FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT UNDER THE CENTURYTEL, INC. (2006 Grants to Section 16 Officers)
Exhibit
10.2(g)(iii)
UNDER
THE CENTURYTEL, INC.
2005
MANAGEMENT INCENTIVE COMPENSATION PLAN
(2006
Grants to Section 16 Officers)
THIS
NON-QUALIFIED STOCK OPTION AGREEMENT (this (“Agreement”) is entered
into as of February 21, 2006, 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 21, 2006 (the “Date of Grant”), the right, privilege and
option to purchase _______ shares of Common Stock (the “Option”) at an exercise
price of $35.41 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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March
15, 2007
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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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March
15, 2008
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With
respect to all of the shares covered by the Option, less any shares
previously issued.
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March
15, 2009
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The
Option shall expire and may not be exercised later than 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 (“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 xxxxxxx xxxxxxx 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 Series BB Participating Cumulative Preference Stock or other
securities or property of the Company (the “Rights” and each a “Right”) remain
outstanding pursuant to that certain Rights Agreement dated as of August 27,
1996 between CenturyTel and the Rights Agent named therein, as amended through
the date of such exercise, or pursuant to any successor 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).
10.
BINDING
EFFECT
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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Xxxx
X. Post, III
Chairman and Chief Executive Officer
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____________________________
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{insert name}
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Optionee
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