EXHIBIT 10.3
THIS DOCUMENT CONSTITUTES PART OF A PROSPECTUS COVERING SECURITIES THAT
HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933.
RESTRICTED STOCK AND
PERFORMANCE SHARE AGREEMENT
UNDER THE
1995 INCENTIVE COMPENSATION PROGRAM
THIS AGREEMENT is made as of February 24, 1998, by and between Century
Telephone Enterprises, Inc. ("Century") and ____________ ("Award Recipient").
WHEREAS, Century maintains the 1995 Century Telephone Enterprises, Inc.
Incentive Compensation Plan, as amended (the "Plan"), under which the Incentive
Awards Subcommittee of the Compensation Committee of the Board of Directors of
Century (the "Committee") may, among other things, grant restricted shares (the
"Restricted Stock") of Century's common stock, $1.00 par value per share (the
"Common Stock"), and awards in the form of performance shares (the "Performance
Shares") to key employees of Century or its subsidiaries as the Committee may
determine, subject to terms, conditions, or restrictions as it may deem
appropriate;
WHEREAS, pursuant to the Plan the Committee has awarded to the Award
Recipient a Restricted Stock award and a Performance Share award.
NOW, THEREFORE, in consideration of the premises, it is agreed with
respect to the Restricted Stock and Performance Shares as follows:
1.
AWARD OF SHARES
1.1 Under the terms of the Plan, the Committee hereby awards to the Award
Recipient, Time-vested shares of Restricted Stock that vest on January 1, 2003,
if, subject to Section 4 hereof, the Award Recipient remains employed by Century
on that date (the "Time-Vested Restricted Stock").
1.2 Under the terms of the Plan, the Committee also awards to the Award
Recipient, Performance-based shares of Restricted Stock (the "Performance-Based
Restricted Stock") and Performance Shares that vest if, subject to Section 4
hereof, the Award Recipient remains employed by Century through January 1, 2003
and the performance goals described in Section 3 hereof are achieved.
1.3 All awards hereunder are subject to the terms, conditions, and
restrictions set forth in the Plan and in this Agreement. The date of grant of
the Restricted Stock and Performance Shares is February 24, 1998.
2.
AWARD RESTRICTIONS ON
RESTRICTED STOCK
2.1 The Restricted Period is a period that begins on the date hereof and
ends at such time after December 31, 2002 as the Committee has been able to
determine if and to what extent the applicable conditions and performance goals
provided herein have been met.
2.2 In addition to the conditions and restrictions provided in the Plan,
during the Restricted Period, the shares of Restricted Stock and the right to
vote the Restricted Stock and to receive dividends thereon may not be sold,
assigned, transferred, exchanged, pledged, hypothecated or otherwise encumbered.
During the Restricted Period, except as otherwise provided in this Section 2,
the Award Recipient shall be entitled to all rights of a shareholder of Century,
including the right to vote the shares and receive dividends and/or other
distributions declared on the Restricted Stock.
3.
PERFORMANCE CRITERIA FOR PERFORMANCE-BASED
RESTRICTED STOCK AND PERFORMANCE SHARES
3.1 The restrictions on shares of Performance-Based Restricted Stock will
lapse and the Performance Shares will be earned depending upon Century's total
shareholder return as compared to the total shareholder return of other
comparable companies, as follows:
a. At the end of the year 2002, the total shareholder return
(determined by calculating the increase in stock price plus reinvestment
of dividends) for the five-year period of 1998 through 2002 (the
"Performance Period") will be calculated for each of the companies (the
"Peer Companies") included in the performance graph (the "Graph") that
appears in the Company's proxy statement issued in connection with the
first annual meeting following the end of the Performance Period.
b. Each Peer Company will be ranked based upon total shareholder
return as reflected in the Graph for the Performance Period.
c. The average shareholder return of the Peer Companies that make up
the top one-third, middle one-third and bottom one-third of the companies
included in the Graph will be calculated.
d. If Century's total shareholder return for the Performance Period
is less than the average total shareholder return of the bottom one-third
of the Peer Companies none of the shares of Performance-Based Restricted
Stock will vest and no Performance Shares will be earned.
e. If Century's total shareholder return for the Performance Period
equals or exceeds the average total shareholder return of the companies in
the bottom one-third of the Peer Companies, then the portion of the
Performance-Based Restricted Stock that vests (not more than the number of
shares granted) will be equal to
(A / B) x C
with A equal to the difference between the Century total shareholder
return and the bottom one-third average return
and B equal to the difference between the middle one-third average and
the bottom one-third average
and C equal to the number of shares of Performance-Based Restricted
Stock granted.
f. In addition to the Performance-Based Restricted Stock that will
vest under the terms described in 3.1.e. above, if Century's total
shareholder return for the Performance Period is greater than the average
shareholder return of the middle one-third of the Peer Companies, the
Award Recipient will earn Performance Shares. The portion of the
Performance Shares that are earned (not more than the number granted) will
be equal to
(D / E) x F
with D equal to the difference between the Century total shareholder
return and the middle one-third average return
and E equal to the difference between the top one-third average and the
middle one-third average
and F equal to the number of Performance Shares granted.
g. If earned, the Performance Shares will be paid in shares of
Common Stock.
3.3 Although permitted by the terms of the Plan, the Committee may not
waive any of the performance requirements described in this Section 3 or
accelerate the termination of the Restricted Period with respect to the
Performance-Based Restricted Stock and Performance Shares. All shares of
Restricted Stock will vest, and all Performance Shares will be earned, however,
in the event of a Corporate Change of the Company, as provided in Section 10.11
of the Plan.
3.4 Prior to the lapse of restrictions on shares of Performance-Based
Restricted Stock or the issuance of shares of Common Stock in payment of
Performance Shares, the Committee must certify in writing (including through the
adoption of resolutions set forth in duly recorded minutes) that all applicable
performance goals and conditions have been met.
3.5 Any shares of Restricted Stock with respect to which restrictions do
not lapse and any Performance Shares that are not earned shall be forfeited upon
termination of the Restricted Period.
4.
TERMINATION OF EMPLOYMENT
4.1 If an Award Recipient's employment terminates as the result of death,
disability within the meaning of Section 22(e)(3) of the Internal Revenue Code
("Disability"), or retirement on or after reaching age 55 ("Retirement") during
the Performance Period, all shares of Time-Vested Restricted Stock shall
immediately vest and all restrictions thereon shall lapse. Termination of
employment for any other reason during the Performance Period, except
termination in connection with a Corporate Charge, results in forfeiture of all
Time-Vested Restricted Stock.
4.2 If an Award Recipient's employment terminates during the first year of
the Performance Period for any reason, all shares of Performance-Based
Restricted Stock shall be immediately forfeited and no Performance Shares shall
be earned.
4.3 If an Award Recipient's employment terminates as a result of death,
Disability or Retirement following the first year of the Performance Period, the
Award Recipient shall receive the pro rata portion of the Performance-Based
Restricted Stock and Performance Shares based upon the number of full years of
the Performance Period that has elapsed prior to termination of employment and
Century's total shareholder return for such years as compared to the Peer
Companies included in the Graph in the following year. Other shares of
Performance-Based Restricted Stock and Performance Shares shall be forfeited.
5.
STOCK CERTIFICATES
5.1 The stock certificates evidencing the Restricted Stock shall be
retained by Century until the termination of the Restricted Period and the lapse
of restrictions under the terms hereof. Century shall place a legend on the
stock certificates restricting the transferability of the shares of Restricted
Stock.
5.2 Upon the lapse of restrictions on shares of Restricted Stock and when
Performance Shares are earned, Century shall cause a stock certificate without a
restrictive legend to be issued with respect to the vested Restricted Stock and
the earned Performance Shares in the name of the Award Recipient or his or her
nominee within 30 days after the end of the Restricted Period. Upon receipt of
such stock certificate, the Award Recipient is free to hold or dispose of the
shares represented by such certificate, subject to applicable securities laws.
6.
DIVIDENDS
Any dividends paid on shares of Restricted Stock shall be paid to the
Award Recipient currently. No dividends or dividend equivalents will be paid
with respect to the Performance Shares prior to the issuance of Common Stock in
payment thereof.
7.
WITHHOLDING TAXES
At the time that all or any portion of the Restricted Stock vests or the
Performance Shares are earned, the Award Recipient must deliver to Century the
amount of income tax withholding required by law.
8.
ADDITIONAL CONDITIONS
Anything in this Agreement to the contrary notwithstanding, if at any time
Century 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 issued or issuable pursuant hereto 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 hereto, or the removal or any restrictions imposed on such
shares, such shares of Common Stock shall not be issued, in whole or in part, or
the restrictions thereon removed, unless such listing, registration,
qualification, consent or approval shall have been effected or obtained free of
any conditions not acceptable to Century.
9.
NO CONTRACT OF EMPLOYMENT INTENDED
Nothing in this Agreement shall confer upon the Award Recipient any right
to continue in the employment of Century, or to interfere in any way with the
right of Century to terminate the Award Recipient's employment relationship with
Century at any time.
10.
BINDING EFFECT
This Agreement shall inure to the benefit of and be binding upon the
parties hereto and their respective heirs, executors, administrators and
successors.
11.
INCONSISTENT PROVISIONS
The shares of Restricted Stock and Performance Shares granted hereby are
subject to the provisions of the Plan. If any provision of this Agreement
conflicts with a provision of the Plan, the Plan provision shall control.
IN WITNESS WHEREOF the parties hereto have caused this Agreement to be
executed on the day and year first above written.
CENTURY TELEPHONE ENTERPRISES, INC.
By: _______________________________
Xxxx X. Post, III, President and
Chief Executive Officer
_______________________________
Award Recipient
