Exhibit 10.1
FORM OF NON-QUALIFIED
STOCK OPTION AGREEMENT
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
insider trading 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 (
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