FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT UNDER THE CENTURYTEL, INC. (2007 Grants to Section 16 Officers)
Exhibit
10.1
UNDER
THE CENTURYTEL, INC.
2005
MANAGEMENT INCENTIVE COMPENSATION PLAN
(2007
Grants to Section 16 Officers)
THIS
NON-QUALIFIED STOCK OPTION AGREEMENT (this “Agreement”) is entered
into as of February 26, 2007, by and between CenturyTel, Inc., a Louisiana
corporation (“CenturyTel”), and _________________ (“Optionee”).
WHEREAS,
CenturyTel maintains the 2005 Management Incentive Compensation Plan (the
“Plan”), under which the Compensation Committee of the Board of Directors of
CenturyTel (the “Committee”) may, directly or indirectly, among other things,
grant options to purchase shares of CenturyTel’s common stock, $1.00 par value
per share (the “Common Stock”), to key employees of CenturyTel or its
subsidiaries (collectively, the “Company”), on terms and conditions as it may
deem appropriate; and
WHEREAS,
pursuant
to the Plan the Committee has awarded to the Optionee an option to purchase
shares of Common Stock on the terms and conditions specified below;
NOW,
THEREFORE,
in
consideration of the premises, it is agreed as follows:
1.
GRANT
OF
OPTION
1.01 In
consideration of future services, CenturyTel hereby grants to Optionee,
effective February 26, 2007 (the “Date of Grant”), the right, privilege and
option to purchase _______ shares of Common Stock (the “Option”) at an exercise
price of $45.90 per share.
1.02 The
Option is
a non-qualified stock option and shall not be treated as an incentive stock
option under Section 422 of the Internal Revenue Code of 1986, as amended
(the
“Code”).
2.
TIME
OF
EXERCISE
2.01 Subject
to the provisions of the Plan and the other provisions of this Agreement,
the
Optionee shall be entitled to exercise the Option as follows:
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With
respect to one-third of the shares covered by the
Option...........................................................................
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on
or after February 26, 2008
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With
respect to two-thirds of the shares covered by the Option,
less any shares
previously issued.............
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on
or after February 26, 2009
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With
respect to all of the shares covered by the Option, less
any shares
previously issued...................
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on
or after February 26, 2010.
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The
Option shall expire and may not be exercised later than February 26, 2017,
ten
years after the Date of Grant.
2.02 Notwithstanding
the foregoing, the Option shall become accelerated and immediately exercisable
in full (a) if Optionee dies while he is employed by the Company, (b)
if
Optionee becomes disabled within the meaning of Section 22(e)(3) of the
Code
(“Disability”) while he is employed by the Company, (c) if Optionee retires from
employment with the Company on or after attaining the age of 55 with
at least
ten years of prior service with the Company (“Retirement”) or (d) pursuant to
the provisions of the Plan.
3.
CONDITIONS
FOR EXERCISE OF OPTION
During
Optionee’s lifetime, the Option may be exercised only by him or by his legal
representative. The Option must be exercised while Optionee is employed
by the
Company, or, to the extent exercisable at the time of termination
of employment,
within 190 days of the date on which he ceases to be an employee,
except that
(a) if he ceases to be an employee because of Retirement, the Option
may be
exercised within three years from the date on which he ceases to
be an employee,
(b) if an Optionee’s employment is terminated for cause, the unexercised portion
of the Option is immediately terminated, and (c) in the event of
Optionee’s
Disability or death, the Option may be exercised by the Optionee
or, in the case
of death, by his estate or by the person to whom such right devolves
from him by
reason of his death within two years after the date of his Disability
or death;
provided,
however,
that the
Option and all option gain, as defined in Section 4.01, shall at
all times be
subject to the forfeiture provisions of Section 4 hereof; and provided
further
that no
rights to purchase Common Stock under this Option may be exercised
later than
ten years after the Date of Grant.
4.
FORFEITURE
OF OPTION AND OPTION GAIN
4.01 If,
at
any time during Optionee’s employment by the Company or within 18 months after
termination of employment, Optionee engages in any activity in
competition with
any activity of the Company, or inimical, contrary or harmful
to the interests
of the Company, including but not limited to: (a) conduct relating
to Optionee’s
employment for which either criminal or civil penalties against
Optionee may be
sought, (b) conduct or activity that results in termination of
Optionee’s
employment for cause, (c) violation of Company policies, including,
without
limitation, the Company’s ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ policy and corporate compliance
program, (d) accepting employment with, acquiring a 5% or more
equity or
participation interest in, serving as a consultant, advisor,
director or agent
of, directly or indirectly soliciting or recruiting any employee
of the Company
who was employed at any time during Optionee’s tenure with the Company, or
otherwise assisting in any other capacity or manner any company
or enterprise
that is directly or indirectly in competition with or acting
against the
interests of the Company or any of its lines of business (a “competitor”),
except for (A) any isolated, sporadic accommodation or assistance
provided to a
competitor, at its request, by Optionee during Optionee’s tenure with the
Company, but only if provided in the good faith and reasonable
belief that such
action would benefit the Company by promoting good business relations
with the
competitor and would not harm the Company’s interests in any substantial manner
or (B) any other service or assistance that is provided at the
request or with
the written permission of the Company, (e) disclosing or misusing
any
confidential information or material concerning the Company,
(f) engaging in,
promoting, assisting or otherwise participating in a hostile
takeover attempt of
the Company or any other transaction or proxy contest that could
reasonably be
expected to result in a Change of Control (as defined in the
Plan) not approved
by CenturyTel’s Board of Directors or (g) making any statement or disclosing
any
information to any customers, suppliers, lessors, lessees, licensors,
licensees,
regulators, employees or others with whom the Company engages
in business that
is defamatory or derogatory with respect to the business, operations,
technology, management, or other employees of the Company, or
taking any other
action that could reasonably be expected to injure the Company
in its business
relationships with any of the foregoing parties or result in
any other
detrimental effect on the Company, then (i) the Option shall
automatically
terminate without any payment to Optionee effective the date
on which Optionee
engages in such activity, unless terminated sooner by operation
of another term
or condition of this Agreement or the Plan, and (ii) Optionee
shall pay in cash
to the Company, without interest, any option gain realized by
Optionee from
exercising all or a portion of the Option during the period beginning
one year
prior to termination of employment (or one year prior to the
date Optionee first
engages in such activity if no termination occurs) and ending
on the date on
which the Option terminates. For purposes hereof, “option gain” shall mean the
difference between the closing market price of the Common Stock
on the date of
exercise minus the exercise price, multiplied by the number of
shares
purchased.
4.02 If
Optionee owes any amount to the Company under Section 4.01 above,
Optionee
acknowledges that the Company may deduct such amount from any
amounts the
Company owes Optionee from time to time for any reason (including
without
limitation amounts owed to Optionee as salary, wages, reimbursements
or other
compensation, fringe benefits, retirement benefits or vacation
pay). Whether or
not the Company elects to make any such set-off in whole or in
part, if the
Company does not recover by means of set-off the full amount
Optionee owes it,
Optionee hereby agrees to pay immediately the unpaid balance
to the
Company.
4.03 Optionee
may be released from Optionee’s obligations under Sections 4.01 and 4.02 above
only if the Committee determines in its sole discretion that
such action is in
the best interests of the Company.
5.
PREFERENCE
SHARE PURCHASE RIGHTS
Upon
exercise of an Option at a time when preference share purchase
rights to
purchase shares of preference stock or other securities or
property of the
Company (“Rights”) remain outstanding pursuant to any rights agreement, then
Optionee shall receive Rights in conjunction with Optionee’s receipt of shares
of Common Stock on the terms and conditions of the applicable
rights
agreement.
6.
ADDITIONAL
CONDITIONS
Anything
in this Agreement to the contrary notwithstanding, if
at any time CenturyTel
further determines, in its sole discretion, that the
listing, registration or
qualification (or any updating of any such document)
of the shares of Common
Stock issuable pursuant to the exercise of an Option
is necessary on any
securities exchange or under any federal or state securities
or blue sky law, or
that the consent or approval of any governmental regulatory
body is necessary or
desirable as a condition of, or in connection with the
issuance of shares of
Common Stock pursuant thereto, or the removal of any
restrictions imposed on
such shares, such shares of Common Stock shall not be
issued, in whole or in
part, unless such listing, registration, qualification,
consent or approval
shall have been effected or obtained free of any conditions
not acceptable to
CenturyTel. CenturyTel agrees to use commercially reasonable
efforts to issue
all shares of Common Stock issuable hereunder on the
terms provided
herein.
7.
ATTORNEYS’
FEES AND EXPENSES
Should
any party hereto retain counsel for the purpose of
enforcing, or preventing the
breach of, any provision hereof, including, but not
limited to, the institution
of any action or proceeding in court to enforce any
provision hereof, to enjoin
a breach of any provision of this Agreement, to obtain
specific performance of
any provision of this Agreement, to obtain monetary
or liquidated damages for
failure to perform any provision of this Agreement,
or for a declaration of such
parties’ rights or obligations hereunder, or for any other judicial
remedy, then
the prevailing party shall be entitled to be reimbursed
by the losing party for
all costs and expenses incurred thereby, including,
but not limited to,
attorneys’ fees (including costs of appeal).
8.
NO
CONTRACT OF EMPLOYMENT INTENDED
Nothing
in this Agreement shall confer upon Optionee any
right to continue in the
employment of the Company or to interfere in any
way with the right of the
Company to terminate Optionee’s employment relationship with the Company at any
time.
9.
WITHHOLDING
TAXES
The
Company may make such provisions as it may deem
appropriate for the withholding
of any federal, state and local taxes that it determines
are required to be
withheld on any exercise of the Option. In accordance
with and subject to the
terms of the Plan, Optionee may satisfy the tax
withholding obligation in whole
or in part by delivering currently owned shares
of Common Stock or electing to
have CenturyTel withhold from the shares Optionee
otherwise would receive
hereunder shares of Common Stock having a value
equal to the minimum amount
required to be withheld (as determined under the
Plan); provided,
however,
that to
prevent the issuance of fractional shares and the
under-withholding of taxes,
Optionee agrees that the number of shares withheld
or delivered shall be rounded
up to the next whole number of shares.
10.
BINDING
EFFECT
Upon
being duly executed and delivered by CenturyTel
and Optionee, this Agreement
shall inure to the benefit of and be binding
upon the parties hereto and their
respective heirs, executors, administrators,
legal representatives and
successors. Without limiting the generality of
the foregoing, whenever the term
“Optionee” is used in any provision of this Agreement under
circumstances where
the provision appropriately applies to the heirs,
executors, administrators or
legal representatives to whom this Option may
be transferred by will or by the
laws of descent and distribution, the term “Optionee” shall be deemed to include
such person or persons.
11.
INCONSISTENT
PROVISIONS
Optionee
agrees that the Option granted hereby is subject
to the terms, conditions,
restrictions and other provisions of the Plan
as fully as if all such provisions
were set forth in their entirety in this Agreement.
If any provision of this
Agreement conflicts with a provision of the Plan,
the Plan provision shall
control. Optionee acknowledges that a copy of
the Plan and a prospectus
summarizing the Plan was distributed or made
available to Optionee and that
Optionee was advised to review such materials
prior to entering into this
Agreement. Optionee waives the right to claim
that the provisions of the Plan
are not binding upon Optionee and Optionee’s heirs, executors, administrators,
legal representatives and successors.
12.
ADJUSTMENTS
TO OPTIONS
The
parties acknowledge that (i) appropriate adjustments
shall be made to the number
and class of shares of Common Stock subject to
the Option and to the exercise
price in certain situations described in Section
4.5 of the Plan and (ii)
adjustments to the rights of the Optionee might
be made in the event of a Change
of Control, as defined in Section 11.12 of the
Plan.
13.
TERMINATION
OF OPTION
The
Committee, in its sole discretion, may terminate
the Option. However, no
termination may adversely affect the rights of
Optionee to the extent that the
Option is currently exercisable on the date of
such termination.
14.
GOVERNING
LAW
This
Agreement shall be governed by and construed
in accordance with the laws of the
State of Louisiana.
15.
SEVERABILITY
If
any
term or provision of this Agreement, or the application
thereof to any person or
circumstance, shall at any time or to any extent
be invalid, illegal or
unenforceable in any respect as written, Optionee
and CenturyTel intend for any
court construing this Agreement to modify or
limit such provision so as to
render it valid and enforceable to the fullest
extent allowed by law. Any such
provision that is not susceptible of such reformation
shall be ignored so as to
not affect any other term or provision hereof,
and the remainder of this
Agreement, or the application of such term or
provision to persons or
circumstances other than those as to which it
is held invalid, illegal or
unenforceable, shall not be affected thereby
and each term and provision of this
Agreement shall be valid and enforced to the
fullest extent permitted by
law.
16.
ENTIRE
AGREEMENT; MODIFICATION
The
Plan
and this Agreement contain the entire agreement
between the parties with respect
to the subject matter contained herein and may
not be modified, except as
provided in the Plan, as it may be amended from
time to time in the manner
provided therein, or in this Agreement, as it
may be amended from time to time
by a written document signed by each of the parties
hereto. Any oral or written
agreements, representations, warranties, written
inducements, or other
communications with respect to the subject matter
contained herein made prior to
the execution of the Agreement shall be void
and ineffective for all
purposes.
IN
WITNESS WHEREOF,
the parties hereto have caused this Agreement
to be executed as of the day and
year first above written.
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CenturyTel,
Inc.
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By:
____________________________________
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▇▇▇▇
▇. Post, III
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Chairman
and Chief Executive Officer
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_______________________________________
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{insert
name}
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Optionee
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