) the
aggregate amount of any other such all-cash distributions to all or
substantially all holders of its Common Stock made within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 2.10 has been made, exceeds an amount equal
to 10% of the product of the Sale Price on the Business Day immediately
preceding the date on which the Company declares such distribution (the "Reference
Date") times the number of shares of Common Stock outstanding on such
Reference Date, then, and in each such case, immediately after the close of
business on such Reference Date, the Conversion Rate shall be adjusted so that
it shall equal the price determined by multiplying the Conversion Rate in effect
immediately prior to the close of business on such Reference Date by a fraction
(i) the numerator of which shall be equal to the Sale Price on the Reference
Date less an amount equal to the quotient of (x) the excess of such combined
amount over such 10% divided by (y) the number of shares of Common Stock
outstanding on the Reference Date and (ii) the denominator of which shall be
equal to the Sale Price on such Reference Date; provided, however,
that if the portion of the cash so distributed applicable to one share of Common
Stock is equal to or greater than the Sale Price of the Common Stock on the
Reference Date, in lieu of the foregoing adjustment, adequate provision shall be
made so that each holder of Debentures shall have the right to receive upon
conversion of a Debenture (or any portion thereof) the amount of cash such
holder would have received had such holder converted such Debenture (or portion
thereof) immediately prior to such Reference Date. If such dividend or
distribution is not so paid or made, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
dividend or distribution had not been declared.
Section 2.11
When Adjustment May Be Deferred.
No adjustment in the Conversion Rate need be made unless the adjustment would
require an increase or decrease of at least 1% in the Conversion Rate. Any
adjustments that are not made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Article 2 shall be made
to the nearest cent or to the nearest 1/1,000th of a share, as the case may be.
Section 2.12
When No Adjustment Required.
No adjustment to the Conversion Rate need be made as a result of:
(1) (i) the issuance of the rights;
(ii) the distribution of separate certificates representing the rights;
(iii) the exercise or redemption of the rights in accordance with any rights
agreement; or (iv) the termination or invalidation of the rights, in each case,
pursuant to the Company's existing shareholders rights plan, as amended,
modified, or supplemented from time to time, or any newly adopted shareholders
rights plans;
(2) the issuance of any shares of Common
Stock pursuant to any present or future plan providing for the reinvestment of
dividends or interest payable on securities of the Company and the investment of
additional optional amounts in shares of Common Stock under any such plan;
(3) the issuance of any shares of Common
Stock or options or rights to purchase those shares pursuant to any present or
future employee, director or consultant benefit plan or program of or assumed by
the Company or any of its Subsidiaries;
(4) the issuance of any shares of Common
Stock pursuant to any option, warrant, right or exercisable, exchangeable or
convertible security outstanding as of the Original Issue Date; or
(5) the occurrence or nonoccurrence of
any event, condition or transaction other than those specifically described in
this Article 2. To the extent the
Debentures become convertible pursuant to this Article 2 in whole or in part
into cash, no adjustment need be made thereafter as to the cash. Interest will
not accrue on the cash.
Section 2.13
Notice of Adjustment.
Whenever the Conversion Rate is adjusted, the Company shall promptly mail to
Holders a notice of the adjustment. The Company shall file with the Trustee and
the Conversion Agent such notice briefly stating the facts requiring the
adjustment and the manner of computing it. The certificate shall be conclusive
evidence that the adjustment is correct. Neither the Trustee nor any Conversion
Agent shall be under any duty or responsibility with respect to any such
certificate except to exhibit the same to any Holder desiring inspection
thereof.
Section 2.14
Voluntary Increase.
The Company from time to time may increase the Conversion Rate by any amount at
any time for at least 20 days, so long as the increase is irrevocable during
such period. Whenever the Conversion Rate is voluntarily increased, the Company
shall mail to the Holders of Debentures and file with the Trustee and the
Conversion Agent a notice of the increase. The Company shall mail the notice at
least 15 days before the date the increased Conversion Rate takes effect. The
notice shall state the increased Conversion Rate and the period it will be in
effect. A voluntary increase of the Conversion Rate does not change or adjust
the Conversion Rate otherwise in effect for purposes of Section 2.06, 2.07 or
2.08.
Section 2.15
Notice of Certain Transactions.
If: (1) the Company takes any action that
would require an adjustment in the Conversion Rate pursuant to Section 2.06,
2.07, 2.08, 2.09 or 2.10 (unless no adjustment is to occur pursuant to
Section 2.12); or
(2) the Company takes any action that
would require a supplemental indenture pursuant to Section 2.16; or
(3) there is a liquidation or dissolution
of the Company; then the Company shall mail to Holders and file
with the Trustee and the Conversion Agent a notice stating the proposed record
date for the dividend, distribution or subdivision or the proposed effective
date of a combination, reclassification, consolidation, merger, binding share
exchange, transfer, liquidation or dissolution giving rise to the adjustment.
The Company shall file and mail the notice at least 15 days before such date.
Failure to file or mail the notice or any defect in it shall not affect the
validity of the transaction.
Section 2.16
Reorganization of Company; Special
Distributions. If the Company is a
party to a transaction subject to Article X of the Original Indenture (other
than a sale of all or substantially all of the assets of the Company in a
transaction in which the holders of shares of Common Stock immediately prior to
such transaction do not receive securities, cash or other assets of the Company
or any other person) or a merger or binding share exchange which reclassifies or
changes its outstanding shares of Common Stock, the person obligated to deliver
securities, cash or other assets upon conversion of Debentures shall enter into
a supplemental indenture. If the issuer of securities deliverable upon
conversion of Debentures is an Affiliate of the successor Company, that issuer
shall join in the supplemental indenture. The supplemental
indenture shall provide that the Holder of a Debenture may convert it into the
kind and amount of securities, cash or other assets which such Holder would have
received immediately after the consolidation, merger, binding share exchange or
transfer if such Holder had converted the Debenture immediately before the
effective date of the transaction, assuming (to the extent applicable) that such
Holder (i) was not a constituent person or an Affiliate of a constituent person
to such transaction; (ii) made no election with respect thereto; and (iii) was
treated alike with the plurality of non-electing Holders. The supplemental
indenture shall provide for future adjustments which shall be as nearly
equivalent as may be practical to the adjustments provided for in this
Article 2. The successor corporation shall mail to Holders a notice briefly
describing the supplemental indenture. If this
Section applies, Section 2.06 shall not apply. If the Company makes
a distribution to all holders of its shares of Common Stock of any of its assets,
or debt securities or any rights, warrants or options to purchase securities of
the Company that, but for the provisions of the last paragraph of Section 2.08,
would otherwise result in an adjustment in the Conversion Rate pursuant to the
provisions of Section 2.08, then, from and after the record date for determining
the holders of shares of Common Stock entitled to receive the distribution, a
Holder of a Debenture that converts such Debenture in accordance with the
provisions of this Indenture shall upon such conversion be entitled to receive,
in addition to the shares of Common Stock into which the Debenture is
convertible, the kind and amount of securities, cash or other assets comprising
the distribution that such Holder would have received if such Holder had
converted the Debenture immediately prior to the record date for determining the
holders of shares of Common Stock entitled to receive the distribution.
Section 2.17
Company Determination Final.
Any determination that the Company or the Board of Directors must make pursuant
to this Article (including under Section 2.03, 2.06, 2.07, 2.08, 2.09, 2.10,
2.11, 2.12, 2.16 or 2.18) is conclusive, absent manifest error.
Section 2.18
Trustee's Adjustment Disclaimer. (a) The
Trustee shall, on behalf of the Company, determine at the end of each fiscal
quarter whether the Debentures are convertible under Section 2.01(a), and shall
notify the Company of its determination. (b)
Except as otherwise provided in paragraph
(a) above, the Trustee has no duty to determine when an adjustment under this
Article 2 should be made, how it should be made or what it should be. The
Trustee has no duty to determine whether a supplemental indenture under
Section 2.16 is required or whether any provisions of any supplemental indenture
are correct. The Trustee shall not be accountable for and makes no
representation as to the validity or value of any securities or assets issued
upon conversion of Debentures. The Trustee shall not be responsible for the
Company's failure to comply with this Article 2. Each Conversion Agent shall
have the same protection under this Section 2.18 as the Trustee. All
calculations required under this Article 2 shall be performed by the Company,
with notice thereof to the Trustee.
Section 2.19
Simultaneous Adjustments.
In the event that this Article 2 requires adjustments to the Conversion Rate
under more than one of Sections 2.06, 2.07, 2.08, 2.09 and 2.10 and the record
dates for the distributions giving rise to such adjustments shall occur on the
same date, then only one such adjustment shall be made so that the adjustment
will be the amount of adjustment that has the highest absolute value to the
Holders.
Section 2.20
Successive Adjustments.
After an adjustment to the Conversion Rate under this Article 2, any subsequent
event requiring an adjustment under this Article 2 shall cause an adjustment to
the Conversion Rate as so adjusted.
ARTICLE 3
Section 3.01
Company's Right to Redeem; Notice to
Trustee. The Company, at its option,
may redeem the Debentures in accordance with the provisions and at the
Redemption Prices set forth in the Debentures. If the Company elects to redeem
Debentures pursuant to the provisions set forth in the Debentures, it shall
notify the Trustee in writing of the Redemption Date, the principal amount of
Debentures to be redeemed and the Redemption Price. The Company shall
give written notice to the Trustee of any such redemption containing the
information provided for in Section 3.03 not less than 30 days nor more than 60
days before the Redemption Date (unless a shorter notice shall be satisfactory
to the Trustee).
Section 3.02
Selection of Debentures to Be
Redeemed. If less than all the
Debentures are to be redeemed by the Company, unless the procedures of the
Clearing Agency provide otherwise, the Trustee shall select the Debentures to be
redeemed by lot, on a pro rata basis or by another method the Trustee considers
fair and appropriate (so long as such method is not prohibited by the rules of
any stock exchange on which the Debentures are then listed). The Trustee shall
make the selection at least 35 days but not more than 60 days before the
Redemption Date from outstanding Debentures not previously called for
redemption. Debentures and
portions of Debentures that the Trustee selects for redemption shall be in
principal amounts of $1,000 or an integral multiple of $1,000. Provisions of
the Indenture that apply to Debentures called for redemption also apply to
portions of Debentures called for redemption. The Trustee shall notify the
Company promptly of the Debentures or portions of the Debentures to be redeemed. If any Debenture
selected for partial redemption is converted in part before termination of the
conversion right with respect to the portion of the Debenture so selected, the
converted portion of such Debenture shall be deemed (so far as may be) to be the
portion selected for redemption. Debentures, which have been converted during a
selection of Debentures to be redeemed, may be treated by the Trustee as
outstanding for the purpose of such selection.
Section 3.03
Notice of Redemption.
At least 30 days but not more than 60 days before the Redemption Date, the
Company shall mail a notice of redemption by first-class mail, postage prepaid,
to each Holder of Debentures to be redeemed. The notice shall
identify the Debentures to be redeemed and shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3)
the Conversion Rate;
(4)
the name and address of the Paying
Agent and the Conversion Agent;
(5)
that Debentures called for redemption
may be converted at any time before the close of business on the date that is
two Business Days prior to the Redemption Date;
(6)
that Holders who want to convert
their Debentures must satisfy the requirements set forth in this Supplemental
Indenture and the Debentures;
(7)
that Debentures called for redemption
must be surrendered to the Paying Agent at least two Business Days prior to the
Redemption Date to collect the Redemption Price;
(8)
if fewer than all of the outstanding
Debentures are to be redeemed, the certificate numbers, if any, and principal
amounts of the particular Debentures to be redeemed;
(9)
that, unless the Company defaults in
making payment of such Redemption Price, interest, if any, on Debentures called
for redemption will cease to accrue on and after the Redemption Date; and
(10)
the CUSIP number(s) for the
Debentures. At the Company's
request, the Trustee shall give the notice of redemption in the Company's name
and at the Company's expense, provided that the Company makes such request at
least three Business Days prior to the date by which such notice of redemption
must be given to Holders in accordance with this Section 3.03.
Section 3.04
Effect of Notice of Redemption.
Once notice of redemption is given by or on behalf of the Company pursuant to
Section 3.03, Debentures called for redemption become due and payable on the
Redemption Date and at the Redemption Price stated in such notice except for
Debentures which are converted in accordance with the terms of this Supplemental
Indenture and the Debentures. Upon surrender to the Paying Agent, such
Debentures shall be paid at the Redemption Price stated in such notice.
Section 3.05
Deposit of Redemption Price.
Prior to 10:00 a.m. (New York City time), on the Redemption Date, the Company
shall deposit with the Paying Agent (or if the Company or a Subsidiary or an
Affiliate of either of them is the Paying Agent, shall segregate and hold in
trust) money sufficient to pay the Redemption Price of all Debentures to be
redeemed on that date other than Debentures or portions of Debentures called for
redemption which on or prior thereto have been delivered by the Company to the
Trustee for cancellation or have been converted. The Paying Agent shall as
promptly as practicable return to the Company any money not required for that
purpose (because of conversion of Debentures or otherwise) pursuant to
Article XI of the Original Indenture. If such money is then held by the Company
in trust and is not required for such purpose it shall be discharged from such
trust.
Section 3.06
Debentures Redeemed in Part.
Subject to Section 1.05, upon surrender of a Debenture that is redeemed in
part, the Company shall execute and the Trustee shall authenticate and deliver
to the Holder a new Debenture in an authorized denomination equal in principal
amount to the unredeemed portion of the Debenture surrendered.
Section 3.07
Purchase of Debentures by the Company
at Option of the Holder. (a)
General. On the terms and subject to
the conditions of this Section 3.07, Debentures shall be purchased by the
Company at the option of the Holder on August 1, 2006, August 1, 2010 and August
1, 2017 (each, a "Purchase Date"), at a price equal to 100% of the
principal amount of the Debentures to be purchased plus accrued and unpaid
interest, if any, to such Purchase Date (the "Purchase Price").
Purchases of Debentures hereunder shall be made, at the option of the Holder
thereof, upon:
(1)
delivery to the Paying Agent by the
Holder of a written notice of purchase (a "Purchase Notice") during the
period beginning at any time from the opening of business on the date that is 20
Business Days prior to the relevant Purchase Date until the close of business on
the last Business Day prior to such Purchase Date stating:
A.
the certificate number of the
Debenture which the Holder will deliver to be purchased or the appropriate
Clearing Agency procedures to be complied with if Global Debentures are still
outstanding,
B.
the portion of the principal amount
of the Debenture which the Holder will deliver to be purchased, which portion
must be in principal amounts of $1,000 or an integral multiple thereof,
C.
that such Debenture shall be
purchased by the Company as of the Purchase Date pursuant to the terms and
conditions specified in the Debentures and in this Supplemental Indenture, and
D.
for any purchases on or after August
1, 2010, in which the Company elects, pursuant to Section 3.07(b), to pay the
Purchase Price, in whole or in part, in shares of Common Stock but such portion
of the Purchase Price shall ultimately be paid to such Holder entirely in cash
because any of the conditions to payment of the Purchase Price in shares of
Common Stock is not satisfied prior to the close of business on the last
Business Day prior to the relevant Purchase Date, as set forth in
Section 3.07(d), whether such Holder elects (i) to withdraw such Purchase Notice
as to some or all of the Debentures to which such Purchase Notice relates
(stating the principal amount and certificate numbers, if any, of the Debentures
as to which such withdrawal shall relate), or (ii) to receive cash in respect of
the entire Purchase Price for all Debentures (or portions thereof) to which such
Purchase Notice relates; and
(2) delivery of such Debenture to the
Paying Agent with the Purchase Notice (together with all necessary endorsements)
at the offices of the Paying Agent, such delivery being a condition to receipt
by the Holder of the Purchase Price therefor; provided, however, that such
Purchase Price shall be so paid pursuant to this Section 3.07 only if the
Debenture so delivered to the Paying Agent shall conform in all respects to the
description thereof in the related Purchase Notice, as reasonably determined by
the Company. If a Holder, in such
Holder's Purchase Notice and in any written notice of withdrawal delivered by
such Holder pursuant to the terms of Section 3.09, fails to indicate such
Holder's choice with respect to the election set forth in clause (D) of
Section 3.07(a)(1), such Holder shall be deemed to have elected to receive cash
in respect of the entire Purchase Price for all Debentures subject to such
Purchase Notice in the circumstances set forth in such clause (D). The Company shall
purchase from the Holder thereof, pursuant to this Section 3.07, a portion of a
Debenture, only if the principal amount of such portion is $1,000 or an integral
multiple of $1,000. Provisions of this Supplemental Indenture that apply to the
purchase of all of a Debenture also apply to the purchase of such portion of
such Debenture. Any purchase by the
Company contemplated pursuant to the provisions of this Section 3.07 shall be
consummated, upon satisfaction of all conditions hereunder, in the manner
specified in Sections 3.09 and 3.10. Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent a
Purchase Notice contemplated by this Section 3.07(a) shall have the right to
withdraw such Purchase Notice at any time prior to the close of business on the
last Business Day prior to the Purchase Date by delivery of a written notice of
withdrawal to the Paying Agent in accordance with Section 3.09. The Paying Agent
shall promptly notify the Company of the receipt by it of any Purchase Notice or
written notice of withdrawal thereof. (b)
Company's Right to Elect Manner of
Payment of Purchase Price for Payment. The Company shall pay cash for any
Debentures purchased on August 1, 2006 pursuant to this Section 3.07. The
Debentures to be purchased on any Purchase Date pursuant to Section 3.07(a) on
or after August 1, 2010, may be paid for, in whole or in part, at the election
of the Company, in U.S. legal tender ("cash") or shares of Common Stock, or in
any combination of cash and shares of Common Stock (provided that accrued and
unpaid interest shall be paid in cash), subject to the conditions set forth in
Sections 3.07(c) and (d). The Company shall designate, in the Company Notice
delivered pursuant to Section 3.07(e), whether the Company will purchase the
Debentures for cash or, for purchases on or after August 1, 2010, shares of
Common Stock, or, if a combination thereof, the percentages of the Purchase
Price of Debentures in respect of which it will pay in cash or shares of Common
Stock; provided that the Company will pay cash for fractional interests in
shares of Common Stock. For purposes of determining the existence of potential
fractional interests, all Debentures subject to purchase by the Company held by
a Holder shall be considered together (no matter how many separate certificates
are to be presented). Each Holder whose Debentures are purchased pursuant to
this Section 3.07 shall receive the same percentage of cash or shares of Common
Stock in payment of the Purchase Price for such Debentures, except (i) as
provided in Section 3.07(d) with regard to the payment of cash in lieu of
fractional shares of Common Stock and (ii) in the event that the Company is
unable to purchase the Debentures of a Holder or Holders for shares of Common
Stock because any necessary qualifications or registrations of the shares of
Common Stock under applicable state securities laws cannot be obtained, the
Company may purchase the Debentures of such Holder or Holders for cash. The
Company may not change its election with respect to the consideration (or
components or percentages of components thereof) to be paid once the Company has
given its Company Notice to Holders except pursuant to Section 3.07(d) in the
event of a failure to satisfy, prior to the close of business on the last
Business Day prior to the Purchase Date, any condition to the payment of the
Purchase Price, in whole or in part, in shares of Common Stock. At least three
Business Days before each Company Notice Date, the Company shall deliver an
Officers' Certificate to the Trustee specifying: (i)
the manner of payment selected by the Company, (ii)
the information required by Section 3.07(e) in the Company Notice, (iii)
if the Company elects to pay the Purchase Price, or a specified percentage
thereof, in shares of Common Stock for purchases on or after August 1, 2010,
that the conditions to such manner of payment set forth in Section 3.07(d) have
been or will be complied with, (iv)
whether the Company desires the Trustee to give the Company Notice required by
Section 3.07(e) on its behalf, and (v)
the principal amount of the Debentures plus accrued and unpaid interest. (c)
Purchase with Cash. At the option of
the Company, the Purchase Price of Debentures in respect of which a Purchase
Notice pursuant to Section 3.07(a) has been given, or a specified percentage
thereof, may be paid by the Company with cash equal to the aggregate Purchase
Price of such Debentures. Notwithstanding the foregoing sentence, the Purchase
Price of Debentures in respect of which a Purchase Notice pursuant to
Section 3.07(a) has been given with respect to August 1, 2006 must be paid by
the Company with cash equal to the aggregate Purchase Price of the Debentures,
plus accrued and unpaid interest. (d)
Payment by Issuance of Shares of Common
Stock. At the option of the Company, the Purchase Price of Debentures in
respect of which a Purchase Notice pursuant to Section 3.07(a) has been given
with respect to a Purchase Date occurring on August 1, 2010 or August 1, 2017,
or a specified percentage thereof, may be paid by the Company by the issuance of
a number of shares of Common Stock equal to the quotient obtained by dividing
(i) the portion of the Purchase Price to be paid in shares of Common Stock by
(ii) the Market Price of one share of Common Stock as determined by the Company
in the Company Notice, subject to the next succeeding paragraph. The Company will not
issue fractional shares of Common Stock in payment of the Purchase Price.
Instead, the Company will pay cash based on the current Market Price for all
fractional shares. It is understood that if a Holder elects to have more than
one Debenture purchased, the number of shares of Common Stock shall be based on
the aggregate amount of Debentures to be purchased. The Company's right
to exercise its election, as of August 1, 2010 or August 1, 2017, to purchase
Debentures through the issuance of shares of Common Stock shall be conditioned
upon: (i)
the Company not having elected in its Company Notice to pay entirely in cash and
its election in a timely Company Notice to purchase all or a specified
percentage of the Debentures with shares of Common Stock as provided herein; (ii)
the registration of such shares of Common Stock under the Securities Act, or the
Exchange Act, in each case, if required; (iii)
the listing of such shares of Common Stock on the principal national securities
exchange (currently the NYSE) or other principal exchange or market on which the
shares of Common Stock are listed or traded; (iv)
any necessary qualification or registration under applicable state securities
laws or the availability of an exemption from such qualification and
registration; and (v)
the receipt by the Trustee of an Officers' Certificate and an Opinion of Counsel
each stating that (A) the terms of the issuance of the shares of Common Stock
are in conformity with this Indenture and (B) the shares of Common Stock to be
issued by the Company in payment of the Purchase Price (or any portion thereof)
in respect of the Debentures have been duly authorized and, when issued and
delivered pursuant to the terms of this Indenture in payment of the Purchase
Price (or any portion thereof) in respect of the Debentures, will be validly
issued, fully paid and non-assessable and, to the best of such counsel's
knowledge, free from preemptive rights, and, in the case of such Officers'
Certificate, stating that the conditions above and the condition set forth in
the second succeeding sentence have been satisfied and, in the case of such
Opinion of Counsel, stating that the conditions in clauses (i) through (iv)
above have been satisfied. Such Officers'
Certificate shall also set forth the number of shares of Common Stock to be
issued for each $1,000 principal amount of Debentures and the Sale Price of a
share of Common Stock on each trading day during the period commencing on the
first trading day of the period during which the Market Price is calculated.
The Company may pay the Purchase Price (or any portion thereof) in shares of
Common Stock only if the information necessary to calculate the Market Price is
published in a daily newspaper of national circulation or is otherwise readily
available. If the foregoing conditions are not satisfied with respect to a
Holder or Holders prior to the close of business on the last Business Day prior
to the Purchase Date, and the Company has elected to purchase the Debentures
pursuant to this Section 3.07(d) through the issuance of shares of Common Stock,
the Company shall pay the entire Purchase Price of the Debentures of such Holder
or Holders in cash. The "Market Price"
means the average of the Sale Prices of the Common Stock for the five trading
day period ending on the third Business Day prior to the applicable Purchase
Date (if the third Business Day prior to the applicable Purchase Date is a
trading day, or if not, then on the last trading day prior to the third Business
Day), appropriately adjusted to take into account the occurrence, during the
period commencing on the first of the trading days during the five trading day
period and ending on the Purchase Date, of any event described in Sections 2.06,
2.07, 2.08, 2.09 or 2.10; subject, however, to the conditions set forth in
Article 2. Upon determination of
the actual number of shares of Common Stock to be issued upon repurchase of
Debentures, the Company will disseminate a press release through Dow Jones &
Company, Inc. or Bloomberg Business News containing this information or publish
the information on the Company's website or through such other public medium as
the Company may use at that time. (e)
Company Notice. In connection with
any purchase of Debentures pursuant to the provisions set forth in this Section
3.07 and the Debentures, the Company shall give notice to Holders setting forth
information specified in this Section 3.07(e) (the "Company Notice").
The Company Notice shall be sent to Holders (and to beneficial owners as
required by applicable law) not less than 20 Business Days prior to each
Purchase Date (the "Company Notice Date"). In the event the
Company has elected to pay the Purchase Price (or a specified percentage
thereof) with shares of Common Stock or any combination of cash or shares of
Common Stock pursuant to Section 3.07(d) for purchases on or after August 1,
2010, the Company Notice shall:
(1) state that each Holder will receive
shares of Common Stock with a Market Price determined as of a specified
date prior to the Purchase Date equal to such specified percentage of the
Purchase Price of the Debentures held by such Holder (except any cash amount to
be paid in lieu of fractional shares and in respect of accrued and unpaid
interest, if any);
(2)
set forth the method of calculating
the Market Price of the shares of Common Stock; and
(3)
state that because the Market Price
of shares of Common Stock will be determined prior to the Purchase Date, Holders
of the Debentures will bear the market risk with respect to the value of the
shares of Common Stock to be received from and after the date such Market Price
is determined to the Purchase Date. In any case, each
Company Notice shall include a form of Purchase Notice to be completed by a
Holder and shall state: (ii)
the Purchase Price and the Conversion Rate; (iii)
the name and address of the Paying Agent and the Conversion Agent; (iv)
that Debentures as to which a Purchase Notice has been given may be converted if
they are otherwise convertible in accordance with Article 2 and the provisions
of the Debentures only if the applicable Purchase Notice has been validly
withdrawn in accordance with the terms of this Supplemental Indenture; (v)
that Debentures must be surrendered to the Paying Agent to collect payment; (vi)
that the Purchase Price for any Debenture as to which a Purchase Notice has been
given and not withdrawn will be paid promptly following the later of the
Purchase Date and the time of surrender of such Debenture; (vii)
the procedures the Holder must follow to exercise its put rights under this
Section 3.07 and a brief description of those rights; (viii)
briefly, the conversion rights of the Debentures; (ix)
the procedures for withdrawing a Purchase Notice including, without limitation,
for a conditional withdrawal pursuant to the terms of Section 3.07(a)(1)(D) or
Section 3.09; (x)
that, unless the Company defaults in making payment on Debentures for which a
Purchase Notice has been submitted, interest, if any, on such Debentures will
cease to accrue on and after the Purchase Date; and (xi)
the CUSIP number of the Debentures. At the Company's
request, the Trustee shall give such Company Notice in the Company's name and at
the Company's expense; provided, however, that, in all cases, the text of such
Company Notice shall be prepared by the Company. (f)
Covenants of the Company. All shares
of Common Stock delivered upon purchase of the Debentures shall be newly issued
shares or treasury shares, shall be duly authorized, validly issued, fully paid
and nonassessable, and shall be free from preemptive rights and free of any lien
or adverse claim. (g)
Procedure upon Purchase. The Company
shall deposit cash (in respect of cash purchases under this Section 3.07 or
payments for fractional interests or accrued and unpaid interest, as applicable)
or shares of Common Stock, or a combination thereof, as applicable, at the time
and in the manner as provided in Section 3.10, sufficient to pay the aggregate
Purchase Price of all Debentures to be purchased pursuant to this Section 3.07.
As soon as practicable after the Purchase Date, the Company shall deliver to
each Holder entitled to receive shares of Common Stock through the Paying Agent,
a certificate for the number of full shares of Common Stock issuable in payment
of the Purchase Price. The person in whose name the certificate for the shares
of Common Stock is registered shall be treated as a holder of record of Common
Stock on the Business Day following the applicable Purchase Date. No payment or
adjustment will be made for dividends on the shares of Common Stock the record
date for which occurred on or prior to the Purchase Date. (h)
Taxes. If a Holder of a purchased
Debenture is paid in shares of Common Stock, the Company shall pay any
documentary, stamp or similar issue or transfer tax due on such issue of Common
Stock. However, the Holder shall pay any such tax which is due because the
Holder requests the Common Stock to be issued in a name other than the Holder's
name. The Paying Agent may refuse to deliver the certificates representing the
shares of Common Stock being issued in a name other than the Holder's name until
the Paying Agent receives a sum sufficient to pay any tax which will be due
because the shares of Common Stock are to be issued in a name other than the
Holder's name. Nothing herein shall preclude any income tax withholding required
by law or regulations.
Section 3.08
Purchase of Debentures by the Company
at Option of the Holder upon a Change in Control. (a)
If a Change in Control occurs, the
Debentures not previously purchased or redeemed by the Company shall be
purchased by the Company, at the option of the Holder thereof, at a purchase
price in cash equal to the principal amount of such Debentures plus any accrued
and unpaid interest to the Change in Control Purchase Date (the "Change in
Control Purchase Price"), as of the date that is 45 days after the date of
the Change in Control Notice delivered by the Company (the "Change in Control
Purchase Date"), subject to satisfaction by or on behalf of the Holder of
the requirements set forth in Section 3.08(c). A "Change in
Control" shall be deemed to have occurred at such time after the Debentures
are originally issued as either of the following events shall occur:
(i) any person, including any syndicate or group
deemed to be a "person" under Section 13(d)(3) of the Exchange Act, acquires
beneficial ownership, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of transactions, of shares of the
Company's Capital Stock entitling the person to exercise 50% or more of the
total voting power of all shares of the Company's Capital Stock that are
entitled to vote generally in elections of directors, other than an acquisition
by the Company, any of the Company's Subsidiaries or any of the Company's
employee benefit plans; or
(ii) the Company merges or consolidates with or
into any other person, another person merges into the Company, or the Company
conveys, sells, transfers or leases all or substantially all of its assets to
another person, other than any transaction: (A) that does not result in any
reclassification, conversion, exchange or cancellation of outstanding shares of
the Company's Capital Stock, (B) pursuant to which the holders of the Common
Stock immediately prior to the transaction have the entitlement to exercise,
directly or indirectly, 50% or more of the total voting power of all shares of
Capital Stock entitled to vote generally in the election of directors of the
continuing or surviving corporation immediately after the transaction, or (C)
which is effected solely to change the Company's jurisdiction of incorporation
and results in a reclassification, conversion or exchange of outstanding shares
of the Common Stock solely into shares of common stock of the surviving entity. Notwithstanding the
foregoing provisions of this Section 3.08, a Change in Control shall not be
deemed to have occurred if (A) the Sale Price for any five trading days within
the period of 10 consecutive trading days ending immediately after the later of
a Change in Control or the public announcement of a Change in Control, in the
case of a Change in Control relating to an acquisition of Capital Stock, or the
period of 10 consecutive trading days ending immediately before a Change in
Control, in the case of a Change in Control relating to a merger, consolidation
or asset sale, equals or exceeds 105% of the Applicable Conversion Price of the
Debentures in effect on each of those trading days or (B) all of the
consideration (excluding cash payments for fractional shares and cash payments
made pursuant to dissenters' appraisal rights) in a merger or consolidation
otherwise constituting a Change in Control under clause (i) or clause (ii) above
consists of shares of common stock traded on a national securities exchange or
quoted on the Nasdaq National Market (or will be so traded or quoted immediately
following the merger or consolidation) and as a result of the merger or
consolidation the Debentures become convertible into such common stock. For
purposes of this Section 3.08, (x) whether a person is a "beneficial owner"
shall be determined in accordance with Rule 13d-3 under the Exchange Act and (y)
"person" includes any syndicate or group that would be deemed to be a "person"
under Section 13(d)(3) of the Exchange Act. (b)
No later than 30 days after the occurrence
of a Change in Control, the Company shall mail a written notice of the Change in
Control (the "Change in Control Notice") by first-class mail to the
Trustee and to each Holder (and to beneficial owners as required by applicable
law). The notice shall include a form of Change in Control Purchase Notice to
be completed by a Holder and shall state:
(1) briefly, the events causing a Change
in Control and the date of such Change in Control;
(2)
the date by which the Change in
Control Purchase Notice pursuant to this Section 3.08 must be given;
(3)
the Change in Control Purchase Date;
(4)
the Change in Control Purchase Price;
(5)
the name and address of the Paying
Agent and the Conversion Agent;
(6)
the Conversion Rate and any
adjustments thereto;
(7)
that the Debentures as to which a
Change in Control Purchase Notice has been given may be converted if they are
otherwise convertible pursuant to Article 2 and the provisions of the Debentures
only if the Change in Control Purchase Notice has been validly withdrawn in
accordance with the terms of this Supplemental Indenture;
(8)
that the Debentures must be
surrendered to the Paying Agent to collect payment;
(9)
that the Change in Control Purchase
Price for any Debenture as to which a Change in Control Purchase Notice has been
duly given and not withdrawn will be paid promptly following the later of the
Change in Control Purchase Date and the time of surrender of such Debenture;
(10)
briefly, the procedures the Holder
must follow to exercise rights under this Section 3.08;
(11)
briefly, the conversion rights of the
Debentures;
(12)
the procedures for withdrawing a
Change in Control Purchase Notice;
(13)
that, unless the Company defaults in
making payment of such Change in Control Purchase Price on Debentures
surrendered for purchase, such Debentures will cease to accrue interest on and
after the Change in Control Purchase Date; and
(14)
the CUSIP number of the Debentures. (c)
A Holder may exercise its rights specified
in Section 3.08(a) upon delivery of a written notice of purchase (a "Change
in Control Purchase Notice") to the Paying Agent at any time on or prior to
the 30th day after the date the Company delivers its Change in Control Notice,
stating:
(1)
the certificate number of the
Debenture which the Holder will deliver to be purchased;
(2)
the portion of the principal amount
of the Debenture which the Holder will deliver to be purchased, which portion
must be $1,000 or an integral multiple thereof; and
(3)
that such Debenture shall be
purchased pursuant to the terms and conditions specified in the Debentures. The delivery of such
Debenture to the Paying Agent with the Change in Control Purchase Notice
(together with all necessary endorsements) at the offices of the Paying Agent
shall be a condition to the receipt by the Holder of the Change in Control
Purchase Price therefor; provided, however, that such Change in Control Purchase
Price shall be so paid pursuant to this Section 3.08 only if the Debenture so
delivered to the Paying Agent shall conform in all respects to the description
thereof set forth in the related Change in Control Purchase Notice, as
reasonably determined by the Company. The Company shall
purchase from the Holder thereof, pursuant to this Section 3.08, a portion of a
Debenture only if the principal amount of such portion is $1,000 or an integral
multiple of $1,000. Provisions of this Indenture that apply to the purchase of
all of a Debenture also apply to the purchase of such portion of such Debenture. Any purchase by the
Company contemplated pursuant to the provisions of this Section 3.08 shall be
consummated, upon satisfaction of all conditions hereunder, in the manner
specified in Sections 3.09 and 3.10. Notwithstanding
anything herein to the contrary, any Holder delivering to the Paying Agent a
Change in Control Purchase Notice contemplated by this Section 3.08 shall have
the right to withdraw such Change in Control Purchase Notice at any time prior
to the close of business on the last Business Day prior to the Change in Control
Purchase Date by delivery of a written notice of withdrawal to the Paying Agent
in accordance with Section 3.09. The Paying Agent
shall promptly notify the Company of the receipt by it of any Change in Control
Purchase Notice or written notice of withdrawal thereof.
Section 3.09
Effect of Purchase Notice or Change
in Control Purchase Notice. Upon
receipt by the Paying Agent of the Purchase Notice or the Change in Control
Purchase Notice specified in Section 3.07(a) or Section 3.08(c), as applicable,
the Holder of the Debenture in respect of which such Purchase Notice or Change
in Control Purchase Notice, as the case may be, was given shall (unless such
Purchase Notice or Change in Control Purchase Notice, as the case may be, is
withdrawn as specified in the following two paragraphs) thereafter be entitled
to receive solely the Purchase Price or the Change in Control Purchase Price, as
the case may be, with respect to such Debenture. Such Purchase Price or Change
in Control Purchase Price shall be paid to such Holder, subject to receipt of
funds and/or securities by the Paying Agent, promptly following the later of (x)
the applicable Purchase Date or the Change in Control Purchase Date, as the case
may be, with respect to such Debenture (provided the conditions in
Section 3.07(a) or Section 3.08(c), as applicable, have been satisfied) and (y)
the time of delivery of such Debenture to the Paying Agent by the Holder thereof
in the manner required by Section 3.07(a) or Section 3.08(c), as applicable.
Debentures in respect of which a Purchase Notice or Change in Control Purchase
Notice has been given by the Holder thereof may not be converted pursuant to
Article 2 on or after the date of the delivery of such Purchase Notice or Change
in Control Purchase Notice unless such Purchase Notice or Change in Control
Purchase Notice has first been validly withdrawn as specified in the following
two paragraphs. A Purchase
Notice or Change in Control Purchase Notice may be
withdrawn by means of a written notice of withdrawal delivered to the office of
the Paying Agent at any time prior to the close of business on the last Business
Day prior to the Purchase Date or Change in Control Purchase Date specifying: (1)
the certificate
number, if any, of the Debenture in respect of
which such notice of withdrawal is being submitted or the appropriate Clearing
Agency procedures to be complied with if Global Debentures are still
outstanding, (2)
the principal
amount of the Debenture with respect to which such notice of withdrawal is being
submitted, and (3)
the principal
amount, if any, of such Debenture which remains subject to the original Purchase
Notice or Change in Control Purchase Notice, as the case may be, and which has
been or will be delivered for purchase by the Company. A written notice of withdrawal of a Purchase
Notice may be in the form set forth in the preceding paragraph or may be in the
form of (i) a conditional withdrawal contained in a Purchase Notice pursuant to
the terms of Section 3.07(a)(1)(D) or (ii) a conditional withdrawal containing
the information set forth in Section 3.07(a)(1)(D) and the preceding paragraph
and contained in a written notice of withdrawal delivered to the Paying Agent as
set forth in the preceding paragraph. There shall be no purchase of any Debentures
pursuant to Section 3.07 or 3.08 if there has occurred (prior to, on or after,
as the case may be, the giving, by the Holders of such Debentures, of the
required Purchase Notice or Change in Control Purchase Notice, as the case may
be) and is continuing an Event of Default (other than a default in the payment
of the Purchase Price or Change in Control Purchase Price, as the case may be,
with respect to such Debentures). The Paying Agent will promptly return to the
respective Holders thereof any Debentures (x) with respect to which a Purchase
Notice or Change in Control Purchase Notice, as the case may be, has been
withdrawn in compliance with this Indenture, or (y) held by it during the
continuance of an Event of Default (other than a default in the payment of the
Purchase Price or Change in Control Purchase Price, as the case may be, with
respect to such Debentures) in which case, upon such return, the Purchase Notice
or Change in Control Purchase Notice with respect thereto shall be deemed to
have been withdrawn.
Section 3.10
Deposit of Purchase Price or Change
in Control Purchase Price. Prior to
10:00 a.m. (local time in the City of New York) on the Business Day following
the Purchase Date or the Change in Control Purchase Date, as the case may be,
the Company shall deposit with the Trustee or with the Paying Agent (or, if the
Company or a Subsidiary or an Affiliate of either of them is acting as the
Paying Agent, shall segregate and hold in trust) an amount of cash (in
immediately available funds if deposited on such Business Day) or Common Stock,
if permitted hereunder, sufficient to pay the aggregate Purchase Price or Change
in Control Purchase Price, as the case may be, of all the Debentures or portions
thereof which are to be purchased as of the Purchase Date or Change in Control
Purchase Date, as the case may be.
Section 3.11
Debentures Purchased in Part.
Subject to Section 1.05, any Debenture which is to be purchased only in part
shall be surrendered at the office of the Paying Agent (with, if the Company or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company and the Trustee duly executed by, the Holder
thereof or such Holder's attorney duly authorized in writing) and the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
such Debenture, without service charge, a new Debenture or Debentures, of any
authorized denomination as requested by such Holder in aggregate principal
amount equal to, and in exchange for, the portion of the principal amount of the
Debenture so surrendered which is not purchased.
Section 3.12
Covenant to Comply With Securities
Laws Upon Purchase of Debentures. When
complying with the provisions of Section 3.07 or 3.08 hereof (provided that such
offer or purchase constitutes an "issuer tender offer" for purposes of Rule
13e-4 (which term, as used herein, includes any successor provision thereto)
under the Exchange Act at the time of such offer or purchase), the Company shall
(i) comply with Rule 13e- 4 and Rule 14e-1 (or any successor provision) under
the Exchange Act, (ii) file the related Schedule TO (or any successor schedule,
form or report) under the Exchange Act, and (iii) otherwise comply with all
federal and state securities laws so as to permit the rights and obligations
under Sections 3.07 and 3.08 to be exercised in the time and in the manner
specified in Sections 3.07 and 3.08.
Section 3.13
Repayment to the Company.
The Trustee and the Paying Agent shall return to the Company any cash or shares
of Common Stock that remain unclaimed, together with interest or dividends, if
any, thereon (subject to the provisions of Section 7.05 of the Original
Indenture), held by them for the payment of the Purchase Price or Change in
Control Purchase Price, as the case may be; provided, however, that to the
extent that the aggregate amount of cash or shares of Common Stock deposited by
the Company pursuant to Section 3.10 exceeds the aggregate Purchase Price or
Change in Control Purchase Price, as the case may be, of the Debentures or
portions thereof which the Company is obligated to purchase as of the Purchase
Date or Change in Control Purchase Date, as the case may be, then, unless
otherwise agreed in writing with the Company, promptly after the Business Day
following the Purchase Date or Change in Control Purchase Date, as the case may
be, the Trustee shall return any such excess to the Company together with
interest or dividends, if any, thereon (subject to the provisions of
Section 7.05 of the Original Indenture).
ARTICLE 4
Section 4.01
Additional Events of Default.
Any Event of Default set forth in Article 6 of the Original Indenture and any
one of the following events shall constitute an "Event of Default"
hereunder and thereunder whenever used with respect to the Debentures in this
Indenture (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body): (1) a default by the Company in the payment of
any Redemption Price, Purchase Price or Change in Control Purchase Price due
with respect to any Debentures when such amount becomes due and payable;
provided, however, that notwithstanding the foregoing, the Company's
failure to pay such amounts, if caused solely by a wire transfer malfunction or
similar problem outside of the Company's control, shall not be deemed an Event
of Default; or (2)
failure by the Company to pay Registration
Default Damages or a default by the Company in the payment of any contingent
interest, which failure or default, in either case, continues for 30 Business
Days.
ARTICLE 5
Section 5.01
Recitals by Company.
The recitals in this Supplemental Indenture are made by the Company only and not
by the Trustee, and all of the provisions contained in the Original Indenture in
respect of the rights, privileges, immunities, powers and duties of the Trustee
shall be applicable in respect of the Debentures and this Supplemental Indenture
as fully and with like effect as if set forth herein in full.
Section 5.02
Ratification and Confirmation of
Original Indenture. As supplemented
hereby, the Original Indenture is in all respects ratified and confirmed, and
the Original Indenture and this Supplemental Indenture shall be read, taken and
construed as one and the same instrument. Unless otherwise indicated, Section
and Article references contained herein are references to this Supplemental
Indenture.
Section 5.03
Executed in Counterparts.
This Supplemental Indenture may be executed in several counterparts, each of
which shall be deemed to be an original, and such counterparts shall together
constitute but one and the same instrument.
Section 6.01
Agreements.
The Company and the Trustee on behalf of the Holders agree (i) that for United
States federal income tax purposes the Debentures will be treated as
indebtedness subject to the Treasury regulations governing contingent payment
debt instruments, (ii) that the Holders will report original issue discount and
interest on the Debentures in accordance with the Company's determination of
both the "comparable yield" and the "projected payment schedule" and (iii) to be
bound by the Company's application of the Treasury regulations that govern
contingent payment debt instruments. For this purpose, the "comparable yield"
for the Debentures is 8.97% compounded semi-annually. Holders may obtain the
projected payment schedule by submitting a written request for such schedule to
the Company. The Company shall file with the Trustee no later than the end of
each calendar year or at any other time as the Trustee may request (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on outstanding Debentures as of the end of such
year and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.
IN WITNESS WHEREOF, each party hereto has caused
this instrument to be signed in its name and behalf by its duly authorized
officers, all as of the day and year first above written. CENTURYTEL,
INC.
By:
/s/
R. Stewart Ewing, Jr.
R. Stewart Ewing, Jr.
Chief Financial Officer
By:
/s/
Stacey Goff
Stacey Goff
Assistant Secretary
/s/ Stacey Goff
REGIONS BANK,
as Trustee
By: /s/ Jo Ann
Mayfield
EXHIBIT A (Form of Face of Debenture) THIS SECURITY WILL BE SUBJECT TO THE REGULATIONS
GOVERNING CONTINGENT PAYMENT DEBT INSTRUMENTS FOR UNITED STATES FEDERAL INCOME
TAX PURPOSES. AS REQUIRED UNDER APPLICABLE TREASURY REGULATIONS, THE COMPANY
HAS SET FORTH THE "COMPARABLE YIELD" IN SECTION 6.01 OF THE SECOND SUPPLEMENTAL
INDENTURE PURSUANT TO WHICH THIS SECURITY IS BEING ISSUED. THE HOLDER OF THIS
SECURITY MAY OBTAIN THE PROJECTED PAYMENT SCHEDULE BY SUBMITTING A WRITTEN
REQUEST FOR SUCH INFORMATION TO CENTURYTEL, INC., 100 CENTURYTEL DRIVE, MONROE,
LOUISIANA 71203, ATTENTION: INVESTOR RELATIONS. [If the Debenture is to be a Global Debenture,
insert: THIS SECURITY IS A GLOBAL DEBENTURE WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE CLEARING AGENCY OR
A NOMINEE OF THE CLEARING AGENCY. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES
REGISTERED IN THE NAME OF A PERSON OTHER THAN THE CLEARING AGENCY OR ITS NOMINEE
ONLY IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE, AND NO TRANSFER OF
THIS SECURITY (OTHER THAN A TRANSFER OF THIS DEBENTURE AS A WHOLE BY THE
CLEARING AGENCY TO A NOMINEE OF THE CLEARING AGENCY OR BY A NOMINEE OF THE
CLEARING AGENCY TO THE CLEARING AGENCY OR ANOTHER NOMINEE OF THE CLEARING AGENCY
OR TO A SUCCESSOR CLEARING AGENCY OR TO A NOMINEE OF SUCH SUCCESSOR) MAY BE
REGISTERED EXCEPT IN LIMITED CIRCUMSTANCES. UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW
YORK, NEW YORK) TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT AND ANY DEBENTURE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT HEREON IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY A PERSON IS
WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.] [THIS SECURITY (OR ITS PREDECESSOR) WAS
ORIGINALLY ISSUED IN A TRANSACTION EXEMPT FROM REGISTRATION UNDER THE UNITED
STATES SECURITIES ACT OF 1933, (THE "SECURITIES ACT"), AND THIS SECURITY
MAY NOT BE OFFERED, SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH
REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS NOTE
MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE
SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER. THE HOLDER OF THIS SECURITY AGREES FOR THE
BENEFIT OF CENTURYTEL, INC. THAT, UNTIL THE EXPIRATION OF THE APPLICABLE HOLDING
PERIOD WITH RESPECT TO THIS SECURITY AND ANY SHARES OF COMMON STOCK ISSUABLE
UPON CONVERSION OF THIS SECURITY SET FORTH IN RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR RULE), (A) THIS SECURITY AND ANY SHARES OF COMMON STOCK
ISSUABLE UPON CONVERSION OF THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR
OTHERWISE TRANSFERRED, ONLY (I) IN THE UNITED STATES, TO A PERSON WHO THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF
RULE 144A, (II) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES
ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE) OR IN A TRANSACTION NOT
SUBJECT TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT OR (III) PURSUANT
TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF
CASES (I) THROUGH (III) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY
STATE OF THE UNITED STATES AND OTHER JURISDICTIONS AND (B) THE HOLDER WILL, AND
EACH SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS SECURITY AND
ANY SHARES OF COMMON STOCK ISSUABLE UPON CONVERSION OF THIS SECURITY FROM IT OF
THE RESALE RESTRICTIONS REFERRED TO IN (A) ABOVE. CENTURYTEL, INC., AND THE
TRUSTEE RESERVE THE RIGHT TO REQUIRE , PRIOR TO ANY OFFER, TRANSFER OR SALE
PURSUANT TO CLAUSE (II), THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS
OR OTHER INFORMATION SATISFACTORY TO CENTURYTEL, INC. AND THE TRUSTEE, AS THE
CASE MAY BE. THIS SECURITY, ANY SHARES OF COMMON STOCK
ISSUABLE UPON ITS CONVERSION AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES AND OTHER
TRANSFERS OF THIS SECURITY AND ANY SUCH SHARES TO REFLECT ANY CHANGE IN
APPLICABLE LAW OR REGULATION (OR INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY. THE
HOLDER OF THIS SECURITY AND ANY SUCH SHARES OF COMMON STOCK SHALL BE DEEMED BY
THE ACCEPTANCE OF THIS SECURITY AND ANY SUCH SHARES OF COMMON STOCK TO HAVE
AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT. BY ITS ACCEPTANCE OF THE SECURITIES EVIDENCED
HEREBY OR A BENEFICIAL INTEREST IN SUCH SECURITIES, THE HOLDER OF, AND ANY
PERSON THAT ACQUIRES A BENEFICIAL INTEREST, IN SUCH SECURITIES AGREES TO BE
BOUND BY THE PROVISIONS OF THE REGISTRATION RIGHTS AGREEMENT DATED AS OF
AUGUST 26, 2002 (THE "REGISTRATION RIGHTS AGREEMENT") AND RELATING TO THE
REGISTRATION UNDER THE SECURITIES ACT OF THE SECURITIES EVIDENCED HEREBY.] The foregoing legends may be removed from this
Debenture on satisfaction of the conditions specified in the Indenture. CUSIP No. 156700AE6 $ No.
CENTURYTEL, INC. CenturyTel, Inc., a Louisiana corporation (the "Company,"
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received, hereby promises to pay
to___________________, or registered assigns, the principal sum of
______________ DOLLARS ($____________), on August 1, 2032 (such date is
hereinafter referred to as the "Stated Maturity Date"), and to pay
interest on said principal sum from August 26, 2002 or from the next most recent
date to which interest has been paid or duly provided for, semi-annually in
arrears, on February 1 and August 1 of each year (each such date, an "Interest
Payment Date"), commencing on February 1, 2003, at the rate of 4.75% per
annum until the principal hereof shall have been paid or duly made available for
payment and, to the extent permitted by law, to pay interest, compounded
semiannually, on any overdue principal and premium, if any, and on any overdue
installment of interest at the same rate per annum; provided, however, that if a
Registration Default (as defined in the Registration Rights Agreement) occurs,
Registration Default Damages (as defined in the Registration Rights Agreement)
will accrue on this Security in accordance with Section 2(c) of the Registration
Rights Agreement. Subject to the accrual and record date
provisions specified in the Indenture, the Company shall pay contingent interest
in cash to the Holders during any six-month period (a "Contingent Interest
Period") from August 1 to January 31 and from February 1 to July 31,
commencing with the six-month period beginning August 1, 2006, if the average
Debenture Price for the Applicable Five Trading Day Period with respect to such
Contingent Interest Period equals 120% or more of $1,000 principal amount of
Debentures. The amount of contingent interest payable per $1,000 principal
amount of Debentures in respect of any Contingent Interest Period shall equal
the greater of (x) Cash Dividends paid by the Company per share of Common Stock
during that Contingent Interest Period multiplied by the number of shares of
Common Stock into which $1,000 principal amount of Debentures is convertible
pursuant to the Indenture at the then applicable Conversion Rate as of the
record date for such contingent interest and (y) .125% of the average Debenture
Price for the Applicable Five Day Trading Period with respect to such Contingent
Interest Period payable in the manner and on the dates set forth in the
Indenture (as defined below). The amount of interest payable for any period
shall be computed on the basis of a 360-day year consisting of twelve 30-day
months and, except as provided in the Indenture (as defined below), the amount
of interest payable for any period shorter than a full semi-annual period for
which interest is computed will be computed on the basis of the actual number of
days elapsed in such 180-day period. [In the event that any date on which
interest is payable on this Debenture is not a Business Day, then payment of
interest payable on such date will be made on the next succeeding day that is a
Business Day (and without any interest or other payment in respect of such
delay), except that, if such Business Day is in the next succeeding calendar
year, such payment shall be made on the immediately preceding Business Day, in
each case with the same force and effect as if made on such Interest Payment
Date.] The interest installment or contingent interest
so payable, and punctually paid or duly provided for, on any Interest Payment
Date will, as provided in the Indenture, be paid to the Person in whose name
this Debenture (or one or more predecessor Debentures) is registered at the
close of business on the Regular Record Date for such interest installment or
contingent interest, which shall be the close of business on the fifteenth day
of the month immediately preceding the month in which such Interest Payment Date
falls, or the Contingent Interest Record Date for such contingent interest
payment, which shall be the record date for the related Cash Dividend or, if no
Cash Dividend is paid by the Company during any quarter within a Contingent
Interest Period, to Holders as of the 15th day preceding the last day of the
relevant Contingent Interest Period. Any such interest installment or
contingent interest not punctually paid or duly provided for, on any Interest
Payment Date, shall forthwith cease to be payable to the Holders at the close of
business on such Regular Record Date or Contingent Interest Record Date, as the
case may be, and may be paid by the Company to the Person in whose name this
Debenture is registered at the close of business on a special record date to be
fixed by the Trustee for the payment of such Defaulted Interest, which shall not
be more than 15 or less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee of the notice of such
proposed payment, and notice of which shall be given to the Holders of the
Debentures not less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with the
requirements of any securities exchange, if any, on which the Debentures shall
be listed, and upon such notice as may be required by such exchange, all as more
fully provided in the Indenture. The principal of (and premium, if any) and the
interest or contingent interest on this Debenture shall be payable at the office
or agency of the Company maintained for that purpose in the City of Monroe,
State of Louisiana, or the Borough of Manhattan, The City and State of New York,
in any coin or currency of the United States of America that at the time of
payment is legal tender for payment of public and private debts; provided,
however, that payment of interest or contingent interest may be made at the
option of the Company by check mailed to the address of the Person entitled
thereto as such address shall appear in the security register. [Principal,
premium, if any, and interest or contingent interest payable on any payment date
will be paid to DTC with respect to this Debenture held for its account by Cede
& Co. or a successor depositary, as the case may be, for the purpose of
permitting such party to credit the payment received by it in respect of this
Debenture to the accounts of the beneficial owners hereof.]1 This Debenture is convertible as specified on
the following pages of this Debenture. The indebtedness evidenced by this
Debenture is, to the extent provided in the Indenture, senior and unsecured and
will rank in right of payment on parity with all other senior unsecured
obligations of the Company. REFERENCE IS HEREBY MADE TO THE FURTHER
PROVISIONS OF THIS DEBENTURE SET FORTH ON THE FOLLOWING PAGES HEREOF, WHICH
FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH
AT THIS PLACE. Unless the certificate of authentication hereon
has been executed by the Trustee by manual signature, this Debenture shall not
be entitled to any benefit under the Indenture or be valid or obligatory for any
purpose. IN WITNESS WHEREOF, the Company has caused this
instrument to be duly executed under its corporate seal. Dated: CENTURYTEL,
INC.
By:
Name:
Title:
By:
Name:
Title: This Debenture is one of a duly authorized issue
of unsecured securities, debentures, notes or other evidences of indebtedness of
the Company issued and issuable in one or more series under an Indenture, dated
as of March 31, 1994, as supplemented by the Second Supplemental Indenture dated
as of August 20, 2002 (collectively, the "Indenture"), between the
Company and Regions Bank (successor-in-interest to First American Bank & Trust
of Louisiana and Regions Bank of Louisiana), as trustee (the "Trustee," which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitation of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of the debt securities issued
thereunder and of the terms upon which said debt securities are, and are to be,
authenticated and delivered. This Debenture is one of the series designated on
the face hereof as 4.75% Convertible Senior Debentures, Series K, due 2032 (the
"Debentures"). Such series is limited in aggregate principal amount to
$150,000,000 (or $165,000,000 if the over-allotment option referred to in the
Purchase Agreement is exercised in full). Capitalized terms used herein for
which no definition is provided herein shall have the meanings set forth in the
Indenture. 1. Redemption of Debentures at the
Option of the Company. The Debentures are not
entitled to the benefit of any sinking fund. Prior to August 5, 2006, the
Debentures are not redeemable. The Debentures are redeemable at the option of
the Company, in whole or in part, at any time or from time to time, on or after
August 5, 2006 upon not less than 30 nor more than 60 days' notice of redemption
by mail as set forth in the Indenture at the following redemption prices
(expressed as percentages of principal amount thereof), if redeemed during the
twelve-month period beginning on August 5 of each year indicated (August 5,
2006, in the case of the first such year) plus accrued and unpaid interest to,
but excluding, the date fixed for redemption:
Year
Redemption
2006
102.85%
2007
102.38%
2008
101.90%
2009
101.43%
2010
100.95%
2011
100.48%
2012 and thereafter
100.00%
2. Notice of Redemption. Notice of redemption
pursuant to Paragraph 1 of this Debenture will be mailed at least 30 days but
not more than 60 days before the Redemption Date to each Holder of Debentures to
be redeemed at the Holder's registered address and to beneficial holders as
required by applicable law. If money sufficient to pay the Redemption Price of
all Debentures or portions thereof to be redeemed on the Redemption Date is
deposited with the Paying Agent prior to or on the Redemption Date, interest
will cease to accrue on such Debentures or portions thereof immediately after
such Redemption Date. Debentures in denominations larger than $1,000 of
principal amount may be redeemed in part but only in integral multiples of
$1,000 of principal amount. 3.
Purchase of Debentures By the Company at the Option of the Holder. Subject to the terms and
conditions of the Indenture, the Company shall become obligated to purchase, at
the option of the Holder, all or any portion of the Debentures held by such
Holder on August 1, 2006, August 1, 2010 and August 1, 2017 (each, a "Purchase
Date") in integral multiples of $1,000 at a Purchase Price equal to 100% of
the principal amount of the Debentures to be purchased plus accrued and unpaid
interest, if any, to such Purchase Date. To exercise such right, a Holder shall
deliver to the Trustee a written Purchase Notice containing the information set
forth in the Indenture at any time from the opening of business on the date that
is 20 Business Days prior to such Purchase Date until the close of business on
the last day prior to such Purchase Date, and shall deliver the Debentures to
the Paying Agent as set forth in the Indenture. If the Purchase Notice is given
and withdrawn during such period, as set forth in the Indenture, the Company
will not be obligated to purchase the related Debentures. If the Purchase Date is
August 1, 2006, the Purchase Price must be paid in cash. If the Purchase Date
is August 1, 2010 or August 1, 2017, the Purchase Price may be paid, at the
option of the Company, in cash or by the issuance and delivery of shares of
Common Stock, or in any combination thereof, provided that accrued interest
shall be paid in cash, as set forth in the Indenture. At the option of the
Holder and subject to the terms and conditions of the Indenture, the Company
shall become obligated to offer to purchase the Debentures held by such Holder
within 30 days (which purchase shall occur 45 days after the date of such offer)
after the occurrence of a Change in Control for a Change in Control Purchase
Price equal to 100% of the principal amount of the Debentures to be purchased
plus accrued and unpaid interest, if any, to the Change in Control Purchase
Date, which Change in Control Purchase Price shall be paid in cash. Holders have the right
to withdraw any Purchase Notice or Change in Control Purchase Notice, as the
case may be, by delivering to the Paying Agent a written notice of withdrawal in
accordance with the provisions of the Indenture. If cash (and/or shares
of Common Stock if permitted under the Indenture) sufficient to pay the Purchase
Price or Change in Control Purchase Price, as the case may be, of all Debentures
or portions thereof to be purchased on the Purchase Date or the Change in
Control Purchase Date, as the case may be, is deposited with the Paying Agent on
the Business Day following the Purchase Date or the Change in Control Purchase
Date, interest ceases to accrue on such Debentures or portions thereof
immediately after such Purchase Date or Change in Control Purchase Date, and the
Holder thereof shall have no other rights as such other than the right to
receive the Purchase Price or Change in Control Purchase Price upon surrender of
such Debenture. 4.
Conversion. Subject to the
procedures set forth in the Indenture, a Holder of Debentures may convert
Debentures for Common Stock of the Company at any time on or before noon, New
York time, on the Business Day immediately preceding August 1, 2032 if at least
one of the conditions as specified in the Indenture is satisfied on the
Conversion Date. Debentures in respect of
which a Holder has delivered a notice of exercise of the option to require the
Company to purchase such Debentures or to purchase such Debentures in the event
of a Change in Control may be converted only if the notice of exercise is
withdrawn in accordance with the terms of the Indenture. The initial Conversion
Rate is 24.7188 shares of Common Stock per $1,000 aggregate principal amount of
Debentures, subject to adjustment in certain events described in the Indenture.
The Company shall deliver cash or a check in lieu of any fractional share of
Common Stock. To surrender a Debenture
for conversion, a Holder must (1) complete and manually sign the irrevocable
conversion notice below (or complete and manually sign a facsimile of such
notice) and deliver such notice to the Conversion Agent, (2) surrender the
Debenture to the Conversion Agent if the Debenture is in certificated form,
(3) furnish appropriate endorsements and transfer documents and (4) pay any
transfer or similar tax, if required. A Holder may convert a
portion of a Debenture if the principal amount of such portion is $1,000 or an
integral multiple of $1,000. No payment or adjustment will be made for
dividends on the shares of Common Stock except as provided in the Indenture.
Except as otherwise provided in the Indenture, upon conversion of a Debenture,
the Holder will not receive any cash payment representing accrued and unpaid
interest with respect to the converted Debenture. Instead, upon conversion, the
Company will deliver to the Holder a fixed number of shares of Common Stock and
any cash payment to account for fractional shares. Accrued interest will be
deemed paid in full rather than canceled, extinguished or forfeited. The
Company will not adjust the Conversion Rate to account for accrued interest. The Conversion Rate will
be adjusted as provided in Article 2 of the Second Supplemental Indenture. The
Company may increase the Conversion Rate for at least 20 days, so long as the
increase is irrevocable during such period. If the Company is a
party to a consolidation, merger or binding share exchange pursuant to which the
Common Stock is converted into cash, securities or other property, then at the
effective time of the transaction, the right to convert a Debenture into shares
of Common Stock will be changed into a right to convert it into the kind and
amount of securities, cash or other property which the Holder would have
received if the Holder had converted its Debentures immediately prior to such
transaction in accordance with the terms of the Indenture. 5.
Paying Agent, Conversion Agent and Bid Agent. Initially, Regions Bank,
an Alabama state banking corporation, shall act as Paying Agent, Conversion
Agent and Bid Agent. The Company may appoint and change any Paying Agent,
Conversion Agent or Bid Agent without notice, other than notice to the Trustee
except that the Company will at all times maintain at least one Paying Agent and
an office or agency where each Debenture may be surrendered for registration of
transfer or exchange, in each case in the Borough of Manhattan, The City of New
York. The Company or any of its Subsidiaries or any of their Affiliates may act
as Paying Agent, or Conversion Agent, but not as Bid Agent. 6.
Events of Default. In case an Event of
Default, as defined in the Indenture, with respect to the Debentures shall have
occurred and be continuing, the principal of the Debentures may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture. 7.
Amendment; Waiver. The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the
Holders of not less than a majority in aggregate principal amount of the
Debentures of each series affected at the time Outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
the Indenture or of any supplemental indenture or of modifying in any manner the
rights of the Holders of the Debentures, provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any Debentures or
any series, or reduce the principal amount thereof, or reduce the rate or extend
the time of payment of interest thereon, or reduce any premium payable upon the
redemption thereof, without the consent of the Holder of each Debenture so
affected or (ii) reduce the aforesaid percentage of Debentures, the Holders of
which are required to consent to any such supplemental indenture, without the
consent of the Holders of each Debenture then Outstanding and affected thereby.
The Indenture also contains provisions permitting the Holders of a majority in
aggregate principal amount of the Debentures of any series at the time
Outstanding, on behalf of the Holders of Debentures of such series, to waive any
past default in the performance of any of the covenants contained in the
Indenture, or established pursuant to the Indenture with respect to such series,
and its consequences, except a default in the payment of the principal of, or
premium, if any, or interest on any of the Debentures of such series. Any such
consent or waiver by the registered Holder of this Debenture (unless revoked as
provided in the Indenture) shall be conclusive and binding upon such Holder and
upon all future Holders and owners of this Debenture and of any Debenture issued
in exchange hereof or in place hereof (whether by registration of transfer or
otherwise), irrespective of whether or not any notation of such consent or
waiver is made upon this Debenture. No reference herein to
the Indenture and no provision of this Debenture or of the Indenture shall alter
or impair the obligation of the Company, which is absolute and unconditional, to
pay the principal of and interest on this Debenture at the times and place and
at the rate and in the currency herein prescribed. 8.
Transfers. As provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Debenture is registrable in the security register, upon surrender of this
Debenture for registration of transfer at the office or agency of the Company
for such purpose, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the security registrar and duly
executed by, the Holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures, of this series, of authorized
denominations and of like tenor and for the same aggregate principal amount,
will be issued to the designated transferee or transferees. No service charge
shall be made for any such registration of transfer or exchange, but the Company
may require payment of a sum sufficient to cover any tax or other governmental
charge payable in connection therewith. 9.
Institution of Proceedings. As provided in and
subject to the provisions of the Indenture, the Holder of this Debenture shall
not have the right to institute any proceeding with respect to the Indenture or
for the appointment of a receiver or trustee or for any other remedy thereunder,
unless such Holder shall have previously given the Trustee written notice of a
continuing Event of Default with respect to the Debentures, the Holders of not
less than 25% in aggregate principal amount of the Debentures at the time
Outstanding shall have made written request to the Trustee to institute
proceedings in respect of such Event of Default as Trustee and offered the
Trustee reasonable indemnity, and the Trustee shall not have received from the
Holders of a majority in aggregate principal amount of Debentures at the time
Outstanding a direction inconsistent with such request and shall have failed to
institute any such proceeding for 60 days after receipt of such notice, request
and offer of indemnity. The foregoing shall not apply to any suit instituted by
the Holder of this Debenture for the enforcement of any payment of principal
hereof or any premium or interest hereon on or after the respective due dates
expressed herein. 10.
Registered Owner. Prior to due presentment
of this Debenture for registration of transfer, the Company, the Trustee, any
Paying Agent and any security registrar may deem and treat the Person in whose
name this Debenture is registered as the absolute owner hereof for all purposes,
whether or not this Debenture be overdue and notwithstanding the notice of
ownership or writing hereon made by anyone other than the security registrar,
and neither the Company, the Trustee nor any such agent shall be affected by
notice to the contrary. 11. No
Recourse Against Others. No recourse shall be had
for the payment of the principal of or any premium or the interest or contingent
interest on this Debenture, or for any claim based hereon, or otherwise in
respect hereof, or based on or in respect of the Indenture, against any
incorporator, shareholder, affiliate, officer or director, as such, past,
present or future, of the Company or of any predecessor or successor Company,
whether by virtue of any constitution, statute or rule of law, or by the
enforcement of any assessment or penalty or otherwise, all such liability being,
by the acceptance hereof and as part of the consideration for the issuance
hereof, expressly waived and released. 12.
Form; Denomination. The Debentures are
issuable only in registered form without coupons in denominations of $1,000 and
any integral multiple thereof. As provided in the Indenture and subject to the
limitations therein set forth, Debentures are exchangeable for a like aggregate
principal amount of Debentures of a different authorized denomination, as
requested by the Holder surrendering the same upon surrender of the Debenture or
Debentures to be exchanged at the office or agency of the Company. 13. Tax
Treatment. The Company and the
Trustee on behalf of the Holders agree (i) that for United States federal income
tax purposes the Debentures will be treated as indebtedness subject to the
Treasury regulations governing contingent payment debt instruments, (ii) that
the Holders will report original issue discount and interest on the Debentures
in accordance with the Company's determination of both the "comparable yield"
and the "projected payment schedule" and (iii) to be bound by the Company's
application of the Treasury regulations that govern contingent payment debt
instruments. For this purpose, the "comparable yield" for the Debentures is
8.97% compounded semi-annually. The Company shall file with the Trustee no
later than the end of each calendar year or at any other time as the Trustee may
request (i) a written notice specifying the amount of original issue discount
(including daily rates and accrual periods) accrued on outstanding Debentures as
of the end of such year and (ii) such other specific information relating to
such original issue discount as may then be relevant under the Internal Revenue
Code of 1986, as amended from time to time. 14.
Registration Rights The Holders of the
Debentures are entitled to the benefits of a Registration Rights Agreement,
dated as of August 26, 2002, including the receipt of liquidated damages upon a
Registration Default (as defined in such agreement). 15.
Governing Law. This Debenture shall be
governed by, and construed in accordance with, the internal laws of the State of
Louisiana.
FORM OF CONVERSION NOTICE To: CenturyTel, Inc. The undersigned registered holder of this
Debenture hereby exercises the option to convert this Debenture, or portion
hereof (which is $1,000 principal amount of a Debenture or an integral multiple
thereof) designated below, for shares of Common Stock of CenturyTel, Inc. in
accordance with the terms of the Indenture referred to in this Debenture, and
directs that the shares, if any, issuable and deliverable upon such conversion,
together with any check for cash deliverable upon such conversion, and any
Debentures representing any unconverted principal amount hereof, be issued and
delivered to the registered holder hereof unless a different name has been
indicated below. If shares or any portion of this Debenture not converted are
to be issued in the name of a Person other than the undersigned, the undersigned
shall pay all transfer taxes payable with respect thereto. This notice shall be deemed to be an irrevocable
exercise of the option to convert this Debenture.
Dated:
Signature(s)
Signature(s) must
be guaranteed by a commercial bank or trust company or a member firm of a
major stock exchange if shares of Common Stock are to be issued, or
Debentures to be delivered, other than to or in the name of the registered
holder.
Fill in for
registration of shares if to be delivered, and Debentures if to be issued
other than to and in the name of registered holder:
(Name)
(Street Address)
(City, state and
zip code)
Please print name
and address
ABBREVIATIONS The following abbreviations, when used in the
inscription on the face of this instrument, shall be construed as though they
were written out in full according to applicable laws or regulations:
TEN COM--as tenants in common UNIF
GIFT MIN ACT --
(2)
Estimated solely for the purpose of calculating the
registration fee pursuant to Rule 457(c) of the Securities Acto of 1993, as
amended, based upon the average of the bid and ask prices for the debentures
on the Portal Market on October 9, 2002.
Includes associated preference share purchase rights, which
prior to the occurrence of certain events will not be
exercisable or evidenced separate from our common stock.
Represents the number of shares of our common stock that are issuable
upon conversion of the debentures registered hereby at the conversion price
of $40.455 per share. Pursuant to Rule 416 under the Securities Act,
the number of shares of common stock registered hereby shall include an
indeterminate number of shares of common stock that may be issued in
connection with a stock split, stock dividend, recapitalization or similar
event.
No separate consideration will be received for the shares of our common
stock issuable upon conversion of the
debentures and, therefore, no registration fee is required pursuant to Rule
457(i) under the Securities Act.
our ability to effectively manage our growth, including
integrating newly acquired properties into our operations, hiring adequate
numbers of qualified staff and successfully upgrading our billing and other
information systems
the risks inherent in rapid technological change
the effects of ongoing changes in the regulation of the
communications industry, including the final outcome of pending regulatory
and judicial proceedings affecting communication companies generally
the effects of greater than anticipated competition in our
markets
possible changes in the demand for, or pricing of, our products
and services, including lower than anticipated demand for our newly offered
products and services
our ability to successfully introduce new product or service
offerings on a timely and cost-effective basis
the direct and indirect effects on our business resulting from
the financial difficulties of other communications companies, including the
effect on our ability to collect receivables from financially troubled
carriers and our ability to access the capital markets on favorable terms,
and
the effects of more general factors, such as changes in interest
rates, in the capital markets, in general market or economic conditions or
in legislation, regulation or public policy.
Annual Report on Form 10-K for the year ended December 31, 2001.
Quarterly Reports on Form 10-Q for the quarters ended March 31,
2002 and June 30, 2002.
Current Reports on Form 8-K filed on January 31, 2002, February
1, 2002, March 22, 2002, April 25, 2002, April 29, 2002, May 3, 2002, June
28, 2002, July 15, 2002, July 19, 2002, July 26, 2002, August 13, 2002 (two
reports), August 14, 2002, August 22, 2002 and October 8, 2002.
The description of our common stock contained in our registration
statement, as amended and restated on Form 8-A/A (File No. 1-7784; filed
November 19, 1999), and the description of our related preference share
purchase rights contained in our registration statement, as amended and
restated on Form 8-A/A (File No. 1-7784; filed on November 19, 1999).
All documents filed by us with the SEC 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 this offering.
PROSPECTUS
SUMMARY
Number of Access Lines
Percent of Access Lines
Wisconsin
495,690(1)
20.3%
Missouri
484,998(2)
19.9%
Alabama
295, 662
12.1%
Arkansas
270,703
11.1%
Washington
189,465
7.8%
Michigan
116,045
4.7%
Louisiana
104,562
4.3%
Colorado
97,282
4.0%
Ohio
84,455
3.5%
Oregon
77,464
3.2%
Montana
66,272
2.7%
Texas
49,474
2.0%
Minnesota
31,179
1.3%
Tennessee
27,574
1.1%
Mississippi
24,105
1.0%
New Mexico
6,550
−(3)
Idaho
6,074
−(3)
Wyoming
5,526
−(3)
Indiana
5,480
−(3)
Iowa
2,082
−(3)
Arizona
1,980
−(3)
−(3)
2,443,128
100%
EARNINGS RATIOS
7.875% Series L, due 2012
--
500,000
500,000
161
Total CenturyTel, Inc. Inc
2,659,059
300,000
(473,375)
665,000
3,150,684
Subsidiaries
523,526
523,526
Total long-term debt
3,182,585
300,000
(473,375)
665,000
3,674,210
at least three such bids
are not obtained by the bid solicitation agent, or
in our reasonable
judgment, the bid quotations are not indicative of the secondary market
value of the debentures,
issue, register the
transfer of or exchange any debenture during a period beginning at the
opening of business 15 days before any selection of debentures for
redemption and ending at the close of business on the earliest date on which
the relevant notice of redemption is deemed to have been given to all
holders of debentures to be so redeemed; or
register the transfer of
or exchange any debenture so selected for redemption, in whole or in part,
except the unredeemed portion of any debenture being redeemed in part.
at any time at the
option of the holder if the average sale price of our common stock for the
last 20 trading days in the preceding calendar quarter is greater than or
equal to 120% of the conversion price,
at any time if the
credit rating assigned the debentures is reduced to Ba2 or lower by Moodys
or BB+ or lower by S&P,
if we have called the
debentures for redemption, or
upon the occurrence of
specified corporate transactions,
distribute to all
holders of our common stock certain rights entitling them to purchase, for a
period expiring within 60 days, shares of our common stock at less than the
sale price at the time, or
distribute to all
holders of our common stock our assets, debt securities or certain rights to
purchase our securities, which distribution has a per share value exceeding
10% of the sale price of our common stock on the day preceding the
declaration date for such distribution,
the
payment of dividends and other distributions payable exclusively in shares
of our common stock on our common stock;
the
issuance to all holders of our common stock of rights or warrants that allow
the holders to purchase shares of our common stock at less than the then
current sale price; provided that no adjustment will be made if holders of
the debentures may participate in the transaction on a basis and with notice
that our board of directors determines to be fair and appropriate or in some
other cases;
subdivisions or combinations of our common stock;
the
payment of dividends and other distributions to all holders of our common
stock consisting of our debt, securities or assets or certain rights to
purchase our securities, except for those rights or warrants referred to in
the second bullet clause above and dividends and other distributions paid
exclusively in cash, and excluding cash dividends or other cash
distributions from current or retained earnings unless the annualized amount
thereof per share exceeds 10% of the closing price of the shares of common
stock on the day preceding the date of the declaration of such dividend or
distribution, provided that no adjustment will be made if all holders of the
debenture may participate in the transactions;
the
payment to holders of our common stock in respect of a tender or exchange
offer, other than an odd-lot offer, by us or any of our subsidiaries for our
common stock to the extent that the offer involves aggregate consideration
that, together with (1) any cash and the fair market value of any other
consideration payable in respect of any tender offer by us or any of our
subsidiaries for shares of our common stock consummated within the preceding
12 months not triggering a conversion price adjustment and (2) all-cash
distributions to all or substantially all stockholders made within the
preceding 12 months not triggering a conversion price adjustment, exceeds an
amount equal to 10% of the market capitalization of our common stock on the
expiration date of the tender offer; and
the
distribution to all or substantially all stockholders of all-cash
distributions in an aggregate amount that, together with (1) any cash and
the fair market value of any other consideration payable in respect of any
tender offer by us or any of our subsidiaries for shares of our common stock
consummated within the preceding 12 months not triggering a conversion price
adjustment and (2) all other all-cash distributions to all or substantially
all stockholders made within the preceding 12 months not triggering a
conversion price adjustment, exceeds an amount equal to 10% of the market
capitalization of our common stock on the business day immediately preceding
the day on which we declare the distribution.
whether we will pay the
purchase price of the debentures in shares of our common stock, or any
combination of cash and shares of our common stock, specifying the
percentages of each; and
the procedures that holders
must follow to require us to purchase their debentures.
A holders notice electing to require us to purchase debentures must state:
if certificated debentures
have been issued, the debentures certificate numbers, or if not
certificated, your notice must comply with appropriate DTC procedures;
the portion of the principal
amount of debentures to be purchased, in multiples of $1,000;
that the debentures are to be
purchased by us pursuant to the applicable provisions of the debentures; and
for any purchases on or after
August 1, 2010, in the event we elect, pursuant to the notice that we are
required to give, to pay the purchase price in shares of our common stock,
in whole or in part, but the purchase price is ultimately to be paid to the
holder entirely in cash because any of the conditions to payment of the
purchase price or portion of the purchase price in shares of our common
stock is not satisfied prior to the close of business on the last day prior
to the purchase date, as described below, whether the holder elects:
(1)
to withdraw the purchase
notice as to some or all of the debentures to which it relates, or
to receive cash in respect of
the entire purchase price for all debentures or portions of debentures
subject to the purchase notice.
the principal amount of the
withdrawn debentures;
if certificated debentures
have been issued, the certificate numbers of the withdrawn debentures, or if
not certificated, your notice must comply with appropriate DTC procedures; and
the principal amount, if any,
which remains subject to the purchase notice.
the debentures will cease
to be outstanding;
interest, including any
contingent interest payable, will cease to accrue; and
all other rights of the
holder will terminate, other than the right to receive the purchase price
upon delivery of the debentures.
any person, including any
syndicate or group deemed to be a person under Section 13(d)(3) of the
Exchange Act, acquires beneficial ownership, directly or indirectly, through
a purchase, merger or other acquisition transaction or series of
transactions, of shares of our capital stock entitling the person to
exercise 50% or more of the total voting power of all shares of our capital
stock that is entitled to vote generally in elections of directors, other
than an acquisition by us, any of our subsidiaries or any of our employee
benefit plans; or
we merge or consolidate
into any other person, another person merges into us, or we convey, sell,
transfer or lease all or substantially all of our assets to another person,
other than any transaction:
that does not result in any
reclassification, conversion, exchange or cancellation of outstanding
shares of our capital stock, or
pursuant to which the
holders of our common stock immediately prior to the transaction are
entitled to exercise, directly or indirectly, 50% or more of the total
voting power of all shares of capital stock entitled to vote generally in
the election of directors of the continuing or surviving corporation
immediately after the transaction, or
which is effected solely to
change our jurisdiction of incorporation and results in a
reclassification, conversion or exchange of outstanding shares of our
common stock solely into shares of common stock of the surviving entity.
the sale price of our
common stock for any five trading days within the period of 10 consecutive
trading days ending immediately after the later of the Change in Control or
the public announcement of the Change in Control in the case of a Change in
Control relating to an acquisition of capital stock, or the period of 10
consecutive trading days ending immediately before the Change in Control, in
the case of Change in Control relating to a merger, consolidation or asset
sale, equals or exceeds 105% of the conversion price of the debentures in
effect on each of those trading days, or
all of the consideration
(excluding cash payments for fractional shares and cash payments made
pursuant to dissenters appraisal rights) in a merger or consolidation
otherwise constituting a Change in Control under clause (1) or (2) above
consists of shares of common stock traded on a national securities exchange
or quoted on the Nasdaq National Market (or will be so traded or quoted immediately
following the merger or consolidation) and as a result of the merger or
consolidation the debentures become convertible into such common stock.
whether a person is a
beneficial owner will be determined in accordance with Rule 13d-3 under
the Exchange Act; and
person includes any
syndicate or group that would be deemed to be a person under Section
13(d)(3) of the Exchange Act.
DESCRIPTION OF COMMON STOCK
-
varying prices determined at
the time of sale; or
-
negotiated prices.
-
in transactions otherwise than on such exchanges or services or
in the over-the-counter market; or
-
through the writing of
options or similar securities.
SEC registration fee
$
Printing costs
$
Legal fees and expenses
$
40,000
Accounting fees and expenses
$
40,000
Miscellaneous
$
75,000
Total
$
201,000
Item 17. Undertakings.
Glen F. Post, III
Chairman of the Board of Directors
and Chief Executive Officer
to Registration Statement
_______________
_______________
1This
Table of Contents does not constitute part of this Second Supplemental Indenture
or have any bearing upon the interpretation of any of its terms and provisions.
REDEMPTION AND PURCHASES
ADDITIONAL EVENTS OF DEFAULT
MISCELLANEOUS PROVISIONS
Attest:
Stacey Goff
Assistant Secretary
Jo Ann Mayfield
Vice President / Corporate Trust Officer
4.75% CONVERTIBLE SENIOR DEBENTURES, SERIES K, DUE 2032
1 Include this bracketed language if this is a Global Note.
Attest:
Name:
Title:
Price
Signature Guarantee
Principal Amount at Stated Maturity Date to be purchased (if less than all):
$__,000
Social Security or Other Taxpayer Number
(Cust) (Minor)
TEN ENT--as tenants by the entireties Under Uniform Gifts to Minors Act _____________
(State)
JT TEN--as joint tenants with rights of
survivorship and not as tenants
in common
Additional abbreviations may also be used though not on the above list.
FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
(please
insert Social Security or other identifying number of assignee)
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS,
INCLUDING POSTAL ZIP CODE OF ASSIGNEE
the within Debenture and all rights thereunder,
hereby irrevocably constituting and appointing
Agent to transfer said Debenture on the books of the Company, with full power of
substitution in the premises.
Dated:
NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.
Signature Guarantee:
SIGNATURE GUARANTEE
Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.
[TO BE ATTACHED TO GLOBAL DEBENTURES]
SCHEDULE OF INCREASES OR DECREASES
The following increases or decreases in this Global
Debenture
have been made:
Date |
Amount of decrease in principal amount of Debenture evidenced by the Global Debenture |
Amount of increase in principal amount of Debenture evidenced by the Global Debenture |
Principal amount of Debenture evidenced by the Global Debenture following such decrease or increase |
Signature of authorized officer of Trustee |
EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Debentures of the series designated therein referred to in the within-mentioned Indenture.
REGIONS BANK, as Trustee |
||
|
||
|
||
By: |
|
|
Authorized Officer |
Dated:
Exhibit 4.5
to Registration Statement
REGISTRATION RIGHTS AGREEMENT
Dated as of August 26, 2002
between
CENTURYTEL, INC.
and
BANC OF AMERICA SECURITIES LLC
J.P. MORGAN SECURITIES INC.
WACHOVIA SECURITIES, INC.
Table of Contents
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Page |
1 |
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REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT (this "Agreement") dated as of August 26, 2002, between CENTURYTEL, INC., a Louisiana corporation (the "Company"), BANC OF AMERICA SECURITIES LLC, J.P. MORGAN SECURITIES INC. and WACHOVIA SECURITIES, INC. (collectively, the "Initial Purchasers"). This Agreement is made pursuant to the Purchase Agreement, dated August 20, 2002 (the "Initial Placement"), between the Company, as the issuer of the Debentures (as defined herein), and the Initial Purchasers (the "Purchase Agreement"). The Debentures are to be issued pursuant to the provisions of an Indenture dated as of March 31, 1994 and a Second Supplemental Indenture dated as of August 20, 2002 (collectively, the "Indenture"), in each case, between the Company and Regions Bank (as successor-in-interest to First American Bank and Trust of Louisiana and Regions Bank of Louisiana), as trustee (the "Trustee"). The Indenture will provide that the Debentures will be convertible into fully paid, nonassessable shares of common stock, par value $1.00 per share, of the Company on the terms, and subject to the conditions, set forth in the Indenture. To induce the Initial Purchasers to purchase the Debentures, the Company has agreed to provide the registration rights set forth in this Agreement for the benefit of the Holders (as defined herein).
For purposes of this Agreement, the following terms shall have the following respective meanings:
(a) "Applicable Conversion Price" means, as of any date of determination, the aggregate principal amount per $1,000 principal amount of Debentures as of such date of determination divided by the Conversion Rate in effect as of such date of determination or, if no Debentures are then outstanding, the Conversion Rate that would be in effect were any Debentures then outstanding.
(b) "Business Day" shall have the meaning assigned such term in the Indenture.
(c) "Closing Date" means the date on which the Debentures are initially issued.
(d) "Commission" means the Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.
(e) "Conversion Rate" shall have the meaning assigned such term in the Indenture.
(f) "Debentures" means the 4.75% Convertible Senior Debentures, Series K, due 2032, issued under the Indenture and sold by the Company to the Initial Purchasers, and securities (other than the Shares) of the Company issued in exchange therefor or in lieu thereof pursuant to the Indenture.
(g) "Deferral Notice" has the meaning assigned thereto in Section 3(g).
(h) "Deferral Period" has the meaning assigned thereto in Section 3(g).
(i) "Effective Time" means the time and date as of which the Commission declares the Shelf Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes effective.
(j) "Exchange Act" means the Securities Exchange Act of 1934, or any successor thereto, and the rules, regulations and forms promulgated thereunder, all as the same shall be amended from time to time.
(k) "Holder" or "Holders" means the Initial Purchasers for so long as they own any Registrable Securities, and such of its respective successors and assigns who acquire Registrable Securities, directly or indirectly, from such person or from any successor or assign of such person, in each case for so long as such person is a registered owner of any Registrable Securities under the Indenture.
(l) "Material Event" has the meaning assigned thereto in Section 3(b)(vi).
(m) "Notice And Questionnaire" means a written notice delivered to the Company containing substantially the information called for by the Selling Security Holder Notice and Questionnaire attached as Annex A hereto.
(n) "Notice Holder" means, on any date, any Holder of the Registrable Securities that has delivered a completed and signed Notice and Questionnaire to the Company on or prior to such date.
(o) "Notice of Transfer" shall mean a Notice of Transfer pursuant to a Shelf Registration Statement substantially in the form of Annex B attached hereto.
(p) "Person" shall have the meaning assigned such term in the Indenture.
(q) "Prospectus" means the prospectus included in any Shelf Registration Statement, as amended or supplemented by any amendment or prospectus supplement, including post-effective amendments, and all materials incorporated by reference or explicitly deemed to be incorporated by reference in such Prospectus.
(r) "Registrable Securities" means the Securities; provided, however, that such Securities shall cease to be Registrable Securities when (i) in the circumstances contemplated by Section 2(a) of this Agreement, a registration statement registering such Securities under the Securities Act has been declared or becomes effective and such Securities have been sold or otherwise transferred by the Holder thereof pursuant to such effective registration statement; (ii) such Securities are sold pursuant to Rule 144 under circumstances in which any legend borne by such Securities relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed or such Securities are eligible to be sold pursuant to paragraph (k) of Rule 144; or (iii) such Securities shall cease to be outstanding (including, in the case of the Debentures, upon conversion into Shares).
(s) "Registration Default" has the meaning assigned thereto in Section 2(c).
(t) "Registration Default Damages" has the meaning assigned thereto in Section 2(c).
(u) "Registration Expenses" shall mean any and all expenses incident to performance of or compliance by the Company with this Agreement, including without limitation: (i) all Commission or National Association of Securities Dealers, Inc. (the "NASD") registration and filing fees; (ii) all fees and expenses incurred in connection with compliance with state securities or blue sky laws (including reasonable fees and disbursements of one firm acting as counsel for any underwriters or Holders in connection with blue sky qualification of any of the Registrable Securities) and compliance with the rules of the NASD; (iii) all expenses of any Persons in preparing or assisting in preparing, word processing, printing and distributing any registration statement pursuant to this Agreement, any Prospectus and any amendments or supplements thereto, and in preparing or assisting in preparing, printing and distributing such registration statement, any Prospectus and any amendments or supplements thereto, and in preparing or assisting in preparing, printing and distributing any underwriting agreements, securities sales agreements and other documents relating to the performance of and compliance with this Agreement; (iv) any fees charged by securities rating services for rating the Securities; (v) the fees and disbursements of counsel for the Company and of the independent certified public accountants of the Company, including the expenses of any "comfort" letters required by or incident to such performance and compliance; (vi) the fees and expenses of the Trustee, and any paying agent, transfer agent, exchange agent or custodian; (vii) all fees and expenses incurred in connection with the listing, if any, of any of the Securities on any securities exchange or exchanges; and (viii) the reasonable fees and expenses of any experts retained by the Company in connection with such registration statement.
(v) "Resale Period" means the period beginning on the date the Shelf Registration Statement becomes effective and ending on the earlier of (i) the date the Shelf Registration Statement ceases to be effective or (ii) the second anniversary of the Closing Date or any later closing date for the sale of Option Securities (as defined in the Purchase Agreement).
(w) "Rule 144," "Rule 405" and "Rule 415" means, in each case, such rule promulgated under the Securities Act.
(x) "Securities" means, collectively, the Debentures and the Shares.
(y) "Securities Act" means the Securities Act of 1933, or any successor thereto, and the rules, regulations and forms promulgated thereunder, all as the same shall be amended from time to time.
(z) "Shares" means the shares of common stock of the Company, par value $1.00 per share, into which the Debentures are convertible pursuant to the Indenture or that have been issued upon any conversion of the Debentures into such common stock, including any other shares of capital stock or other securities of the Company into which such common stock may be reclassified or changed, together with any and all other securities that may from time to time be issuable upon conversion of the Debentures.
(aa) "Shelf Registration" has the meaning assigned thereto in Section 2(a).
(bb) "Shelf Registration Statement" has the meaning assigned thereto in Section 2(a).
(cc) "Trust Indenture Act" means the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, all as the same shall be amended from time to time.
(dd) "Underwriting Majority" means on any date, Holders holding at least a majority of the aggregate principal amount of the Registrable Securities outstanding on such date; provided, that for the purpose of this definition, a holder of Shares that constitute Registrable Securities and issued upon conversion of Debentures shall be deemed to hold an aggregate principal amount of Registrable Securities (in addition to the principal amount of Debentures held by such holder) equal to the product of (x) the number of Shares that are Registrable Securities held by such holder and (y) the then Applicable Conversion Price.
(ee) "Underwritten Offering" means a registration in which securities of the Company are sold to an underwriter for reoffering to the public.
Unless the context otherwise requires, any reference herein to a "section" or "clause" refers to a Section or clause, as the case may be, of this Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Agreement as a whole and not to any particular Section or other subdivision.
Unless the context otherwise requires, any reference to a statute, rule or regulation refers to the same (including any successor statute, rule or regulation thereto) as it may be amended from time to time.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) The Company agrees to file under the Securities Act as promptly as practicable but in any event within 90 days after the Closing Date a "shelf" registration statement providing for the registration of, and the sale on a continuous or delayed basis by the Holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission (such registration, the "Shelf Registration" and such registration statement, the "Shelf Registration Statement"). The Company agrees to use its reasonable best efforts to cause the Shelf Registration Statement to become or be declared effective within 150 days after the Closing Date and to keep such Shelf Registration Statement continuously effective for a period ending on the earlier of (i) the time when the Debentures covered by the Shelf Registration Statement may be sold pursuant to Rule 144 (assuming that no Holder at such date or within the three-month period preceding such date was an affiliate of the Company) without any limitations under clauses (c), (e), (f) and (h) of Rule 144 or (ii) the date on which all Registrable Securities registered thereunder are disposed of in accordance with the Shelf Registration or in accordance with Rule 144.
(b) Each Holder of Registrable Securities agrees that if such Holder wishes to sell Registrable Securities pursuant to a Shelf Registration Statement and related Prospectus, it will do so only in accordance with this Section 2(b) and Section 3(g) of this Agreement. Not less than 30 calendar days prior to the date on which the Company intends in good faith to have the Shelf Registration Statement declared effective, the Company shall mail the Notice and Questionnaire to the Holders of Registrable Securities. The Company shall take action to name each Holder that is a Notice Holder as of the date that is 20 calendar days prior to the effectiveness of the Shelf Registration Statement so that such Holder is named as a selling securityholder in the Shelf Registration Statement at the time of its effectiveness and is permitted to deliver the Prospectus forming a part thereof as of such time to purchasers of such Holder's Registrable Securities in accordance with applicable law. After the Shelf Registration Statement has become effective, the Company shall, upon the request of any Holder of Registrable Securities, promptly send a Notice and Questionnaire to such Holder. From and after the date the Shelf Registration Statement is declared effective, the Company shall, as promptly as practicable after the date a Notice and Questionnaire is delivered to the Company, and in any event within 10 Business Days after such date, (i) if required by applicable law, file with the Commission a post-effective amendment to the Shelf Registration Statement or prepare and, if required by applicable law, file a supplement to the related Prospectus or a supplement or amendment to any document incorporated therein by reference or file any other required document so that the Holder delivering such Notice and Questionnaire is named as a selling securityholder in the Shelf Registration Statement and the related Prospectus in such a manner as to permit such Holder to deliver such Prospectus to purchasers of the Registrable Securities in accordance with applicable law and, if the Company shall file a post-effective amendment to the Shelf Registration Statement, the Company shall use its reasonable best efforts to cause such post-effective amendment to be declared effective under the Securities Act as promptly as is practicable; (ii) provide such Holder copies of any documents filed pursuant to Section 2(b)(i) upon written request; and (iii) notify such Holder as promptly as practicable after the effectiveness under the Securities Act of any post-effective amendment filed pursuant to Section 2(b)(i); provided that if such Notice and Questionnaire is delivered to the Company during a Deferral Period, the Company shall so inform the Holder delivering such Notice and Questionnaire and shall take the actions set forth in clauses (i), (ii) and (iii) above upon expiration of the Deferral Period in accordance with Section 3(g) of this Agreement. Notwithstanding anything contained herein to the contrary, the Company shall be under no obligation to name any Holder that is not a Notice Holder as a selling securityholder in any Shelf Registration Statement or related Prospectus; provided, however, that any Holder that becomes a Notice Holder pursuant to the provisions of this Section 2(b) (whether or not such Holder was a Notice Holder at the time the Shelf Registration Statement was declared effective) shall be named as a selling securityholder in the Shelf Registration Statement or related Prospectus in accordance with the requirements of this Section 2(b).
(c) If any of the following events (any such event, a "Registration Default") shall occur, then liquidated damages (the "Registration Default Damages"), consisting solely of the payments referenced below in this paragraph, shall become payable in respect of the Securities (in addition to the interest otherwise due on the Debentures and on the regular interest dates relating to the Debentures to the holder of record entitled to receive such interest payment as set forth in the Indenture) as follows:
(i) if the Shelf Registration Statement is not filed with the Commission within 90 days after the Closing Date, then commencing on the 91st day after the Closing Date, Registration Default Damages shall accrue on the aggregate principal amount of any outstanding Debentures that are Registrable Securities and on the Applicable Conversion Price of any outstanding Shares that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such 91st day and an additional 0.25% per annum at the beginning of each subsequent 90-day period; or
(ii) if the Shelf Registration Statement is not declared effective by the Commission on or prior to the 150th day following the Closing Date, then commencing on the 151st day after the Closing Date, Registration Default Damages shall accrue on the aggregate principal amount of any outstanding Debentures that are Registrable Securities and on the Applicable Conversion Price of any outstanding Shares that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such 151st day and an additional 0.25% per annum at the beginning of each subsequent 90-day period; or
(iii) if the Shelf Registration Statement has been declared effective but such Shelf Registration Statement ceases to be effective (other than pursuant to Section 3(g) of this Agreement) at any time prior to the earlier of (A) the time when the Debentures covered by the Shelf Registration Statement may be sold pursuant to Rule 144 under the Securities Act (assuming that no Holder at such date or within the three-month period preceding such date was an affiliate of the Company) without any limitations under clauses (c), (e), (f) and (h) of Rule 144 or (B) the date on which all Registrable Securities registered thereunder are disposed of in accordance therewith or in accordance with Rule 144, then commencing on the day such Shelf Registration Statement ceases to be effective, Registration Default Damages shall accrue on the aggregate principal amount of any outstanding Debentures that are Registrable Securities and the Applicable Conversion Price of any outstanding Shares that are Registrable Securities at a rate of 0.25% per annum for the first 90 days following such date on which the Shelf Registration ceases to be effective and an additional 0.25% per annum at the beginning of each subsequent 90-day period; or
(iv) if the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period pursuant to Section 3(g) of this Agreement, then commencing on the day the aggregate duration of Deferral Periods in any period exceeds the number of days permitted in respect of such period, Registration Default Damages shall accrue on the aggregate principal amount of any outstanding Debentures that are Registrable Securities and on the Applicable Conversion Price of any outstanding Shares that are Registrable Securities at a rate of 0.25% per annum for the first 90 days and an additional 0.25% per annum at the beginning of each subsequent 90-day period;
provided, however, that the Registration Default Damages rate on the Securities shall not exceed in the aggregate 0.50% per annum and the Company will not be required to pay Registration Default Damages for more than one Registration Default at a time; provided further, however, that (1) upon the filing of the Shelf Registration Statement (in the case of clause (i) above), (2) upon the effectiveness of the Shelf Registration Statement (in the case of clause (ii) above), (3) upon the effectiveness of the Shelf Registration Statement which had ceased to remain effective (in the case of clause (iii) above), (4) upon the termination of the Deferral Period that caused the limit on the aggregate duration of Deferral Periods in a period set forth in Section 3(g) to be exceeded (in the case of clause (iv) above) (5) upon the termination of certain transfer restrictions on the Securities as a result of the application of Rule 144(k) or (6) upon the date on which all Registrable Securities registered under the Shelf Registration Statement are disposed of in accordance therewith or in accordance with Rule 144, Registration Default Damages on the Securities as a result of such clause, as the case may be, shall cease to accrue. Within three Business Days of the occurrence or the termination of a Registration Default, the Company shall give the transfer and paying agent for its common stock, in the case of notice with respect to its common stock issued or issuable upon conversion of the Debentures, notice of such commencement or termination, of the obligation to pay Registration Default Damages with regard to such commencement or termination (such notice to be contained in an Officers' Certificate (as such term is used in the Indenture)), and prior to receipt of such Officers' Certificate the transfer and paying agent shall be entitled to assume that no such commencement has occurred, as the case may be. In the same manner, the Company shall notify the Trustee in writing within three Business Days of the occurrence or the termination of a Registration Default.
(d) The Company shall pay all Registration Expenses in connection with the registration pursuant to Section 2(a) hereof. Each Holder shall pay all expenses of its counsel, underwriting discounts and commissions and transfer taxes, if any, relating to the sale or disposition of such Holder's Registrable Securities pursuant to the Shelf Registration.
(e) Any reference herein to a registration statement shall be deemed to include any document incorporated therein by reference as of the applicable Effective Time and any reference herein to any post-effective amendment to a registration statement shall be deemed to include any document incorporated therein by reference as of a time after such Effective Time.
(f) Notwithstanding any other provision of this Agreement, a Holder of Registrable Securities who does not comply with the provisions of Section 2(b), if applicable, shall not be entitled to receive Registration Default Damages unless and until such Holder complies with the provisions of such section, if applicable.
The following provisions shall apply to a Shelf Registration Statement filed pursuant to Section 2 of this Agreement:
(a) At the Effective Time of the Shelf Registration Statement, the Indenture shall have been qualified under the Trust Indenture Act.
(b) In connection with the Company's obligations with respect to the Shelf Registration, the Company shall:
(i) prepare and file with the Commission the Shelf Registration Statement with respect to the Shelf Registration on any form which may be utilized by the Company and which shall permit the disposition of the Registrable Securities in accordance with the intended method or methods thereof, as specified in writing by the Holders of the Registrable Securities, furnish to the Holders of Registrable Securities, upon written request, copies of any such Registration Statement and use its reasonable best efforts to cause such Shelf Registration Statement to become effective in accordance with Section 2(a) above;
(ii) prepare and file with the Commission such amendments and supplements to the Shelf Registration Statement and the Prospectus included therein as may be necessary to effect and maintain the effectiveness of such Shelf Registration Statement for the period specified in Section 2(a) above and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Shelf Registration Statement, and furnish to the Holders of the Registrable Securities, upon written request, copies of any such supplement or amendment promptly following it being used or filed with the Commission;
(iii) comply, as to all matters within the Company's reasonable control, with the provisions of the Securities Act with respect to the disposition of all of the Registrable Securities covered by the Shelf Registration Statement in accordance with the intended methods of disposition by the Holders thereof provided for in such Shelf Registration Statement;
(iv) provide to any of (A) the Holders of the Registrable Securities to be included in a Shelf Registration Statement, (B) the underwriters (which term, for purposes of this Agreement, shall include a person deemed to be an underwriter within the meaning of Section 2(11) of the Securities Act), if any, thereof, (C) the sales or placement agent, if any, therefor, (D) counsel for such underwriters or agent and (E) not more than one counsel for all the Holders of such Registrable Securities who so request of the Company in writing the opportunity to participate in the preparation of such Shelf Registration Statement, upon written request, each Prospectus included therein or filed with the Commission and each amendment or supplement thereto;
(v) for a reasonable period prior to the filing of the Shelf Registration Statement, and throughout the period specified in Section 2(a), make reasonably available, upon request, during normal business hours by a representative of the Holders of the Registrable Securities and the other persons referred to in Section 3(b)(iv) above, such financial and other information and books and records of the Company, and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by the Company in writing as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such registration statement or otherwise), or (B) such person shall be required so to disclose such information pursuant to a subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given the Company prompt prior written notice of such requirement and the opportunity to contest the same or seek an appropriate protective order), or (C) such information is set forth in such Shelf Registration Statement or the Prospectus included therein or in an amendment to such Shelf Registration Statement or an amendment or supplement to such Prospectus in order that such Shelf Registration Statement, Prospectus, amendment or supplement, as the case may be, does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading;
(vi) promptly notify the selling Holders of Registrable Securities, the sales or placement agent, if any, therefor and the managing underwriter or underwriters, if any, thereof named in a Shelf Registration Statement or a supplement thereto, and confirm such notice in writing, (A) when such Shelf Registration Statement or the Prospectus included therein or any Prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation or written threat of any proceedings for that purpose, (C) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or written threat of any proceeding for such purpose, (D) of the occurrence of (but not the nature of or details concerning) any event or the existence of any condition or fact (a "Material Event") as a result of which such Shelf Registration Statement shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, or any Prospectus shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading (provided, however, that no notice by the Company shall be required pursuant to this clause (D) in the event that the Company either promptly files a Prospectus supplement to update the Prospectus or a Current Report on Form 8-K or other appropriate Exchange Act report that is incorporated by reference into such Shelf Registration Statement, which, in either case, contains the requisite information with respect to such Material Event that results in such Shelf Registration Statement no longer containing any untrue statement of material fact or omitting to state a material fact necessary to make the statements contained therein not misleading), (E) of the determination by the Company that a post-effective amendment to such Shelf Registration Statement will be filed with the Commission, which notice may, at the discretion of the Company (or as required pursuant to Section 3(g)), state that it constitutes a Deferral Notice, in which event the provisions of Section 3(g) shall apply, or (F) at any time when a Prospectus is required to be delivered under the Securities Act, that such registration statement, Prospectus, Prospectus supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act;
(vii) use reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of the Shelf Registration Statement or any post-effective amendment thereto at the earliest practicable date;
(viii) if reasonably requested in writing by any managing underwriter or underwriters, any placement or sales agent or any Holder of Registrable Securities, promptly incorporate in a Prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the Commission relating to the terms of the sale of such Registrable Securities, including information with respect to the principal amount or number of Registrable Securities being sold by such Holder or agent or to any underwriters, the name and description of such Holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities to be sold by such Holder or agent or to such underwriters; and make all required filings of such Prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such Prospectus supplement or post-effective amendment;
(ix) upon written request, furnish to each Holder of Registrable Securities, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(b)(iv), an executed copy (or, in the case of a Holder of Registrable Securities, a conformed copy) of the Shelf Registration Statement, each such amendment or supplement thereto (in each case including all exhibits thereto) and such number of copies of such Shelf Registration Statement (excluding exhibits thereto) and of the Prospectus included in such Shelf Registration Statement (including each preliminary Prospectus and any summary Prospectus), in conformity in all material respects with the applicable requirements of the Securities Act and the Trust Indenture Act; and the Company hereby consents to the use in compliance with applicable law of such Prospectus (including any such preliminary or summary Prospectus) and any amendment or supplement thereto by each such Holder and by any such agent and underwriter, in each case in the form most recently provided to such person by the Company in connection with the offering and sale of the Registrable Securities covered by the Prospectus (including any such preliminary Prospectus) or any supplement or amendment thereto; and
(x) use all reasonable efforts to (A) register or qualify the Registrable Securities to be included in the Shelf Registration Statement under such securities laws or blue sky laws of such United States jurisdictions as any Holder of such Registrable Securities and each placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request, and (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period such Shelf Registration Statement is required to remain effective under Section 2(a) and for so long as may be necessary to enable any such Holder, agent or underwriter to complete its distribution of Securities pursuant to such Shelf Registration Statement but in any event not later than the date through which the Company is required to keep such Shelf Registration Statement effective pursuant to Section 2(a); provided, however, that the Company shall not be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(b)(x), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its certificate of incorporation or by-laws or any agreement between it and its stockholders.
In case any of the foregoing obligations is dependent upon information provided or to be provided by a party other than the Company, such obligation shall be subject to the provision of such information by such party; provided that the Company shall use its commercially reasonable efforts to obtain the necessary information from any party responsible for providing such information.
(c) In the event that the Company would be required, pursuant to Section 3(b)(vi)(D), to notify the selling Holders of Registrable Securities, the placement or sales agent, if any, therefor or the managing underwriters, if any, thereof named in the Shelf Registration Statement or a supplement thereto of the existence of the circumstances described therein, the Company shall furnish to each of the selling Holders, to each placement or sales agent, if any, and to each such underwriter, if any, a reasonable number of copies of a Prospectus supplemented or amended in the manner required under Section 3(f) hereof, so that, as thereafter delivered to purchasers of Registrable Securities, such Prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each selling Holder of Registrable Securities agrees that upon receipt of any notice from the Company, pursuant to Section 3(b)(vi)(D), such Holder shall forthwith discontinue (and cause any placement or sales agent or underwriters acting on their behalf to discontinue) the disposition of Registrable Securities pursuant to the Shelf Registration Statement applicable to such Registrable Securities until such Holder (i) shall have received copies of such amended or supplemented Prospectus and, if so directed by the Company, such Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Holder's possession of the Prospectus covering such Registrable Securities at the time of receipt of such notice or (ii) shall have received written notice from the Company that the disposition of Registrable Securities pursuant to the Shelf Registration Statement may continue.
(d) In addition to the information required to be provided by each selling Holder in its Notice and Questionnaire, the Company may require each Holder of Registrable Securities as to which any registration pursuant to Section 2(a) is being effected to furnish to the Company such information regarding such Holder and such Holder's intended method of distribution of such Registrable Securities as the Company may from time to time reasonably request in writing, but only to the extent that such information is required in order to comply with the Securities Act or state securities or blue sky laws. Each such Holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Holder to the Company or of the occurrence of any event in either case as a result of which any Prospectus relating to such registration contains or would contain an untrue statement of a material fact regarding such Holder or such Holder's intended method of disposition of such Registrable Securities or omits to state any material fact regarding such Holder or such Holder's intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such Prospectus shall not contain, with respect to such Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading. Each such Holder further agrees that in the event the amount of Registrable Securities that are beneficially owned by such Holder and are registered pursuant to such Shelf Registration Statement is reduced due to a sale of such Registrable Securities under such Registration, such Holder shall deliver to the Company and the Trustee, at the time of such sale, a Notice of Transfer.
(e) Until the earlier of (i) the expiration of two years after the Closing Date or (ii) such time as the Shelf Registration Statement has become or has been declared effective by the Commission, the Company will not, and will not permit any of its "affiliates" (as defined in Rule 144) to, resell any of the Securities which constitute "restricted securities" under Rule 144 that have been reacquired by any of them, except for Securities purchased by the Company or any of such affiliates and resold in a transaction registered under the Securities Act.
(f) Subject to Section 3(g) hereof, upon the occurrence of a Material Event, the Company shall as promptly as practicable prepare and file a post-effective amendment to the Shelf Registration Statement or a supplement to the related Prospectus or any document incorporated therein by reference or file any other required document that would be incorporated by reference into such Shelf Registration Statement and related Prospectus so that such Shelf Registration Statement does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, and such Prospectus does not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, as thereafter delivered to the purchasers of the Registrable Securities being sold thereunder, and, in the case of a post-effective amendment to a Shelf Registration Statement, use all commercially reasonable efforts to cause it to be declared effective by the Commission as promptly as is reasonably practicable.
(g) Upon the occurrence or existence of any pending corporate development or any other Material Event that, in the sole judgment of the Company, makes it appropriate to suspend the availability of the Shelf Registration Statement and the related Prospectus, the Company shall give written notice (without notice of the nature or details of such events) to the Notice Holders that the availability of the Shelf Registration Statement is suspended (a "Deferral Notice") and, upon receipt of any Deferral Notice, each Notice Holder agrees not to sell any Registrable Securities pursuant to the Shelf Registration Statement until such Notice Holder's receipt of copies of the supplemented or amended Prospectus provided for in Section 3(f) above, or until it is advised in writing by the Company that the Prospectus may be used, and has received copies of any additional or supplemental filings that are incorporated or deemed incorporated by reference in such Prospectus. The period during which the availability of the Shelf Registration Statement and any Prospectus is suspended (the "Deferral Period") shall, without the Company incurring any obligation to pay liquidated damages pursuant to Section 2(c) above, not exceed forty-five (45) days in any consecutive three (3) month period or ninety (90) days in any consecutive twelve (12) month period.
(h) The Company shall cause all Shares issued or issuable upon conversion of the Debentures to be listed on each securities exchange or quotation system on which the Company's common stock, par value $1.00 per share, is then listed no later than the date a Shelf Registration Statement is declared effective and, in connection therewith, to make such filings as may be required under the Exchange Act and to have such filings declared effective as and when required thereunder.
Each Holder agrees, by acquisition of the Registrable Securities, that no Holder of Registrable Securities shall be entitled to sell any of such Registrable Securities pursuant to a Shelf Registration Statement or to receive a Prospectus relating thereto, unless such Holder has furnished the Company with a Notice and Questionnaire as required pursuant to Section 2(b) hereof (including the information required to be included in such Notice and Questionnaire) and the information set forth in the next sentence. Each Notice Holder agrees promptly to furnish to the Company all information required to be disclosed in order to make the information previously furnished to the Company by such Notice Holder not misleading and any other information regarding such Notice Holder and the distribution of such Registrable Securities as may be required to be disclosed in the Shelf Registration Statement under applicable law or pursuant to Commission comments and otherwise agrees to comply with Section 3(d) hereof. Each Holder further agrees not to sell any Registrable Securities pursuant to the Shelf Registration Statement without delivering, or causing to be delivered, a Prospectus to the purchaser thereof and, following termination of the Resale Period, to notify the Company, within 10 business days of request, of the amount of Registrable Securities sold pursuant to the Shelf Registration Statement and, in the absence of a response, the Company may assume that all of the Holder's Registrable Securities were so sold.
(a) The Underwriting Majority may sell its Registrable Securities in an Underwritten Offering pursuant to the Shelf Registration Statement only with the Company's consent, which consent shall not be unreasonably withheld.
(b) No holder may participate in any Underwritten Offering hereunder unless such Holder:
(i) agrees to sell such Holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the Persons entitled hereunder to approve such arrangements; and
(ii) completes and executes all reasonable questionnaires, powers of attorney, indemnities, underwriting agreements, lock-up letters and other documents reasonably required under the terms of such underwriting arrangements.
(c) In any such Underwritten Offering, the investment banker or investment bankers and manager or managers that will administer the offering shall be designated by the Company, subject to the consent of Holders holding at least a majority in aggregate principal amount of the Registrable Securities (calculated in accordance with Section 1(dd)) to be included in such Underwritten Offering (which shall not be unreasonably withheld or delayed); provided that such Holders shall be responsible for all underwriting commissions and discounts in connection therewith.
(d) In connection with any Underwritten Offering, underwriters' counsel shall be Pillsbury Winthrop LLP or such other counsel reasonably acceptable to the Company.
6. REPRESENTATIONS AND WARRANTIES.
The Company represents and warrants to, and agrees with, the Initial Purchasers and each of the other Holders from time to time of Registrable Securities that:
(a) Each registration statement covering Registrable Securities and each Prospectus (including any preliminary or summary Prospectus) contained therein or furnished pursuant to Section 3(b) hereof and any further amendments or supplements to any such registration statement or Prospectus, when it becomes effective or is filed with the Commission, as the case may be, and, in the case of an underwritten offering of Registrable Securities, at the time of the closing under the underwriting agreement relating thereto, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at all times subsequent to the Effective Time when a Prospectus would be required to be delivered under the Securities Act, other than from (i) such time as a notice has been given to Holders of Registrable Securities pursuant to Section 3(b)(vi)(D) hereof until (ii) such time as the Company furnishes an amended or supplemented Prospectus pursuant to Section 3(c) hereof or such time as the Company provides notice that offers and sales pursuant to the Shelf Registration Statement may continue, each such registration statement, and each Prospectus (including any summary Prospectus) contained therein or furnished pursuant to Section 3(b) hereof, as then amended or supplemented, will conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of a Holder of Registrable Securities expressly for use therein.
(b) Any documents incorporated by reference in any Prospectus referred to in Section 6(a) hereof, when they become or became effective or are or were filed with the Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading, provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by or on behalf of a Holder of Registrable Securities expressly for use therein.
(c) The consummation of the transactions contemplated hereby will not result in the creation or imposition of any lien, charge or encumbrance upon any of the assets of the Company or any of the Subsidiaries (as defined in the Purchase Agreement) pursuant to the terms of, or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or give any other party a right to terminate any of its obligations under, or result in the acceleration of any obligation under, the articles of incorporation or by-laws (or comparable instruments) of the Company or any of the Subsidiaries, any indenture, mortgage, deed of trust, voting trust agreement, loan agreement, bond, debenture, note agreement or other evidence of indebtedness, lease, contract or other agreement or instrument to which the Company or any of the Subsidiaries is a party or by which the Company or any of its Subsidiaries or any of their respective properties is or are bound or affected, or violate or conflict with any franchise or any judgment, ruling decree, order, statute, law, rule or regulation of any court or other governmental agency or body applicable to the business or properties of the Company or any of the Subsidiaries; and no consent, approval, authorization or order of, or any filing, registration, qualification or declaration with, any court or federal, state or local governmental agency or body is required for the consummation by the Company of the transactions contemplated by this Agreement, except the registration under the Securities Act contemplated hereby, the qualification of the Indenture under the Trust Indenture Act and except such as may be required under state securities or blue sky laws.
(d) This Agreement has been duly authorized, executed and delivered by the Company.
(a) Indemnification By The Company. The Company shall, and it hereby agrees to, indemnify and hold harmless each of the Holders of Registrable Securities included in the Shelf Registration Statement, and each person who is named in such Shelf Registration Statement or a supplement thereto as an underwriter in any offering or sale of such Registrable Securities and each person who controls any such person (each, a "Participant") against any losses, claims, damages or liabilities (or actions in respect thereof), joint or several, to which such Participant may become subject under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of a material fact contained in any registration statement under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such Participant, or any amendment or supplement thereto, or arise out of or are based upon any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, and to reimburse such Participant for any legal or other expenses reasonably incurred by them in connection with investigating or defending any action or claim as such expenses are incurred; provided, however, that the Company shall not be liable to any such Participant in any such case to the extent that any such loss, claim, damage, liability or action (i) arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary, final or summary prospectus, or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such Participant expressly for use therein. The foregoing indemnity with respect to any preliminary prospectus shall not inure to the benefit of any Participant from whom the person asserting any such losses, claims, damages or liabilities purchased Registrable Securities if a copy of the Prospectus (as then amended or supplemented if the Company shall have furnished any amendments or supplements thereto) was not sent or given by or on behalf of such Participant to such person, if required by law so to have been delivered, at or prior to the written confirmation of the sale of the Registrable Securities to such person, and if the Prospectus (as so amended or supplemented) would have cured the defect giving rise to such losses, claims, damages or liabilities.
(b) Indemnification By Participants. The Company may require, as a condition to including any Registrable Securities in any registration statement filed pursuant to Section 2(a) hereof and to entering into any underwriting agreement with respect thereto, that it shall have received an undertaking reasonably satisfactory to it from the Holders of such Registrable Securities and from each underwriter named in any such underwriting agreement, severally and not jointly, to (i) indemnify and hold harmless the Company and all other holders of Registrable Securities, against any losses, claims, damages or liabilities (or actions in respect thereof) to which the Company or such other holders of Registrable Securities may become subject, under the Securities Act, the Exchange Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Holder or underwriter pertaining to such Holder or underwriter expressly for use therein, and (ii) reimburse the Company for any legal or other expenses reasonably incurred by it in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that no such Holder shall be required to undertake liability to any person under this Section 7(b) for any amounts in excess of the dollar amount of the proceeds to be received by such Holder from the sale of such Holder's Registrable Securities pursuant to such registration.
(c) Notices Of Claims, Etc. Promptly after receipt by an indemnified party under Section 7(a) or (b) of notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against the indemnifying party under such subsection, notify the indemnifying party in writing of the commencement thereof; but the omission so to notify the indemnifying party will not relieve the indemnifying party from any liability which it may have to any indemnified party otherwise than under Section 7(a) or (b). In case any such action is brought against any indemnified party, and it notifies the indemnifying party of the commencement thereof, the indemnifying party will be entitled to participate therein, and to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party). Upon receipt of notice from the indemnifying party to such indemnified party of its election so to assume the defense of such action and approval by the indemnified party of counsel, the indemnifying party shall not be liable to such indemnified party under Section 7(a) or (b) for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party (other than reasonable costs of investigation) in connection with the defense thereof. In any such action, any indemnified party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such indemnified party unless (i) the indemnifying party and the indemnified party shall have mutually agreed to the retention of such counsel or (ii) the named parties to any such proceeding (including any impleaded parties) include both the indemnifying party and the indemnified party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. No indemnifying party shall, without the prior written consent of the indemnified party, effect any settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which any indemnified party is or could have been a party and indemnity could have been sought hereunder by such indemnified party (whether or not the indemnified party is an actual or potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of such indemnified party from all liability on any claims that are the subject matter of such action and (ii) does not include any statement as to, or an admission of, fault, culpability or a failure to act, by or on behalf of any indemnified party.
(d) Contribution. If for any reason the indemnification provisions contemplated by Section 7(a) or (b) are unavailable or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative benefits received by such indemnifying party on the one hand and such indemnified party on the other from the Initial Placement and any sales of Registrable Securities under the Shelf Registration Statement; provided, however, that in no case shall the Initial Purchasers be responsible, in the aggregate, for any amount in excess of the purchase discount or commission applicable to the Debentures, as set forth in the Purchase Agreement. If, however, the allocation provided by the immediately preceding sentence is not permitted by applicable law or if the indemnified party failed to give the notice required under Section 7(c) above, then each indemnifying party shall contribute to such amount paid or payable by such indemnified party in such proportion as is appropriate to reflect not only such relative benefits but also the relative fault of the indemnifying party on the one hand and the indemnified party on the other in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. Benefits received by the Company shall be deemed to be equal to the total net proceeds from the Initial Placement (before deducting expenses other than purchase discounts and commissions). Benefits received by the Initial Purchasers shall be deemed to be equal to the total purchase discounts and commissions received in connection with the Initial Placement, and benefits received by any other Holders shall be deemed to be equal to the value of receiving Registrable Securities registered under the Securities Act. Benefits received by any underwriter shall be deemed to be equal to the total underwriting discounts and commissions, as set forth on the cover page of the Prospectus forming a part of the Shelf Registration Statement which resulted in losses, claims, damages or liabilities (or actions in respect thereof). The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party on the one hand or by such indemnified party on the other, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 7(d) were determined by pro rata allocation (even if the Holders or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 7(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 7(d), no Holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such Holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such Holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The Holders' and any underwriters' obligations in this Section 7(d) to contribute shall be several in proportion to the principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint.
(e) Obligations not limited by this provision. The obligations of the Company under this section shall be in addition to any liability which the Company may otherwise have and shall extend, upon the same terms and conditions, to each person, if any, who controls any Participant within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act; and the obligations of the Participants under this section shall be in addition to any liability which the respective Participants may otherwise have and shall extend, upon the same terms and conditions, to each director of the Company and to each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act.
The Company covenants to the Holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, the Company shall use commercially reasonable efforts to timely file the reports required to be filed by it under the Exchange Act or the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144), or, if it ceases to be so required to file such reports, the Company will upon the request of any Holder or beneficial owner of the Registrable Securities make publicly available the information specified in subparagraph (c)(2) of Rule 144, all to the extent required from time to time to enable a Holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the written request of any Holder of Registrable Securities in connection with that Holder's sale pursuant to Rule 144, the Company shall deliver to such Holder a written statement as to whether it has complied with such requirements.
(a) Notices. All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: If to the Company, to it at 100 CenturyTel Drive, Monroe, Louisiana 71203, Attention: Harvey P. Perry, Executive Vice President, Chief Administrative Officer, General Counsel and Secretary; if to the Initial Purchasers, to it at the address for the Initial Purchasers set forth in the Purchase Agreement; and if to a Holder, to the address of such Holder set forth in the security register, a Notice and Questionnaire or other records of the Company or to such other address as the Company or any such Holder may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
(b) Parties In Interest. All the terms and provisions of this Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the respective successors and assigns of the parties hereto. In the event that any transferee of any Holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a party hereto for all purposes and such Registrable Securities shall be held subject to all of the terms of this Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by and to perform, all of the applicable terms and provisions of this Agreement.
(c) Survival. The respective indemnities, agreements, representations, warranties and each other provision set forth in this Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any Holder of Registrable Securities, any director, officer or partner of such Holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such Holder.
(d) LAW GOVERNING. THIS REGISTRATION RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
(e) Headings. The descriptive headings of the several Sections and paragraphs of this Agreement are inserted for convenience only, do not constitute a part of this Agreement and shall not affect in any way the meaning or interpretation of this Agreement.
(f) No Inconsistent Agreements. The Company has not entered into nor will the Company on or after the date of this Agreement enter into any agreement that is inconsistent with the rights granted to the Holders of Registrable Securities in this Agreement or otherwise conflicts with the provisions hereof. The rights granted to the Holders hereunder do not in any way conflict with and are not inconsistent with the rights granted to the holders of the Company's other issued and outstanding securities under any such agreements.
(g) Entire Agreement; Amendments. The provisions of this Agreement, including the provisions of this sentence, may not be amended, modified or supplemented, and waivers or consents to departures from the provisions hereof may not be given unless the Company has obtained the written consent of an Underwriting Majority affected by such amendment, modification, supplement, waiver or departure. Notwithstanding the foregoing sentence, (i) this Agreement may be amended, without the consent of any Holder of Registrable Securities, by written agreement signed by the Company and the Initial Purchasers, to cure any ambiguity, correct or supplement any provision of this Agreement that may be inconsistent with any other provision of this Agreement or to make any other provisions with respect to matters or questions arising under this Agreement that shall not be inconsistent with other provisions of this Agreement, (ii) this Agreement may be amended, modified or supplemented, and waivers and consents to departures from the provisions hereof may be given, by written agreement signed by the Company and the Initial Purchasers to the extent that any such amendment, modification, supplement, waiver or consent is, in their reasonable judgment, necessary or appropriate to comply with applicable law (including any interpretation of the staff of the SEC) or any change therein and (iii) to the extent any provision of this Agreement relates to the Initial Purchasers, such provision may be amended, modified or supplemented, and waivers or consents to departures from such provisions may be given, by written agreement signed by the Initial Purchasers and the Company.
(h) Counterparts. This Agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.
(i) Third Party Beneficiary. Each of the Holders shall be a third party beneficiary of the agreements made hereunder between the Company on the one hand, and the Initial Purchasers, on the other hand, and shall have the right to enforce such agreements directly to the extent it deems such enforcement necessary or advisable to protect its rights or the rights of Holders hereunder.
(j) Securities Held By the Company or Its Affiliates. Whenever the consent or approval of Holders of a specified percentage of Registrable Securities is required hereunder, Registrable Securities held by the Company or its affiliates (as such term is defined in Rule 405) shall not be counted in determining whether such consent or approval was given by the Holders of such required percentage.
IN WITNESS WHEREOF, the parties have executed this Registration Rights Agreement as of the date first written above.
CenturyTel, Inc.
By: /s/ R. Stewart Ewing, Jr.
Name: R. Stewart Ewing, Jr.
Title: Executive Vice President
and
Chief Financial Officer
Banc Of America Securities LLC
J.P. Morgan Securities Inc.
Wachovia Securities, Inc.
By: Banc of America Securities LLC
By:
/s/ William C. Caccamise
Name: William C. Caccamise
Title: Managing Director
ANNEX A
FORM OF SELLING SECURITYHOLDER NOTICE AND QUESTIONNAIRE
The undersigned beneficial holder of 4.75% Convertible Senior Debentures, Series K, due 2032 (the "debentures") of CenturyTel, Inc. (the "Company") or shares of common stock, par value $1.00 per share (the "common stock" and, together with the debentures, the "Registrable Securities"), of the Company understands that the Company has filed or intends to file with the Securities and Exchange Commission a registration statement on Form S-3 (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Registrable Securities in accordance with the terms of the Registration Rights Agreement, dated as of August 26, 2002 (the "Registration Rights Agreement"), between the Company and the Initial Purchasers named therein. The Registration Rights Agreement is available from the Company upon request at the address set forth below. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Registration Rights Agreement.
Each beneficial owner of Registrable Securities is entitled to the benefits of the Registration Rights Agreement. In order to sell or otherwise dispose of any Registrable Securities pursuant to the Shelf Registration Statement, a beneficial owner of Registrable Securities generally will be required to be named as a selling securityholder in the related prospectus, deliver a prospectus to purchasers of Registrable Securities and be bound by those provisions of the Registration Rights Agreement applicable to such beneficial owner (including certain indemnification provisions as described below). Beneficial owners are encouraged to complete and deliver this Notice and Questionnaire prior to the effectiveness of the Shelf Registration Statement so that such beneficial owners may be named as selling securityholders in the related prospectus at the time of effectiveness. Upon receipt of a completed Notice and Questionnaire from a beneficial owner following the effectiveness of the Shelf Registration Statement, the Company will, as promptly as practicable but in any event within five business days of such receipt, file such amendments to the Shelf Registration Statement or supplements to the related prospectus as are necessary to permit such holder to deliver such prospectus to purchasers of Registrable Securities.
Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and the related prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and the related prospectus.
NOTICE
The undersigned beneficial owner (the "Selling Securityholder") of Registrable Securities hereby gives notice to the Company of its intention to sell or otherwise dispose of Registrable Securities beneficially owned by it and listed below in Item 3 (unless otherwise specified under Item 3) pursuant to the Shelf Registration Statement. The undersigned, by signing and returning this Notice and Questionnaire, understands and agrees that it will be bound by the terms and conditions of this Notice and Questionnaire and the Registration Rights Agreement.
The undersigned hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:
QUESTIONNAIRE
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(a) Full legal name of Selling Securityholder: |
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(b) Full legal name of registered Holder (if not the same as (a) above) through which Registrable Securities listed in (3) below are held: |
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(c) Full legal name of DTC participant (if applicable and if not the same as (b) above) through which Registrable Securities listed in (3) below are held: |
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2. |
Address for notices to Selling Securityholder: |
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Telephone (including area code):
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Fax (including area code):
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Contact Person:
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3. |
Beneficial ownership of Registrable Securities: |
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(a) Type and Principal Amount of Registrable Securities beneficially owned: |
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(b) CUSIP No(s). of such Registrable Securities beneficially owned: |
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4. |
Beneficial ownership of the Company securities owned by the Selling Securityholder: |
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EXCEPT AS SET FORTH BELOW IN THIS ITEM (4), THE UNDERSIGNED IS NOT THE BENEFICIAL OR REGISTERED OWNER OF ANY SECURITIES OF THE COMPANY OTHER THAN THE REGISTRABLE SECURITIES LISTED ABOVE IN ITEM (3). |
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(a) Type and Amount of other Company securities beneficially owned by the Selling Securityholder: |
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(b) CUSIP No(s). of such other Company securities beneficially owned: |
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5. |
Relationship with the Company: |
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EXCEPT AS SET FORTH BELOW, NEITHER THE UNDERSIGNED NOR ANY OF ITS AFFILIATES, OFFICERS, DIRECTORS OR PRINCIPAL EQUITY HOLDERS (5% OR MORE) HAS HELD ANY POSITION OR OFFICE OR HAS HAD ANY OTHER MATERIAL RELATIONSHIP WITH THE COMPANY (OR ITS PREDECESSORS OR AFFILIATES) DURING THE PAST THREE YEARS. |
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State any exceptions here: |
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6. |
Plan of distribution: |
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EXCEPT AS SET FORTH BELOW, THE UNDERSIGNED (INCLUDING ITS DONEES OR PLEDGEES) INTENDS TO DISTRIBUTE THE REGISTRABLE SECURITIES LISTED ABOVE IN ITEM (3) PURSUANT TO THE SHELF REGISTRATION STATEMENT ONLY AS FOLLOWS (IF AT ALL): SUCH REGISTRABLE SECURITIES MAY BE SOLD FROM TIME TO TIME DIRECTLY BY THE UNDERSIGNED OR ALTERNATIVELY, THROUGH UNDERWRITERS, IN ACCORDANCE WITH THE REGISTRATION RIGHTS AGREEMENT, BROKER-DEALERS OR AGENTS. IF THE REGISTRABLE SECURITIES ARE SOLD THROUGH UNDERWRITERS OR BROKER-DEALERS OR AGENTS, THE SELLING SECURITYHOLDER WILL BE RESPONSIBLE FOR UNDERWRITING DISCOUNTS OR COMMISSIONS OR AGENT'S COMMISSIONS. SUCH REGISTRABLE SECURITIES MAY BE SOLD IN ONE OR MORE TRANSACTIONS AT FIXED PRICES, AT PREVAILING MARKET PRICES AT THE TIME OF SALE, AT VARYING PRICES DETERMINED AT THE TIME OF SALE, OR AT NEGOTIATED PRICES. SUCH SALES MAY BE EFFECTED IN TRANSACTIONS (WHICH MAY INVOLVE BLOCK TRANSACTIONS) (I) ON ANY NATIONAL SECURITIES EXCHANGE OR QUOTATION SERVICE ON WHICH THE REGISTRABLE SECURITIES MAY BE LISTED OR QUOTED AT THE TIME OF SALE, (II) IN THE OVER-THE-COUNTER MARKET, (III) IN TRANSACTIONS OTHERWISE THAN ON SUCH EXCHANGES OR SERVICES OR IN THE OVER-THE-COUNTER MARKET OR (IV) THROUGH THE WRITING OF OPTIONS. IN CONNECTION WITH SALES OF THE REGISTRABLE SECURITIES OR OTHERWISE, THE UNDERSIGNED MAY ENTER INTO HEDGING TRANSACTIONS WITH BROKER-DEALERS, WHICH MAY IN TURN ENGAGE IN SHORT SALES OF THE REGISTRABLE SECURITIES, SHORT AND DELIVER REGISTRABLE SECURITIES TO CLOSE OUT SUCH SHORT POSITIONS, OR LOAN OR PLEDGE REGISTRABLE SECURITIES TO BROKER-DEALERS THAT IN TURN MAY SELL SUCH SECURITIES. |
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State any exceptions here: |
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NOTE: |
In no event will such method(s) of distribution take the form of an underwritten offering of the Registrable Securities without the prior agreement of the Company. |
The undersigned acknowledges that it understands its obligation to comply with the provisions of the Exchange Act and the rules thereunder relating to stock manipulation, particularly Regulation M thereunder (or any successor rules or regulations), and the provisions of the Securities Act relating to prospectus delivery in connection with any offering of Registrable Securities pursuant to the Shelf Registration Statement. The undersigned agrees that neither it nor any person acting on its behalf will engage in any transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under the Registration Rights Agreement to indemnify and hold harmless certain persons as set forth therein.
Pursuant to the Registration Rights Agreement, the Company has agreed under certain circumstances to indemnify the Selling Securityholders against certain liabilities.
In accordance with the undersigned's obligation under the Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the undersigned agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein that may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains effective. All notices hereunder and pursuant to the Registration Rights Agreement shall be made in writing at the address set forth below.
By signing below, the undersigned consents to the disclosure of the information contained herein in its answers to items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and the related prospectus. The undersigned understands that such information will be relied upon by the Company in connection with the preparation or amendment of the Shelf Registration Statement and the related prospectus.
IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.
Dated:
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Beneficial Owner: |
By:
Name: Title: |
PLEASE RETURN THE COMPLETED AND
EXECUTED NOTICE
AND QUESTIONNAIRE TO:
CenturyTel, Inc.
100 CenturyTel Drive, Monroe, Louisiana 71203
Attention: Secretary
ANNEX B
NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT
Attention: Trust Officer
Re: CenturyTel, Inc. (the "Company")
4.75% Convertible Senior Debentures, Series K, due 2032
Dear Sirs:
Please be advised that __________________ has transferred $___________ aggregate principal amount of the above-referenced Debentures (or __________ shares of the Company's common stock, par value $1.00 per share, issued upon conversion of such Debentures) pursuant to an effective Registration Statement on Form S-4 (File No. 333-____) filed by the Company.
We hereby certify that the above-named beneficial owner of the Debentures (or such shares of common stock) is named as a "Selling Holder" in the Prospectus dated, _________, 20__ or in supplements thereto, and that the aggregate principal amount of the Debentures (or number of shares of such common stock) transferred are the Debentures (or such shares of common stock) listed in such Prospectus opposite such owner's name.
Dated:
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Very truly yours, | |
(Name) By: (Authorized Signature) |
Exhibit 5.1
to Registration Statement
[Letterhead of Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P.]
October 9, 2002
CenturyTel, Inc.
100 CenturyTel Drive
Monroe, Louisiana 71203
Re: Registration Statement on Form S-3
CenturyTel, Inc.
Ladies and Gentlemen:
We have acted as special counsel to CenturyTel, Inc. ("CenturyTel") in connection with the preparation of CenturyTels Registration Statement on Form S-3 (the "Registration Statement") filed on or about the date hereof with the Securities and Exchange Commission under the Securities Act of 1933, as amended, relating to the registration of the resale of (i) $165 million aggregate principal amount of 4.75% Convertible Senior Debentures, Series K, due 2032 (the "Debentures") issued by CenturyTel pursuant to an Indenture, dated as of March 31, 1994, as supplemented through and including the Second Supplemental Indenture thereto dated as of August 20, 2002 (the "Indenture"), between CenturyTel and Regions Bank, as trustee, and (ii) 4,078,602 shares of the CenturyTels common stock, par value $1.00 per share (the "Common Stock"), issuable upon conversion of the Debentures, plus such indeterminate number of shares of Common Stock as may become issuable by means of an adjustment to the conversion price of the Debentures (collectively, the "Conversion Shares").
In rendering the opinions set forth below, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents and are relying upon the truth and accuracy of the statements, covenants, representations and warranties set forth therein: (i) the Registration Statement; (ii) the Indenture; (iii) the global certificates representing the Debentures; (iv) minutes from the meetings of the Board of Directors of CenturyTel held on February 22, 1994 and February 26, 2002 and resolutions adopted by the Special Pricing Committee of the Board of Directors of CenturyTel on August 20, 2002; (v) CenturyTel's amended and restated articles of incorporation and CenturyTel's bylaws, as amended, each as certified to our satisfaction, and (vi) certain certificates, documents and other instruments delivered prior to the date hereof in connection with the issuance of the Debentures, including, without limitation, certain opinions and certificates delivered to the initial purchasers of the Debentures and certificates and orders relating to the authentication and delivery of the Debentures. We have also, without independent investigation or verification, relied upon factual representations made by CenturyTel during the course of our representation and upon such other documents, records, certificates and other instruments, including certificates or other written or oral advice of officers of CenturyTel, as we considered necessary or appropriate in connection with rendering the opinions expressed below.
In our examination of such documents, we have assumed without independent verification (i) that each of the documents and instruments reviewed by us has been duly authorized, executed and delivered by each of the parties thereto other than CenturyTel and is enforceable against such parties in accordance with the terms thereof, (ii) the authenticity of all documents and instruments submitted to us as originals, (iii) the conformity to the originals of all documents and instruments submitted to us as conformed, certified or photostatic copies, (iv) the accuracy and completeness of all corporate records made available to us by CenturyTel, (v) the absence of any other documents, instruments, records, agreements or understandings that alter, modify or change in any way the terms of the Indenture or the Debentures, or the validity or accuracy of the representations made to us orally or as set forth in any documents, instruments, records or agreements provided to or reviewed by us, (vi) the genuineness of all signatures on all documents and instruments examined by us and (vii) the power and legal capacity of all persons (other than CenturyTel) who have executed documents reviewed by us hereunder.
Based upon the foregoing and subject to the following qualifications and comments, we are of the opinion that:
1. The Debentures are valid and binding obligations of CenturyTel, enforceable against CenturyTel in accordance with their terms and entitled to the benefits of the Indenture, except that (a) the enforceability thereof may be subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or other similar laws, now or hereafter in effect, relating to creditorsrights generally, (b) the enforceability thereof is subject to general principles of equity (regardless of whether such enforceability is considered in a proceeding at law or equity) and that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to equitable defenses and to the discretion of the court before which any proceeding therefore may be brought and (c) certain provisions contained in the Indenture and Debentures relating to remedies may be limited by public policy, equitable principles or other provisions of applicable laws, rules, regulations, court decisions or constitutional requirements.
2. The Conversion Shares have been duly authorized, and, if and when issued by CenturyTel upon conversion of the Debentures in accordance with the terms of the Debentures and the Indenture, will be validly issued, fully paid and nonassessable.The foregoing opinions are subject to the following exceptions, qualifications, and comments:
(a) In connection with our foregoing opinions, we have assumed that neither the issuance and delivery of the Debentures, nor the compliance by CenturyTel with the terms of the Debentures, will violate any applicable law or regulation (including those relating to the regulation of communications companies) or will result in a violation of any provision of any instrument or agreement then binding upon CenturyTel, or any restriction imposed by any court or governmental body having jurisdiction over CenturyTel or its assets.
(b) We are members of the bar of the State of Louisiana and do not purport to be experts on the laws of any other jurisdiction. The opinions rendered herein are specifically limited to currently applicable United States federal law and the laws of the State of Louisiana, in each case subject to paragraph (a) above and in each case solely as they relate to the opinions expressed herein.
(c) The foregoing opinion regarding the enforceability of the Debentures is subject to the following exceptions, qualifications and comments:
(i) the possible unenforceability of provisions permitting modifications of an agreement only in writing;
(ii) the possible unenforceability of provisions that the terms of an agreement are severable;
(iii) the effect of laws requiring mitigation of damages;
(iv) the effect and possible unenforceability of contractual provisions providing for choice of governing law;
(v) the possible unenforceability of provisions requiring indemnification for, or providing exculpation, release or exemption from liability for, action or inaction, to the extent such action or inaction involves negligence or willful misconduct or to the extent otherwise contrary to public policy;
(vi) the possible unenforceability of waivers or advance consents that have the effect of waiving a partys unmatured rights;
(vii) the possible unenforceability of provisions that waivers or consents by a party may not be given effect unless in writing or in compliance with particular requirements or that a persons course of dealing, course of performance, or the like or failure or delay in taking actions may not constitute a waiver of related rights or provisions or that one or more waivers may not constitute a waiver of related rights or provisions or that one or more waivers may not under certain circumstances constitute a waiver of other matters of the same kind; and
(viii) the possible unenforceability of provisions permitting the exercise, under certain circumstances, of rights without notice or without providing opportunity to cure failures to perform.
(d) All opinions rendered herein are as of the date hereof and are based upon the circumstances that exist at the present time, including, without limitation, statutes, cases, regulations, facts and circumstances as they currently exist, all of which are subject to change. We assume no obligation to update or supplement this letter or the opinions given herein to reflect any facts or circumstances which may hereafter come to our attention, or any changes in laws or interpretations thereof which may hereafter occur.
(e) Except as to the matters, documents and transactions specifically addressed herein, we express no opinion whatsoever, and no opinion whatsoever is to be inferred, as to any other matter, document or transaction.
This opinion is furnished to you in connection with the filing of the Registration Statement and is not to be used, circulated, quoted or otherwise relied upon for any other purpose.
We hereby consent to the use of this opinion as an exhibit to the Registration Statement and to the reference to our name in the prospectus contained therein. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the general rules and regulations of the Securities and Exchange Commission.
Yours very truly, |
||
Jones, Walker, Waechter, Poitevent, | ||
Carrère & Denègre, L.L.P. | ||
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|
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By: |
/s/ Kenneth J. Najder |
|
Kenneth J. Najder |
||
Partner |
Exhibit 8.1
to Registration Statement
[Letterhead of Jones, Walker, Waechter, Poitevent, Carrère & Denègre, L.L.P.]
October 9, 2002
CenturyTel, Inc.
100 CenturyTel Drive
Monroe, Louisiana 71203
RE: Registration Statement on Form S-3
CenturyTel, Inc.
Ladies and Gentlemen:
We have acted as tax counsel to CenturyTel, Inc. ("CenturyTel") in connection with its issuance of $165 million aggregate principal amount of 4.75% Convertible Senior Debentures, Series K, due 2032 (the "Debentures"), which are convertible into shares of CenturyTel's common stock, par value $1.00 per share (the "Common Stock" and together with the Debentures, the "Securities"). The Securities are described in the Prospectus (the "Prospectus"), which forms a part of the registration statement on Form S-3 filed by CenturyTel with the Securities and Exchange Commission on or about the date hereof (the "Registration Statement"). Capitalized terms used herein that are not otherwise defined herein have the meaning assigned to such terms in the Registration Statement.
In rendering the opinion set forth below, we have examined originals or copies, certified or otherwise identified to our satisfaction, of the following documents and are relying upon the truth and accuracy of the statements, covenants, representations and warranties set forth therein: (i) the Registration Statement and Prospectus; (ii) the Indenture, dated as of March 31, 1994, as supplemented through and including the Second Supplemental Indenture thereto dated as of August 20, 2002 between CenturyTel and Regions Bank, as trustee; (iii) the global certificates representing the Debentures; and (iv) such other agreements and documents as we have considered necessary or appropriate for the purpose of rendering the opinion set forth below.
Based on our examination of the foregoing items and subject to the assumptions, exceptions, limitations and qualifications set forth herein, we are of the opinion that the discussion regarding the United States federal income tax consequences relating to the purchase, ownership and disposition of the Securities set forth in the Prospectus under the heading "Certain United States Federal Income Tax Consequences," insofar as it purports to constitute summaries of matters of current United States federal tax law and regulations or legal conclusions with respect thereto, constitutes accurate summaries of the matters described therein in all material respects.
In our examination of the materials referred to above, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals and the conformity to original documents of all copies of documents submitted to us. In addition, we also have assumed that factual representations made to us are true, correct and complete and that the transactions related to the issuance, sale, exchange, conversion or redemption of the Securities have been or will be consummated in accordance with the terms of the documents described herein. If any of the above described assumptions are untrue for any reason or if the issuance, sale, exchange, conversion or redemption of the Securities is consummated in a manner that is inconsistent with the manner in which such transactions are described in the Prospectus and Registration Statement, our opinions as expressed above may be adversely affected and may not be relied upon.
We express no opinion with respect to the transactions referred to herein or in the Prospectus and Registration Statement other than as expressly set forth herein.
Our opinions are based upon the Internal Revenue Code of 1986, as amended, the Treasury regulations promulgated thereunder and other relevant authorities and law, all as in effect on the date hereof. Consequently, future changes in the law may cause the tax treatment of the transactions referred to herein to be materially different from that described in the Prospectus and Registration Statement. We disclaim any undertaking to advise you of any subsequent changes of the matters stated, represented or assumed herein or any subsequent changes in applicable law, regulations or interpretations thereof.
We are members of the Bar of the State of Louisiana, and we do not express any opinion herein concerning any law other than the federal law of the United States.
We consent to the filing of this opinion as an exhibit to the Registration Statement and to the reference to us in the Prospectus under the caption "Legal Matters." In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act of 1933 or the general rules and regulations of the Securities and Exchange Commission.
Yours very truly,
Jones, Walker, Waechter, Poitevent,
Carrère & Denègre, L.L.P.
By: /s/ Rudolph R. Ramelli
Rudolph R. Ramelli
Partner
Exhibit 12.1
to Registration Statement
Ratio of earnings to fixed charges
|
|
Six |
|
Six |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non- |
|
|
Non- |
2001 |
|
|
Non- |
2000 |
|
|
Non- |
1999 |
|
|
Non- |
1998 |
|
|
Non- |
1997 |
|||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
|
|
2001 |
|
2000 |
|
1999 |
|
1998 |
|
1997 |
||||||||||||||
|
|
|
|
||||||||||||||||||||||
Net income |
149,530 |
9,289 |
158,819 |
343,031 |
(117,370) |
225,661 |
231,474 |
(2,646) |
228,828 |
239,769 |
(1,452) |
238,317 |
228,757 |
(30,528) |
198,229 |
255,978 |
(106,416) |
149,562 |
|||||||
Income taxes |
81,880 |
5,002 |
86,882 |
210,025 |
(66,698) |
143,327 |
154,711 |
(4,166) |
150,545 |
189,503 |
(36,821) |
152,682 |
158,701 |
(19,331) |
139,370 |
152,363 |
(63,224) |
89,139 |
|||||||
|
|
|
|
|
|
||||||||||||||||||||
Net income before income taxes |
231,410 |
14,291 |
245,701 |
|
553,056 |
(184,068) |
368,988 |
|
386,185 |
(6,812) |
379,373 |
|
429,272 |
(38,273) |
390,999 |
|
387,458 |
(49,859) |
337,599 |
|
408,341 |
(169,640) |
238,701 |
||
Adjustments to earnings: |
|||||||||||||||||||||||||
Fixed charges |
105,951 |
105,951 |
229,649 |
229,649 |
187,766 |
187,766 |
153,222 |
153,222 |
168,870 |
168,870 |
58,005 |
58,005 |
|||||||||||||
Capitalized interest |
(840) |
(840) |
(3,472) |
(3,472) |
(3,800) |
(3,800) |
(1,990) |
(1,990) |
(626) |
(626) |
(797) |
(797) |
|||||||||||||
Preferred stock dividend requirement before tax |
(306) |
(306) |
(654) |
(654) |
(664) |
(664) |
(675) |
(675) |
(692) |
(692) |
(734) |
(734) |
|||||||||||||
Gross earnings from unconsolidated |
|||||||||||||||||||||||||
cellular partnerships |
(24,196) |
(24,196) |
(42,553) |
(7,890) |
(50,443) |
(26,986) |
(5,330) |
(32,316) |
(29,956) |
(6,860) |
(36,816) |
(32,869) |
- |
(32,869) |
(27,852) |
- |
(27,852) |
||||||||
Distributed earnings from unconsolidated |
|||||||||||||||||||||||||
cellular partnerships |
12,676 |
12,676 |
30,856 |
30,856 |
35,842 |
35,842 |
22,219 |
22,219 |
26,515 |
26,515 |
16,825 |
16,825 |
|||||||||||||
Gross losses from unconsolidated |
|||||||||||||||||||||||||
cellular partnerships |
0 |
15,093 |
15,093 |
- |
- |
2,281 |
2,281 |
- |
- |
58 |
58 |
||||||||||||||
Minority losses from majority-owned |
|||||||||||||||||||||||||
subsidiaries |
(61) |
(61) |
(127) |
(127) |
(1,702) |
(1,702) |
(10) |
(10) |
(37) |
(37) |
(1,437) |
(1,437) |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Earnings as adjusted |
324,634 |
338,925 |
781,848 |
589,890 |
576,641 |
564,499 |
574,363 |
529,230 |
548,619 |
498,760 |
452,409 |
282,769 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Fixed charges |
|||||||||||||||||||||||||
Interest expense |
104,805 |
104,805 |
225,523 |
225,523 |
183,302 |
183,302 |
150,557 |
150,557 |
167,552 |
167,552 |
56,474 |
56,474 |
|||||||||||||
Allowance for funds used during construction |
840 |
840 |
3,472 |
3,472 |
3,800 |
3,800 |
1,990 |
1,990 |
626 |
626 |
797 |
797 |
|||||||||||||
Preferred stock dividend requirement before tax |
306 |
306 |
654 |
654 |
664 |
664 |
675 |
675 |
692 |
692 |
734 |
734 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Total fixed charges |
105,951 |
105,951 |
229,649 |
229,649 |
187,766 |
187,766 |
153,222 |
153,222 |
168,870 |
168,870 |
58,005 |
58,005 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Ratio of earnings to fixed charges and preferred |
|||||||||||||||||||||||||
stock dividends |
3.06 |
3.20 |
3.40 |
2.57 |
3.07 |
3.01 |
3.75 |
3.45 |
3.25 |
2.95 |
7.80 |
4.87 |
Ratio of earnings from continuing operations to fixed
charges and preferred stock dividends
Six months |
|||||||||||||||||||||||||
Six months |
Non- |
2001 |
2000 |
1999 |
1998 |
1997 |
|||||||||||||||||||
Non- |
Non- |
Non- |
Non- |
Non- |
|||||||||||||||||||||
2001 |
2000 |
1999 |
1998 |
1997 |
|||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
Income from continuing operations |
83,065 |
9,289 |
92,354 |
144,146 |
(16,377) |
127,769 |
124,229 |
5,494 |
129,723 |
135,520 |
(5,571) |
129,949 |
116,272 |
(18,255) |
98,017 |
181,080 |
(106,416) |
74,664 |
||||||
|
Income taxes from continuing operations |
44,636 |
5,002 |
49,638 |
88,711 |
(8,666) |
80,045 |
83,542 |
2,957 |
86,499 |
88,560 |
(2,964) |
85,596 |
83,731 |
(9,830) |
73,901 |
104,968 |
(63,224) |
41,744 |
||||||
|
Net income from continuing operations |
|
|
|
|
|
|
||||||||||||||||||
before income taxes |
127,701 |
14,291 |
141,992 |
232,857 |
(25,043) |
207,814 |
207,771 |
8,451 |
216,222 |
224,080 |
(8,535) |
215,545 |
200,003 |
(28,085) |
171,918 |
286,048 |
(169,640) |
116,408 |
|||||||
|
Adjustments to earnings (from continuing operations): | ||||||||||||||||||||||||
Fixed charges |
105,951 |
105,951 |
229,649 |
229,649 |
187,766 |
187,766 |
153,222 |
153,222 |
168,870 |
168,870 |
58,005 |
58,005 |
|||||||||||||
Capitalized interest |
(840) |
(840) |
(3,472) |
(3,472) |
(3,800) |
(3,800) |
(1,990) |
(1,990) |
(626) |
(626) |
(797) |
(797) |
|||||||||||||
Preferred stock dividend requirement before tax |
(306) |
(306) |
(654) |
(654) |
(664) |
(664) |
(675) |
(675) |
(692) |
(692) |
(734) |
(734) |
|||||||||||||
Minority losses from majority-owned |
|||||||||||||||||||||||||
subsidiaries |
- |
- |
(35) |
(35) |
(1,614) |
(1,614) |
- |
- |
- |
- |
- |
- |
|||||||||||||
|
Earnings from continuing operations as adjusted |
232,506 |
246,797 |
458,345 |
433,302 |
389,459 |
397,910 |
374,637 |
366,102 |
367,555 |
339,470 |
342,522 |
172,882 |
||||||||||||
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|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Fixed charges from continuing operations: | ||||||||||||||||||||||||
Interest expense |
104,805 |
104,805 |
225,523 |
225,523 |
183,302 |
183,302 |
150,557 |
150,557 |
167,552 |
167,552 |
56,474 |
56,474 |
|||||||||||||
Allowance for funds used during construction |
840 |
840 |
3,472 |
3,472 |
3,800 |
3,800 |
1,990 |
1,990 |
626 |
626 |
797 |
797 |
|||||||||||||
Preferred stock dividend requirement before tax |
306 |
306 |
654 |
654 |
664 |
664 |
675 |
675 |
692 |
692 |
734 |
734 |
|||||||||||||
Total fixed charges |
105,951 |
105,951 |
229,649 |
229,649 |
187,766 |
187,766 |
153,222 |
153,222 |
168,870 |
168,870 |
58,005 |
58,005 |
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
|
Ratio of earnings from continuing operations to fixed | ||||||||||||||||||||||||
charges and preferred stock dividends |
2.19 |
2.33 |
2.00 |
1.89 |
2.07 |
2.12 |
2.45 |
2.39 |
2.18 |
2.01 |
5.91 |
2.98 |
Exhibit 23.1
to Registration Statement
Independent Auditors' Consent
The Board of Directors
CenturyTel, Inc.:
We consent to the use of our report incorporated herein by reference and to the reference to our firm under the heading "Experts" in the prospectus.
/s/ KPMG LLP
Shreveport, Louisiana
October 9, 2002
Exhibit 23.2
to Registration Statement
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the Registration Statement and related Prospectus of CenturyTel, Inc. dated October 10, 2002 for the registration of $165,000,000 of 4.75% Convertible Senior Debentures, Series K, due 2032 and Shares of Common Stock Issuable upon Conversion of the Debentures and to the incorporation by reference therein of our report dated April 24, 2002 (except for Note 1, as to which the date is July 1, 2002) with respect to the special purpose financial statements of Verizon's Alabama Operations for the year ended December 31, 2001 and our report dated April 24, 2002 (except for Note 1, as to which the date is August 31, 2002), with respect to the special purpose financial statements of Verizon's Missouri Operations for the year ended December 31, 2001 included in the Current Reports on Form 8-K of CenturyTel, Inc. dated August 1, 2002 and August 31, 2002, respectively, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
October 8, 2002
Exhibit 25.1
to Registration Statement
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)__
________
REGIONS BANK
(Exact names of trustees as specified in its charter)
Alabama State Banking Corporation (Jurisdiction of incorporation or organization if not a U.S. national bank) |
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63-0371391 (I.R.S. Employer Identification No.) |
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|
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417 North 20th Street Birmingham, Alabama (Address of principal executive offices) |
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35202 (Zip Code) |
Robert B. Rinehart
Regions Bank
60 Commerce Street
Montgomery, Alabama 36104
334-230-6120
(Name, address and telephone number
of agent for service)
______
CenturyTel, Inc.
(Exact names of obligors as specified in their charters)
Louisiana (States or other jurisdictions of incorporation or organization) |
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72-0651161 (I.R.S. Employer Identification Nos) |
100 CenturyTel Drive Monroe, Louisiana (Address of principal executive offices) |
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71203 (Zip Code) |
4.75% CONVERTIBLE SENIOR DEBENTURES, SERIES K, DUE 2032
(Title of the indenture securities)
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to which it is subject.
Federal Reserve Bank of Atlanta, Atlanta, Georgia
Alabama State Banking Department, Montgomery, Alabama.
(b) Whether it is authorized to exercise corporate trust powers.
Yes
Item 2. Affiliations with the obligor.
None. Certain officers and directors of CenturyTel, Inc. (namely, Glen F. Post, III, Chief Executive Officer and Chairman of the Board, and William R. Boles, Jr., Director) act as non-voting regional advisory directors of an affiliate of Regions Bank, Regions Bank of Louisiana. Pursuant to Rule 7a-26 of the Trust Indenture Act of 1939, Regions Bank consequently disclaims the existence or admission of any control relationship arising out of these relationships.
Item 16. List of exhibits.
The additional exhibits listed below are filed herewith: (Exhibits, if any, identified in parentheses are on file with the Commission and are incorporated herein by reference as exhibits hereto pursuant to Rule 7a-29 under the Trust Indenture Act of 1939 and Rule 24 of the Commissions Rules of Practice.)
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1a. |
Restated Articles of Incorporation of the
Trustee. (Exhibit 1 to Form T-1, Registration No. 22-21909). |
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1b. |
Articles of Amendment to Restated Articles of
Incorporation of the Trustee. (Exhibit 1b to Form T-1, filed in
connection with the Current Report on Form 8-K of BellSouth
Telecommunications, Inc. dated October 9, 1997). |
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2. |
Not applicable. |
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3. |
Authorization of the Trustee to exercise
corporate trust powers (Exhibit 3 to Form T-1, Registration No.
22-21909). |
|
4. |
Bylaws of the Trustee. (Exhibit 4 to Form T-1,
Registration No. 33-60351). |
|
5. |
Not applicable. |
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6. |
Consent of the Trustee required by Section
321(b) of the Trust Indenture Act of 1939, as amended. |
|
7. |
Latest report of condition of the Trustee
published pursuant to law or the requirements of its supervising or
examining authority as of the close of business on December 31,
2001. |
|
8. |
Not applicable. |
|
9. |
Not applicable. |
__________
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939 the trustee, Regions Bank, a state banking corporation organized and
existing under the laws of the State of Alabama, has duly caused this statement
of eligibility to be signed on its behalf by the undersigned, thereunto duly
authorized, all in the City of Montgomery and State of Alabama, on the 9th of
October, 2002.
REGIONS BANK |
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By: |
/s/ Robert B. Rinehart |
|
Robert B. Rinehart |
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Senior Vice President and Corporate |
||
Trust Manager |
EXHIBIT 6 TO FORM T-1
CONSENT OF TRUSTEE
Pursuant to the requirements of Section 321(b) of the Trust Indenture Act of 1939, as amended, in connection with the proposed issue of senior debt securities by CenturyTel, Inc., we hereby consent that reports of examination by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon request therefor.
REGIONS BANK |
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|
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By: |
/s/ Robert B. Rinehart |
|
Robert B. Rinehart |
||
Senior Vice President and Corporate |
||
Trust Manager |
Dated: October 9, 2002
EXHIBIT 7 TO FORM T-1
CONSOLIDATED REPORT OF CONDITION OF
Regions Bank
of 417 North 20th Street, Birmingham, Alabama 35202
and Subsidiaries,
a member of the Federal Reserve System,
at the close of business June 30, 2002, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act
ASSETS |
|
DOLLAR AMOUNT IN THOUSANDS |
Cash and balances due from depository institutions: |
|
|
Noninterest-bearing balances and currency and coin |
|
$1,068,908 |
Interest-bearing balances |
|
6,881 |
Securities: |
|
|
Held to maturity securities |
|
7,228 |
Available for sale securities |
|
8,180,308 |
Federal Funds sold
and securities purchased under agreements to |
|
|
Federal funds sold and securities purchased under agreements to resell |
|
344,644 |
Loans and lease financing receivables: |
|
|
Loans and leases, net of unearned income |
$31,424,939 |
|
Less: Allowance for loan and lease losses |
430,805 |
|
Less: Allocated transfer risk reserve |
0 |
|
Loans and leases, net of unearned income, allowance, and reserve |
|
30,994,136 |
Trading assets |
|
0 |
Premises and fixed assets (including capitalized leases) |
|
591,805 |
Other real estate owned |
|
52,092 |
Investments in unconsolidated subsidiaries and associated companies |
|
123,622 |
Customers liability to this bank on acceptances outstanding |
|
53,844 |
Intangible assets: |
|
|
Goodwill |
|
144,602 |
Other intangible assets |
|
158,311 |
Other assets |
|
1,013,845 |
TOTAL ASSETS |
|
$42,949,419 |
LIABILITIES |
|
DOLLAR AMOUNT IN THOUSANDS |
Deposits: |
|
|
In domestic offices |
|
$ 28,493,438 |
Noninterest-bearing |
$ 2,834,346 |
|
Interest-bearing |
25,659,092 |
|
In foreign offices, Edge and Agreement subsidiaries, and IBFs |
|
3,215,919 |
Noninterest-bearing |
0 |
|
Interest-bearing |
3,215,919 |
|
Federal funds purchased and securities sold under agreements to repurchase |
|
1,521,041 |
Trading liabilities |
|
0 |
Other borrowed money |
|
5,590,919 |
Banks liability on acceptances executed and outstanding |
|
53,844 |
Subordinated notes and debentures |
|
46,951 |
Other liabilities |
|
496,418 |
TOTAL LIABILITIES |
|
39,418,530 |
Minority interest in consolidated subsidiaries |
|
156,676 |
EQUITY CAPITAL |
|
|
Perpetual Preferred Stock and Related Surplus |
|
0 |
Common stock |
|
103 |
Surplus |
|
1,052,167 |
Retained earnings |
|
2,240,485 |
Accumulated other comprehensive income |
|
126,458 |
Other equity capital components |
|
0 |
TOTAL EQUITY CAPITAL |
|
3,419,213 |
TOTAL LIABILITIES, MINORITY INTEREST AND EQUITY CAPITAL |
|
$ 42,994,419 |