UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE 14A INFORMATION

Proxy Statement Pursuant to Section 14(a) of the

Securities Exchange Act of 1934

(Amendment No.    )

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¨	Soliciting Material under §240.14a-12
CENTURYLINK, INC.
(Name of registrant as specified in its charter)
(Name of person(s) filing proxy statement, if other than the registrant)
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2013 Notice of Annual Meeting

and Proxy Statement

and

Annual Financial Report

May 22, 2013

10:00 a.m. local time

100 CenturyLink Drive

Monroe, Louisiana

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE

ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON MAY 22, 2013

This proxy statement and related materials are

available at www.envisionreports.com/ctl.

All references in this proxy statement or related materials to “we,” “us,” “our,” the “Company” or “CenturyLink” refer to CenturyLink, Inc. In addition, each reference to (i) the “Board” refers to our Board of Directors, (ii) our “executives” or “executive officers” refers to our eight executive officers listed in the tables beginning on page 3 of this proxy statement, (iii) “meeting” refers to the 2013 annual meeting of our shareholders described further herein, (iv) “named officers,” “named executive officers” or “NEOs” refers to the five executive officers listed in the Summary Compensation Table appearing on page 52 of this proxy statement, (v) “Embarq” refers to Embarq Corporation, which we acquired on July 1, 2009, (vi) “Qwest” refers to Qwest Communications International Inc., which we acquired on April 1, 2011, (vii) “Savvis” refers to SAVVIS, Inc., which we acquired on July 15, 2011, and (viii) the “SEC” refers to the U.S. Securities and Exchange Commission. Unless otherwise provided, all information is presented as of the date of this proxy statement.

CenturyLink, Inc.

100 CenturyLink Drive

Monroe, Louisiana 71203

Notice of Annual Meeting of Shareholders

TIME AND DATE	10:00 a.m. local time on May 22, 2013
PLACE	Corporate Conference Room CenturyLink Headquarters 100 CenturyLink Drive Monroe, Louisiana
ITEMS OF BUSINESS	(1)    Elect as directors the eight nominees named in the accompanying proxy statement (2)    Ratify the appointment of KPMG LLP as our independent auditor for 2013 (3)    Conduct a non-binding advisory vote regarding our executive compensation (4)    Act upon four separate shareholder proposals if properly presented at the meeting (5)    Transact such other business as may properly come before the meeting and any adjournment.
RECORD DATE	You can vote if you were a shareholder of record on April 3, 2013.
PROXY VOTING	Shareholders are invited to attend the meeting in person. Even if you expect to attend, it is important that you vote by telephone or the Internet, or by completing and returning a proxy or voting instruction card.

Stacey W. Goff

Secretary

April 9, 2013

TABLE OF CONTENTS

	Page
GENERAL INFORMATION ABOUT THE ANNUAL MEETING		1
ELECTION OF DIRECTORS		2
CORPORATE GOVERNANCE		10
Governance Guidelines		10
Independence		11
Committees of the Board		12
Director Nomination Process		13
Compensation Setting Process		15
Risk Oversight		15
Top Leadership Positions and Structure		16
Waivers of Governance Requirements		16
Access to Information		16
RATIFICATION OF THE SELECTION OF THE INDEPENDENT AUDITOR		17
AUDIT COMMITTEE REPORT		18
ADVISORY VOTE ON EXECUTIVE COMPENSATION		19
SHAREHOLDER PROPOSALS		19
Equity Retention Proposal		20
Bonus Deferral Proposal		22
Proxy Access Proposal		24
Confidential Voting Proposal		27
OWNERSHIP OF OUR SECURITIES		29
Principal Shareholders		29
Executive Officers and Directors		30
COMPENSATION DISCUSSION AND ANALYSIS		31
Executive Summary		31
Pay for Performance		33
Our Compensation Philosophy		34
Our Compensation Practices		34
Use of Market Data		35
Overview of Elements and Amounts of Compensation		36
Salary		38
Annual Incentive Bonuses		39
Long-Term Equity Incentive Compensation		42
2010 and 2011 Retention Grants		44
Other Benefits		44
Our Compensation Decision-Making Process		47
Forfeiture of Prior Compensation		50
Stock Ownership Guidelines		50
Use of Employment Agreements		51
Tax Gross-ups		51
Anti-Hedging and Anti-Pledging Policies		51
Other Compensation Matters		51
COMPENSATION COMMITTEE REPORT		52
EXECUTIVE COMPENSATION		52
Overview		52
Incentive Compensation and Other Awards		54
Pension Benefits		57
Deferred Compensation		58
Potential Termination Payments		59

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	Page
DIRECTOR COMPENSATION		63
Overview		63
Cash and Stock Payments		65
Other Benefits		66
Director Stock Ownership Guidelines		67
PERFORMANCE GRAPH		67
TRANSACTIONS WITH RELATED PARTIES		68
Recent Transactions		68
Review Procedures		68
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE		68
ADDITIONAL INFORMATION ABOUT THE MEETING		68
Quorum		68
Vote Required to Elect Directors		68
Vote Required to Adopt Other Proposals at the Meeting		69
Effect of Abstentions		69
Effect of Non-Voting		69
Revocations		69
Voting by Participants in Our Benefit Plans		69
Cost of Proxy Solicitation		70
Other Matters Considered at the Meeting		70
Conduct of the Meeting		70
Postponement or Adjournment of the Meeting		70
OTHER MATTERS		70
Shareholder Nominations and Proposals for the 2014 Annual Meeting		70
Proxy Materials		71
Annual Financial Report		71
Appendix A — Annual Financial Report		A-1

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CenturyLink, Inc.

100 CenturyLink Drive

Monroe, Louisiana 71203

PROXY STATEMENT

April 9, 2013

GENERAL INFORMATION ABOUT THE ANNUAL MEETING

Why am I receiving these proxy materials?

Our Board of Directors is soliciting your proxy to vote at our 2013 annual meeting of shareholders because you owned shares of our stock at the close of business on April 3, 2013, the record date for the meeting, and are entitled to vote those shares at the meeting. Our proxy materials are being made available to you on the Internet beginning on or about April 10, 2013. This proxy statement summarizes information regarding matters to be considered at the meeting. You do not need to attend the meeting to vote your shares. For additional information on our proxy materials, see “Other Matters — Proxy Materials” appearing below.

When and where will the meeting be held?

The meeting will be held at 10:00 a.m. local time on Wednesday, May 22, 2013, in the corporate conference room at our corporate headquarters, 100 CenturyLink Drive, Monroe, Louisiana. If you would like directions to the meeting, please see our website, http://ir.centurylink.com.

What matters will be considered at the meeting?

Shareholders will vote on the following matters at the meeting:

Matter	Board Voting Recommendation	Page Reference
•    election of the eight director nominees named herein (Item 1)	For each nominee	2
•    ratification of the appointment of KPMG LLP as our independent auditor for 2013 (Item 2)	For	17
•    non-binding advisory vote regarding our executive compensation (Item 3)	For	19
•    the four shareholder proposals described in this proxy statement if each is properly presented at the meeting (Items 4(a), 4(b), 4(c) and 4(d))	Against each	19

How many votes may I cast?

You may cast one vote for every share of our common stock or Series L preferred stock that you owned on the record date. Our common stock and Series L preferred stock vote together as a single class on all matters. In this proxy statement, we refer to these shares as our “Common Shares” and “Preferred Shares,” respectively, and as our “Voting Shares,” collectively. As of the record date, we had 614,602,997 Common Shares and 7,018 Preferred Shares outstanding.

What is the difference between holding shares as a shareholder of record and as a beneficial owner?

If shares are registered in your name with our transfer agent, Computershare Investor Services L.L.C., you are the “shareholder of record” of those shares and you may directly vote these shares, together with any shares credited to your account if you are a participant in our automatic dividend reinvestment and stock purchase service or our employee stock purchase plans.

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If your shares are held on your behalf in a stock brokerage account or by a bank or other nominee, you are the “beneficial owner” of shares held in “street name.” We have requested that our proxy materials be made available to you by your broker, bank or nominee, who is considered the shareholder of record of those shares.

If I am a shareholder of record, how do I vote?

If you are a shareholder of record, you may vote in person at the meeting or by proxy in any of the following three ways:

• call 1-800-652-8683 and follow the instructions provided;

• log on to the Internet at www.envisionreports.com/ctl and follow the instructions at that site; or

• request a paper copy of our proxy materials and, following receipt thereof, mark, sign and date your proxy card and return it to Computershare.

Please note that you may not vote by telephone or the Internet after 1:00 a.m. Central Time on May 22, 2013.

If I am a beneficial owner of shares held in street name, how do I vote?

As the beneficial owner, you have the right to instruct your broker, bank or nominee how to vote your shares by using any voting instruction card supplied by them or by following their instructions for voting by telephone, the Internet, or in person.

If I am a benefit plan participant, how do I vote?

Please see “Additional Information About the Meeting — Voting by Participants in Our Benefit Plans” appearing below.

Do I need identification to attend the meeting in person?

Yes. Please bring proper identification, together with the Notice Regarding Availability of Proxy Materials mailed to you, which will serve as your admission ticket. If your shares are held in street name, please bring acceptable proof of ownership, such as a letter from your broker or an account statement stating or showing that you beneficially owned Voting Shares on the record date.

Where can I find additional information about the conduct of the meeting, voting requirements, and other similar matters relating to the meeting?

Please see “Additional Information About the Meeting” appearing below.

ELECTION OF DIRECTORS

(Item 1 on Proxy or Voting Instruction Card)

The first proposal for consideration at the meeting is the election of each of the eight candidates named below as a director for a one-year term expiring at our 2014 annual meeting of shareholders, or until his or her successor is duly elected and qualified.

At our 2012 annual meeting, the shareholders voted to eliminate prospectively the classification of directors on our Board. Previously, our directors had been classified into three separate classes and held office for staggered three-year terms. Effective as of the 2012 annual meeting, the shareholders approved terminating each of the three director classes as of the expiration date of that class’s three-year term, with subsequent terms being for one year only. As a result of this change:

• last year a class of four directors was elected to one-year terms,

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• this year a second class of four directors will be elected to one-year terms, and

• next year a third class of directors will be elected to one-year terms,

at which time we will have fully declassified our Board. Our Board is currently fixed at 13 members.

Acting upon the recommendation of its Nominating and Corporate Governance Committee, the Board has nominated the eight below-named directors to stand for re-election to one-year terms at the meeting. Unless authority is withheld, all votes attributable to Voting Shares represented by each duly executed and delivered proxy will be cast for the election of each of the eight below-named nominees. Under our bylaw nominating procedures, these nominees are the only individuals who may be elected at the meeting. For additional information on our nomination process, see “Corporate Governance — Director Nomination Process.” If for any reason any such nominee should decline or become unable to stand for election as a director, which we do not anticipate, the persons named as proxies may vote instead for another candidate designated by the Board, without re-soliciting proxies.

As discussed further under “Additional Information About the Meeting — Vote Required to Elect Directors”, each of the eight nominees must receive a majority of the votes cast to be elected at the meeting.

The following tables provide certain information with respect to:

• our eight nominees,

• each of the five other directors whose term will continue after the meeting, and

• our executive officers.

As discussed further elsewhere herein, five of our below-listed directors formerly served as directors of Embarq or Qwest prior to our acquisitions of those companies.

Nominees (for a one-year term expiring in 2014):

W. Bruce Hanks, age 58; a director since 1992; a consultant with Graham, Bordelon and Co., Inc., an investment management and financial planning company, since 2005; Athletic Director of the University of Louisiana at Monroe from 2001 to 2004; held various executive positions at CenturyLink from 1980 through 2001, most notably Chief Operating Officer, Senior Vice President — Corporate Development and Strategy, Chief Financial Officer, and President — Telecommunications Services; worked as a certified public accountant with Peat, Marwick & Mitchell for three years prior to then; currently an advisory director of IberiaBank Corporation; also served in the past on the executive boards of several telecommunications industry associations and the boards of other publicly-owned companies. Key Qualifications, Experiences and Skills: •    Prior executive experience with, and historical knowledge of, our company and its prior acquisitions •    Former experience as a certified public accountant •    Qualifies as an “audit committee financial expert” •    Prior experience as a director of other publicly-owned companies

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	C. G. Melville, Jr., age 72; a director since 1968; retired in 1992 after serving as President of Melville Equipment, Inc., a family-owned distributor of marine and industrial equipment, for nearly 30 years; Chief Executive Officer of a family-owned telephone company for six years prior to its sale to CenturyLink in 1968. Key Qualifications, Experiences and Skills: •    Experience owning and managing telecommunications companies •    Experience as a former chief executive of family-owned privately-held companies
	Fred R. Nichols, age 66; a director since 2003; retired in 2000 from Cox Communications, Inc., where he served as Executive Vice President of Operations since 1999; held various executive positions at TCA Cable TV, Inc. (which was publicly-traded between 1982 and its sale to Cox in 1999) from 1980 to 1999, most notably serving as Chairman, President and Chief Executive Officer from 1997 to 1999 and President and Chief Operating Officer from 1989 to 1997; also served in the past on the executive boards of (i) two cable industry trade associations, (ii) Telesynergy, a cable television programming consortium, and (iii) C-SPAN, a cable television network; prior to joining TCA in 1980, worked as a commercial banker for nine years and as a certified public accountant with Peat, Marwick & Mitchell for three years. Key Qualifications, Experiences and Skills: •    Executive experience in the communications industry •    Experience as a former chief executive of a publicly-held company that engaged in multiple acquisitions •    Former experience as a certified public accountant and commercial banker
	William A. Owens, age 72; a director since July 1, 2009; non-executive Chairman of the Board of CenturyLink since July 1, 2009; Managing Director and Chairman of AEA Investors Asia, a private equity company, since 2006; Vice Chairman, President and Chief Executive Officer of Nortel Networks Corporation, a global supplier of communications equipment, from 2004 to 2005; Chairman and Chief Executive Officer of Teledesic LLC, a satellite communications company, from 1998 to 2003; served in the U.S. military from 1962 to 1996, holding various key leadership positions, including Vice Chairman of the Joint Chiefs of Staff; currently a director of AEA Investors LP, Polycom, Inc., Wipro Limited and Viasystems Group, Inc.; formerly a director of Unifrax Corporation and Amerilink within the past five years; Chairman of the Board of Embarq prior to July 1, 2009. Key Qualifications, Experiences and Skills: •    Executive experience in the communications industry •    Experience as a former chief executive of publicly-held companies •    Government relations expertise •    International business experience •    Director of other domestic and international publicly-held companies

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	Harvey P. Perry, age 68; a director since 1990; non-executive Vice Chairman of the Board of Directors of CenturyLink since 2004; retired from CenturyLink in 2003; joined CenturyLink in 1984, serving as Secretary and General Counsel for approximately 20 years and Executive Vice President and Chief Administrative Officer for almost five years; prior to then, worked as an attorney in private practice for 15 years. Key Qualifications, Experiences and Skills: •    Prior executive experience with, and historical knowledge of, our company and its prior acquisitions •    Legal experience representing telecommunications companies
	Glen F. Post, III, age 60; a director since 1985; Chief Executive Officer of CenturyLink since 1992, and President since July 1, 2009 (and from 1990 to 2002); Chairman of the Board of CenturyLink between 2002 and 2009; Vice Chairman of the Board of CenturyLink between 1993 and 2002; held various other positions at CenturyLink between 1976 and 1993, most notably Treasurer, Chief Financial Officer and Chief Operating Officer. Key Qualifications, Experiences and Skills: •    Executive experience in the telecommunications business •    Experience as our chief executive
	Laurie A. Siegel, age 57; a director since July 1, 2009; retired in September 2012 from Tyco International Ltd., a diversified manufacturing and service company, where she served as Senior Vice President of Human Resources and Internal Communications since 2003; held various positions with Honeywell International Inc. from 1994 to 2002, including Vice President of Human Resources — Specialty Materials; prior to then, was director of global compensation at Avon Products and a principal of Strategic Compensation Associates; a director of Embarq prior to July 1, 2009. Key Qualifications, Experiences and Skills: •    Executive experience with a multi-national company •    Human resources and executive compensation expertise
	Joseph R. Zimmel, age 59; a director since 2003; a business and financial consultant since 2002; Advisory Director of the Goldman Sachs Group from 2001 to 2002; Managing Director of the Communications, Media & Entertainment Group for the Americas in the investment banking division of Goldman, Sachs & Co. from 1999 to 2001, after acting as Managing Director and a co-head of the group from 1992 to 1999; Managing Director in the mergers and acquisitions department of Goldman, Sachs & Co. from 1988 to 1992; currently a director of FactSet Research Systems Inc. and formerly a director of Digitas Inc. within the past five years. Key Qualifications, Experiences and Skills: •    Advisory experience in the communications industry •    Acquisition and investment banking expertise •    Qualifies as an “audit committee financial expert” •    Director of other publicly-owned companies
The Board unanimously recommends a vote FOR each of these above-listed nominees.

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Directors serving terms expiring in 2014:
	Virginia Boulet, age 59; a director since 1995; Special Counsel at Adams and Reese LLP, a law firm, since 2002; prior to then, practiced as a corporate and securities attorney for Phelps Dunbar, L.L.P. from 1992 to 2002 and Jones Walker LLP from 1983 to 1992; currently a director of W&T Offshore, Inc. Key Qualifications, Experiences and Skills: •    Legal experience representing telecommunications companies and regarding business combinations •    Director of another publicly-held company
	Peter C. Brown, age 54; a director since July 1, 2009; Chairman of Grassmere Partners, LLC, a private investment firm, since July 2009; held several executive level positions, including Chairman of the Board, President and Chief Executive Officer, with AMC Entertainment Inc., a theatrical exhibition company, between 1991 and 2009; founded Entertainment Properties Trust, a NYSE-listed real estate investment trust, in 1997 and served as its Chairman of the Board of Trustees until 2003 and again from 2010 to present; currently a director of Entertainment Properties Trust and Cinedigm Digital Cinema Corporation; formerly a director of National CineMedia, Inc. within the past five years and a director of Embarq prior to July 1, 2009. Key Qualifications, Experiences and Skills: •    Experience as a former chief executive of a publicly-held company •    Qualifies as an “audit committee financial expert” •    Director of other publicly-held companies
	Richard A. Gephardt, age 72; a director since July 1, 2009; President and Chief Executive Officer of Gephardt Group, a multi- disciplined consulting firm, since 2005; consultant to Goldman Sachs & Co. since 2005; strategic advisor in the government affairs practice group of DLA Piper between 2005 and 2009; senior advisor to FTI Consulting between 2007 and 2009; member of the U.S. House of Representatives from 1976 to 2005, representing Missouri’s Third District and holding key leadership positions, including House Minority Leader; currently a director of Centene Corporation, Ford Motor Company, Spirit Aerosystems Holdings, Inc. and United States Steel Corporation; formerly a director of Dana Holding Company within the past five years, and a director of Embarq prior to July 1, 2009. Key Qualifications, Experiences and Skills: •    Government and labor relations expertise •    Director of other publicly-held companies

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Gregory J. McCray, age 50; a director since 2005; Chief Executive Officer and a director of ACAL Energy Ltd., a company which develops fuel cell engine technology, since January 2013; Chairman and Chief Executive Officer of Antenova Limited, a British wireless components development company, between 2003 and December 2012; Chairman and Chief Executive Officer of PipingHot Networks, a wireless start-up, from 2000 to 2002; Senior Vice President, Customer Operations, at Lucent Technologies from 1997 to 2000; Sales Vice President, U.S. Eastern Region, at Lucent Technologies from 1994 to 1997; held engineering, product management and other managerial roles at AT&T and IBM from 1984 to 1993. Key Qualifications, Experiences and Skills: •    Executive experience in the communications and technology industries •    Experience as a chief executive of privately-held companies •    Engineering expertise •    International business experience

Michael J. Roberts, age 62; a director since April 1, 2011; Chief Executive Officer and founder of Westside Holdings LLC, a marketing and brand development company; served as President and Chief Operating Officer of McDonald’s Corporation, a foodservice retailer, from 2004 to 2006; served as Chief Executive Officer of McDonald’s USA during 2004 and as President of McDonald’s USA from 2001 to 2004; currently a director of W.W. Grainger, Inc. and Standard Parking Corporation, and a director of Qwest prior to April 1, 2011. Key Qualifications, Experiences and Skills: •    Experience as a chief executive •    Marketing and branding expertise •    Director of other publicly-held companies •    Qualifies as an “audit committee financial expert”

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Executive Officers Who Are Not Directors:
Listed below is information on each of our executive officers who are not directors. Unless otherwise indicated, each person has been engaged in the principal occupation shown for more than the past five years.
	O. Matthew Beal, age 43; Senior Vice President — Corporate Strategy and Product Development since May 2012, and Chief Technology Officer since 2008; served as Senior Vice President — Product Development and Network Strategy between 2009 and May 2012 and as Vice President — Engineering between 2008 and 2009; prior to joining CenturyLink, worked as a technology officer for over 10 years with several companies, including most recently as Managing Director of Strategy for British Telecom’s design division.
	William E. Cheek, age 57; President — Wholesale Operations since July 1, 2009; served as President — Wholesale Markets for Embarq from 2006 to 2009; served in similar capacities at divisions or affiliates of Sprint Nextel Corporation from 2004 to 2006.
	David D. Cole, age 55; Senior Vice President — Controller and Operations Support; served as Senior Vice President — Operations Support since 1999, and as Controller since April 1, 2011.
	R. Stewart Ewing, Jr., age 61; Executive Vice President and Chief Financial Officer.

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	Stacey W. Goff, age 47; Executive Vice President, General Counsel and Secretary since July 1, 2009; served as Senior Vice President, General Counsel and Secretary prior to then.
	Maxine L. Moreau, age 51; Senior Vice President — Network Services since May 2012; served as Senior Vice President, Integration and Process Improvement from 2010 to May 2012, as Senior Vice President, Centralized Operations from 2009 to 2010, and as Vice President of Operations from 2006 to 2009.
	Karen A. Puckett, age 52; Executive Vice President and Chief Operating Officer since July 2009; served as President and Chief Operating Officer from 2002 until July 2009.

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CORPORATE GOVERNANCE

Governance Guidelines

Our Board has adopted corporate governance guidelines, which it reviews at least annually. For information on how you can obtain a complete copy of our guidelines, see “— Access to Information” below.

Among other things, our corporate governance guidelines provide as follows:

Director Qualifications

• The Board of Directors will have a majority of independent directors. The Nominating and Corporate Governance Committee is responsible for reviewing with the Board, on an annual basis, the requisite skills and characteristics of new Board members as well as the composition of the Board as a whole.

• The Board expects directors who change the job or responsibility they held when they were elected to the Board to volunteer to resign from the Board.

• On the terms and subject to the conditions specified in our bylaws, directors will be elected by a majority vote of the shareholders and any incumbent director failing to receive a majority of votes cast must promptly tender his or her resignation to the Board.

• No director may serve on more than two other unaffiliated public company boards, unless this prohibition is waived by the Board.

• No director may be appointed or nominated to a new term if he or she would be age 75 or older at the time of the election or appointment.

• Annually, the Board will determine affirmatively which of our directors are independent for purposes of complying with our corporate governance guidelines and the listing standards of the New York Stock Exchange, or NYSE. A director will not be independent for these purposes unless the Board affirmatively determines that the director does not, either directly or indirectly through the director’s affiliates or associates, have a material commercial, banking, consulting, legal, accounting, charitable, familial or other relationship with the Company or its affiliates, other than as a director.

Director Responsibilities

• The Board periodically reviews our long-term strategic plans, and annually holds a multi-day strategic planning session.

• Unless otherwise determined by the Board, when a management director retires or ceases to be an active employee for any other reason, that director will be considered to have resigned concurrently from the Board.

Chairman; Lead Outside Director

• The Board elects a Chairman from among its members. The Chairman may be a director who also has executive responsibilities, including the CEO (an executive chair), or may be one of the Company’s independent directors (a non-executive chair). The Board believes it is in the best interests of the Company for the Board to remain flexible with respect to whether to elect an executive chair or a non-executive chair so that the Board may provide for succession planning and respond effectively to changes in circumstances.

• The non-management directors meet in executive session at least quarterly. The lead outside director elected by the independent directors may call additional meetings of the non-management directors at any time. At all times during which the Chairman is a non-executive chair, all of the functions and responsibilities of the lead outside director shall be performed by the non-executive chair.

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CEO Evaluation and Management Succession

• The Nominating and Corporate Governance Committee conducts an annual review of the CEO’s performance and provides a report of its findings to the Board.

• The Nominating and Corporate Governance Committee reports periodically to the Board on succession planning.

Recoupment of Compensation

• If the Board or any committee of the Board determines that any bonus, incentive payment, commission, equity award or other compensation awarded to or received by an executive officer was based on any financial or operating result that was impacted by the executive officer’s knowing or intentional fraudulent or illegal conduct, the Board or a Board committee may recover from the executive officer the compensation it considers appropriate under the circumstances.

Stock Ownership Guidelines

• We require our executive officers to beneficially own CenturyLink stock equal in market value to specified multiples of their annual base salary. All executive officers have three years from the date they first become subject to a particular ownership level to attain that target.

• We require our outside directors to beneficially own CenturyLink stock equal in market value to five times their annual cash retainer. Outside directors have five years from their election or appointment date to attain that target.

• For any year during which an executive or director does not meet his or her ownership target, the executive or director is expected to hold a specified percentage of the CenturyLink stock that the executive or director acquires through our equity compensation programs, excluding shares sold to pay taxes associated with the acquisition thereof.

• The Compensation Committee administers the guidelines, and may modify their terms and grant hardship exceptions in its discretion.

• See “Compensation Discussion and Analysis — Stock Ownership Guidelines” for information on the executive ownership multiples and the holding percentages currently in effect.

Standards of Business Conduct and Ethics

• All of our directors, officers and employees are required to abide by our long-standing ethics and compliance policies and programs, which include standards of business conduct.

• Any waiver of our policies, principles or guidelines relating to business conduct or ethics for executive officers or directors may be made only by the Board or one of its duly authorized committees.

Other

• Directors have full access to our officers and employees.

• Like most other NYSE-listed companies, (i) all of the Board’s standing committees are comprised solely of independent directors, (ii) we provide orientation for new directors, (iii) we maintain a continuing education program for our directors, and (iv) the Board and each committee conducts annual self-reviews.

Independence

Based on the information made available to it, the Board of Directors has affirmatively determined that each of the directors, with the exception of Mr. Post and Mr. Gephardt, qualifies as an independent director under the

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standards referred to above under “— Governance Guidelines.” In making these determinations, the Board, with assistance from counsel, evaluated responses to a questionnaire completed by each director regarding relationships and possible conflicts of interest. In its review of director independence, the Board considered all known commercial, banking, consulting, legal, accounting, charitable, familial or other relationships any director may have with us.

Some of our directors are employed by or affiliated with companies with which we do business in the ordinary course, either as a service provider, a customer or both. As required under the NYSE listing standards and our Corporate Governance Guidelines, our Board examined the amount spent by us with those companies and by those companies with us. With the exception of our purchase of consulting services from a company that employs Mr. Gephardt (as discussed further below under “Transactions With Related Parties”), in all cases the amount spent under these transactions fell far below the threshold established in the NYSE listing standards and in our Corporate Governance Guidelines. Consequently, our Board concluded that the amounts spent under these transactions did not create a material relationship with us that would interfere with the exercise of independent judgment by any of these directors other than Mr.  Gephardt.

Committees of the Board

During 2012, the Board of Directors held ten meetings, including a two-day strategic planning session.

During 2012, the Board’s Audit Committee held eight meetings. The Audit Committee is currently composed of four independent directors, all of whom the Board has determined to be audit committee financial experts, as defined under the federal securities laws. The Audit Committee’s functions are described further below under “Audit Committee Report.”

The Board’s Compensation Committee met seven times during 2012. The Compensation Committee is currently composed of five directors, all of whom qualify as “non-employee directors” under Rule 16b-3 promulgated under the Securities Exchange Act of 1934 and all of whom, other than Harvey P. Perry, qualify as “outside directors” under Section 162(m) of the Internal Revenue Code. The Compensation Committee is described further below under “Compensation Discussion and Analysis.”

The Board’s Nominating and Corporate Governance Committee (which we refer to below as the “Nominating Committee”) met four times during 2012. The Nominating Committee is responsible for, among other things, (i) recommending to the Board nominees to serve as directors and officers, (ii) monitoring the composition and size of the Board and its committees, (iii) periodically reassessing our corporate governance guidelines described above, (iv) leading the Board in its annual review of the Board’s performance, (v) reviewing shareholder proposals and making recommendations to the Board regarding how to respond, and (vi) reviewing annually the Chief Executive Officer’s performance, reporting to the Board on succession planning for senior executive officers and appointing an interim CEO if the Board does not make such an appointment within 72 hours of the CEO dying or becoming disabled. For information on the director nomination process, see “— Director Nomination Process” below.

The Board also maintains a Risk Evaluation Committee, which met four times during 2012. The Risk Evaluation Committee is described further below under the heading “— Risk Oversight.”

Each of the committees listed above is composed solely of independent directors under the standards referred to above under “— Governance Guidelines.”

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The table below lists the Board’s standing committees and their membership:

Outside Director(1)	Audit Committee Member	Compensation Committee Member(2)	Nominating and Corporate Governance Committee Member	Risk Evaluation Committee Member
Virginia Boulet		ü	Chair
Peter C. Brown	ü			ü
W. Bruce Hanks	Chair			ü
Gregory J. McCray			ü	ü
C. G. Melville, Jr.			ü	Chair
Fred R. Nichols		ü	ü
William A. Owens		ü	ü
Harvey P. Perry		ü
Michael J. Roberts	ü
Laurie A. Siegel		Chair
Joseph R. Zimmel	ü

(1) Glen F. Post, III does not serve on any board committees, other than the Special Pricing Committee described below. Richard A. Gephardt does not serve on any board committees.

(2) The Compensation Committee maintains an Incentive Awards Subcommittee comprised of Ms. Boulet, Mr. Nichols, Adm. Owens and Ms. Siegel.

If you would like additional information on the responsibilities of the committees listed above, please refer to the committees’ respective charters, which can be obtained in the manner described below under “— Access to Information.”

The Board has also established a Special Pricing Committee that has authority to approve the terms and offering prices of any CenturyLink securities sold pursuant to our outstanding shelf registration statement. This ad hoc committee is comprised of Peter C. Brown, W. Bruce Hanks, Glen F. Post, III and Joseph R. Zimmel.

During 2012, all of our directors attended at least 75% of the aggregate number of all board meetings and all meetings of board committees on which they served. In addition, each of our directors then in office attended the 2012 annual shareholders’ meeting, other than one director who could not attend due to health issues and another who had a pre-existing scheduling conflict.

Director Nomination Process

Nominations for the election of directors at our annual shareholders’ meetings may be made by the Board (upon the receipt of recommendations of the Nominating Committee) or by any shareholder of record who complies with our bylaws. Under our bylaws, any shareholder of record interested in making a nomination generally must deliver written notice to the Company’s Secretary not more than 180 days and not less than 90 days in advance of the first anniversary of the preceding year’s annual shareholders meeting. For the meeting this year, the Board has nominated the eight nominees listed above under “Election of Directors” to stand for election as directors, and no shareholders submitted any nominations. For further information on deadlines for submitting nominations for our 2014 annual shareholders meeting, see “Other Matters — Shareholder Nominations and Proposals for the 2014 Annual Meeting — Other Proposals and Nominations.”

The written notice required to be sent by any nominating shareholder must include (i) the name, age, business address and residential address of the nominating shareholder and any other person acting in concert with such shareholder, (ii) a representation that the nominating shareholder is a record holder of Voting Shares, and intends to make his nomination in person, (iii) a description of all agreements among the nominating

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shareholder, any person acting in concert with him, each proposed nominee and any other person pursuant to which the nomination or nominations are to be made and (iv) various biographical information about each proposed nominee, including principal occupation, holdings of Voting Shares and other information required to be disclosed in our proxy statement. The notice must also be accompanied by the written consent of each proposed nominee to serve as a director if elected, and an affidavit certifying that each proposed nominee meets the qualifications for service specified in the bylaws and summarized below. We may require a proposed nominee to furnish other reasonable information or certifications. Shareholders interested in bringing before a shareholders’ meeting any matter other than a director nomination should consult our bylaws for additional procedures governing such requests. We may disregard any nomination or submission of any other matter that fails to comply with these bylaw procedures.

The Nominating Committee will consider candidates nominated by shareholders in accordance with our bylaws. Upon receipt of any such nominations, the Nominating Committee will review the submission for compliance with our bylaws, including determining if the proposed nominee meets the bylaw qualifications for service as a director. These provisions disqualify any person who fails to respond satisfactorily to any inquiry for information to enable us to make certifications required by the Federal Communications Commission under the Anti-Drug Abuse Act of 1988, or who has been arrested or convicted of certain specified drug offenses or engaged in actions that could lead to such an arrest or conviction.

In the past, the Nominating Committee has considered director candidates suggested by Nominating Committee members, other directors, senior management and shareholders. In connection with our July 1, 2009 merger with Embarq, we added to our Board seven directors who previously served as directors of Embarq, four of whom continue to serve. Similarly, in connection with our April 1, 2011 merger with Qwest, we added to our Board four directors who previously served as directors of Qwest, one of whom continues to serve. During the several years preceding the Embarq merger, the Nominating Committee retained, on an as-needed basis, national search firms to help identify potential director candidates, including three directors added to the Board between 2003 and 2005. The Nominating Committee may retain search firms from time to time in the future to help identify additional director candidates. With respect to this year’s meeting, all of the nominees are incumbent directors with several years of prior service on our Board or the board of Embarq.

Under our corporate governance guidelines, the Nominating Committee assesses director candidates based on their independence, diversity, character, skills and experience in the context of the needs of the Board. Although the guidelines permit the Nominating Committee to adopt additional selection guidelines or criteria, it has chosen not to do so. Instead, the Nominating Committee annually assesses skills and characteristics then required by the Board based on its membership and needs at the time of the assessment. In evaluating the needs of the Board, the Nominating Committee considers the qualification of incumbent directors and consults with other members of the Board and senior management. In addition, the Nominating Committee seeks candidates committed to representing the interests of all shareholders and not any particular constituency. The Nominating Committee believes this flexible approach enables it to respond to changes caused by director retirements and industry developments.

In connection with assessing the needs of the Board, the Nominating Committee has sought individuals who possess skill and experience in a diverse range of fields. The Nominating Committee also has sought a mix of individuals from inside and outside of the communications industry. The table above listing biographical data about our directors includes a listing of the key qualifications, experiences and skills that the Nominating Committee and Board reviewed in connection with nominating or re-nominating them for service on the Board. In light of our current business and operations, we believe the following skills and experience are particularly important:

• senior leadership experience

• industry or technical expertise

• financial, accounting or capital markets expertise

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• public company board experience

• business combination or investment banking experience

• brand marketing expertise

• government, labor or human resources expertise

• international business experience

• legal expertise.

In connection with determining the current composition of the Board, the Nominating Committee assessed the diverse range of skills and experience of our directors outlined above, coupled with the judgment that each has exhibited and the knowledge of our operations that each has acquired in connection with their service on the Board. Over the past year, the Board elected to continue to retain the services of two directors who experienced recent changes in their principal occupation. In connection with doing so, the Board acted upon the recommendation of the Nominating Committee and considered the expertise and contributions of both directors. Although it does not have a formal diversity policy, the Nominating Committee believes that our directors possess a diverse range of backgrounds, perspectives, skills and experiences.

Although we do not have a history of receiving director nominations from shareholders, the Nominating Committee envisions that it would evaluate any such candidate on the same terms as other proposed nominees, but would place a substantial premium on retaining incumbent directors who are familiar with our management, operations, business, industry, strategies and competitive position, and who have previously demonstrated a proven ability to provide valuable contributions to the Board and CenturyLink.

Compensation Setting Process

The Compensation Committee hires consulting firms to assist it in setting executive and director compensation. In late 2010, the Committee retained Hay Group, following a nationwide search to replace PricewaterhouseCoopers LLC, which advised the Committee for the previous six years. For additional information on the processes used by the Committee to set executive compensation, see “Compensation Discussion and Analysis.”

Risk Oversight

Our Board oversees our Company’s risk management function, which is a coordinated effort among our business units, our senior leadership, our risk management personnel and our internal audit department. Our directors typically discharge their risk oversight responsibilities by having management provide periodic briefing and information sessions. In some cases, including major new acquisitions, capital expenditures or strategic investments, the full Board participates in risk oversight. In most cases involving recurring systemic risk, a Board committee is primarily responsible for risk oversight. For many years, our Board has maintained a Risk Evaluation Committee, which is responsible for assisting management to identify, monitor, and manage recurring risks to our business, properties and employees. The Risk Evaluation Committee regularly monitors our litigation and insurance coverages, and is also responsible for overseeing our ethics and compliance program. The Board’s other committees are responsible for overseeing specific risks, particularly the Audit Committee with respect to financial, tax and accounting risks and the Compensation Committee with respect to compensation risks. For a discussion of the Compensation Committee’s risk analysis, see “Compensation Discussion and Analysis — Our Compensation Decision-Making Process — Risk Assessment.” The Board regularly receives reports from each of these committees, and periodically receives enterprise risk management reports from management.

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Top Leadership Positions and Structure

Admiral William A. Owens serves as our Chairman and lead outside director. As explained further on our website, you may contact Adm. Owens by writing a letter to the Chairman and Lead Outside Director, c/o Post Office Box 5061, Monroe, Louisiana 71211, or by sending an email to boardinquiries@centurylink.com. As indicated above, the non-management directors meet in executive session at least quarterly.

Adm. Owens was appointed as our Chairman and lead outside director on July 1, 2009, in connection with our acquisition of Embarq. Prior to July 1, 2009, Adm. Owens served as chairman of Embarq, and, prior to that, as the chief executive of a communications equipment provider and a satellite company. We believe Adm. Owens’ service as our Chairman has facilitated the post-merger integration of the management and operations of CenturyLink and Embarq.

The Board believes that the separation of the Chairman and CEO positions has functioned effectively over the past several years. Separating these positions allows our CEO to have primary responsibility for the operational leadership and strategic direction of our business, while allowing our Chairman to lead the Board in its fundamental role of providing guidance to and independent oversight of management. While our by-laws and corporate governance guidelines do not require our Chairman and CEO positions to be separate, the Board believes that delegating responsibilities between Adm. Owens, as Chairman, and Mr. Post, as CEO, is the appropriate leadership structure for our Company at this time. Our Board, however, periodically reviews its leadership structure and may make such changes in the future as it deems appropriate. The Board believes that its programs for overseeing risk would be effective under a variety of top leadership structures, and, accordingly, this factor has not materially affected its current choice of structure.

Waivers of Governance Requirements

Members of our Board are subject to our Corporate Governance Guidelines, which, among other things, prohibit a director from serving on more than two additional unaffiliated public company boards. In addition to serving on our Board, Richard A. Gephardt and William A. Owens serve on the board of directors of more than two unaffiliated public companies. In connection with appointing both of them to the Board, the Board waived compliance by each of them with the above-described service limitation, subject to the understanding that this waiver permits such individuals to serve only on the boards of the unaffiliated companies on which they were then serving, unless and until the individual is permitted to accept a new directorship under our Corporate Governance Guidelines then in effect due to any future reductions in the number of the individual’s directorships, any future changes in such guidelines, or any future additional waivers granted by the Board.

Access to Information

The following documents are posted on our website at www.centurylink.com:

• Amended and restated articles of incorporation

• Bylaws

• Corporate governance guidelines

• Charters of our Board committees

• Corporate ethics and compliance program documents, including the CenturyLink Code of Conduct.

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RATIFICATION OF THE SELECTION OF THE INDEPENDENT AUDITOR

(Item 2 on Proxy or Voting Instruction Card)

The Audit Committee of the Board has appointed KPMG LLP as our independent auditor for the fiscal year ending December 31, 2013, and we are submitting that appointment to our shareholders for ratification on an advisory basis at the meeting. Although shareholder ratification of KPMG’s appointment is not legally required, we are submitting this matter to the shareholders, as in the past, as a matter of good corporate practice.

If the shareholders fail to vote on an advisory basis in favor of the appointment, the Audit Committee will reconsider whether to retain KPMG LLP, and may appoint that firm or another without re-submitting the matter to the shareholders. Even if the shareholders ratify the appointment, the Audit Committee may, in its discretion, select a different independent auditor at any time during the year if it determines that such a change would be in the Company’s best interests. In connection with selecting the independent auditor, the Audit Committee reviews the auditor’s qualifications, control procedures, cost, proposed staffing, prior performance and other relevant factors.

In connection with the audit of the 2013 financial statements, we entered into an engagement letter with KPMG LLP which sets forth the terms by which KPMG will provide audit services to us. Any future disputes between KPMG and us under that letter will be subject to certain specified alternative dispute resolution procedures.

The following table lists the aggregate fees and costs billed to us by KPMG and its affiliates for the 2011 and 2012 services identified below:

	Amount Billed
	2011		2012
Audit Fees(1)	$	9,782,527	$	8,756,591
Audit-Related Fees(2)		654,546		114,903
Tax Fees(3)		626,628		499,865
Other		—		—
Total Fees	$	11,063,701	$	9,371,359

(1) Includes the cost of (i) services rendered in connection with auditing our annual consolidated financial statements, (ii) auditing our internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002, (iii) reviewing our quarterly financial statements, (iv) auditing the financial statements of several of our telephone subsidiaries, (v) services rendered in connection with reviewing our registration statements and issuing related comfort letters, (vi) statutory audits for certain of our foreign subsidiaries, and (vii) consultations regarding accounting standards.

(2) Includes the cost of auditing our benefit plans, preparing “agreed upon procedures” reports, and providing general accounting consulting services.

(3) Includes costs associated with (i) assistance in preparing income tax returns and related matters (which were approximately $234,000 in 2011 and $24,000 in 2012), (ii) assistance with various tax audits (which were $0 in 2011 and approximately $16,000 in 2012), (iii) assistance with our acquisition of Qwest (which were approximately $67,000 in 2011 and $0 in 2012), and (iv) general tax planning, consultation and compliance (which were approximately $325,000 in 2011 and $460,000 in 2012).

The Audit Committee maintains written procedures that require it to annually review and pre-approve the scope of all services to be performed by our independent auditor. This review includes an evaluation of whether the provision of non-audit services by our independent auditor is compatible with maintaining the auditor’s independence in providing audit and audit-related services. The Committee’s procedures prohibit the independent auditor from providing any non-audit services unless the service is permitted under applicable law

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and is pre-approved by the Audit Committee or its Chairman. The Chairman is authorized to pre-approve projects expected to cost no more than $75,000, provided the total cost of all projects pre-approved by the Chairman during any fiscal quarter does not exceed $125,000. The Audit Committee has pre-approved the Company’s independent auditor to provide up to $75,000 per quarter of miscellaneous permitted tax services that do not constitute discrete and separate projects. The Chairman and the Chief Financial Officer are required periodically to advise the full Committee of the scope and cost of services not pre-approved by the full Committee. Although applicable regulations waive these pre-approval requirements in certain limited circumstances, the Audit Committee did not use these waiver provisions in either 2011 or 2012.

KPMG has advised us that one or more of its partners will be present at the meeting. We understand that these representatives will be available to respond to appropriate questions and will have an opportunity to make a statement if they desire to do so.

Ratification of KPMG’s appointment as our independent auditor for 2013 will require the affirmative vote of the holders of at least a majority of the Voting Shares present or represented at the meeting.

The Board unanimously recommends a vote FOR this proposal.

AUDIT COMMITTEE REPORT

Management is responsible for our internal controls and financial reporting process. Our independent auditor is responsible for performing an independent audit of our consolidated financial statements and the effectiveness of our internal control over financial reporting, and to issue reports thereon. As more fully described in its charter, the Audit Committee is responsible for assisting the Board in its general oversight of these processes, and for appointing the independent auditor.

In this context, the Committee has met and held discussions with management and our internal auditors and independent auditor for 2012, KPMG LLP. Management represented to the Committee that our consolidated financial statements were prepared in accordance with generally accepted U.S. accounting principles. The Committee has reviewed and discussed with management and KPMG the consolidated financial statements, and management’s report and KPMG’s report and attestation on internal control over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act of 2002. The Committee also discussed with KPMG matters required to be discussed by Statement on Auditing Standards No. 61, as amended.

KPMG also provided to the Committee the written disclosures required by the applicable requirements of the Public Company Accounting Oversight Board regarding the independent auditor’s communications with audit committees concerning independence. The Committee discussed with KPMG that firm’s independence, and considered the effects that the provision of non-audit services may have on KPMG’s independence.

Based on and in reliance upon the reviews and discussions referred to above, and subject to the limitations on the role and responsibilities of the Committee referred to in its charter, the Committee recommended that the Board of Directors include the audited consolidated financial statements in our Annual Report on Form 10-K for the year ended December 31, 2012.

If you would like additional information on the responsibilities of the Audit Committee, please refer to its charter, which you can obtain in the manner described above under “Corporate Governance — Access to Information.”

Submitted by the Audit Committee of the Board of Directors.

W. Bruce Hanks (Chair)	Peter C. Brown
Michael J. Roberts	Joseph R. Zimmel

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ADVISORY VOTE ON EXECUTIVE COMPENSATION

(Item 3 on Proxy or Voting Instruction Card)

This year we are once again providing you with the opportunity to vote on a non-binding, advisory resolution to approve the compensation of our named executive officers as disclosed in this proxy statement pursuant to the rules of the SEC.

Under our executive compensation programs, our named executive officers are rewarded for achieving specific annual and long-term goals, as well as increased shareholder value. We believe this structure aligns executive pay with our financial performance and the creation of sustainable shareholder value. The Compensation Committee of our Board continually reviews our executive compensation programs to ensure they achieve the goals of aligning our compensation with current market practices and your interests as shareholders. For additional information on our executive compensation, we urge you to read the “Compensation Discussion and Analysis” and “Executive Compensation” sections of this proxy statement.

At the meeting, we will ask you to vote, in an advisory manner, to approve the overall compensation of our executive officers, as described herein further below, including the Compensation Discussion and Analysis, the summary compensation table and the other related tables and disclosures. This proposal, commonly known as a “say-on-pay” proposal, gives you the opportunity to express your views. This advisory vote is not intended to address any specific item of compensation, but rather the overall compensation policies and practices with respect to our named executive officers as described in this proxy statement. Accordingly, your vote will not directly affect or otherwise limit any existing compensation or award arrangement of any of our named executive officers. It is our current policy to provide you this advisory voting opportunity annually.

While this “say-on-pay” vote is advisory and will not be binding on our Company or the Board, it will provide valuable information to our Compensation Committee regarding shareholder sentiment about our executive compensation. Additionally, we invite shareholders who wish to communicate with our Board on executive compensation or any other matters to contact us as provided under “Corporate Governance — Top Leadership Positions and Structure.”

Approval of this proposal will require the affirmative vote of the holders of at least a majority of the Voting Shares present or represented at the meeting.

The Board recommends that you vote FOR the overall compensation of our named executive officers as described in this proxy statement.

SHAREHOLDER PROPOSALS

(Items 4(a), 4(b), 4(c) and 4(d) on Proxy or Voting Instruction Card)

We periodically receive suggestions from our shareholders, some as formal shareholder proposals. We give careful consideration to all suggestions, and assess whether they promote the best long-term interests of CenturyLink and its shareholders.

We expect Items 4(a), 4(b), 4(c) and 4(d) to be presented by shareholders at the meeting. In accordance with SEC rules, we are reprinting the proposals and supporting statements as they were submitted to us, other than minor formatting changes. We take no responsibility for them. On request to the Secretary at the address listed under “Other Matters — Annual Financial Report,” we will provide information about the sponsors’ shareholdings, as well as the names, addresses and shareholdings of any co-sponsors. Adoption of each of these four proposals requires the affirmative vote of the holders of at least a majority of the Voting Shares present or represented at the meeting.

The Board recommends that you vote AGAINST Items 4(a), 4(b), 4(c) and 4(d) for the reasons we give after each one.

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Equity Retention Proposal (Item 4(a))

The following proposal was submitted by the Board of Trustees of the International Brotherhood of Electrical Workers Pension Fund, 900 Seventh Street, NW, Washington D.C., 20001, which urges you to vote for this proposal.

“RESOLVED: Shareholders of CenturyLink (the “Company”) urge the Compensation Committee of the Board of Directors (the “Committee”) to adopt a policy requiring that senior executives retain a significant percentage of shares acquired through equity compensation programs until reaching normal retirement age or terminating employment with the Company. For the purpose of this policy, normal retirement age shall be defined by the Company’s qualified retirement plan that has the largest number of plan participants. The shareholders recommend that the Committee adopt a share retention percentage requirement of at least 75 percent of net after-tax shares. The policy should prohibit hedging transactions for shares subject to this policy which are not sales but reduce the risk of loss to the executive. This policy shall supplement any other share ownership requirements that have been established for senior executive, and should be implemented so as not to violate the Company’s existing contractual obligations or the terms of any compensation or benefit plan currently in effect.

Supporting Statement: Equity-based compensation is an important component of senior executive compensation at our Company. While we encourage the use of equity-based compensation for senior executives, we are concerned that our Company’s senior executives are generally free to sell shares received from our Company’s equity compensation plans. In our opinion, the Company’s current share ownership guidelines for its senior executives do not go far enough to ensure that the Company’s equity compensation plans continue to build stock ownership by senior executives over the long-term.

For example, our Company’s share ownership guidelines require the Chief Executive Officer (the “CEO”) to hold an amount of shares equivalent to six times his salary, or approximately 160,000 shares based on the current trading price. In comparison, the CEO currently owns 1.1 million shares. In 2011, our Company granted the CEO 52,707 time-vested shares and up to 105,414 performance-based shares, assuming maximum pay-out. In other words, the equivalent of one year’s equity awards could nearly meet the Company’s share ownership guidelines for the CEO.

We believe that requiring senior executives to only hold shares equal to a set target loses effectiveness over time. After satisfying these target holding requirements, senior executives are free to sell all the additional shares they receive in equity compensation.

Our proposal seeks to better link executive compensation with long-term performance by requiring a meaningful share retention ratio for shares received by senior executives from the Company’s equity compensation plans. Requiring senior executives to hold a significant percentage of shares obtained through equity compensation plans until they reach retirement age will better align the interests of executives with the interests of shareholders and the Company. A 2009 report by the Conference Board Task Force on Executive Compensation observed that such hold-through-retirement requirements give executives ‘an ever growing incentive to focus on long-term stock price performance as the equity subject to the policy increases’ (available at http://www.conference-board.org/pdf_free/ExecCompensation2009.pdf).”

The Board recommends that you vote AGAINST this proposal for the following reasons:

The Board agrees with the proponent that equity ownership by executive officers serves to align the long-term interests of our senior executives and shareholders. We believe, however, that sensible stock ownership and compensation programs balance the importance of aligning the long-term interests of executives and shareholders with the need to permit executives and shareholders to prudently manage their personal financial affairs. As described further below, the Board believes that our stock ownership guidelines, in conjunction with

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our performance-based compensation plans and policies, successfully strike this balance effectively, making the adoption of the current proposal unnecessary. By contrast, the rigid anti-diversification mandate inherent in this proposal could be harmful in several respects, and put us at a competitive disadvantage for attracting and retaining executive officers.

Our executives are already subject to share ownership requirements. Our stock ownership guidelines (which are discussed further in “Corporate Governance — Governance Guidelines” and “Compensation Discussion and Analysis — Stock Ownership Guidelines”) mandate significant stock ownership for all of our executives. Specifically, these guidelines require our CEO to beneficially own CenturyLink stock with a value of at least six times his annual base salary and all other executive officers to beneficially own CenturyLink stock with a value of at least three times their annual base salary. All of our top executives own CenturyLink stock at levels well in excess of these requirements. For instance, our CEO currently holds stock valued at over 25 times his current salary. We believe that our stock ownership guidelines accomplish the proponent’s intended purpose of aligning executive and shareholder interests through at-risk equity ownership.

Our compensation plans and policies further align the long-term interests of our executives and shareholders. Our executive compensation plans and policies are carefully designed to provide additional alignment of the long-term interests of our senior executives and shareholders. Typically, a substantial majority of our annual executive compensation consists of awards of time-vested and performance-based restricted stock. Our time-vested restricted stock typically vests over a three-year period so that our executives realize full value from the grants only after serving us for at least three years, while our performance-based restricted stock vests only if we achieve our three-year threshold level of targeted performance. As such, the value realized upon vesting of our restricted stock is directly tied to our long-term performance and the appreciation of our stock price over the vesting period, which benefits all shareholders. In addition, we have implemented both anti-hedging and anti-pledging policies to ensure that our executives’ stock remains at-risk, as well as recoupment policies designed to further assure a linkage between our executive compensation and our long-term performance. We believe our compensation plans and policies, coupled with our above-described stock ownership guidelines, achieve the central objective of this shareholder proposal.

Adoption of the proponent’s proposal could be harmful in several respects. While it is essential that our executive officers have a meaningful equity stake in our Company, the Board also believes that it is important that we do not place undue hardships on our executive officers and do not disable them from being able to responsibly manage their personal financial affairs. The adoption of this policy would limit our executive officers’ abilities to engage in customary and prudent estate planning, portfolio diversification or charitable giving. Worse yet, these onerous restrictions could create a strong incentive for senior executives to resign in order to realize the value of their prior service. We believe that the type of retention policy described in this proposal is not common among our peers and that the adoption of this proposal would put us at a competitive disadvantage relative to our peers who do not have such restrictions.

Our guidelines, plans and policies are better balanced than the proponent’s proposal. We believe our Compensation Committee of independent directors is best suited to formulate executive compensation principles and practices that discourage excessive risk-taking and promote long-term, sustainable value creation, and that it must have the flexibility to structure effective and competitive compensation policies and programs. We believe that our current mix of ownership guidelines, compensation practices and policies provide for an appropriate balance between aligning the long-term interests of management and the shareholders, while also permitting our executives to prudently manage their own affairs.

For all these reasons, our Board believes this proposal is unnecessary and undesirable, and contrary to your best interests.

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Bonus Deferral Proposal (Item 4(b))

The following proposal was submitted by the Communications Workers of America Members’ General Fund, 501 Third Street, N.W., Washington, D.C. 20001-2797, which urges you to vote for this proposal.

“RESOLVED, Stockholders of CenturyLink, Inc. (“Company”) urge the Compensation Committee to adopt the following bonus deferral policy for senior executives in order to promote a more long-term perspective:

1. Any discretionary bonus and any payment under the Company’s Annual Incentive Bonus Plans (“Bonus”) that is based on financial measurements (“Financial Metric”) whose performance measurement period is one year or shorter shall not be paid in full for a period of three years (“Deferral Period”) following the end of the performance measurement period;

2. The Compensation Committee shall develop a methodology for (a) determining what proportion of a Bonus should be paid immediately, (b) adjusting the remainder of the Bonus over the Deferral Period to reflect performance on the Financial Metric(s) during the Deferral Period and (c) paying out the remainder of the Bonus, adjusted if required, during and at the end of the Deferral Period; and

3. The adjustment(s) described above should not require achievement of new performance goals but should focus on the quality and sustainability of the performance on the Financial Metric(s) during the Deferral Period.

The policy should be implemented so as not to violate any existing contractual obligation of the Company or the terms of any compensation or benefit plan currently in effect. It should not have the effect of reducing amounts awarded or earned before the adoption of the policy.

Supporting Statement: As long-term stockholders, we support executive compensation policies that promote the creation of sustainable value. We are concerned that short-term incentive compensation plans can encourage senior executives to manage for the short-term and take on excessive risk. The recent Wall Street financial crisis illustrates what can happen when executives are rewarded for short-term performance without any effort to ensure that the performance is sustainable.

In 2011, CEO and President Glen F. Post, III, received more than $1.22 million under the Annual Incentive Bonus Plan on his base salary of $1.0 million. The five named officers in the 2011 Proxy Statement received more than $3.35 million under the Annual Incentive Bonus Plans on $2.97 million in base salary — collectively equal to 113% of base salaries. The problem is long-standing: between 2007 and 2011, over five years, the named officers received $17.425 million in bonuses on $17.450 in salary — bonuses equal to 99.9% of salary for the named officers. We do not believe such bonuses should be paid over such a limited horizon.

This proposal urges that the Compensation Committee adopt a bonus deferral policy to encourage a longer-term orientation for senior executives. Specifically, the proposal asks that the Compensation Committee develop a system for holding back some portion of each bonus based on short-term financial metrics for a period of three years and adjusting the unpaid portion to account for performance during that three-year period. The Compensation Committee would have discretion to set the precise terms and mechanics of this process.”

The Board recommends that you vote AGAINST this proposal for the following reasons:

For the second consecutive year, you are being asked to vote on a proposal on this same topic. At last year’s annual meeting of shareholders, holders of less than 29% of the voted shares supported a nearly identical proposal. For the reasons discussed below, we continue to believe that our existing compensation policies adequately address the concerns addressed in this proposal.

We believe this proposal essentially proposes to eliminate our annual incentive bonus program, which we believe is not in the Company’s best interests. We believe our current executive compensation program,

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consisting of a balanced mix of annual cash bonuses and long-term equity awards, achieves the central goal of the proponent’s objective to encourage the creation of sustainable shareholder value. Additionally, we believe several of our policies further achieve the benefits sought by this proposal. Finally, we believe that compensation paid in accordance with this proposal may not be tax deductible under the Internal Revenue Code.

Our balanced mix of annual and long-term programs are better suited to attain our goals and retain our executives. We agree with the proponent that our compensation programs should promote creating “sustainable value,” but believe our current mix of annual and long-term programs is a more effective means of attaining this goal than the proponent’s suggestion of using only long-term programs. Our complementary mix of cash and equity compensation has been established by our Compensation Committee to drive annual results, while ensuring our executives also remain focused on long-term sustainable financial performance. The current structure rewards executives for consistently achieving strong operating performance in current and future years. Our peers similarly use annual and long-term pay programs, and any failure to offer both could reduce the competitiveness of our overall compensation program and increase the risk of competitors hiring our officers. As more thoroughly described under “Compensation Discussion and Analysis,” we pay well over half of our executive compensation in the form of long-term equity grants. The Committee, which is composed solely of independent directors, believes these equity grants effectively accomplish the proposal’s key objective because the ultimate value of the equity awards will be reduced if our performance declines, and half of the awards are subject to forfeiture if we fail to attain certain long-term performance objectives. Rather than requiring us, in essence, to eliminate our current annual bonus program, we believe it is in the Company’s best interests to retain our current balanced approach of rewarding executives for attaining both annual and long-term goals.

Our policies further achieve the proponent’s goals. To further promote long-term growth and reduce the potential for excessive risk taking and misconduct, the Committee has adopted negative discretion, clawback and stock ownership policies. With respect to negative discretion, the Committee retains the right to unilaterally reduce the amount of annual bonuses if the Committee believes for any reason that it is unwarranted to pay such amount to any or all of the executives. The Committee has also implemented clawback policies that provide safeguards against inappropriate behavior. We believe we were among the earliest advocates of receiving contractual commitments from our executives to forfeit their incentive compensation if they engage in a broad range of specified behaviors that are detrimental to us. In addition, our stock ownership guidelines require our executives to own a substantial amount of our stock, which further aligns the interests of our executives and shareholders. We believe these policies, which are further described below under the heading “Compensation Discussion and Analysis,” help maintain executive focus on stable and sustainable corporate growth.

Our current programs are more tax efficient. Our annual bonuses are designed to comply with the performance-based exemption for deduction of compensation in excess of $1 million under Section 162(m) of the Internal Revenue Code. We believe it would be difficult to design an annual incentive plan that complies with the exemption in 162(m) but also delays payment until certain additional performance targets are achieved in the future (after the original performance period has ended and the annual performance targets have been met and certified by the Committee). The loss of the exemption under 162(m) by implementing this proposal could be costly to you and the Company.

In short, the Board believes that issuing tax-deductible annual incentive bonuses and long-term equity incentive compensation, together with several complementary compensation policies, adequately address the concerns of this proposal and are better suited to advancing your and the Company’s best interests.

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Proxy Access Proposal (Item 4(c))

The following proposal was submitted by Hazel A. Floyd, 4660 Newton Street, Denver, Colorado 80211, and Mary Ann Neuman, 6073 Quebec Avenue North, New Hope, Minnesota 55428, both of whom urge you to vote for the following proposal:

“RESOLVED: The shareholders of CenturyLink (“the Company”) ask our Board of Directors to adopt a “proxy access” bylaw, with conforming amendments to related bylaws, that requires CenturyLink to include in any proxy materials prepared for a shareholder meeting at which directors will be elected, the name, Disclosure and Statement (as defined herein) of any person nominated for election to the board by a shareholder or group thereof (the “Nominator”) that meets the criteria set out below. The Company shall allow shareholders to vote on such nominee(s) on CenturyLink’s proxy card.

The number of shareholder-nominated candidates appearing in proxy materials shall not exceed 20% of the number of directors then serving. This bylaw should provide that a Nominator must:

1. beneficially own 3% or more of the Company’s outstanding common stock continuously for at least three years before the nomination is submitted;

2. give the Company written notice, within the time period identified in CenturyLink’s bylaws, of information required by the bylaws and any rules of the SEC about (i) the nominee, including his or her consent to being named in the proxy materials, to serving as a director if elected, and to public disclosure of data required by the bylaws; and (ii) the Nominator, including proof of ownership of the required shares (the “Disclosure”); and

3. certify that (i) it assumes liability stemming from any legal violation arising from the Nominator’s communications with shareholders, including the Disclosure and Statement; (ii) it will comply with all applicable legal requirements in its own soliciting material; and (iii) to the best of its knowledge, the required shares were acquired in the ordinary course of business and not to change or influence control at CenturyLink.

The Nominator may submit with the Disclosure a supporting statement not exceeding 500 words (the “Statement”). The Board shall adopt procedures for timely resolving disputes over whether the notice of a nomination, Disclosure and Statement satisfy the bylaw and any applicable regulations, and the priority given to multiple nominations exceeding the 20% limit.

Supporting Statement: We believe long-term owners of CenturyLink should have a meaningful voice in electing directors.

This proposal adopts the strict 3% and 3-year eligibility threshold adopted by the SEC’s now-vacated 2010 proxy access rule.

The 20% limit on shareholder-nominated candidates will prevent abuse, we believe, and is the limit Hewlett-Packard agreed to put before shareholders in 2013 with a recommended “yes” vote.

The need for greater accountability at CenturyLink is compelling in our view:

• Performance-Based Restricted Shares pay out 50% of Target for relative total shareholder return as low as the bottom 25th percentile among S&P 500 companies.

• “Golden Parachutes”: If CEO Glen Post terminates after a change in control he’d receive an estimated $25.9 million (as of year-end 2011), more than eleven times his 2011 base salary plus target bonus (2012 Proxy, page 58).

• “Pension Parachutes”: Senior executives terminated after a change in control receive extra years of age and service credits, boosting their qualified and non-qualified pension benefits.”

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The Board recommends that you vote AGAINST this proposal for the following reasons:

We fully agree with the proponent that board accountability is a critical aspect of good corporate governance. We believe, however, that shareholders already have a strong voice in our affairs, and that this proposal could potentially harm the board’s effectiveness and ability to fulfill its oversight responsibility to you as shareholders.

This proposal attempts to address a problem that does not exist at our Company. The fundamental premise of this proposal is that accountability to shareholders may be lacking at CenturyLink and that remedial action is necessary. We believe that premise is unfounded. The interests of shareholders are well represented by our directors, 85% of whom are independent. Shareholders already have multiple means of expressing themselves to our directors, including the following:

• an opportunity to annually elect our directors through a majority voting standard in uncontested elections

• an opportunity to recommend director candidates, which our Nominating and Corporate Governance Committee considers on the same basis as other proposed nominees (as described further under “Corporate Governance — Director Nomination Process”)

• an annual “say-on-pay” vote, which provides shareholders with an opportunity to express their views on our executive compensation

• an opportunity to communicate directly with independent directors and our independent Chairman of the Board (as described further under “Corporate Governance — Top Leadership Positions and Structure”)

• our practice of reviewing correspondence from shareholders on governance, compensation or financial matters at regular meetings of our independent board committees

• federal proxy rules that enable shareholders to solicit proxies for their nominees

• shareholder proposal mechanisms under the Company’s bylaws and under federal proxy rules.

We believe we have been quite attentive to shareholder concerns in recent years. In response to concerns raised by shareholders, we recently declassified our Board to permit annual director elections, and adopted a majority voting standard for uncontested director elections. In addition, we have:

• implemented anti-hedging, anti-pledging, clawback and other policies favored by shareholder advocacy groups

• terminated our shareholder rights plan several years ago

• eliminated tax gross-ups, supplemental executive retirement benefits, modified single-trigger severance benefits, and other practices viewed unfavorably by some shareholders.

In short, we believe our current policies and practices afford our shareholders a strong voice in our affairs, as borne out by our recent governance enhancements.

This proposal could be harmful in several respects, and lead to an inexperienced, fragmented, and less effective board with directors who may pursue narrow special interests. Ultimately, the proposal could lead to annual contested elections in which up to 20% of the Board is newly elected each year. This could harm us in various ways, including the following:

• The potential for such high annual turnover could lead to an inexperienced board that lacks sufficient knowledge and understanding of our current and past business to provide meaningful and effective oversight of our operations and long-term strategies. Abrupt changes in the composition of our Board could impair our ability to develop, refine, monitor and execute our long-term plans.

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• Implementation of the proposal would bypass the Board’s current process for identifying, screening and selecting directors who meet applicable independence requirements, qualifications and experience profiles. To function optimally, we believe any board should be comprised of directors with the set of complementary skills and experiences needed to provide the appropriate oversight role for their company in light of its particular operating environment and strategic priorities. Companies in the telecommunications industry operate in a highly complex and fluid regulatory environment, and we face increasing competition, challenges and opportunities. As such, we need a team of directors with a broad and comprehensive range of skills necessary to understand the short- and long-term financial, competitive and regulatory impact of our operational and strategic decisions. Our current director nominating process is overseen by our Nominating and Corporate Governance Committee. This committee is composed entirely of independent directors charged with the responsibility of assembling a qualified and diverse board and screening potential nominees to determine whether their particular talents are congruous with the skills and experience of the other directors. Under the direction of this committee, we have united a group of directors with a diverse range of expertise and experience, including relevant industry, regulatory, financial, accounting, governmental, labor, merger and acquisition, compensation, engineering, legal and risk management knowledge. We believe this team of directors has fostered our rapid expansion and creation of shareholder value despite a challenging and evolving industry landscape. Adoption of this proposal threatens these gains by undercutting the role of our Nominating and Corporate Governance Committee in continuing to assemble and maintain a highly qualified and cohesive group of directors well-suited to our future challenges.

• Implementation of this proposal would facilitate proxy contests that can be expensive and disruptive, and create an uneven playing field in which we would bear substantial proxy expense while each shareholder nominee would need expend little resources to promote its candidacy. The United States Court of Appeals for the District of Columbia overturned the SEC’s proxy access rule precisely because it determined that the SEC had not adequately assessed the expense and distraction proxy contests would entail. Under current federal proxy rules, the playing field is leveled, as shareholder nominees similarly need to undertake the expense of soliciting proxies on the nominee’s behalf. The desire to avoid this expense has sometimes been cited as a reason for proxy access, but we believe there is no reason why shareholders holding 3% of our outstanding shares (which at today’s share price would constitute over $500 million worth of shares) should not, if they have a legitimate interest in sitting on the Board, bear the expense of soliciting proxies.

• Implementation of this proposal would allow a shareholder (such as a labor union or public pension fund) with a narrowly-focused special interest to use the proxy process to promote a specific agenda rather than the interests of all shareholders, creating the very real risk of politicizing the Board election process at virtually no cost to the proponent. The nomination of a candidate through the proponent’s proxy access proposal would convert each such Board election into a contested contest in which the proposed director nominee would only need to win only a plurality of votes to be elected. By bypassing our carefully established vetting process, this proposal could end up favoring the short-term interests of a few rather than the long-term interest of all shareholders.

• This proposal could fragment the board. Currently, all but two of our directors are independent, and are thereby qualified to serve on our principal board committees. The proposal does not require shareholders to nominate independent directors. This could result in a bulkanized board consisting of independent directors discharging traditional board responsibilities for the benefit of all shareholders, and non-independent directors unable to similarly contribute. This disparity could create tensions, particularly if the shareholder-nominated directors advocate for narrow interests that are not shared by all shareholders. Moreover, a director elected by one shareholder group in one year may face successful opposition from a director nominated by another shareholder group in a subsequent year, setting up ongoing instability on the Board. Any resulting disruption in board harmony and cohesiveness could result in further director turnover and deter qualified individuals from serving.

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For all these reasons, we believe it is risky, if not reckless, to abandon a board nomination process that has fostered years of long-term growth for all shareholders in exchange for an experimental process that could be disruptive and harmful to our board operations.

In sum, the Board believes that this proposal is, at best, unnecessary and, at worst, disruptive and harmful.

Confidential Voting Proposal (Item 4(d))

The following proposal was submitted by the Association of U.S. West Retirees, 8223 East Roma Avenue, Scottsdale, Arizona, 85251, which urges you to vote for this proposal.

“Resolved: The shareholders of CenturyLink, Inc. urge our Board of Directors to adopt a policy that prior to the Annual Meeting, the outcome of votes cast by proxy on uncontested matters, including a running tally of votes for and against, shall not be available to management or the Board and shall not be used to solicit votes. This enhanced confidential voting requirement should apply to (i) management-sponsored or Board-sponsored resolutions seeking approval of executive compensation arrangements or for other purposes, including votes mandated under NYSE rules; (ii) proposals required by law, or the Company’s Bylaws, to be put before shareholders for a vote (e.g., say-on-pay advisory votes); and (iii) shareholder resolutions submitted for inclusion in the proxy pursuant to SEC Rule 14a-8.

This enhanced confidential voting requirement shall not apply to elections of directors, or to contested proxy solicitations, except at the Board’s discretion. Nor shall this proposal impede the Company’s ability to monitor the number of votes cast for the purpose of achieving a quorum, or to conduct solicitations for other proper purposes.

Supporting Statement: Although ‘confidential voting’ rules guarantee a secret ballot, unlike governmental elections, corporate officers are able to monitor voting results and take active steps to influence the outcome — even on matters, such as ratification of stock option or other executive compensation plans, where they have a direct personal stake in the outcome.

As a result, a Yale Law School study concluded: ‘Management-sponsored proposals (the vast majority of which concern the approval of stock options or other bonus plans) are overwhelmingly more likely to win a corporate vote by a very small amount than lose by a very small amount — to a degree that cannot occur by chance.’

‘The results [data on close proxy votes] indicate that, at some point in the voting process, management obtains highly accurate information about the likely voting outcome and, based on that information, acts to influence the vote,’ concluded Yale Professor Yair Listokin’s 2008 study (‘Management Always Wins the Close Ones’) published in the American Law and Economics Review.

Professor Listokin based his conclusion on more than 13,000 management-sponsored resolutions over a seven-year period, a majority of which related to approval of executive compensation. While most votes are not close, close votes are won by management at a rate that ‘should occur by chance less than one in one billion times,’ Listokin concluded.

The NYSE Listed Company Manual observes that ‘an increasing number of important corporate decisions are being referred to shareholders for their approval. . . . The Exchange encourages this growth in corporate democracy.’

However, we believe ‘corporate democracy’ is distorted if, in close elections, senior executives can change the outcome of votes on executive compensation by monitoring voting results and using corporate resources to solicit the votes needed to win.

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As Professor Listokin concluded, ‘management’s ability to obtain accurate information while voting is still occurring should be stopped because it gives management an important advantage relative to opponents of a resolution.’”

The Board recommends that you vote AGAINST this proposal for the following reasons:

As discussed further below, we believe this proposal substantially overstates the magnitude of the issue, and prescribes the wrong remedy.

Most of our shareholders can already vote confidentially. Most of our shareholders beneficially hold their shares through a broker, bank or other nominee. Because such shareholders may object to having their identity disclosed to the Company, these beneficial holders already have the means to vote confidentially. For those of our retail shareholders who are record holders of our stock, they may attain confidential voting by re-registering their shares in the name of a broker, bank or other nominee. Similarly, CenturyLink shares held by participants in our various retirement plans are held in trust and voted by the plan trustee pursuant to confidential voting instructions provided by the plan participants. Accordingly, most of our shareholders either already vote confidentially, or have the means to do so.

Our communications with shareholders are customary and beneficial. Regarding our record shareholders who own shares directly registered in their own names, we can and do monitor their votes and occasionally contact these shareholders for a variety of purposes. Typically we contact larger shareholders who have not yet voted to urge them to cast their ballots to assure a quorum and to ask them if they have any questions about the upcoming shareholder meeting or our proxy disclosures. From time to time, we will canvass our larger institutional holders to learn more about their decision-making processes, including whether they independently analyze our voting proposals or rely on third party analysis. Occasionally, we may contact shareholders whose proxy cards are not correctly completed to ensure their shares are voted as intended. On certain occasions, we have detected patterns of non-voting, and inquired into whether our proxy materials or notices have been received. All of these activities are quite customary, completely legal and, in our judgment, not only benign, but also beneficial to shareholders.

We favor transparency, not secrecy. Like most companies, we have steadily increased our interactions with shareholders over the past several years, and our proxy solicitation conversations are part of that process. Various regulatory changes over the past decade have fostered more open and transparent communications between management and shareholders, including (i) disclosures encouraging shareholders to contact officers or directors, (ii) “say on pay” votes that encourage dialogue about executive compensation and (iii) rules requiring registered management investment companies to disclose how they vote their portfolio securities. We welcome all of these changes, which cumulatively have improved the flow of information between companies and their shareholders. Secret ballots would halt an important channel of meaningful communication with our shareholders, and in our view would be a step backwards toward an earlier era of cloistered communications. Contrary to distorting “corporate democracy,” we believe that openness — not secrecy — enables us to better understand our shareholders and their concerns.

We do not engage in the practices that this proposal is designed to address. The proponent suggests that issuers engage in coercive behavior when contacting shareholders. We do not engage in these practices and believe our shareholder solicitations have historically been lawfully conducted in a fair and equitable manner. The proponent appears to be searching for a costly and burdensome solution to a problem that our shareholders do not face.

Our existing proxy solicitation system encourages direct, lawful and open communication with all shareholders, while permitting confidentiality for those who desire it. We believe that this shareholder proposal is not in your or the Company’s best interests.

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OWNERSHIP OF OUR SECURITIES

Principal Shareholders

The following table sets forth information regarding ownership of our Common Shares by the persons known to us to have beneficially owned more than 5% of the outstanding Common Shares on December 31, 2012, unless otherwise noted.

Name and Address	Amount and Nature of Beneficial Ownership of Common Shares(1)			Percent of Outstanding Common Shares(1)
Capital Research Global Investors 333 South Hope Street Los Angeles, California 90071		72,641,735	(2)		11.6	%
Blackrock, Inc. 40 East 52nd Street New York, New York 10022		47,305,255	(3)		7.6	%
State Street Corporation State Street Financial Center One Lincoln Street Boston, Massachusetts 02111		34,894,026	(4)		5.6	%

(1) Determined in accordance with Rule 13d-3 of the SEC based upon information furnished by the person or persons listed. In addition to Common Shares, we have outstanding Preferred Shares that vote together with the Common Shares as a single class on all matters. One or more persons beneficially own more than 5% of the Preferred Shares; however, the percentage of total voting power held by such persons is immaterial. For additional information regarding the Preferred Shares, see “Questions and Answers About the Meeting — How many votes may I cast?”

(2) Based on information contained in a Schedule 13G/A Report dated as of March 8, 2013 that this investor filed with the SEC. In this report, the investor indicated that, as of February 28, 2013, it held sole voting and dispositive power with respect to all of these shares.

(3) Based on information contained in a Schedule 13G/A Report dated as of February 8, 2013 that this investor filed with the SEC. In this report, the investor indicated that, as of December 31, 2012, it held sole voting and dispositive power with respect to all of these shares.

(4) Based on information contained in a Schedule 13G Report dated as of February 11, 2013 that this investor filed with the SEC. In this report, the investor indicated that, as of December 31, 2012, it shared voting and dispositive power with respect to all of these shares with various of its subsidiaries specified in such report.

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Executive Officers and Directors

The following table sets forth information, as of the record date, regarding the beneficial ownership of Common Shares by our executive officers and directors. Except as otherwise noted, all beneficially owned shares are held with sole voting and investment power and are not pledged to third parties.

	Components of Total Shares Owned
Name	Unrestricted Shares Beneficially Owned (1)		Unvested Restricted Stock (2)		Options or Rights Exercisable Within 60 Days (3)		Total Shares Beneficially Owned (4)
Executive Officers
Glen F. Post, III		574,659		228,357		200,000		1,003,016
Karen A. Puckett(5)		185,497		93,894		75,000		354,391
R. Stewart Ewing, Jr.		114,472		74,389		145,600		334,461
Stacey W. Goff		47,784		53,931		40,500		142,215
William E. Cheek		42,506		25,772		11,430		79,708
David D. Cole(6)		127,687		54,116		40,500		222,303
O. Matthew Beal		20,499		11,828		—		32,327
Maxine L. Moreau		9,876		14,374		10,000		34,250
Outside Directors:
Virginia Boulet(7)		16,834		5,547		—		22,381
Peter C. Brown		14,431		5,547		—		19,978
Richard A. Gephardt		2,036		5,547		—		7,583
W. Bruce Hanks		14,489		5,547		—		20,036
Gregory J. McCray		3,005		5,547		—		8,552
C.G. Melville, Jr.		1,299		5,547		—		6,846
Fred R. Nichols		4,451		5,547		—		9,998
William A. Owens		9,529		10,706		—		20,235
Harvey P. Perry(8)		66,356		5,547		—		71,903
Michael J. Roberts		4,916		4,564		—		9,480
Laurie A. Siegel		12,651		5,547		—		18,198
Joseph R. Zimmel(9)		25,695		5,547		—		31,242
All directors and executive officers as a group (20 persons)(10)		1,298,672		627,401		523,030		2,449,369

(1) This column includes the following number of shares allocated to the individual’s account under one of our qualified 401(k) plans: 126,811 — Mr. Post; 6,860 — Ms. Puckett; 21,473 — Mr. Ewing; 4,877 — Mr. Goff; 834 — Mr. Cheek; 33,912 — Mr. Cole; 689 — Mr. Beal; and 1,070 — Ms. Moreau. Participants in these plans are entitled to direct the voting of their plan shares, as described in greater detail elsewhere herein.

(2) Reflects (i) for all shares listed, unvested shares of Restricted Stock over which the person holds sole voting power but no investment power, and (ii) with respect to our performance-based restricted stock granted to our executive officers in 2011 and 2012, the number of shares that will vest if we attain target levels of performance.

(3) Reflects shares that the person has the right to acquire within 60 days of the record date pursuant to options granted under our incentive compensation plans; does not include (i) shares that might be issued under restricted stock units if our performance exceeds target levels, (ii) options held by Mr. Ewing’s ex-wife, as described further under “Executive Compensation — Incentive Compensation and Other Awards — Outstanding Awards,” or (iii) “phantom units” held by Mr. Roberts that are payable in cash upon the termination of his service as a director, as described further under “Director Compensation — Other Benefits.”

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(4) None of the persons named in the table beneficially owns more than 1% of the outstanding Common Shares. The shares beneficially owned by all directors and executive officers as a group constituted 0.4% of the outstanding Common Shares as of the record date (calculated in accordance with rules of the SEC assuming that all options listed in the table have been exercised for Common Shares retained by the recipient).

(5) Includes 202 shares held by Ms. Puckett as custodian for the benefit of her children.

(6) Includes 6,898 plan shares beneficially held by Mr. Cole’s wife, one of our former employees, in her accounts under our qualified 401(k) plan, as to which Mr. Cole disclaims beneficial ownership.

(7) Includes 955 shares held by Ms. Boulet as custodian for the benefit of her children.

(8) Includes 709 shares beneficially held by Mr. Perry’s spouse, as to which Mr. Perry disclaims beneficial ownership, and 12,083 shares held by Mr. Perry through our dividend reinvestment plan (as of the most recent date practicable).

(9) Includes 5,000 shares held by a private charitable foundation, as to which Mr. Zimmel is a trustee, and 472 shares held by Mr. Zimmel through our dividend reinvestment plan (as of the most recent date practicable).

(10) Includes (i) 7,607 shares held beneficially by the spouses of these individuals, as to which beneficial ownership is disclaimed, (ii) 1,157 shares held as custodian for the benefit of children of such individuals, (iii) 5,000 shares held in a private charitable foundation and (iv) 12,555 held through our dividend reinvestment plan (as of the most recent date practicable), all as described further in the notes above.

COMPENSATION DISCUSSION AND ANALYSIS

In this CD&A, we first summarize our 2012 highlights, as well as our commitment to aligning executive pay with performance and value creation, our general compensation philosophy, and our compensation programs and benchmarking practices. We then describe the various elements of our compensation programs in detail. Finally, we discuss in detail our compensation decision-making process and various other compensation-related matters.

Executive Summary

As described further below, the central goals of our executive pay programs are to incentivize our executives to attain objectives that we believe will create shareholder value, to reward performance that contributes to the execution of our business strategies, and to attract and retain the right executives for our business.

2012 Business Highlights. During 2012, we achieved several significant accomplishments, including the following:

• Added over 195,000 broadband subscribers during the year, representing 3.5% growth during 2012

• Continued solid growth of Prism TV subscribers, with over 45,000 added in 2012

• Developed and launched “SavvisDirect” — a highly scalable and easy-to-use cloud services platform designed for businesses of all sizes

• Generated strong shareholder total return during 2012

• Successfully completed nearly $3.4 billion of debt refinancing transactions, which, coupled with other financing transactions, strengthened our capital structure by extending the average maturity of our outstanding debt by over three years and lowering our interest costs

• Realized synergies from our recently-completed acquisitions faster and in amounts greater than anticipated

• Increased our “strategic revenues” by 4.5% during 2012 compared to proforma 2011 revenue figures, which resulted in our annual “strategic” revenues exceeding our “legacy” revenues for the first time ever.

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2012 Executive Compensation Highlights. During 2012, our Compensation Committee addressed the growing gap between the compensation of our named executive officers and their peers caused by the rapid acquisition-driven growth in the size, territorial reach and complexity of the Company.

As illustrated by the table below, during a two-year period ending July 2011, our revenues increased by over 600%, but our executive compensation increased only modestly since 2010.

(1) Equals the average amount of recurring core compensation paid to each of the executive officers named in the Summary Compensation Tables included in our last five proxy statements, with recurring core compensation being defined as the amount of total compensation reflected in these tables minus amounts reported for “change in pension value” and “all other compensation” minus the amount of compensation associated with non-recurring retention grants awarded in 2010 to our top executives as part of a comprehensive program designed to ensure that over 200 of our top officers and managers were adequately incentiveized to remain employed with us through completion of our acquisition of Qwest.

Consequently, as of early 2012 our executive compensation had fallen well below mean peer compensation levels for all key elements of pay. For more information, see “— Use of Market Data” and “— Overview of Elements and Amounts of Compensation — Shortfall in Compensation Levels.” After reviewing updated benchmarking data and assessing management’s progress in attaining various operational and individual goals, the Committee elected in mid-year 2012 to begin to reduce these pay disparities by raising our executives’ salaries.

Our recent key executive compensation decisions and highlights, are summarized below:

• In August 2012, we increased the CEO’s salary by 7.7%, and the salaries of our other four named executive officers by between 8.5 and 17.8%.

• We left our executives’ 2012 target annual incentive bonus opportunities unchanged from 2011.

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• Similarly, we granted 2012 long-term equity incentive compensation to our executives with fair values unchanged from 2011.

• In May 2012, we received the favorable vote of over 97% of our shareholders with regards to our annual “say on pay” vote.

• In August 2012, we adopted an executive severance plan that provides cash severance benefits to executives involuntarily terminated without cause in order to provide market-competitive benefits customary among our peers.

• During 2012, we continued to link a substantial majority of our executive compensation to our annual performance measured against four metrics and to our relative total shareholders return over a three-year period, all as discussed further under “— Pay for Performance” appearing immediately below and the discussion of our incentive pay appearing further below.

Pay for Performance

We believe that a significant portion of our executives’ compensation should be payable only when merited by our performance. Currently, all of our executives’ annual bonus compensation and half of their long-term equity incentive compensation is payable only if we attain certain specified goals, thereby placing a substantial portion of executive compensation at risk. The remaining portion of our executives’ long-term equity incentive compensation is currently paid in time-vested restricted stock, the value of which is dependent on our performance over an extended vesting period. This pay element is designed to create additional incentives for our executives to focus on sustainable, long-term growth.

As part of its assessment of the executives’ performance, the Compensation Committee requested its independent compensation consultant to measure CenturyLink’s 2012 performance against its 13-company peer group discussed below based on eight separate metrics (growth in revenues, diluted earnings per share and operating cash flow; operating cash flow margin; operating cash flow return on equity; return on investment and capital; and total shareholder return). To help confirm the validity of its findings, the Compensation Committee separately measured CenturyLink’s performance against an extended 19-company peer group that included six additional telecommunications companies. Variances between our relative performance measured under the two separate groups were minimal.

Reviewing data on these metrics, the compensation consultant determined that CenturyLink:

• scored within or near the top 10% of its peers in revenue growth, operating cash flow growth, and operating cash flow margin,

• marginally under-performed the 50^th percentile of its peers in earnings per share growth, return on investment and assets, operating cash flow return on equity, and total shareholder return, and

• performed overall, on average, at or slightly above the 50^th percentile of its peers (weighing all eight measures equally).

The Committee also noted that CenturyLink and its executives:

• outperformed all but one of the performance goals selected to set management’s 2012 annual bonuses, and

• achieved this operational performance during a time in which its management team remained actively engaged in integrating Embarq, Qwest and Savvis into CenturyLink’s operations, which has substantially increased the scope and complexity of our business.

For further information on the performance goals selected by our Compensation Committee, see below — “Annual Incentive Bonuses” and “— Long-Term Equity Incentive Compensation.” For more information on our recent financial performance, see Appendix A to this proxy statement.

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Our Compensation Philosophy

We compensate our senior management through a mix of programs designed to be market-competitive and fiscally-responsible.

Our executive compensation programs are designed to:

• provide performance-based reward opportunities that support growth and innovation without encouraging excessive risk,

• reinforce our business strategies and our creation of long-term shareholder value by making substantial amounts of our executives’ compensation dependent upon attaining these goals,

• align the interests of executives and shareholders by providing a majority of our executive compensation in the form of long-term equity grants,

• attract, retain and motivate key executives by providing competitive compensation with an appropriate mix of fixed and variable compensation, short- term and long-term incentives, and cash and equity-based pay,

• recognize and support outstanding contributions and results, both on an individual basis and a company or divisional basis,

• manage cost and share dilution, and

• whenever possible, promote internal equity by offering the same compensation to executives whom we expect to make roughly equivalent contributions.

Our Compensation Practices

To assist us in achieving our broad compensation goals outlined above, we apply the following practices (many of which are described further elsewhere in this CD&A):

What We Do

• Deliver a substantial majority of our executives’ compensation in a form tied to our performance, and weigh this variable compensation heavily towards long-term equity awards

• Award half of our equity incentives as performance-based restricted stock with vesting requirements

• Benchmark each pay element against 50^th percentile peer compensation levels

• Require shareholders to approve any future severance agreements valued at more than 2.99 times the executive’s target cash compensation

• Require our executives to own a significant amount of our stock

• Maintain a “clawback” policy and, unlike most other companies, require our executives to agree to compensation forfeiture covenants

• Limit the number of performance-based restricted shares awarded to our executives if our total shareholder return over the applicable performance period is negative (regardless of how strong our relative performance is)

• Annually review the continued appropriateness of our peer group

• Annually review our compensation programs to avoid encouraging excessively risky behavior

• Conduct an annual “say-on-pay” vote.

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What We Don’t Do

• Maintain a supplemental executive retirement plan

• Award single-trigger change-in-control equity acceleration provisions (excluding pre-2011 awards)

• Provide excise tax “gross-up” payments (except under soon-to-expire agreements assumed in prior acquisitions)

• Permit our directors or employees to hedge our stock

• Permit our directors or key officers to pledge our stock

• Pay dividends on our executives’ unvested restricted stock (excluding pre-2011 awards)

• Permit the Compensation Committee’s current consultant to provide services to CenturyLink

• Provide significant perquisites

• Accrue additional benefits under our defined benefit plans for non-represented employees

• Enter into employment agreements with our incumbent executives.

Use of Market Data

Assuming targeted levels of performance are achieved, we strive to provide to each executive who has demonstrated strong performance total compensation within a range of the median of compensation levels paid by a designated group of peer companies selected by our Compensation Committee. We believe that paying executive compensation at competitive levels allows us to attract and retain talented executives, while also enabling us to maintain a competitive cost base with respect to compensation expense. For a discussion of several additional factors that impact the actual amount of compensation paid to each executive, see “— Our Compensation Decision-Making Process — Review Process” and for a discussion of initial steps we have taken to address pay shortfalls among our officers, see “— Overview of Elements and Amounts of Compensation — Shortfall in Compensation Levels.”

Based on input from its compensation consultant, the Compensation Committee used the following tools in 2012 to compare the compensation of our executives against individuals who work in similarly-situated positions at comparable companies:

• survey data compiled by the compensation consultant containing compensation information about a broad range of public companies generally similar in size to us, and

• compensation data publicly disclosed by companies included within the peer groups we used in 2012 for these purposes.

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Since we agreed in 2010 to acquire Qwest, we have made several refinements to our peer group to match the increased size, complexity and diversity of our operations and lines of business. During 2010 and 2011, we primarily used a 14-member peer group that consisted wholly of cable and communications firms. In 2010, the Committee initially developed a replacement 15-member peer group that was used in a secondary manner in 2011 and as our primary peer group in early 2012. In August 2012, the Committee determined that the 15-member group was comprised of too many companies engaged in businesses dissimilar to ours. Consequently, following consultations with its independent compensation consultant, the Committee in August 2012 adopted the following 13-company peer group:

Cablevision Systems Corporation*	Motorola Solutions, Inc.
Charter Communications, Inc.	NII Holdings, Inc.
Comcast Corporation*	QUALCOMM Incorporated
DIRECTV*	Sprint Nextel Corp.*
Dish Network Corp.*	Time Warner Cable Inc.*
Frontier Communications Corporation*	Viacom Inc.
Liberty Global Inc.*

* Included as members of the 14-company and 15-company predecessor peer groups used by us prior to August 2012.

In connection with approving the new 13-company peer group first used in August 2012, the Committee (i) retained eight companies from the predecessor groups (as highlighted in the list above) engaged in one or more of our primary lines of business, (ii) added five new companies that are generally comparable to us in terms of size, markets and operations, and (iii) removed from its predecessor 15-member peer group several non-communication companies, including Barnes & Noble, Inc., Fedex Corporation, Gannett Co., Inc., The McGraw Hill Companies, Inc., Virgin Media, Inc., and Xerox Corp. In selecting these 13 peer companies, the Committee included two other telecommunication companies (Sprint and Frontier), but elected not to include Verizon or AT&T, both of which are substantially larger than us, or any other telecommunication companies, all of which are substantially smaller than us.

For additional information about how we set pay levels, see “— Our Compensation Decision-Making Process.”

Overview of Elements and Amounts of Compensation

Principal Components. The principal components of our 2012 executive compensation are summarized in the following table:

Compensation Component	Description	Purpose	Principal 2012 Actions
Base Salary	Fixed; reviewed annually and adjusted, if and when appropriate	Compensate executives fairly based on their level of responsibilities with a fixed amount of cash providing basic financial security	Increased in August 2012 by $40,000 to $79,000 per named executive officer for the reasons discussed under “— Salary.”
Annual Incentive Awards	Annual variable performance-based cash awards payable upon the attainment of certain below- described cash flow, legacy revenue, strategic revenues and “strategic enhancement” goals	Motivate and reward executives to achieve annual business objectives critical to our overall performance and growth	Named executive officers received annual bonuses for 2012 ranging from approximately $394,000 to $1,768,000, which reflects our attainment of all but one of our 2012 performance goals. See “— Annual Incentive Bonuses.”

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Compensation Component	Description	Purpose	Principal 2012 Actions
Long-Term Incentive Awards	Equity awards granted annually as a combination of (i) time-vested restricted stock and (ii) performance-based restricted stock, the amount of which actually earned will vary based on our relative total shareholder return over a three-year period	Motivate and reward executives to achieve sustained long-term growth in the value of the Company, and reinforce the link between the interests of our executives and shareholders	Named executive officers received 2012 long-term incentive awards with grant date fair values unchanged from 2011, ranging from $1,104,000 to $4,400,000. See “— Long-Term Equity Incentive Compensation.”
Health and Welfare Benefits	Fixed under plans	Promote employee health and long-term financial security	No significant changes in 2012. See “— Other Benefits.”
Perquisites and Other Personal Benefits	Fixed	Further promote employee health and security, and promote efficient use of time	No significant changes in 2012. See “— Other Benefits.”
Severance Compensation	Fixed under plans or agreements	Retain executives and enhance their productivity by alleviating concerns about the economic impact of involuntary terminations of employment and, in the case of a change in control, providing continuity of management	Adopted in August 2012 a plan providing customary severance benefits to executives involuntarily terminated without cause; no modifications to our 2011 restated change- of-control agreements. See “— Other Benefits.”

Allocations. The following table and charts illustrate how our named executive officers’ 2012 target compensation was allocated among the three main components of recurring compensation.

	Cash Compensation						Equity Compensation
Title	% from Salary			% from Annual Incentives  (1)			% from Long- Term Incentives (2)
CEO		14	%		17	%		69	%
Other Named Officers		21	%		16	%		63	%

(1) Based on target bonus amounts.

(2) Based on target valuations reported in the Summary Compensation Table below.

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Each element of our 2012 compensation is discussed further below under the headings “— Salary,” “— Annual Incentive Bonuses” and “— Long-Term Equity Incentive Compensation.” In each case, more information on how we determined specific pay levels is located under the heading “— Our Compensation Decision-Making Process.”

Shortfall in Compensation Levels. Subject to continued strong performance by our executives, we generally seek to target our executives’ compensation at the 50th percentile of compensation paid to comparable executives at other companies within our peer group and as compared to broader survey data. In February 2012, the Committee’s independent compensation consultant advised that the Company’s rapid growth had caused its executive compensation levels to fall well below market-competitive compensation levels of peer companies for salary and incentive pay. As discussed in greater detail under the headings below, since early 2012 the Committee has taken certain initial steps to reduce the shortfall between the compensation of our named executives and their peers. Assuming management continues to demonstrate strong performance, the Committee currently intends to close the remaining gap in the future, primarily through enhanced performance-based pay opportunities.

Salary

As noted above, in February 2012 the Committee’s compensation consultant advised that the Company’s salary and incentive compensation levels lagged significantly behind compensation levels paid to comparable executives at peer companies. At that February 2012 meeting, management recommended to maintain executive officer salaries unchanged at that time for a variety of reasons. The Committee agreed, pending receipt of updated peer group compensation data. In August 2012, the Committee reviewed updated compensation analysis prepared by its compensation consultant indicating that the Company’s executive compensation levels had fallen further below mean compensation levels at peer companies included within the 13-company peer group described above under “— Use of Market Data.” The Committee further noted that the Company had made significant progress in integrating its recently-acquired operations into its incumbent operations, and made individualized assessments of which executives merited the largest percentage increases. Based on all these factors, in August 2012 the Committee determined that salary increases were warranted in acknowledgement of

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management’s progress in attaining the Company’s operational goals, and elected to begin to reduce the disparities in pay between the Company and its peers by implementing the following salary increases:

Named Officer	Prior Annual Salary		New Annual Salary (Effective August 2012)		Percentage Increase
Glen F. Post, III     Chief Executive Officer and President	$	1,021,000	$	1,100,000		7.7	%
Karen A. Puckett     Executive Vice President and Chief Operating Officer		664,000		725,000		9.2	%
R. Stewart Ewing, Jr.     Executive Vice President and Chief Financial Officer		599,000		650,000		8.5	%
David D. Cole     Senior Vice President — Controller and Operations Support		435,000		475,000		9.2	%
Stacey W. Goff     Executive Vice President, General Counsel and Secretary		424,564		500,000		17.8	%

Although the Committee has not yet completed its deliberations regarding 2013 executive compensation levels, it currently intends to maintain the 2013 salaries of each named officer at the levels approved in August 2012.

Annual Incentive Bonuses

General. We award annual cash bonuses to key employees based on performance objectives that, if attained, can reasonably be expected to (i) promote our business objectives, (ii) maintain or increase our long-term shareholder value and (iii) correspond to those paid to similarly-situated and comparably skilled executives at peer companies. We currently offer annual incentive bonuses to approximately 20,500, or 38%, of our employees.

The 2012 bonuses paid to our named executive officers were calculated as follows:

Named Officer	2012 Salary		x	Bonus Target %			x	Corporate Performance %  (1)			=	Bonus (2)		Actual Award as % of Salary
Glen F. Post, III     Chief Executive Officer and President	$	1,047,606			125	%			135	%		$	1,767,836		169	%
Karen A. Puckett     Executive Vice President and Chief Operating Officer		684,562			85	%			135	%			785,535		115	%
R. Stewart Ewing, Jr.     Executive Vice President and Chief Financial Officer		616,105			85	%			135	%			706,981		115	%
David D. Cole     Senior Vice President — Controller and Operations Support		448,790			65	%			135	%			393,813		88	%
Stacey W. Goff     Executive Vice President, General Counsel and Secretary		450,096			65	%			135	%			394,959		88	%

(1) Calculated as discussed below under “— Corporate Target Percentage.”

(2) The Committee has discretion to reduce the amount payable to the executive officers in accordance with this calculation, but choose not to with respect to these 2012 bonuses.

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These bonus amounts are reflected in the Summary Compensation Table appearing below under the column “Non-Equity Incentive Plan Compensation.”

Performance Objectives and Targets. Similar to its findings regarding salary, the Committee’s compensation consultant determined in February 2012 that targeted and actual annual incentive bonuses payable to the Company’s executives lagged below those payable to comparable executives at peer companies. Nonetheless, the Committee elected in early 2012 to establish 2012 target bonus opportunities (expressed as a percentage of salary) equal to those used for the prior year, with the understanding that it would re-review executive compensation at future meetings upon receipt of updated data. The Committee also attempted to promote internal equity and teamwork by applying the same target bonus percentage to named executive officers with similar responsibility levels.

Similar to 2011, the Compensation Committee elected in 2012 to base 90% of the senior officers’ 2012 annual incentive bonuses on whether we obtained “minimum,” “target” or “maximum” threshold levels of the following financial goals for 2012:

	Performance Levels (in millions)
Corporate Goal	Minimum		Target(1)			Maximum
Operating Cash Flow(2)	$	7,030.00	$	7,400.00	(3)	$	7,770.00
Legacy Revenue(4)		7,382.25		7,650.00			7,917.75
Strategic Revenue(5)		8,154.25		8,450.00			8,745.75

(1) Based upon the same forecasts used in connection with our publicly-disclosed guidance.

(2) Represents operating income plus depreciation and amortization expenses.

(3) Represents the midpoint of a target that ranges from $7,363 million to $7,437 million.

(4) Represents revenue generated from local voice access lines, long distance and other services as reported in our publicly-filed financial statements; excludes switched access revenues.

(5) Represents revenue from providing the following services: high speed internet, internet protocol television (IPTV), data hosting, cloud computing, private line/special access, Ethernet/multiprotocol label switching (MPLS), satellite video and voice over internet protocol (VoIP), all as reported in our publicly-filed financial statements.

With respect to our operating cash flow target, attainment of less than 95% of the target amount (the “minimum” performance level) was designed to result in no bonus payment, and attainment of more than 105% of the target amount (the “maximum” performance level) was designed to result in twice the bonus payable for attaining the target level of performance. With respect to each of our revenue targets, attainment of less than 96.5% (the “minimum” performance level) of the target amount was designed to result in no bonus payment, and attainment of more than 103.5% of the target amount (the “maximum” performance level) was designed to result in twice the bonus payable for attaining the target level of performance. In all cases, we adjusted these amounts to eliminate the effects of extraordinary or non-recurring transactions in accordance with procedures further described below.

For purposes of calculating the aggregate 2012 bonus payment, the following goals were weighted as follows:

•    Operating Cash Flow	50	%
•    Legacy Revenue	20	%
•    Strategic Revenue	20	%
•    Strategic Enhancements	10	%

Bonuses payable with respect to attainment of “strategic enhancements” were based on the Compensation Committee’s subjective assessment of each senior officer’s specific contributions to our strategic positioning. In

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connection with these determinations, the Committee reviewed company-wide or individual achievements relating to:

• growth in the financial performance or prospects of our strategic services, and growth in our customers for such services

• the operational and cultural integration of our incumbent and recently-acquired operations

• the development of new, expanded or improved services, the construction of new service facilities, the completion of other capital projects, and the commencement or completion of other initiatives promoting immediate or long-term growth deemed relevant by the Committee.

Although the Committee generally prefers to base bonuses on objective quantifiable performance goals, it determined to utilize more qualitative assessments of its strategic enhancements for purposes of the 2012 bonuses principally because measuring success was too dependent on future events and multiple variables to apply fixed objective financial goals.

Rationale for Performance Objectives and Targets. The Committee selected the above-described 2012 metrics because they correlate strongly with the Company’s financial and strategic objectives (including successfully integrating the Company’s recently-acquired operations into its incumbent operations) for the following reasons:

• Strong operating cash flow is critical to our success because it enables us to, among other things, (i) fund strategic capital investments designed to expand our business opportunities, (ii) pay an attractive dividend, and (iii) meet our debt obligations.

• Maximizing our legacy revenues permits us to retain scale and financial resources as we pursue other revenue sources.

• Strategic revenue growth promotes our critical strategic objective of identifying new or growing revenue sources designed to offset anticipated decreases in our legacy revenues and to diversify our earnings streams.

• Strengthening our strategic positioning will further enhance our business strategy of expanding revenue streams that are growing.

The Compensation Committee set the target levels of performance described above based on assessments of the difficulty of achieving such levels and the potential impact of such achievement on enhancing shareholder value. As in past years, the Committee set these target levels of performance with expectation that there would be a significant chance that they would not be achieved, based on information available to the Committee at that time. For 2011 and 2012, each of our executives received bonus payments equal to 96% and 135%, respectively, of their targeted awards.

Corporate Target Percentage. In February 2013, the Compensation Committee reviewed management’s assessment of the Company’s performance during 2012 as compared to the targets established in March 2012 with respect to each of our senior officers. Based on this process, the Committee determined that the aggregate rate of attaining these goals (referred to in the table below as the “Corporate Performance Percentage”) was 135%, calculated as follows:

	Percentage Payout Relating to Goal			x	Weighting Factor			=	Corporate Performance Percentage Components
Operating Cash Flow		152.2	%			50	%			76.1%
Legacy Revenue		146.2	%			20	%			29.2%
Strategic Revenue		85.0	%			20	%			17.0%
Strategic Enhancements		125.0	%			10	%			12.5%
Corporate Performance Percentage										135.0%

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Negative Discretion. As in past years, during 2012 the Committee retained the right to unilaterally reduce, without forfeiting favorable tax treatment of our bonus payments, the amount of the executives’ bonuses calculated using the processes described above if the Committee believes for any reason that it is unwarranted to pay such amount to any or all of the senior officers. With respect to the 2012 bonus payments, the Committee determined that there was no basis for effecting any such reductions.

Recent Actions. Although the Committee has not yet approved 2013 bonus targets for senior officers, it has approved certain design terms of a proposed 2013 bonus program, including refinements to the Committee’s 2013 bonus metrics to further align them with our evolving strategic objectives. Upon receipt of additional information and further deliberations, the Committee will determine later this year if, when and how to address the shortfall between the annual bonus opportunities of our named executives and their peers discussed under the heading “— Overview of Elements and Amounts of Compensation — Shortfall in Compensation Levels.”

Non-Executive Bonuses. Compared to our executive officers, the remainder of our senior officers have more diverse and individualized performance goals. When an officer or manager has responsibility for a particular business unit, division or region, the performance goals are typically heavily weighted toward the operational performance of those units or areas. Other individuals may receive individual performance goals. Depending on the level of seniority, these individuals may also receive a portion of their bonus based on overall corporate performance. As discussed below under the heading “— Our Compensation Decision-Making Process,” the CEO approves the performance goals of substantially all of the non-executive officers under the general supervision of the Compensation Committee.

Long-Term Equity Incentive Compensation

General. Our shareholder-approved long-term incentive compensation programs authorize the Compensation Committee to grant stock options, restricted stock, restricted stock units and various other stock-based incentives to key personnel. We believe stock incentive awards (i) encourage key personnel to focus on sustainable long-term performance, (ii) strengthen the relationship between compensation and growth in the market price of the Common Shares and thereby align management’s financial interests with those of the shareholders and (iii) help attract and retain talented personnel. During the first half of 2013, we intend to offer long-term equity incentive compensation awards to approximately 680, or 1%, of our employees.

2012 Executive Grants. In February 2012, the Committee granted the following number of restricted shares to our named executive officers:

Named Officer	No. of Time- Vested Restricted Shares		Fair Value(1)		No. of Performance Based Restricted Shares(2)		Fair Value(1)		Total Fair Value(1)
Glen F. Post, III		58,843	$	2,200,000		58,844	$	2,200,000	$	4,400,000
Karen A. Puckett		25,677		960,000		25,677		960,000		1,920,000
R. Stewart Ewing, Jr.		19,900		744,000		19,900		744,000		1,488,000
David D. Cole		14,764		552,000		14,765		552,000		1,104,000
Stacey W. Goff		14,764		552,000		14,765		552,000		1,104,000

(1) For purposes of this chart, we value both time-vested and performance-based restricted shares by multiplying the number of shares granted to the executive by the volume-weighted average closing price of our Common Shares over a 15-trading day period ending five days prior to the grant date. In the Summary Compensation Table, however, our 2012 grants of time-vested restricted stock are valued in accordance with FASB ASC Topic 718 based on the closing stock price of our Common Shares on the business day preceding the date of grant, and our 2012 grants of performance-based restricted shares are valued as of the grant date based on probable outcomes in accordance with SEC rules. See footnote 1 to the Summary Compensation Table for more information.

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(2) Based on the number of restricted shares granted in February 2012. As discussed further below, the actual number of shares that vests in the future may be lower or higher.

For more information on these grants, please see below “Executive Compensation — Incentive Compensation and Other Awards.”

Amount of Awards. Each year, the Committee generally determines the size of equity grants, expressed in dollars, based on the recipient’s responsibilities, capabilities, performance and duties, and on information furnished by the Committee’s compensation consultant regarding equity incentive practices among comparable companies.

In determining the size of each senior officer’s 2012 grant, the Committee discussed each officer’s performance and contributions, and reviewed market data regarding long-term incentive compensation paid to comparable executives at companies included in the benchmarking data compiled by the compensation consultant. Based on these deliberations, the Committee elected to grant to each named officer long-term equity awards with a total fair value equal to the total fair value of their 2011 long-term incentive awards (as measured in the manner noted in footnote 1 of the table above).

In establishing equity award levels, we also review the equity ownership levels of the recipients, primarily to determine if our executives continue to be adequately incentivized to create sustainable long-term shareholder value. We believe, however, that each annual grant of long-term compensation should generally match prevailing market practices in order for our compensation packages to remain competitive from year to year, and to mitigate the risk of competitors offering compensation packages to our executives that have superior long-term incentives.

Types of Awards. We strive to pay equity compensation in forms that create appropriate incentives to optimize performance at reasonable cost, that minimize enterprise risk, that align the interests of our officers and shareholders, that foster our long-term financial and strategic objectives and that are competitive with incentives offered by other companies. Since 2008, the Committee has elected to issue all of our long-term equity compensation grants in the form of restricted stock for a variety of reasons, including:

• the Committee’s recognition of the growing use of restricted stock by our peers,

• the Committee’s desire to minimize the dilution associated with our rewards,

• the retentive value of restricted stock under varying market conditions, and

• the loss of accounting advantages formerly associated with stock options.

In an effort to increase the link between our performance and executive compensation, since 2010 the Committee has issued half of the value of the executives’ long-term awards in the form of performance-based restricted stock, with the other half being in the form of time-vested restricted stock. The number of performance-based restricted shares that ultimately vest under the awards made by the Committee in 2010, 2011 and 2012 is dependent on our total shareholder return over two or three-year performance periods in relation to the total shareholder return of the companies comprising the S&P Index over the same periods.

For additional information on the vesting and other terms of our equity awards (including certain voluntary limits on the number of performance-based restricted shares that vest if our total shareholder return over the performance period is negative), see “Executive Compensation — Incentive Compensation and Other Awards.”

Dividends. Since 2011, all dividends paid with respect to restricted stock awards have been payable to the recipient only upon the vesting of the award. In prior years, some or all of these dividends were paid currently.

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Recent Actions. The Committee has not yet granted equity awards to senior officers for 2013. The Committee has, however, approved certain features of proposed 2013 equity grants, including program design changes intended to broaden the scope of the performance metrics applicable to future grants of our performance-based restricted shares. Later this year, the Committee intends, upon receipt of additional information and further deliberations, to determine if, when and how to address the gap between the equity incentive compensation of our named executives and their peers discussed under the heading “— Overview of Elements and Amounts of Compensation — Shortfall in Compensation Levels.”

2010 and 2011 Retention Grants

Qwest Merger. As contemplated under our merger agreement with Qwest, we implemented in mid-2010 a retention program designed to ensure that over 200 of our top officers and managers had adequate incentives to remain employed with us through completion of the Qwest acquisition and the critical period of integration thereafter. In August 2010, the Committee made awards under this plan to our executives. Of the total grant date value of these awards, 100% (in the case of the CEO) or 75% (in the case of all other executives) was composed of equity grants, which are reflected as 2010 compensation in our Summary Compensation Table.

Other than our CEO, our executives received 25% of the grant date fair value of their 2010 retention grants in the form of a deferred cash award. Recipients of deferred cash awards received half of their cash payment on April 1, 2011, the closing date of the Qwest acquisition, and the other half on April 1, 2012, provided they remained employed by us on such dates. See our Summary Compensation Table for more information.

Savvis Merger. In connection with being acquired by us, Savvis adopted executive and broad-based retention programs in which executives and key personnel of Savvis received a combination of cash and restricted stock awards that vested over time.

Other Benefits

As a final component of executive compensation, we provide a broad array of benefits designed to be competitive, in the aggregate, with similar benefits provided by our peers. We summarize these additional benefits below.

Retirement Plans. We maintain one or more traditional qualified defined benefit retirement plans for most of our employees who meet certain eligibility requirements, plus one or more traditional qualified defined contribution 401(k) plans for a similar group of our employees. With respect to these qualified plans, we maintain nonqualified plans that permit our officers to receive or defer supplemental amounts in excess of federally-imposed caps that limit the amount of benefits highly-compensated employees are entitled to receive under qualified plans. Additional information regarding our retirement plans is provided in the tables and accompanying discussion included below under the heading “Executive Compensation.”

Effective January 1, 2011, we changed the retirement benefits that we offer to our employees as part of our ongoing process to align overall benefits for our legacy Embarq and CenturyLink employees. In addition to changes to the benefits offered under certain of our 401(k) plans, we froze benefit accruals under our defined benefit pension plans for non-represented employees as of December 31, 2010. These changes align our retirement benefits closer to those offered by our competitors, many of whom have previously effected similar changes over the past several years.

Change of Control Arrangements. As described in more detail under “Executive Compensation — Potential Termination Payments — Payments Made Upon a Change of Control,” in 2000 we entered into agreements under which we agreed to provide cash and other severance benefits to each of our executive officers who is terminated under certain specified circumstances following a change of control of CenturyLink.

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Effective January 1, 2011, the Compensation Committee restructured these predecessor agreements to prospectively reduce benefits to more closely align them with current market practices. If triggered, benefits under the restructured agreements include payment of (i) a lump sum cash severance payment equal to a multiple of the officer’s annual cash compensation, (ii) the officer’s annual bonus, based on actual performance and the portion of the year served, and (iii) certain continued welfare benefits for a limited period.

We believe these benefits enhance shareholder value because:

• prior to a takeover, these protections help us to recruit and retain talented officers and to help maintain the productivity of our workforce by alleviating concerns over economic security, and

• during or after a takeover, these protections (i) help our personnel, when evaluating a possible business combination, to focus on the best interest of CenturyLink and its shareholders, and (ii) reduce the risk that personnel will accept job offers from competitors during takeover discussions.

Under our restructured agreements, change of control benefits are payable to our executive officers if within a certain specified period following a change in control (referred to as the “protected period”) the officer is terminated without cause or resigns with “good reason,” which is defined to include a diminution of responsibilities, an assignment of inappropriate duties, and a transfer of the officer exceeding 50 miles. We have filed with the SEC copies of our restructured change of control agreements.

The table below shows (i) the length of the “protected period” afforded to officers following a change of control and (ii) the multiple of salary and bonus payment and years of welfare benefits to which officers will be entitled if change of control benefits become payable under our restructured agreements and related policies:

	Protected Period		Multiple of Annual Cash Compensation		Years of Welfare Benefits
CEO		2 years		3 times		3 years
Other Executives		1.5 years		2 times		2 years
Other Officers		1 year		1 time		1 year

Our restructured agreements also:

• eliminated tax “gross-up” provisions, which had previously enabled executives to be reimbursed for taxes imposed as a result of receiving their change of control benefits,

• eliminated “modified single trigger” provisions, which had previously enabled executives to unilaterally request full payment of their severance benefits during “window periods” arising one year after a change of control, regardless of whether the executive had been adversely impacted by the transaction, and

• narrowed the rights of executives to claim that they have “good reason” to resign with full severance benefits.

For more information on change of control arrangements applicable to our executives, see “Executive Compensation — Potential Termination Payments — Payments Made Upon a Change of Control.” For information on change of control severance benefits payable to our junior officers and managers, see “— Severance Benefits” immediately below.

Severance Benefits. In August 2012, the Compensation Committee adopted an executive severance plan that provides severance benefits to our senior officers and other specified key employees. The plan provides cash severance payments equal to two years of total targeted cash compensation (defined as salary plus the targeted amount of annual incentive bonus) for our CEO or one year of total targeted cash compensation for any other

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senior officer, payable solely if the senior officer is involuntarily terminated by us without cause in the absence of a change of control. Payments to senior officers terminated in connection with a change of control are separately governed by the change of control arrangements discussed immediately above under the heading “— Change of Control Arrangements.” Under our executive severance plan, subject to certain conditions, more junior officers or managers receive, among other things, cash payments ranging from 26 to 52 weeks of their total targeted cash compensation, depending on their seniority, if they are either (i) involuntarily terminated without cause in the absence of a change of control or (ii) involuntarily terminated without cause or resign with good reason in connection with a change of control. Severance benefits payable to any senior officers with a pre-existing employment agreement are ineligible to receive payments under this plan if their employment agreement separately provides for severance benefits.

In connection with certain qualifying terminations, our full-time non-union employees not covered by our above-described executive severance plan may, subject to certain conditions, be entitled to cash severance benefits ranging from 4 to 52 weeks of base pay, depending on seniority.

In 2012, we adopted a policy requiring us to seek shareholder approval of any future senior executive severance agreements providing for cash payments, perquisites and accelerated health or welfare benefits with a value greater than 2.99 times the sum of the executive’s base salary plus target bonus.

Perquisites. Officers are entitled to be reimbursed for the cost of an annual physical examination, plus related travel expenses.

Our aircraft usage policy permits the CEO to use our aircraft for personal travel without reimbursing us, and permits each other executive officer to use our aircraft for up to $10,000 per year in personal travel without reimbursing us. In all such cases, personal travel is permitted only if aircraft is available and not needed for superseding business purposes. For purposes of valuing and reporting the use of our aircraft, we determine the incremental cost of aircraft usage on an hourly basis, calculated in accordance with applicable guidelines of the SEC. The incremental cost of this usage, which may be substantially different than the cost as determined under alternative calculation methodologies, is reported in the Summary Compensation Table appearing below. Each year the Compensation Committee receives a report on the personal use of aircraft by senior management, and determines whether or not to alter our aircraft usage policy in any way. In connection with its recent election to retain this policy, the Committee determined that the policy was (i) providing valuable and cost-effective benefits to our executives residing in a small city with limited commercial airline service and (ii) enabling our executives to travel in a manner that we believe is more expeditious than commercial airline service.

In 2006, the Compensation Committee approved restructured insurance arrangements with our executive officers that obligate us to pay premiums on the executive officers’ respective supplemental life insurance policies sufficient to provide the same death benefits available under predecessor agreements, and entitle the executive officers to purchase additional post-retirement coverage at their cost. In mid-2010, we eliminated the right of executives to receive related tax “gross-up” cash payments in amounts equal to the taxes incurred as a result of our premium payments.

Most years, we organize one of our regular board meetings and related committee meetings as a “board retreat” scheduled over a long weekend. These retreats are typically held in an area where we conduct operations, and include site visits that enable our directors and senior officers to meet with local personnel. The spouses of our directors and executive officers are invited to attend these retreats, and we typically schedule recreational activities for those who are able and willing to participate.

We maintain a pool of several corporate apartments in Monroe, Louisiana for use by our employees based in other states who are required regularly or periodically to work in our headquarters offices in Monroe. These apartments have been more cost-effective for us than lodging these individuals in hotel rooms during their visits.

For more information on the items under this heading, see the Summary Compensation Table appearing below.

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Other Employee Benefits. We maintain a stock purchase plan that enables our officers and most of our other employees to purchase Common Shares on attractive terms. We also maintain certain broad-based employee welfare benefit plans in which the executive officers are generally permitted to participate on terms that are either substantially similar to those provided to all other participants or which provide our executives with enhanced benefits upon their death or disability. We also maintain a supplemental disability plan designed to ensure disability payments to our officers in the event payments are unavailable from our disability insurer.

Our Compensation Decision-Making Process

Role of Compensation Committee. The Compensation Committee of our Board establishes, evaluates and monitors our executive compensation programs, subject to the Board’s oversight. Specifically, the Committee (or a subcommittee thereof) approves the compensation payable to each executive officer, as well as any other “senior officer” as defined in the Committee’s charter.

As described further below, the Compensation Committee’s compensation decision-making process requires a careful balancing of a wide range of factors, including:

• the group and individual performance and responsibilities of our executives,

• the competitive compensation practices of peer companies,

• the performance of our Company in relation to our peers and our internal goals,

• the financial impact and risk characteristics of our compensation programs, and

• our strategic and financial imperatives.

The Compensation Committee also establishes, implements, administers and monitors our director cash and equity compensation programs. For more information, see “Director Compensation.

Since acquiring Embarq, Qwest and Savvis over the past couple of years, the Committee has focused generally on comprehensively reviewing our compensation philosophy, strategies, policies and practices to ensure they:

• are appropriate for the larger combined company,

• further link our pay to company performance,

• further reflect prevailing “best practices,” and

• enhance the integration of these acquired companies and their pay practices into the operations and pay practices of the Company.

Role of Compensation Consultants. The Committee engages the services of a compensation consultant to assist in the design and review of executive compensation programs, to determine whether the Committee’s philosophy and practices are reasonable and compatible with prevailing practices, and to provide guidance on specific compensation levels based on industry trends and practices.

The Committee has used Hay Group as its compensation consultant since September 2010. Throughout 2012, representatives of Hay Group actively participated in the design and development of our executive compensation programs, and attended all of the Committee’s meetings. Hay Group provides no other services to the Company, and has no prior relationship with any of our named executive officers. As required by current SEC rules and currently pending New York Stock Exchange listing standards, the Committee has assessed the independence of Hay Group and concluded that its work has not raised any conflicts of interest.

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Review Process. Each year, the Committee and its compensation consultant use benchmarking data to determine median levels of salary, annual bonuses and equity compensation paid to executives comparable to ours. In determining how much to compensate each officer, the Committee also extensively reviews a wide range of other factors, typically including:

• the officer’s individual performance, industry experience and particular set of skills,

• the anticipated degree of difficulty of replacing the officer with someone of comparable experience and skill,

• the role the officer plays in maintaining a cohesive management team and improving the performance of others,

• the role the officer may have played in any recent extraordinary corporate achievements,

• the officer’s pay and performance relative to other officers and employees,

• the officer’s prior compensation in recent years and, to a limited degree, his or her accumulated wealth under our programs,

• the financial community’s assessment of management’s performance, and

• the recent and long-term performance of CenturyLink.

In assessing our performance, we typically review how various measures of our financial performance relate to amounts previously projected by us or market participants, as well as the results of peer telecommunications companies. We also assess operational benchmarks, such as our access line losses or customer growth in relation to our competitors.

Each year, we compile lists of compensation data relating to each of our executives. These “tally sheets” include the executives’ salary, annual cash incentive award, equity-based compensation, perquisites, pension benefit accruals and other compensation. These tally sheets also show the executives’ holdings of our Common Shares and accumulated unrealized gains under prior equity-based compensation awards. The Compensation Committee uses these tally sheets to (i) review the total annual compensation of the executive officers, (ii) assess the executive officers’ wealth accumulation from our compensation programs and (iii) assure that the Committee has a comprehensive understanding of all elements of our compensation programs.

Annual Bonus Procedures. With the assistance of management and its compensation consultant, the Compensation Committee sets bonus targets annually, and, under special circumstances, more frequently than annually. For several years, the Committee has administered our annual bonus program substantially in the manner outlined above under “— Annual Incentive Bonuses.” The Committee is responsible for approving for each year (i) the performance objectives, (ii) the “minimum,” “target” and “maximum” threshold levels of performance, (iii) the weighing of the performance objectives, (iv) the amount of bonus payable if the target level of performance is attained and (v) the finally determined amount of the bonus payments. Upon completion of the fiscal year, our actual operating results are adjusted in accordance with the Committee’s long-standing written procedures designed to eliminate the effects of extraordinary or non-recurring transactions that were not known, anticipated or quantifiable on the date the performance goals were established. Then the specific bonus payments are calculated for that fiscal year using the formulas approved the prior year by the Committee. After our Internal Audit Department has reviewed these determinations and calculations, they are provided in writing to the Committee for its review and approval.

We generally seek to base a significant portion of our executives’ annual cash incentive compensation principally upon our company-wide performance. Officers and managers with lower levels of responsibility typically receive incentive compensation that places a greater emphasis on individual, departmental or divisional goals.

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Under our annual bonus programs, the Committee may pay the annual bonuses in cash or stock. Since 2000, the Committee has paid these bonuses entirely in cash, principally to diversify our compensation mix and prevent us from over-utilizing equity grants.

Annual Equity Grant Procedures. As explained further above, annual grants of stock awards to executives are typically made during the first quarter after we publicly release our earnings. Grants of stock awards to newly-hired executive officers who are eligible to receive them are made at the next regularly scheduled Committee meeting following their hire date. Although we are not currently granting options, we maintain policies controlling when and how option exercise prices are determined. These policies are summarized in our prior proxy statements. We award our executives with a greater proportion of their total compensation in the form of equity grants compared to more junior officers.

Role of CEO and Management in Compensation Decisions. Although the Compensation Committee is responsible for all executive compensation decisions, each year it receives the CEO’s recommendations, particularly with respect to executive salaries. The Committee, in particular, values the CEO’s input and judgment regarding:

• the relative strengths and weakness of the other executives and their recent performance,

• the role these executives play in achieving our operational and strategic goals,

• the potential of these executives to assume different, additional or greater responsibilities in the future,

• internal equity issues that could impact cohesion, teamwork or the overall viability of the executive group, and

• the relative vulnerability of executives to job solicitations from competitors.

The Committee considers the CEO’s recommendations as one of the many factors it uses to establish compensation levels for each executive.

The CEO is also responsible for approving the annual salaries and bonuses of our non-senior officers, including approval of appropriate annual performance goals for such officers. The CEO also approves all equity compensation awards to the non-senior officers, acting under authority delegated by the Compensation Committee in accordance with our shareholder approved long-term incentive plans. The Committee oversees these processes and receives an annual report from the CEO.

The CEO and the executive management team, in consultation with the Compensation Committee’s compensation consultant, recommend to the Compensation Committee business goals to be used in establishing incentive compensation performance targets. In addition, our Senior Vice President, Human Resources, works closely with the Committee and its compensation consultant to ensure that the Committee is provided with appropriate information to discharge its responsibilities.

Assessment of “Say on Pay” Voting Results. As noted above, in May 2012 over 97% of the votes cast by our shareholders with respect to our “say on pay” proposal were favorable. In connection with making executive compensation decisions since May 2012, the Committee has taken note of this vote, and concluded that shareholders are generally satisfied with the scope and structure of our compensation programs. Nonetheless, the Committee has continued to change and refine these programs in an effort to further promote the goals of our executive compensation philosophy described above.

Risk Assessment. As part of its duties, the Compensation Committee assesses risks arising out of our employee compensation policies and practices. Based on its most recent assessment, the Committee does not believe that the risks arising from our compensation policies and practices are reasonably likely to materially adversely affect us. In reaching this determination, we have taken into account the risk exposures of our operations and the following design elements of our compensation programs and policies:

• our balance of annual and long-term compensation elements at the executive and management levels,

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• our use of a diverse mix of performance metrics that create incentives for management to attain goals well aligned with the shareholders’ interests,

• the multi-year vesting of equity awards, which promotes focus on our long-term performance and mitigates the risk of undue focus on our short-term results,

• “claw-back” policies and award caps that provide safeguards against inappropriate behavior, and

• bonus arrangements that are generally subject to the “negative discretion” of either the Committee (for senior officers) or senior management (for other key employees).

We believe these features, as well as the stock ownership requirements for our executive officers, result in a compensation program that aligns our executives’ interests with those of our shareholders and does not promote excessive risk-taking on the part of our executives or other employees.

Forfeiture of Prior Compensation

For over 10 years, all recipients of our equity compensation grants have been required to contractually agree to forfeit certain of their awards (and to return to us any cash, securities or other assets received by them upon the sale of Common Shares they acquired through certain prior equity awards) if at any time during their employment with us or within 18 months after termination of employment they engage in activity contrary or harmful to our interests. The Compensation Committee is authorized to waive these forfeiture provisions if it determines in its sole discretion that such action is in our best interests. We have filed with the SEC copies of our form of equity incentive agreements containing these forfeiture provisions. Our 2010 Executive Officers Short-Term Incentive Plan contains substantially similar forfeiture provisions.

In addition, our Corporate Governance Guidelines authorize the Board to recover, or “clawback,” compensation from an executive officer if the Board determines that any bonus, incentive payment, equity award or other compensation received by the executive was based on any financial or operating result that was impacted by the executive’s knowing or intentional fraudulent or illegal conduct. In addition, certain laws enacted in 2002 would require our CEO and CFO to reimburse us for incentive compensation paid or trading profits earned following the release of financial statements that are subsequently restated due to material noncompliance with SEC reporting requirements caused by misconduct. Additional laws enacted in 2010, which are expected to become effective over the next year, will require all of our current or former executive officers to make similar reimbursement payments in connection with certain financial statement restatements, irrespective of whether such executives were involved with the mistake that caused the restatement.

Stock Ownership Guidelines

Under our current stock ownership guidelines, the CEO is required to beneficially own CenturyLink stock equal in market value to at least six times his annual base salary, and all other executive officers are required to beneficially own CenturyLink stock valued at least three times their annual base salary. Each executive officer has three years to attain these targets.

Under our director stock ownership guidelines, each outside director must beneficially own CenturyLink stock equal in market value to five times the annual cash retainer payable to outside directors. Each outside director has five years from the date they are elected or appointed to attain this target.

For any year during which an executive or outside director does not meet his or her ownership target, the executive or director is expected to hold 65% of the CenturyLink stock that he or she acquires through our equity compensation programs, excluding shares sold to pay related taxes.

All of our officers and directors are currently in compliance with our stock ownership guidelines. For additional information on our stock ownership guidelines, see “Governance Guidelines.”

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Use of Employment Agreements

We have a long-standing practice of not providing employment agreements to our officers, and none of our long-standing executives has been granted an employment agreement. In connection with our recent mergers, however, we have assumed several employment agreements formerly granted by Embarq, Qwest or Savvis to its officers, and in a couple of instances have extended or renewed these arrangements to retain officers critical to our integration plans.

Tax Gross-ups

We eliminated the use of tax “gross-up” benefits in our executives’ change of control agreements and split-dollar insurance policies in 2010, and in our outside directors’ executive physical program in early 2012. Consequently, we continue to provide these tax benefits only to a limited number of our officers under legacy employment agreements that are expected to lapse over the next couple of years. We do not intend to provide tax gross-up benefits in any new compensation programs.

Anti-Hedging and Anti-Pledging Policies

Under our insider trading policy, our employees and directors may not:

• purchase or sell short-term options with respect to CenturyLink shares,

• engage in “short sales” of CenturyLink shares, or

• engage in hedging transactions involving CenturyLink shares which allow employees to fix the value of their CenturyLink shareholdings without all the risks of ownership or cause them to no longer have the same interests or objectives as our other shareholders.

In addition, under our insider trading policy, our senior officers and directors are prohibited from holding our securities in a margin account or otherwise pledging our securities as collateral.

All of our senior officers and directors are currently in compliance with our anti-hedging and anti-pledging policies.

Other Compensation Matters

To the extent that it is practicable and consistent with our executive compensation objectives, we seek to comply with Section 162(m) of the Internal Revenue Code and the regulations adopted thereunder to enable us to claim the tax deductibility of performance-based compensation in excess of $1 million per taxable year to our senior officers. However, if compliance with Section 162(m) conflicts with our compensation objectives or is contrary to the best interests of the shareholders, we will pursue those objectives, regardless of the attendant tax implications. In each of the last several years, we granted time-vested restricted stock that did not qualify as performance-based compensation under Section 162(m). As described further above, we also paid a small portion of our 2012 annual incentive bonuses on terms that did not comply with Section 162(m). In 2013, we took certain steps designed to increase the portion of our executive compensation eligible for favorable tax treatment under Section 162(m). You should be aware, however, that Section 162(m) is highly technical and complex, so that even when we seek favorable tax treatment thereunder, we cannot assure you that our tax position will prevail.

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COMPENSATION COMMITTEE REPORT

The Compensation Committee has reviewed and discussed with management the report included above under the heading “Compensation Discussion and Analysis.” Based on this review and discussion, the Compensation Committee recommended to the Board that the Compensation Discussion and Analysis report be included in this proxy statement and incorporated into our Annual Report on Form 10-K for the year ended December 31, 2012.

Submitted by the Compensation Committee of the Board of Directors.

Laurie A. Siegel (Chair)	Virginia Boulet
Fred R. Nichols	William A. Owens
Harvey P. Perry

EXECUTIVE COMPENSATION

Overview

The following table sets forth certain information regarding the compensation of (i) our principal executive and financial officers and (ii) each of our three most highly compensated executive officers other than our principal executive and financial officers. Following this table is additional information regarding incentive compensation, pension benefits, deferred compensation and potential termination payments pertaining to the named officers. For additional information on the compensation summarized below and other benefits, see “Compensation Discussion and Analysis.”

Summary Compensation Table

Name and Principal Position	Year		Salary		Restricted Stock Awards(1)		Non-Equity Incentive Plan Compensation(2)		Change in Pension Value(3)		All Other Compensation(4)		Total
Glen F. Post, III     Chief Executive Officer and President		2012	$	1,047,606	$	5,157,049	$	1,767,836	$	649,156	$	103,392	$	8,725,040
		2011		1,020,800		4,706,735		1,224,960		383,282		317,667		7,653,445
		2010		1,020,800		9,590,821		1,888,480		661,938		406,336		13,568,375
Karen A. Puckett     Executive Vice President		2012		684,562		2,250,332		1,015,837		411,822		42,838		4,405,391
		2011		663,872		2,053,858		772,022		210,954		126,342		3,827,048
and Chief Operating Officer		2010		663,872		3,562,356		835,151		300,080		76,785		5,438,245
R. Stewart Ewing, Jr.     Executive Vice		2012		616,105		1,744,036		914,696		415,853		38,595		3,729,286
		2011		598,764		1,591,731		696,306		259,685		178,779		3,325,265
President and Chief Financial Officer		2010		598,764		2,936,202		753,245		378,544		331,901		4,998,656
David D. Cole     Senior Vice President —		2012		448,790		1,293,966		528,525		359,479		38,012		2,668,771
		2011		435,380		1,180,951		406,389		202,594		86,806		2,312,120
Controller and Operations Support		2010		435,380		2,062,049		418,835		257,598		83,973		3,257,836
Stacey W. Goff		2012		450,096		1,293,966		526,336		220,263		15,965		2,506,626
Executive Vice President, General Counsel and Secretary

(1) The amounts shown in this column reflect the fair value of (i) awards of restricted stock made in early 2012, 2011 and 2010 in connection with our program of making annual long-term incentive compensation grants and (ii) additional awards of restricted stock made in August 2010 in connection with a retention program designed to incentivize and retain our top personnel through the completion date of the Qwest acquisition and the initial integration period thereafter. The fair value of the awards presented in the table above have

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been determined in accordance with FASB ASC Topic 718 (formerly SFAS 123(R)). For purposes of this table, we determined (i) the value of time-vested restricted shares granted in 2012 using the closing trading price of our Common Shares on the business day immediately preceding the date of grant (which was a holiday), (ii) the value of time-vested restricted shares granted in 2010 and 2011 using a 15-trading day volume-weighted average closing price of our Common Shares and (iii) the value of performance-based restricted shares granted during each year indicated as of the grant date based on probable outcomes using Monte Carlo simulations in accordance with SEC rules. The aggregate value of the restricted stock awards granted to these named executives in 2012, based on the grant date closing trading price of our Common Shares and assuming maximum payout of his or her performance-based restricted shares, would be as follows: Mr. Post, $6,930,607, Ms. Puckett, $3,024,237, Mr. Ewing, $2,343,822, Mr. Cole, $1,738,982, and Mr. Goff, $1,738,982. See footnote 9 titled “Share-based Compensation” of the notes to our audited financial statements included in Appendix A for an explanation of material assumptions that we used to calculate the fair value of these stock awards.

(2) The amounts shown in this column reflect (i) cash payments made under our annual incentive bonus plans for actual performance in the respective years (which are described further under “— Incentive Compensation and Other Awards — 2012 Awards”) and (ii) the portion of Ms. Puckett’s, Mr. Ewing’s, Mr. Cole’s and Mr. Goff’s August 2010 deferred cash award that was paid during 2012 (which are described further under “Compensation Discussion and Analysis — 2010 and 2011 Retention Grants — Qwest Merger”).

(3) Reflects the net change during each of the years reflected in the present value of the executives’ accumulated benefits under the defined benefit plans discussed under “— Pension Benefits.”

(4) The amounts shown in this column are comprised of (i) reimbursements for the cost of an annual physical examination, (ii) personal use of our aircraft, (iii) contributions or other allocations to our defined contribution plans, (iv) the payment of premiums on life insurance policies and (v) cash payments to compensate the executives for any taxes incurred upon receipt of such life insurance premium payments (which is a benefit that was terminated as of January 1, 2011), in each case for and on behalf of the named officers as follows:

Name	Year		Physical Exam		Aircraft Use		Contributions to Plans		Life Insurance Premiums Paid		Tax Reimbursement Payments		Total
Mr. Post		2012	$	2,620	$	15,341	$	85,430	$	—	$	—	$	103,392
		2011		3,201		20,846		102,021		191,599		—		317,667
		2010		3,264		6,940		74,926		191,599		129,606		406,336
Ms. Puckett		2012		—		—		42,838		—		—		42,838
		2011		3,469		—		51,572		71,301		—		126,342
		2010		—		2,420		3,064		42,531		28,770		76,785
Mr. Ewing		2012		—		—		38,595		—		—		38,595
		2011		—		—		47,436		131,343		—		178,779
		2010		—		—		37,425		175,655		118,821		331,901
Mr. Cole		2012		6,577		6,272		25,163		—		—		38,012
		2011		—		—		29,981		56,825		—		86,806
		2010		—		—		27,148		33,896		22,929		83,973
Mr. Goff		2012		—		1,194		14,771		—		—		15,965

In accordance with applicable SEC and accounting rules, we have not reflected the accrual or payment of dividends relating to unvested restricted stock as “All Other Compensation” in the summary compensation table, and we have restated herein the amounts of our 2010 and 2011 “All Other Compensation” reported in our prior proxy statements to conform to this reporting standard. In addition, the amounts shown in the chart above do not reflect any benefits associated with participating in recreational activities scheduled during board retreats. For additional information, see “Compensation Discussion and Analysis — Other Benefits — Perquisites.” We expect to resume the payment of life insurance premiums in 2013.

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Incentive Compensation and Other Awards

2012 Awards. The table and discussion below summarizes:

• the range of potential payouts under incentive bonus awards that were granted to each named officer in March 2012 with respect to performance during 2012, and

• grants of time-vested restricted stock and the range of potential payouts under grants of performance-based restricted stock, in each case made to each named officer during February 2012 as long-term incentive compensation.

Grants of Plan-Based Awards

Name	Type of Award and Grant Date(1)	Range of Payouts Under 2012 Non- Equity Incentive Plan Awards(2)						Estimated Future Share Payouts Under Equity Incentive Plan Awards(3)						All other Stock Awards: Unvested Shares (#)(4)		Grant Date Fair Value of Stock Awards ($)(5)
		Threshold ($)		Target ($)		Maximum ($)		Threshold (#)		Target (#)		Maximum (#)
Glen F. Post, III	Annual Bonus	$	654,754	$	1,309,508	$	2,619,016		—		—		—		—	$	—
	T-V Grant (2/20/12)		—		—		—		—		—		—		58,843		2,278,401
	P-B Grant (2/20/12)		—		—		—		29,422		58,844		117,688		—		2,878,648
Karen A. Puckett	Annual Bonus		290,939		581,877		1,163,755		—		—		—		—		—
	T-V Grant (2/20/12)		—		—		—		—		—		—		25,677		994,213
	P-B Grant (2/20/12)		—		—		—		12,839		25,677		51,354		—		1,256,119
R. Stewart Ewing, Jr.	Annual Bonus		261,845		523,690		1,047,379		—		—		—		—		—
	T-V Grant (2/20/12)		—		—		—		—		—		—		19,900		770,528
	P-B Grant (2/20/12)		—		—		—		9,950		19,900		39,800		—		973,508
David D. Cole	Annual Bonus		145,857		291,713		583,427		—		—		—		—		—
	T-V Grant (2/20/12)		—		—		—		—		—		—		14,764		571,662
	P-B Grant (2/20/12)		—		—		—		7,383		14,765		29,530		—		722,304
Stacey W. Goff	Annual Bonus		146,281		292,562		585,125		—		—		—		—		—
	T-V Grant (2/20/12)		—		—		—		—		—		—		14,764		571,662
	P-B Grant (2/20/12)		—		—		—		7,383		14,765		29,530		—		722,304

(1) “T-V” means “Time-Vested” and “P-B” means “Performance-Based.”

(2) These columns provide information on the potential bonus payouts approved with respect to 2012 performance. For information on the actual amounts paid based on 2012 performance criteria, see the column of the Summary Compensation Table labeled “Non-Equity Incentive Plan Compensation.” As described further below, the failure to meet the “threshold” level of performance would result in no annual bonus payment.

(3) Represents performance-based shares of restricted stock granted on February 20, 2012 to each named executive, as described in greater detail below.

(4) Represents time-vested shares of restricted stock granted on February 20, 2012, as described in greater detail below.

(5) Calculated in accordance with FASB ASC Topic 718 (formerly SFAS 123 (R)). During 2012, we valued restricted shares using (i) the closing trading price of our Common Shares for all time-vested shares issued to our named officers and (ii) values derived based on probable outcomes using Monte Carlo simulations for all performance-based restricted shares issued to our named officers. For additional information, see note 1 to the Summary Compensation Table above.

Terms of 2012 Restricted Stock Awards. The restricted stock issued to our executive officers on February 20, 2012 consisted of awards of time-vested restricted stock and performance-based restricted stock.

For each named officer, the shares of time-vested restricted stock will vest in three equal installments on February 20 of 2013, 2014 and 2015, subject to the named officer’s continued employment with us.

For each named officer, the performance-based restricted shares will, subject to the named officer’s continued employment, vest on March 31, 2015, based on our three-year total shareholder return for 2012, 2013 and 2014, as measured against total shareholder return of the S&P 500 companies for the same three-year period.

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In addition to the vesting described above, all of these time-vested restricted shares and performance-based restricted shares awarded in 2012 also vest upon the death or disability of the named officer, and some or all of these shares may under certain circumstances vest or remain subject to future vesting upon the retirement of the named officer at his or her early or normal retirement age. In addition, upon certain terminations of employment following a change of control of the Company, the 2012 time-vested restricted shares will vest and the performance-based restricted shares will remain subject to future vesting, all as described in greater detail below under “— Potential Termination Payments.” Except as otherwise noted below under “— Outstanding Awards”, the vesting terms for our outstanding restricted stock granted in earlier years is the same as noted above, except that shares of time-vested restricted stock granted before 2011 automatically accelerate upon a change of control.

In the preceding “Grants of Plan-Based Awards” table, the number of performance-based restricted shares listed under the “target” column for each named executive officer represents the number of shares actually granted to that officer and that will vest if we perform at the targeted performance level, which is attaining total shareholder return over the three-year performance period equal to the 50th percentile of the total shareholder return of the companies comprising the S&P 500 Index for the same three-year period. Each named executive officer will receive a greater or lesser number of shares depending on our actual total shareholder return in relation to that of the S&P 500 companies, as illustrated further below:

Performance Level	Company’s Percentile Rank	Payout as % of Target Award
Maximum	³ 75th percentile		200	%
Target	50th percentile		100	%
Threshold	25th percentile		50	%
Below Threshold	< 25th percentile		0	%

Amounts will be prorated if our rank is between (i) the threshold and the target amounts or (ii) the target and the maximum amounts. In no event, however, will more than 100% of the performance-based restricted shares vest if our total shareholder return for the three-year period is negative. Any contingent right of a named executive officer to receive more than the number of shares actually granted are treated by us as restricted stock units under the terms of the CenturyLink 2011 Equity Incentive Plan.

All dividends related to the above-described time-vested and performance-based restricted shares will be paid to the holder only upon the vesting of such shares. Unless and until forfeited, these shares may be voted by the named executive officers.

All of these above-described restricted shares are subject to forfeiture if the officer competes with us or engages in certain other activities harmful to us, all as specified further in the forms of incentive agreements that we have filed with the SEC. See “— Potential Termination Payments.”

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Outstanding Awards. The table below summarizes information on stock options and unvested restricted stock outstanding at December 31, 2012.

Outstanding Equity Awards at December 31, 2012⁽¹⁾

	Option Awards							Stock Awards
								Equity Incentive Plan Awards(3)						All Other Stock Awards
Name	Number of Securities Underlying Unexercised Options(2)			Option Exercise Price ($)		Option Expiration Date		Grant Date		Unvested Shares (#)		Market Value of Unvested Shares ($)		Unvested Shares  (#)(4)		Market Value of Shares that Have Not Vested
Glen F. Post, III		200,000		$	45.90		2/26/2017		2/21/2008		—	$	—		25,478	$	996,699
									3/08/2010		31,600		1,236,192		21,067		824,141
									8/23/2010		—		—		84,878		3,320,427
									5/31/2011		52,707		2,061,898		35,138		1,374,599
									2/20/2012		58,844		2,301,977		58,843		2,301,938
Karen A. Puckett		75,000			45.90		2/26/2017		2/21/2008		—		—		9,555		373,792
									3/08/2010		13,790		539,465		9,193		359,630
									8/23/2010		—		—		25,531		998,773
									5/31/2011		23,000		899,760		15,333		599,827
									2/20/2012		25,677		1,004,484		25,677		1,004,484
R. Stewart Ewing, Jr.		22,500	(5)		28.34		2/25/2014		2/21/2008		—		—		7,962		311,473
		62,100	(5)		33.40		2/17/2015		3/08/2010		10,687		418,075		7,125		278,730
		62,500			35.41		2/20/2016		8/23/2010		—		—		23,028		900,855
		62,500			45.90		2/26/2017		5/31/2011		17,825		697,314		11,883		464,863
									2/20/2012		19,900		778,488		19,900		778,488
David D. Cole		40,500			45.90		2/26/2017		2/21/2008		—		—		5,160		201,859
									3/08/2010		7,929		310,182		5,286		206,788
									8/23/2010		—		—		14,933		584,218
									5/31/2011		13,225		517,362		8,816		344,882
									2/20/2012		14,765		577,607		14,764		577,568
Stacey W. Goff		40,500			45.90		2/26/2017		2/21/2008		—		—		5,160		201,859
									3/08/2010		7,929		310,182		5,286		206,788
									8/23/2010		—		—		14,563		569,705
									5/31/2011		13,225		517,362		8,816		344,882
									2/20/2012		14,765		577,607		14,764		577,568

(1) All information on exercisability, vesting and market value is solely as of December 31, 2012. This table does not reflect (i) exercises of options, vesting of restricted stock or other changes in the equity awards since such date or (ii) any additional equity grants since such date.

(2) We have not granted options to executives since 2007; all of the options summarized under this column were exercisable as of December 31, 2012.

(3) Represents performance-based restricted shares granted on March 8, 2010, May 31, 2011 and February 20, 2012. The chart above assumes that we will perform at “target” levels such that all performance-based shares granted to each named executive will vest fully. For additional information on the vesting and other terms of our most recent grant of performance-based restricted shares, see “— 2012 Awards” and “— Terms of 2012 Restricted Stock Awards.”

(4) All shares listed under this column with a 2008 grant date are shares of time-vested restricted stock that vest at a rate of 20% per year during the first five years after their grant date. All other shares listed under this column are shares of time-vested restricted stock that generally vest at a rate of one-third per year during the first three years after that grant date. For additional information on the vesting and other terms of our most recent grant of time-vested restricted shares, see “— Terms of 2012 Restricted Stock Awards.”

(5) All of these options expiring in 2014 and 41,500 of these options expiring in 2015 were held by Mr. Ewing’s ex-wife as of December 31, 2012.

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2012 Exercises and Vesting. The following table provides information on Common Shares acquired by the named officers during 2012 in connection with the exercise of options and the vesting of restricted stock.

Option Exercises and Stock Vested

	Option Awards				Stock Awards
Name	Number of Shares Acquired on Exercise		Value Realized On Exercise		Number of Shares Acquired on Vesting		Value Realized on Vesting(1)
Glen F. Post, III		—		—		196,158	$	7,716,349
Karen A. Puckett		—		—		74,579		2,935,400
R. Stewart Ewing, Jr.		—		—		61,292		2,412,057
David D. Cole		—		—		41,905		1,648,819
Stacey W. Goff		—		—		41,720		1,641,669

(1) Based on the closing trading price of the Common Shares on the applicable exercise or vesting date.

Pension Benefits

Amount of Benefits. The following table and discussion summarizes pension benefits payable to the named officers under (i) our legacy retirement plan qualified under Internal Revenue Code Section 401(a), which permits eligible participants (including officers) who have completed at least five years of service to receive a pension benefit upon attaining early or normal retirement age, and (ii) our nonqualified supplemental plan, which is designed to pay supplemental retirement benefits to certain officers in amounts equal to the benefits such officers would otherwise forego due to federal limitations on compensation and benefits under qualified plans. We refer to these particular defined benefit plans below as our Qualified Plan and our Supplemental Plan, respectively, and as our “Pension Plans,” collectively.

Name	Plan Name	Number of Years of Credited Service		Present Value of Accumulated Benefit(1)		Payments During Last Fiscal Year
Glen F. Post, III	Qualified Plan		14	$	1,705,808		—
	Supplemental Plan		14		1,863,458		—
Karen A. Puckett	Qualified Plan		13		1,042,257		—
	Supplemental Plan		13		740,758		—
R. Stewart Ewing, Jr.	Qualified Plan		14		1,780,528		—
	Supplemental Plan		14		759,086		—
David D. Cole	Qualified Plan		14		1,400,677		—
	Supplemental Plan		14		363,240		—
Stacey W. Goff	Qualified Plan		14		565,060		—
	Supplemental Plan		14		314,141		—

(1) These figures represent accumulated benefits as of December 31, 2012 based on several assumptions, including the assumption that the executive remains employed by us and begins receiving retirement benefits at the normal retirement age of 65, with such accumulated benefits being discounted from the normal retirement age to December 31, 2012 using discount rates ranging between 4.25% to 5.10%. No adjustments have been made to reflect reductions required under any qualified domestic relations orders. See Note 8 titled “Employee Benefits” of the notes to our audited financial statements included in Appendix A for additional information.

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CenturyLink Pension Plans. With limited exceptions specified in the Pension Plans, we “froze” our Qualified Plan and Supplemental Plan as of December 31, 2010, which means that no additional monthly pension benefits have accrued under such plans since that date (although service after that date continues to count towards vesting and benefit eligibility and a limited transitional benefit for eligible participants continues to accrue through 2015).

Prior to this freezing of benefit accruals, the aggregate amount of a participant’s total monthly pension benefit under the Qualified Plan and Supplemental Plan was equal to the participant’s years of service since 1999 (up to a maximum of 30 years) multiplied by the sum of (i) 0.5% of his final average pay plus (ii) 0.5% of his final average pay in excess of his compensation subject to Social Security taxes, where “final average pay” was defined as the participant’s average monthly compensation during the 60 consecutive month period within his last ten years of employment in which he received his highest compensation. Effective December 31, 2010, the Qualified Plan and Supplemental Plan were amended to cease all future benefit accruals under the above formula (except where a collective bargaining agreement provides otherwise). In lieu of additional accruals under the above-described formula, each affected participant’s accrued benefit as of December 31, 2010 increases 4% per year, compounded annually through the earlier of December 31, 2015 or the termination of the participant’s employment.

Under both of these CenturyLink retirement plans, “average monthly compensation” is determined based on the participant’s salary plus annual cash incentive bonus. Although the retirement benefits described above are provided through separate plans, we have in the past transferred benefits from the Supplemental Plan to the Qualified Plan, and reserve the right to make further similar transfers to the extent allowed under applicable law. The value of benefits transferred to the Qualified Plan, which directly offset the value of benefits in the Supplemental Plan, will be payable to the recipients in the form of enhanced annuities or supplemental benefits. The enhanced annuities are not part of the normal retirement benefit and were not impacted by the plan freeze.

The normal form of benefit payment under both of the Pension Plans is (i) in the case of unmarried participants, a monthly annuity payable for the life of the participant, and (ii) in the case of married participants, an actuarially equivalent monthly annuity payable for the lifetime of the participant and a survivor annuity payable for the lifetime of the spouse upon the participant’s death. Participants may elect optional forms of annuity benefits under each plan and, in the case of the Qualified Plan, an annuity that guarantees ten years of benefits, all of which are actuarially equivalent in value to the normal form of benefit. The enhanced annuities described in the prior paragraph may be paid in the form of a lump sum, at the participant’s election.

The normal retirement age is 65 under both of the Pension Plans. Participants may receive benefits under both of these plans upon “early retirement,” which is defined as attaining age 55 with five years of service. Under both of these plans, the benefit payable upon early termination is calculated under formulas that pay between 60% to 100% of the base plan benefit and 48% to 92% of the excess plan benefit, in each case with the lowest percentage applying to early retirement at age 55 and proportionately higher percentages applying to early retirement after age 55. For additional information on early retirement benefits, please see the applicable early retirement provisions of the Pension Plans, copies of which are filed with the SEC.

Glen Post, Stewart Ewing and David Cole are currently eligible for early retirement under the Qualified Plan and Supplemental Plan.

Deferred Compensation

The following table and discussion provides information on our Supplemental Dollars & Sense Plan, which is designed to permit officers to defer a portion of their salary in excess of the amounts that may be deferred under federal law governing qualified 401(k) plans.

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Non-Qualified Deferred Compensation

Name	Aggregate Balance at December 31, 2011		Executive Contributions in 2012(1)		CenturyLink Contributions in 2012(2)		Aggregate Earnings in 2012(3)		Aggregate Withdrawals/ Distributions		Aggregate Balance at December 31, 2012
Glen F. Post, III	$	1,776,830	$	189,061	$	77,644	$	298,676		—	$	2,342,210
Karen A. Puckett		729,650		68,840		40,157		100,461		—		939,108
R. Stewart Ewing, Jr.		609,612		50,055		29,845		76,284		—		765,796
David D. Cole		467,369		42,362		17,925		88,538		—		616,194
Stacey W. Goff		662,578		43,195		12,068		84,979		—		802,820

(1) All of these amounts in this column reflect contributions by the officer of salary paid in 2012 and reported as 2012 salary compensation in the Summary Compensation Table.

(2) This column includes our match of the officer’s contribution under the terms of the plan. We have reflected all of these amounts as 2012 compensation in the column of the Summary Compensation Table labeled “All Other Compensation.”

(3) Aggregate earnings in 2012 include interest, dividends and distributions earned with respect to deferred compensation invested by the officers in the manner described in the text below.

Under our Supplemental Dollars & Sense Plan, certain of our senior officers may defer up to 25% of their salary in excess of the federal limit on annual contributions to a qualified 401(k) plan. For every dollar that participants contribute to this plan up to 6% of their excess salary, we add an amount equal to the total matching percentage then in effect for matching contributions made by us under our qualified 401(k) plan (which for 2012 equaled the sum of all of the initial 1% contributed and half of the next 5% contributed). All amounts contributed under this supplemental plan by the participants or us may be invested by the participants in the same broad array of money market and mutual funds offered under our qualified 401(k) plan. Participants may change their investments in these funds at any time. We reserve the right to transfer benefits from the Supplemental Dollars & Sense Plan to our qualified 401(k) or retirement plans to the extent allowed under Treasury regulations and other guidance. The value of benefits transferred to our qualified plans directly offsets the value of benefits in the Supplemental Dollars & Sense Plan. Participants in the Supplemental Dollars & Sense Plan normally receive payment of their account balances in a lump sum once they cease working full-time for us.

Potential Termination Payments

The materials below discuss payments and benefits that our officers are eligible to receive if they (i) resign or retire, (ii) are terminated by us, with or without cause, (iii) die or become disabled or (iv) become entitled to termination benefits following a change of control of CenturyLink.

Notwithstanding the information appearing below, you should be aware that our officers have agreed to forfeit their equity compensation awards (and profits derived therefrom) if they compete with us or engage in other activity harmful to our interests while employed with us or within 18 months after termination. Certain other compensation might also be recoverable by us under certain circumstances after termination of employment. See “Compensation Discussion and Analysis — Forfeiture of Prior Compensation” for more information.

Payments Made Upon All Terminations. Regardless of the manner in which our employees’ employment terminates prior to a change of control, they are entitled to receive amounts earned during their term of employment (subject to the potential forfeitures discussed above). With respect to each such terminated employee, such amounts include his or her:

• salary and earned but unused vacation pay through the date of termination, payable immediately following termination in cash

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• annual incentive bonus, but only if such employee served for the entire bonus period or through the date such bonus is payable (unless this service requirement is waived)

• restricted stock that has vested

• benefits accrued and vested under our qualified and supplemental defined benefit pension plans, with payouts generally occurring at early or normal retirement age

• vested account balance held in our qualified and supplemental defined contribution plans, which the employee is generally free to receive at the time of termination

• rights to continued health care benefits to the extent required by law.

Payments Made Upon Voluntary or Involuntary Terminations. In addition to benefits described under the heading immediately above, employees involuntarily terminated by us without cause prior to a change of control are also entitled, subject to certain conditions, to:

• exercise all vested options within 190 days of the termination date

• keep all unvested time-vested restricted stock if approved by our Compensation Committee

• a cash severance payment in the amount described under “Compensation Discussion and Analysis — Other Benefits — Severance Benefits,” plus the receipt of any short-term incentive bonus payable under their applicable bonus plan and outplacement assistance benefits.

None of the benefits listed immediately above are payable if the employee resigns or is terminated for cause, except that resigning employees are entitled to exercise their vested options within 190 days and employees terminated for cause could request the Compensation Committee to accelerate their unvested time-vested restricted stock (which is unlikely to be granted).

Payments Made Upon Retirement. Employees who retire in conformity with our retirement plans and policies are entitled, subject to certain conditions, to:

• exercise all of their options, all of which accelerate upon retirement, within three years of their retirement date

• keep all unvested time-vested restricted stock if approved by our Compensation Committee

• payment of their annual incentive bonus or a pro rata portion thereof, depending on their retirement date

• post-retirement life, health and welfare benefits

• all of the benefits described under the heading “— Payments Made Upon All Terminations.”

In addition, an employee who retires from the Company will continue to vest in his or her unvested performance-based restricted stock for the remainder of the applicable performance period. If the employee takes early retirement, this continued vesting opportunity only applies to a reduced pro rata number of unvested shares, based on the number of days he or she was employed during the performance period.

Payments Made Upon Death or Disability. Upon death or disability, officers (or their estates) are generally entitled to (without duplication of benefits):

• payments under our disability or life insurance plans, as applicable

• exercise all of their options, all of which accelerate upon death or disability, within two years

• keep all of their time-vested restricted stock, whether vested or unvested

• payment of their annual incentive bonus or a pro rata portion thereof, depending on their date of death or disability

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• continued rights to receive (i) life, health and welfare benefits at early or normal retirement age, in the event of disabilities of employees with ten years of prior service, or (ii) health and welfare benefits payable to surviving eligible dependents, in the event of death of employees meeting certain age and service requirements

• all of the benefits described under the heading “— Payments Made Upon All Terminations,” except that (i) upon death benefits under our retirement plans are generally available only to surviving spouses and (ii) benefits payable to mentally disabled employees under our nonqualified defined benefit retirement plans may be paid prior to retirement age.

Payments Made Upon a Change of Control. We have entered into agreements that entitle each of our executive officers who are terminated without cause or resign under certain specified circumstances within certain specified periods following any change in control of CenturyLink to (i) receive a lump sum cash severance payment equal to a multiple of such officer’s annual cash compensation (defined as salary plus the average annual incentive bonus over the past three years), (ii) receive such officer’s currently pending bonus or pro rata portion thereof, depending on the date of termination, and (iii) continue to receive, subject to certain exceptions, certain welfare benefits for certain specified periods. See “Compensation Discussion and Analysis — Other Benefits — Change of Control Arrangements” for a description of the benefits under our change of control agreements.

Under CenturyLink’s above-referenced agreements, a “change in control” of CenturyLink would be deemed to occur upon (i) any person (as defined in the Securities Exchange Act of 1934) becoming the beneficial owner of 30% or more of the outstanding Common Shares, (ii) a majority of our directors being replaced, (iii) consummation of certain mergers, substantial asset sales or similar business combinations, or (iv) approval by the shareholders of a liquidation or dissolution of CenturyLink.

The above-referenced agreements provide the benefits described above if we terminate the officer without cause or the officer resigns with “good reason,” which we describe further under the heading “Compensation Discussion and Analysis — Other Benefits — Change of Control Arrangements.” We have filed copies or forms of these agreements with the SEC.

In the event of a change in control of CenturyLink, our pre-2011 benefit plans generally provide, among other things, that all restrictions on outstanding restricted stock will lapse. In addition, participants in the supplemental defined benefit plan whose service is terminated within two years of the change in control will receive a cash payment equal to the present value of their plan benefits (after providing age and service credits of up to three years if the participant is terminated by us without cause or resigns with “good reason”), determined in accordance with actuarial assumptions specified in the plan. Certain account balances under our qualified retirement plans will also fully vest upon a change of control of CenturyLink.

Under the terms of our 2011 Equity Incentive Plan, incentives granted thereunder will not vest, accelerate, become exercisable or be deemed fully paid unless otherwise provided in a separate agreement, plan or instrument. None of our equity award agreements since 2011 have provided for any such accelerated recognition of benefits solely upon a change of control. Instead, our current award agreements provide that any holder of incentives who is terminated by us or our successor without cause or resigns with good reason following a change of control will be entitled to receive full vesting of his or her time-vested restricted shares and continued rights under his or her performance-based restricted shares (on the same terms as if he or she had not been terminated).

Estimated Potential Termination Payments. The table below provides estimates of the value of payments and benefits that would become payable if our current executives named below were terminated in the manner described below, in each case based on various assumptions, the most significant of which are described in the table’s notes.

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Potential Termination Payments

		Type of Termination of Employment(1)
Name	Type of Termination Payment(2)	Involuntary Termination Without Cause(3)		Retirement(4)		Disability		Death		Termination Upon a Change of Control(5)
Glen F. Post, III	Annual Bonus	$	1,767,836	$	1,767,836	$	1,767,836	$	1,767,836	$	1,767,836
	Equity Awards(6)		—		12,097,025		14,417,872		14,417,872		14,417,872
	Pension and Welfare(7)		34,100		—		—		—		240,057
	Cash Severance(8)		4,950,000		—		—		—		8,141,991
		$	6,751,936	$	13,864,861	$	16,185,708	$	16,185,708	$	24,567,756
Karen A. Puckett	Annual Bonus	$	785,535		—	$	785,535	$	785,535	$	785,535
	Equity Awards(6)		—		—		5,780,195		5,780,195		5,780,195
	Pension and Welfare(7)		26,300		—		—		—		46,200
	Cash Severance(8)		1,341,250		—		—		—		2,879,966
		$	2,153,085		—	$	6,565,730	$	6,565,730	$	9,491,896
R. Stewart Ewing, Jr.	Annual Bonus	$	706,981	$	706,981	$	706,981	$	706,981	$	706,981
	Equity Awards(6)		—		3,843,410		4,628,287		4,628,287		4,628,287
	Pension and Welfare(7)		22,000		—		—		—		70,479
	Cash Severance(8)		1,202,500		—		—		—		2,588,738
		$	1,931,481	$	4,550,390	$	5,335,268	$	5,335,268	$	7,994,485
David D. Cole	Annual Bonus	$	393,813	$	393,813	$	393,813	$	393,813	$	393,813
	Equity Awards(6)		—		2,738,139		3,320,466		3,320,466		3,320,466
	Pension and Welfare(7)		28,400		—		—		—		115,756
	Cash Severance(8)		783,750		—		—		—		1,667,049
		$	1,205,963	$	3,131,952	$	3,714,279	$	3,714,279	$	5,497,085
Stacey W. Goff	Annual Bonus	$	394,959		—	$	394,959	$	394,959	$	394,959
	Equity Awards(6)		—		—		3,305,953		3,305,953		3,305,953
	Pension and Welfare(7)		28,400		—		—		—		50,600
	Cash Severance(8)		825,000		—		—		—		1,706,361
		$	1,248,359		—	$	3,700,912	$	3,700,912	$	5,457,873

(1) All data in the table reflects estimates of the value of payments and benefits assuming the named officer was terminated on December 31, 2012. The closing price of the Common Shares on such date was $39.12. The table reflects only estimates of amounts earned or payable through or at such date based on various assumptions. Actual amounts can be determined only at the time of termination. If a named officer voluntarily resigns or is terminated with cause, he or she will not be entitled to any special or accelerated benefits, but will be entitled to receive various payments or benefits that vested before the termination date. The table reflects potential payments based upon a physical disability; additional benefits may be payable in the event of a mental disability.

(2) As further described above, upon termination of employment, the named officers may become entitled to receive certain special, accelerated or enhanced benefits, including, subject to certain exceptions, the right to receive payment of their annual cash incentive bonus, an acceleration under certain circumstances of the vesting of their outstanding equity awards, current or enhanced pension and welfare benefits, or cash severance payments. The table excludes (i) payments or benefits made under broad-based plans or arrangements generally available to all salaried full-time employees and (ii) benefits, awards or amounts that the officer was entitled to receive prior to termination of employment.

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(3) The amounts listed in this column reflect payments to which the named officer would be entitled to under our executive severance plan if involuntarily terminated by us without cause. The amounts listed in this column would not be payable if the officer voluntarily resigns or is terminated for cause.

(4) Of the named officers, only Messrs. Post, Ewing and Cole are eligible to retire early under CenturyLink’s defined benefit pension plans described above under the heading “Executive Compensation — Pension Benefits.” The amounts reflected under the “Retirement” column do not reflect the amount of lifetime annuity payments payable upon early retirement. Assuming early retirement as of December 31, 2012, Messrs. Post, Ewing and Cole would have been entitled to monthly annuity payments of approximately $22,026, $15,263 and $8,745, respectively, over their lifetimes, some of which, in the case of Mr. Ewing, may be payable to his ex-wife under a qualified domestic relations order. For further information, see the other footnotes below.

(5) The information in this column assumes each named officer became entitled at December 31, 2012 to the benefits under CenturyLink’s agreements in existence on such date described above under “— Payments Made Upon a Change of Control” upon an involuntary termination without cause or resignation with good reason. As described further under such heading, a small portion of these benefits will accrue immediately upon a change of control, regardless of whether the officer’s employment terminates. All amounts are based on several assumptions.

(6) The information in this row (i) reflects the benefit to the named officer arising out of the accelerated vesting of some or all of his or her restricted stock caused by the termination of employment (or in certain cases a change of control), based upon the intrinsic method of valuation, (ii) assumes that the Compensation Committee would not approve the acceleration of the named officer’s restricted stock in the event of an involuntary termination, and (iii) assumes that the Compensation Committee would approve the acceleration of such restricted stock in the event of the early retirement of Messrs. Post, Ewing or Cole.

(7) The information in this row reflects only the incremental benefits that accrue upon an event of termination, and excludes benefits that were vested on December 31, 2012. For information on the present value of the named officers’ accumulated benefits under our defined benefit pension plans, see “— Pension Benefits,” and for information on the aggregate balances of the named officers’ non-qualified deferred compensation, see “— Deferred Compensation.” As indicated above, the named officer would also be entitled to receive a distribution of his or her 401(k) benefits and various other broad-based benefits.

(8) The information in this row excludes, in the case of disability or death, payments made by insurance companies.

DIRECTOR COMPENSATION

Overview

The Board believes that each director who is not employed by us (whom we refer to as outside directors or non-management directors) should be compensated through a mix of cash and equity-based compensation, which most recently has been granted in the form of restricted stock. The Compensation Committee, consisting entirely of independent directors, has primary responsibility for periodically reviewing and considering any revisions to director compensation. The Board reviews the Compensation Committee’s recommendations and determines the amount of director compensation. Since being retained by the Compensation Committee in 2010, Hay Group has assisted the committee in reviewing director compensation.

In late 2011, the Compensation Committee concluded that our director compensation lagged the median compensation paid to directors at peer companies, based on survey data compiled by the Committee’s independent compensation consultant. Based on this data, the Board approved increases in November 2011 in the cash and equity compensation payable to our outside directors. Shortly thereafter, the Board elected to defer implementation of this increase in the outside directors’ cash compensation until late May 2012.

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The table and the discussion below summarizes how we compensated our outside directors in 2012.

2012 Compensation of Outside Directors

Name	Fees Earned or Paid in Cash		Stock Awards(1),(2)		All Other Compensation(3)		Total
Current Directors:
Virginia Boulet	$	116,500	$	114,784	$	—	$	231,284
Peter C. Brown		112,250		114,784		—		227,034
Richard A. Gephardt		79,250		114,784		279,398		473,432
W. Bruce Hanks		137,500		114,784		5,182		257,466
Gregory J. McCray		98,750		114,784		—		213,534
C. G. Melville, Jr.		110,625		114,784		—		225,409
Fred R. Nichols		102,750		114,784		3,692		221,226
William A. Owens		102,750		314,438		—		417,188
Harvey P. Perry		195,250		114,784		8,276		318,310
Michael J. Roberts		97,250		114,784		—		212,034
Laurie A. Siegel		113,813		114,784		—		228,597
Joseph R. Zimmel		106,250		114,784		—		221,034
Former Directors:(4)
Charles L. Biggs	$	26,250	$	—	$	—	$	26,250
Edward A. Mueller		24,250		—		—		24,250
James A. Unruh		26,250		—		—		26,250

(1) For purposes of determining the number of restricted shares to grant to each outside director, the Compensation Committee valued each of these stock awards to equal $115,000 (or $315,000 in the case of Adm. Owens), based upon the volume-weighted average closing price of our Common Shares over a 15-day trading period ending prior to the grant date. For purposes of reporting the fair value of these awards in the table above, however, we valued each grant based upon the closing stock price of our Common Shares on the grant date in accordance with FASB ASC Topic 718 (formerly SFAS 123(R)). These grants vest on May 31, 2013 (subject to accelerated vesting in certain limited circumstances). See “— Cash and Stock Payments.”

(2) The following table sets forth, for each outside director, the total number of outstanding shares of unvested restricted stock held by them as of December 31, 2012 (excluding equity awards granted to certain of the individuals listed below prior to their commencement of service on our board following the Qwest merger), which constitute the only unvested equity-based awards held by our outside directors as of such date:

Name	Unvested Restricted Stock
Current Directors:
Virginia Boulet		5,547
Peter C. Brown		5,547
Richard A. Gephardt		5,547
W. Bruce Hanks		5,547
Gregory J. McCray		5,547
C. G. Melville, Jr.		5,547
Fred R. Nichols		5,547
William A. Owens		10,706
Harvey P. Perry		5,547
Michael J. Roberts		4,564
Laurie A. Siegel		5,547
Joseph R. Zimmel		5,547

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Name	Unvested Restricted Stock
Former Directors:(4)
Charles L. Biggs		—
Edward A. Mueller		—
James A. Unruh		—

For further information on our directors’ stock ownership, see “Ownership of Our Securities — Executive Officers and Directors,” and for information on certain deferred fee arrangements pertaining to Michael J. Roberts, see “— Other Benefits.”

(3) Represents (i) reimbursements for the cost of annual physical examinations, including medical and travel expenses for 2012 examinations and payments made in early 2012 to compensate the directors for taxes payable as a result of receiving reimbursements for 2011 examinations or (ii) in the case of Mr. Gephardt, payment of the consulting fees specified under “Transactions With Related Parties — Recent Transactions.” Except as otherwise noted in this footnote, the table above does not reflect (i) reimbursements for travel expenses, (ii) any benefits associated with participating in recreational activities scheduled during board retreats (as described further under the heading “Compensation Discussion and Analysis — Other Benefits — Perquisites”) or (iii) 2012 payments to Mr. Biggs and Mr. Unruh of previously-disclosed deferred board fees earned by both of them for service as directors of Qwest prior to the date we acquired Qwest (as described further below under the heading “— Other Benefits”).

(4) Served through May 23, 2012.

Cash and Stock Payments

Each outside director is paid an annual fee plus additional amounts for attending various other board or committee meetings. These fees are summarized below:

	Old  Rate(1)		New  Rate(1)
Annual fee	$	50,000	$	65,000
Fee for attending each regular board meeting		2,000		2,000
Fee for attending each special board meeting(2)		2,500		2,000
Fee for attending each committee meeting		1,500		2,000
Fee for attending separate director education programs		2,500		2,000

⁽¹⁾ The new rate became effective May 24, 2012. For further information, see “— Overview.”

⁽²⁾ Includes each day of the Board’s annual planning session.

Currently, William A. Owens, in his capacity as the Chairman of the Board, receives supplemental board fees at the rate of $200,000 per year payable in shares of restricted stock (valued using the 15-trading day average closing price specified in footnote 1 of the table appearing above under “— Overview”). The restricted stock issued to the Chairman during 2012 vests on May 31, 2013 (subject to accelerated vesting in certain limited circumstances). The Board anticipates making a similar grant to the Chairman in May 2013. The Chairman’s duties are set forth in our Corporate Governance Guidelines. See “Corporate Governance.”

Currently, Harvey P. Perry, in his capacity as non-executive Vice Chairman of the Board, receives supplemental board fees at the rate of $100,000 cash per year. The Board anticipates making a similar payment to Mr. Perry in May 2013. The Vice Chairman’s current duties include, among others, (i) assisting the Chairman by facilitating communications among the directors and monitoring the activities of the Board’s committees, (ii) serving at the Chairman’s request on the board of any company in which we have an investment, (iii) monitoring our strategies and (iv) performing certain executive succession functions.

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We pay supplemental board fees to the chairs of each of our committees. These annual supplemental board fees are summarized below:

	Old  Rate(1)		New  Rate(1)
Chair of Audit Committee	$	20,000	$	25,000
Chair of Compensation Committee		10,000		18,750
Chair of Nominating Committee		10,000		15,000
Chair of Risk Evaluation Committee		10,000		12,500

⁽¹⁾  The new rate became effective May 24, 2012. For further information, see “— Overview.”

During 2012 the Compensation Committee authorized each continuing outside director to receive shares of Restricted Stock valued at $115,000 (valued using the 15-trading day average closing price specified in footnote 1 of the table appearing above under “— Overview”) that vest on May 31, 2013 (subject to accelerated vesting in certain limited circumstances). The Compensation Committee currently expects to authorize in May 2013 a grant valued at $115,000 that vests after one year, payable to each outside director serving on the day after our 2013 annual meeting.

Other Benefits

Each outside director is entitled to be reimbursed (i) for expenses incurred in attending board and committee meetings, (ii) for expenses incurred in attending director education programs and (iii) up to $5,000 per year for the cost of an annual physical examination, plus related travel expenses. Effective January 1, 2012, we eliminated the right of each outside director to be reimbursed for the estimated income taxes incurred by such director in connection with receiving reimbursement payments for any examination occurring after such date.

In connection with our 2011 merger with Qwest, we assumed the Qwest Deferred Compensation Plan for Non-Employee Directors. Under this plan, Qwest directors could elect to defer all or a portion of their cash directors’ fees, which were then converted to a number of “phantom units” based the value of a share of Qwest stock, with credit for dividends paid to stockholders “reinvested” in additional phantom units. Certain plan balances were distributed to participants at the close of the merger, but plan balances attributable to amounts deferred on or after January 1, 2005 by Qwest directors who joined our Board following the merger were converted, based on the merger exchange ratio, to phantom units based on the value of a share of CenturyLink common stock. Other than the crediting and “reinvestment” of dividends for outstanding phantom units, CenturyLink does not make any contributions to, and no additional elective deferrals are permitted under, this plan. Subject to the terms of the plan, each participant’s account will be distributed as a lump sum in cash as soon as practicable following the end of his or her service as a director. Each of Messrs. Biggs and Unruh was a participant in this plan, and received a payout from the plan following his termination of service on May 23, 2012 ($393,802 and $589,348, respectively). As of December 31, 2012, Mr. Roberts was the only remaining participant in this plan, with a balance of 4,232.52 phantom units with an aggregate value of $165,576 as of such date.

We supply company-owned tablets to most of our outside directors for use in reviewing materials posted to a dedicated portal that permits management to communicate with the Board.

Our bylaws require us to indemnify our directors and officers so that they will be free from undue concern about personal liability in connection with their service to CenturyLink. We have signed agreements with each of those individuals contractually obligating us to provide these indemnification rights. We also provide our directors with customary directors and officers liability insurance.

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Directors may use our aircraft in connection with company-related business. However, under our aircraft usage policy, neither directors nor their families may use our aircraft for personal trips (except on terms generally available to all of our employees in connection with a medical emergency). We have arranged a charter service that our outside directors can use at their cost for their personal air travel needs. None of our directors have used this charter service since 2007.

Director Stock Ownership Guidelines

For information on our stock ownership guidelines for outside directors, see “Corporate Governance — Governance Guidelines — Stock Ownership Guidelines.”

PERFORMANCE GRAPH

The graph below compares the cumulative total shareholder return on the Common Shares with the cumulative total return of the S&P 500 Index and the S&P Integrated Telecommunications Index for the period from December 31, 2007 to December 31, 2012, in each case assuming (i) the investment of $100 on January 1, 2008 at closing prices on December 31, 2007, and (ii) reinvestment of dividends.

	December 31,
	2007		2008		2009		2010		2011		2012
CenturyLink	$	100.00	$	67.23	$	97.19	$	133.65	$	116.21	$	137.65
S&P 500 Index		100.00		66.47		84.06		96.74		98.76		108.59
S&P Telecom Index(1)		100.00		88.44		94.13		111.84		120.90		117.18

⁽¹⁾  The S&P Integrated Telecommunication Services Index consists of AT&T Inc., CenturyLink, Frontier Communications Corporation, Verizon Communications and Windstream Corporation. The index is publicly available.

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TRANSACTIONS WITH RELATED PARTIES

Recent Transactions

In exchange for consulting services rendered to us in 2012, we paid fees of approximately $279,400 to Gephardt Group Labor Advisory, LLC. Richard A. Gephardt, one of our directors, is the Chief Executive Officer and President, and a principal, of Gephardt Group Labor Advisory, LLC.

During 2012 we paid Michael S. Mueller, a Senior Director Portfolio Manager at Savvis, total gross compensation of approximately $228,550, consisting of approximately $160,124 in salary, $17,858 in annual incentive bonuses and restricted stock with a grant date fair value of $50,568. Mr. Mueller is the son of Edward A. Mueller, a director of ours between April 1, 2011 and May 23, 2012, and has been an employee of Savvis since July 21, 2008.

We are one of the largest employers in Monroe, Louisiana and in several of our other markets, and, as such, employ personnel related by birth or marriage throughout our organization. Several of our executive officers or directors have family members employed by us, although, none of them (other than Michael S. Mueller) earned 2012 compensation in excess of the $120,000 threshold that would require detailed disclosures under the federal proxy rules.

Review Procedures

Early each year, our director of internal audit distributes to the Audit Committee a written report listing our payments to vendors, including a list of transactions with our directors, officers or employees. This annual report permits the independent directors to assess and discuss our related party transactions. Although we have no formal written pre-approval procedure governing related party transactions, our CEO typically seeks approval of the board before engaging in any new related party transaction involving significant sums or risks.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

The Securities Exchange Act of 1934 requires our executive officers and directors, among others, to file certain beneficial ownership reports with the SEC. During 2012, Glen F. Post, III, Karen A. Puckett, R. Stewart Ewing, Jr., David D. Cole and Stacey W. Goff filed late Form 4 reports in connection with vesting of restricted shares in February 2012.

ADDITIONAL INFORMATION ABOUT THE MEETING

Quorum

Our bylaws provide that the presence at the meeting, in person or by proxy, of a majority of the outstanding Voting Shares constitutes a quorum to organize the meeting.

Vote Required to Elect Directors

Our bylaws provide that each of the eight director nominees will be elected if the number of votes cast in favor of the director exceeds the number of votes withheld with respect to the director. You may vote “for” all director nominees or withhold your vote for any one or more of the director nominees. If any of the eight directors fails to receive a majority of the votes cast at the meeting, our bylaws will require such director to tender his or her resignation to the Board for its consideration.

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Vote Required to Adopt Other Proposals at the Meeting

With respect to all other items submitted to a vote at the meeting, the affirmative vote of the holders of at least a majority of the Voting Shares present in person or represented by proxy and entitled to vote at the meeting is required to approve each such item.

Effect of Abstentions

Shares as to which the proxy holders have been instructed to abstain from voting with respect to any particular matter will be treated under the Company’s bylaws as not being cast, present or represented for purposes of such vote. Because all matters must be approved by the holders of a specified percentage of the votes cast or Voting Shares present or represented at the meeting, abstentions will not affect the outcome of any such vote. Shareholders abstaining from voting will be counted as present for purposes of constituting a quorum to organize the meeting.

Effect of Non-Voting

If you properly execute and return a proxy or voting instruction card, your shares will be voted as you specify. If you are a shareholder of record and make no specifications on your validly submitted proxy card, your shares will be voted against the shareholder proposals and in favor of all other items. If you are a beneficial owner of shares and do not give voting instructions to your broker, bank or nominee, they will be entitled to vote your shares only to the extent specified below.

Under the rules of the New York Stock Exchange, brokers who hold shares in street name for customers may vote in their discretion on matters considered to be “routine” when they have not received voting instructions from beneficial owners. Under these rules, brokers who do not receive such instructions will be entitled to vote in their discretion at the meeting with respect to the ratification of the appointment of the independent auditor, but will not be entitled to vote in their discretion with respect to any of the other matters submitted to a vote. If brokers who do not receive voting instructions do not, or cannot, exercise discretionary voting power (a “broker non-vote”) with respect to any matter to be considered at the meeting, shares that are not voted will be treated as present for purposes of constituting a quorum to organize the meeting but not present or cast with respect to considering such matter. Because all matters to be considered at the meeting must be approved by the holders of a specified percentage of the votes cast or Voting Shares present or represented at the meeting, broker non-votes will not affect the outcome of any such vote.

Revocations

Shareholders of record may revoke their proxy or change their votes at any time before their proxy is voted at the meeting by giving a written revocation notice to our secretary, by timely delivering a proxy bearing a later date or by voting in person at the meeting. Beneficial shareholders may revoke or change their voting instructions by contacting the broker, bank or nominee that holds their shares.

Voting by Participants in Our Benefit Plans

If you beneficially own any of our Common Shares by virtue of participating in any retirement plan of CenturyLink, then you will receive a separate voting instruction card that will enable you to direct the voting of these shares. This voting instruction card entitles you, on a confidential basis, to instruct the trustees how to vote the shares allocated to your plan account. The plans require you to act as a “named fiduciary,” which requires you to exercise your voting rights prudently and in the interests of all plan participants. Plan participants who wish to vote should complete and return the voting instruction card in accordance with its instructions. If you elect not to vote the shares allocated to your accounts, your shares will be voted in the same proportion as voted shares regarding each of the items submitted to a vote at the meeting. Plan participants that wish to revoke their voting instructions must contact the trustee and follow its procedures.

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Cost of Proxy Solicitation

We will pay all expenses of soliciting proxies for the meeting. Proxies may be solicited personally, by mail, by telephone or by facsimile by our directors, officers and employees, who will not be additionally compensated therefor. We will also request persons holding Voting Shares in their names for others, such as brokers, banks and other nominees, to forward materials to their principals and request authority for the execution of proxies, and we will reimburse them for their expenses incurred in connection therewith. We have retained Innisfree M&A Incorporated, New York, New York, to assist in the solicitation of proxies, for which we will pay Innisfree fees anticipated to be $15,000 and will reimburse Innisfree for certain of its out-of-pocket expenses.

Other Matters Considered at the Meeting

Management has not timely received any notice that a shareholder desires to present any matter for action at the meeting in accordance with our bylaws (which are described below in “Other Matters — Shareholder Nominations and Proposals for the 2014 Annual Meeting — Other Proposals and Nominations”) other than the shareholder proposals described in this proxy statement, and is otherwise unaware of any matter to be considered by shareholders at the meeting other than those matters specified in the accompanying notice of the meeting. Our proxy and voting instruction cards, however, will confer discretionary voting authority with respect to any other matter that may properly come before the meeting. It is the intention of the persons named therein to vote in accordance with their best judgment on any such matter.

Conduct of the Meeting

The Chairman has broad responsibility and legal authority to conduct the meeting in an orderly and timely manner. This authority includes establishing rules for shareholders who wish to address the meeting. Copies of these rules will be available at the meeting. The Chairman may also exercise broad discretion in recognizing shareholders who wish to speak and in determining the extent of discussion on each item of business. In light of the number of business items on this year’s agenda and the need to conclude the meeting within a reasonable period of time, we cannot assure that every shareholder who wishes to speak on an item of business will be able to do so.

You will not be permitted to bring audio visual equipment, ampliphones or posters into the meeting. We reserve the right, to be exercised in our discretion, to admit guests, such as local politicians or the press, into the meeting.

Postponement or Adjournment of the Meeting

The Chairman may postpone or adjourn the meeting. Your proxy will still be valid and may be voted at the postponed or adjourned meeting. You will still be able to change or revoke your proxy until it is voted.

OTHER MATTERS

Shareholder Nominations and Proposals for the 2014 Annual Meeting

Proxy Statement Proposals. In order to be eligible for inclusion in our 2014 proxy materials pursuant to the federal proxy rules, any shareholder proposal to take action at such meeting must be received by our Secretary by December 10, 2013, and must comply with applicable federal proxy rules.

Other Proposals and Nominations. In addition, our bylaws require shareholders to furnish timely written notice of their intent to nominate a director or bring any other matter before a shareholders’ meeting, whether or not they wish to include their proposal in our proxy materials. In general, notice must be received by our Secretary between November 23, 2013 and February 21, 2014 and must contain specified information

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concerning, among other things, the matters to be brought before such meeting and concerning the shareholder proposing such matters. (If the date of the 2014 annual meeting is more than 30 days earlier or later than May 22, 2014, notice must be received by our Secretary within 15 days of the earlier of the date on which notice of such meeting is first mailed to shareholders or public disclosure of the meeting date is made.) For additional information on these procedures, see “Corporate Governance — Director Nomination Process.”

These advance notice bylaw provisions are in addition to, and separate from, the requirements that a shareholder must meet in order to have a proposal included in our proxy materials under the rules of the SEC.

Proxies granted by a shareholder will give discretionary authority to the proxy holders to vote on any matters introduced pursuant to the above-described advance notice bylaw provisions, subject to applicable rules of the SEC.

You may obtain a copy of our bylaws by reviewing our reports filed with the SEC, by accessing our website at www.centurylink.com, or by contacting our Secretary in the manner specified below.

Proxy Materials

Most shareholders will receive only a written notice of how to access our proxy materials, and will not receive printed copies of the proxy materials unless requested. If you would like to receive a paper copy of our proxy materials, you should follow the instructions for requesting the materials in the notice.

The full set of our materials include:

• the notice and proxy statement for the meeting,

• a proxy or voting instruction card, and

• our 2012 annual report furnished in the following two parts: (1) our 2012 Financial Report, which constitutes Appendix A to this proxy statement, and (2) our 2012 Review and CEO’s Message, prepared as a separate booklet.

Our 2012 annual report is not a part of our proxy soliciting materials.

Annual Financial Report

Appendix A includes our Annual Financial Report, which is excerpted from portions of our Annual Report on Form 10-K for the February year ended December 31, 2012 that we filed with the Securities and Exchange Commission on March 1, 2013. In addition, we have provided you with a copy of or access to a separate booklet titled 2012 Review and CEO’s Message. Neither of these documents is a part of our proxy soliciting materials.

You may obtain a copy of our Form 10-K report without charge by writing to Stacey W. Goff, Secretary, CenturyLink, Inc., 100 CenturyLink Drive, Monroe, Louisiana 71203, or by visiting our website at www.centurylink.com.

You may view online this proxy statement and related materials at www.envisionreports. com/ctl.

By Order of the Board of Directors

Stacey W. Goff

Secretary

Dated: April 9, 2013

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APPENDIX A

to Proxy Statement

CENTURYLINK, INC.

ANNUAL FINANCIAL REPORT

December 31, 2012

A-1

INDEX TO FINANCIAL ANNUAL REPORT

December 31, 2012

The materials included in this Appendix A are excerpted from Items 5, 6, 7 and 8 of our Annual Report on Form 10-K for the year ended December 31, 2012, which we filed with the Securities and Exchange Commission on March 1, 2013. Please see the Form 10-K for additional information about our business and operations.

Information on our Trading Price and Dividends	A-3
Selected Financial Data	A-4
Management’s Discussion and Analysis of Financial Condition and Results of Operations	A-6
Consolidated Financial Statements and Supplementary Data	A-39
Report of Management	A-39
Report of Independent Registered Public Accounting Firm	A-40
Report of Independent Registered Public Accounting Firm	A-41
Consolidated Statements of Operations	A-42
Consolidated Statements of Comprehensive (Loss) Income	A-43
Consolidated Balance Sheets	A-44
Consolidated Statements of Cash Flows	A-45
Consolidated Statements of Stockholders’ Equity	A-46