Exhibit 10.2(f)
CONFORMED COPY
AMENDED AND RESTATED
CENTURYTEL, INC.
2002 MANAGEMENT INCENTIVE COMPENSATION PLAN
WHEREAS, the CenturyTel, Inc.2002 Management Incentive Compensation
Plan (the "Plan") was adopted by the Board of Directors of CenturyTel, Inc. (the
"Company") on February 26, 2002 and approved by the shareholders of the Company
on May 9, 2002, and Amendment No. 1 to the Plan was approved by the Board of
Directors of the Company on May 29, 2003; and
WHEREAS, the Board of Directors now wishes to amend Section 9.1 of the
Plan to provide that no Incentives may be granted under the Plan later than May
9, 2012, which is ten years after the Plan was approved by the Company's
stockholders.
NOW THEREFORE, Section 9.1 of the Plan is hereby amended to read as
provided herein and the Plan is hereby restated in its entirety reflecting such
amendment to read as follows:
1. Purpose. The purpose of the 2002 Management Incentive
Compensation Plan (this "Plan") of CenturyTel, Inc. ("CenturyTel") is to
increase shareholder value and to advance the interests of CenturyTel and its
subsidiaries (collectively, the "Company") by furnishing a variety of equity
incentives (the "Incentives") designed to attract, retain and motivate officers,
key employees, consultants and advisors and to strengthen the mutuality of
interests between such persons and CenturyTel's shareholders. Incentives may
consist of options to purchase shares of CenturyTel's common stock, $1.00 par
value per share (the "Common Stock"), shares of restricted stock or other
stock-based awards the value of which is based upon the value of the Common
Stock, all on terms determined under this Plan. As used in this Plan, the term
"subsidiary" means any corporation, limited liability company or other entity of
which CenturyTel owns (directly or indirectly) within the meaning of Section
425(f) of the Internal Revenue Code of 1986, as amended (the "Code"), 50% or
more of the total combined voting power of all classes of stock, membership
interests or other equity interests issued thereby.
2. Administration.
2.1 Composition. This Plan shall be administered by the
compensation committee of the Board of Directors of CenturyTel, or by
a subcommittee of the compensation committee. The committee or
subcommittee that administers this Plan shall hereinafter be referred
to as the "Committee." The Committee shall consist of not fewer than
two members of the Board of Directors, each of whom shall (a) qualify
as a "non-employee director" under Rule 16b-3 under the Securities
Exchange Act of 1934 (the "1934 Act"), or any successor rule, and
(b) qualify as an "outside director" under Section 162(m) of the Code
and the regulations thereunder (collectively, "Section 162(m)").
2.2 Authority. The Committee shall have authority to award
Incentives under this Plan, to interpret this Plan, to establish any
rules or regulations relating to this Plan that it determines to be
appropriate, to enter into agreements with or provide notices to
participants as to the terms of the Incentives (the "Incentive
Agreements") and to make any other determination that it believes
necessary or advisable for the proper administration of this Plan.
Its decisions concerning matters relating to this Plan shall be final,
conclusive and binding on the Company and participants. The Committee
may delegate its authority hereunder to the extent provided in Section
3 hereof. The Committee shall not have authority to award Incentives
under this Plan to directors in their capacities as such.
3. Eligible Participants. Key employees and officers of the Company
(including officers who also serve as directors of the Company) and consultants
and advisors to the Company shall become eligible to receive Incentives under
this Plan when designated by the Committee. Employees may be designated
individually or by groups or categories, as the Committee deems appropriate.
With respect to participants not subject to Section 16 of the 1934 Act or
Section 162(m), the Committee may delegate to appropriate personnel of the
Company its authority to designate participants, to determine the size, type and
terms of the Incentives to be received by those participants and to determine
any performance objectives for those participants; provided; however that the
exercise price of any stock options granted pursuant to such delegation of
authority shall be, unless otherwise determined by the Committee, equal to the
Fair Market Value of a share of Common Stock on the later of the date of grant
or the date the participant's employment with the Company commences. Any such
delegation by the Committee shall not include the authority to change or modify
in any way the terms of a previously granted Incentive or to take any other
action authorized herein to be taken by the Committee and not specifically
permitted to be delegated in this Section 3.
4. Shares Subject to this Plan. The shares of Common Stock with
respect to which Incentives may be granted under this Plan shall be subject to
the following:
4.1 Type of Common Stock. The shares of Common Stock with
respect to which Incentives may be granted under this Plan may be
currently authorized but unissued shares or shares currently held or
subsequently acquired by the Company as treasury shares, including
shares purchased in the open market or in private transactions.
4.2 Maximum Number of Shares. Subject to the other provisions
of this Section 4, the maximum number of shares of Common Stock that
may be delivered to participants and their beneficiaries under this
Plan shall be 4,500,000 shares of Common Stock.
4.3 Share Counting. To the extent any shares of Common Stock
covered by an Incentive are not delivered to a participant or
beneficiary because the Incentive is forfeited or canceled, or the
shares of Common Stock are not delivered because the Incentive is paid
or settled in cash or used to satisfy the applicable tax withholding
obligation, such shares shall not be deemed to have been delivered for
purposes of determining the maximum number of shares of Common Stock
available for delivery under this Plan. In the event that shares of
Common Stock are issued as Incentives and thereafter are forfeited or
reacquired by the Company pursuant to rights reserved upon issuance
thereof, such forfeited and reacquired Shares may again be issued
under this Plan. If the exercise price of any stock option granted
under this Plan or the applicable withholding taxes are satisfied by
tendering shares of Common Stock to the Company (by either actual
delivery or by attestation), only the number of shares of Common Stock
issued net of the shares of Common Stock tendered shall be deemed
delivered for purposes of determining the maximum number of shares of
Common Stock available for delivery under this Plan.
4.4 Limitations on Number of Shares. Subject to Section 4.5,
the following additional limitations are imposed under this Plan:
(a) The maximum number of shares of Common Stock that may
be issued upon exercise of stock options intended to qualify as
incentive stock options under Section 422 of the Code shall be
4,500,000 shares. Notwithstanding any other provision herein to
the contrary, (i) all shares issuable under incentive stock
options shall be counted against this limit and (ii) shares that
are issued and are later forfeited, cancelled or reacquired by
the Company, shares withheld to satisfy withholding tax
obligations and shares delivered in payment of the Incentive
price or applicable withholding taxes shall have no effect on
this limitation.
(b) The maximum number of shares of Common Stock that
may be covered by Incentives granted under this Plan to any one
individual during any one calendar-year period shall be 600,000.
(c) The maximum number of shares of Common Stock that may
be issued as restricted stock or Other Stock-Based Awards (as
defined below) shall be 500,000 shares.
(d) If, after shares have been earned under an Incentive,
the delivery is deferred, any additional shares attributable to
dividends paid during the deferral period shall be disregarded
for purposes of the limitations of this Section 4.
4.5 Adjustment. In the event of any recapitalization,
reclassification, stock dividend, stock split, combination of
shares or other change in the Common Stock, all limitations on
numbers of shares of Common Stock provided in this Section 4 and
the number of shares of Common Stock subject to outstanding
Incentives shall be equitably adjusted in proportion to the
change in outstanding shares of Common Stock. In addition, in the
event of any such change in the Common Stock, the Committee shall
make any other adjustment that it determines to be equitable,
including without limitation adjustments to the exercise price of
any option and any per share performance objectives of any
Incentive in order to provide participants with the same relative
rights before and after such adjustment.
5. Stock Options. The Committee may grant incentive stock options
(as such term is defined in Section 422 of the Code) or non-qualified stock
options. Any option that is designated as a non-qualified stock option shall not
be treated as an incentive stock option. Each stock option granted by the
Committee under this Plan shall be subject to the following terms and
conditions:
5.1 Price. The exercise price per share shall be determined by
the Committee, subject to adjustment under Section 4.5; provided that
in no event shall the exercise price be less than the Fair Market
Value (as defined below) of a share of Common Stock on the date of
grant, except in the case of a stock option granted in assumption of
or in substitution for an outstanding award of a company acquired by
the Company or with which the Company combines.
5.2 Number. The number of shares of Common Stock subject to the
option shall be determined by the Committee, subject to the limitations
and adjustments provided in Section 4 hereof.
5.3 Duration and Time for Exercise. Subject to earlier
termination as provided in Section 9.4 and 9.13, the term of each
stock option shall be determined by the Committee, but may not exceed
ten years. Each stock option shall become exercisable at such time or
times during its term as shall be determined by the Committee. The
Committee may accelerate the exercisability of any stock option at any
time.
5.4 Repurchase. Upon approval of the Committee, the Company may
repurchase all or a portion of a previously granted stock option from
a participant by mutual agreement before such option has been
exercised by payment to the participant of cash or Common Stock or a
combination thereof with a value equal to the amount per share by
which: (a) the Fair Market Value of the Common Stock subject to the
option on the business day immediately preceding the date of purchase
exceeds (b) the exercise price.
5.5 Manner of Exercise. A stock option may be exercised, in
whole or in part, by giving written notice to the Company, specifying
the number of shares of Common Stock to be purchased. The exercise
notice shall be accompanied by tender of the full purchase price for
such shares, which may be paid or satisfied by (a) cash; (b) check;
(c) delivery of shares of Common Stock, which shares shall be valued
for this purpose at the Fair Market Value on the business day
immediately preceding the date such option is exercised and, unless
otherwise determined by the Committee, shall have been held by the
optionee for at least six months; (d) delivery of irrevocable written
instructions to a broker approved by the Company (with a copy to the
Company) to immediately sell a portion of the shares issuable under
the option and to deliver promptly to the Company the amount of sale
proceeds (or loan proceeds if the broker lends funds to the
participant for delivery to the Company) to pay the exercise price; or
(e) in such other manner as may be authorized from time to time by the
Committee, provided that all such payments shall be made or
denominated in United States dollars. In the case of delivery of an
uncertified check, no shares shall be issued until the check has been
paid in full. Prior to the issuance of shares of Common Stock upon the
exercise of a stock option, a participant shall have no rights as a
shareholder.
5.6 Repricing. Except for adjustments pursuant to Section 4.5
or actions permitted to be taken by the Committee under Section
9.13(c) in the event of a Change of Control, unless approved by the
shareholders of the Company, (a) the exercise price for any
outstanding option granted under this Plan may not be decreased after
the date of grant and (b) an outstanding option that has been granted
under this Plan may not, as of any date that such option has a per
share exercise price that is less than the then current Fair Market
Value of a share of Common Stock, be surrendered to the Company as
consideration for the grant of a new option with a lower exercise
price, shares of restricted stock, an Other Stock-Based Award (as
defined in Section 7.1), a cash payment or Common Stock.
5.7 Incentive Stock Options. Notwithstanding anything in this
Plan to the contrary, the following additional provisions shall apply
to the grant of stock options that are intended to qualify as
incentive stock options.
(a) Any incentive stock option authorized under this
Plan shall contain such other provisions as the Committee shall
deem advisable, but shall in all events be consistent with and
contain or be deemed to contain all provisions required in order
to qualify the options as incentive stock options;
(b) All incentive stock options must be granted within
ten years from the date on which this Plan was adopted by the
Board of Directors;
(c) No incentive stock option shall be granted to any
participant who, at the time such option is granted, would own
(within the meaning of Section 422 of the Code) stock possessing
more than 10% of the total combined voting power of all classes
of stock of the employer corporation or of its parent or
subsidiary corporation; and
(d) The aggregate Fair Market Value (determined with
respect to each incentive stock option as of the time such
incentive stock option is granted) of the Common Stock with
respect to which incentive stock options are exercisable for the
first time by a participant during any calendar year (under this
Plan or any other plan of the Company) shall not exceed $100,000.
To the extent that such limitation is exceeded, such options
shall not be treated, for federal income tax purposes, as
incentive stock options.
5.8 Equity Maintenance. If a participant exercises an option
during the term of his employment with the Company, and pays the
exercise price (or any portion thereof) through the surrender of shares
of outstanding Common Stock owned by the participant, the Committee
may, in its discretion, grant to such participant an additional option
to purchase the number of shares of Common Stock equal to the shares
of Common Stock so surrendered by such participant. Any such
additional options granted by the Committee shall be exercisable at
the Fair Market Value of the Common Stock determined as of the
business day immediately preceding the respective dates such
additional options may be granted. The grant of such additional
options under this Section 5.8 shall be made upon such other terms and
conditions as the Committee may from time to time determine.
6. Restricted Stock.
6.1 Grant of Restricted Stock. An award of restricted stock may
be subject to the attainment of specified performance goals or
targets, restrictions on transfer, forfeitability provisions and such
other terms and conditions as the Committee may determine, subject to
the provisions of this Plan. To the extent restricted stock is
intended to qualify as performance based compensation under Section
162(m), it must be granted subject to the attainment of performance
goals as described in Section 8 and meet the additional requirements
by imposed by Section 162(m).
6.2 Restricted Period. At the time an award of restricted stock
is made, the Committee shall establish a period of time during which
the transfer of the shares of restricted stock shall be restricted
(the "Restricted Period"). Each award of restricted stock may have a
different Restricted Period. A Restricted Period of at least three
years is required, except that if vesting of the shares is subject to
the attainment of specified performance goals, the Restricted Period
may be one year or more. Incremental periodic vesting of portions of
the award during the Restricted Period is permitted. Unless otherwise
provided in the Incentive Agreement, the Committee may in its
discretion declare the Restricted Period terminated upon a
participant's death, disability, retirement or other termination by
the Company and permit the sale or transfer of the restricted stock.
The expiration of the Restricted Period shall also occur as provided
under Section 9.13 upon a Change of Control of the Company.
6.3 Escrow. The participant receiving restricted stock shall
enter into an Incentive Agreement with the Company setting forth the
conditions of the grant. Certificates representing shares of
restricted stock shall be registered in the name of the participant
and deposited with the Company, together with a stock power endorsed
in blank by the participant. Each such certificate shall bear a legend
in substantially the following form:
The transferability of this certificate and the shares of
Common Stock represented by it is subject to the terms and
conditions (including conditions of forfeiture) contained in
the CenturyTel, Inc. 2002 Management Incentive Compensation
Plan (the "Plan") and an agreement entered into between the
registered owner and CenturyTel, Inc. thereunder. Copies of
this Plan and the agreement are on file and available for
inspection at the principal office of the Company.
6.4 Dividends on Restricted Stock. Any and all cash and stock
dividends paid with respect to the shares of restricted stock shall be
subject to any restrictions on transfer, forfeitability provisions or
reinvestment requirements as the Committee may, in its discretion,
prescribe in the Incentive Agreement.
6.5 Forfeiture. In the event of the forfeiture of any shares of
restricted stock under the terms provided in the Incentive Agreement
(including any additional shares of restricted stock that may result
from the reinvestment of cash and stock dividends, if so provided in
the Incentive Agreement), such forfeited shares shall be surrendered
and the certificates cancelled. The participants shall have the same
rights and privileges, and be subject to the same forfeiture
provisions, with respect to any additional shares received pursuant to
Section 4.5 due to a recapitalization, stock split or other change in
capitalization.
6.6 Expiration of Restricted Period. Upon the expiration or
termination of the Restricted Period and the satisfaction of any other
conditions prescribed by the Committee or at such earlier time as
provided for in Section 6.2 and in the Incentive Agreement or an
amendment thereto, the restrictions applicable to the restricted stock
shall lapse and a stock certificate for the number of shares of
restricted stock with respect to which the restrictions have lapsed
shall be delivered, free of all such restrictions and legends other
than those required by law, to the participant or the participant's
estate, as the case may be.
6.7 Rights as a Shareholder. Subject to the restrictions
imposed under the terms and conditions of this Plan and subject to any
other restrictions that may be imposed in the Incentive Agreement,
each participant receiving restricted stock shall have all the rights
of a shareholder with respect to shares of Common Stock during any
period in which such shares are subject to forfeiture and restrictions
on transfer, including without limitation, the right to vote such
shares.
7. Other Stock-Based Awards.
7.1 Grant of Other Stock-Based Awards. Subject to the
limitations described in Section 7.2 hereof, the Committee may grant
to eligible participants "Other Stock-Based Awards," which shall
consist of awards, other than options or restricted stock provided for
in Sections 5 and 6, the value of which is based in whole or in part
on the value of shares of Common Stock. Other Stock-Based Awards may
be awards of shares of Common Stock or may be denominated or payable
in, valued in whole or in part by reference to, or otherwise based on
or related to, shares of, or appreciation in the value of, Common
Stock (including, without limitation, securities convertible or
exchangeable into or exercisable for shares of Common Stock), as
deemed by the Committee consistent with the purposes of this Plan. The
Committee shall determine the terms and conditions of any Other
Stock-Based Award (including which rights of a shareholder, if any,
the recipient shall have with respect to Common Stock associated with
any such award) and may provide that such award is payable in whole or
in part in cash. An Other Stock-Based Award may be subject to the
attainment of such specified performance goals or targets as the
Committee may determine, subject to the provisions of this Plan. To
the extent that an Other Stock-Based Award is intended to qualify as
"performance-based compensation" under Section 162(m), it must be
granted subject to the attainment of performance goals as described in
Section 8 and meet the additional requirements imposed by Section
162(m).
7.2 Limitations. Other Stock-Based Awards granted under this
Section 7 shall be subject to a vesting period of at least three
years, except that if vesting of the award is subject to the
attainment of specified performance goals, a minimum vesting period of
one year is allowed. Incremental periodic vesting of portions of the
award over the required vesting period is permitted. Notwithstanding
the minimum vesting periods described in this Section 7.2, the
Committee may make special grants of Other Stock-Based Awards with
respect to an aggregate of no more than 225,000 shares of Common
Stock, as adjusted under Section 4.5, which special awards shall not
be subject to any minimum vesting requirements.
8. Section 162(m) Awards. To the extent that shares of restricted
stock or Other Stock-Based Awards granted under the Plan are intended to qualify
as "performance-based compensation" under Section 162(m), the vesting, grant or
payment of such awards shall be conditioned on the achievement of one or more
performance goals and must satisfy the other requirements of Section 162(m). The
performance goals pursuant to which such awards shall vest, be granted or be
paid out shall be any or a combination of the following performance measures
applied to the Company, a subsidiary or a division: earnings per share, return
on assets, an economic value added measure, stockholder return, earnings, return
on equity, return on investment, cash provided by operating activities, increase
in cash flow, increase in revenues or operating revenues, or customer growth.
The performance goals may be subject to such adjustments as are specified in
advance by the Committee. For any performance period, the performance objectives
may be measured on an absolute basis or relative to a group of peer companies
selected by the Committee, relative to internal goals or relative to levels
attained in prior years.
9. General.
9.1 Duration. Subject to Section 9.10, no Incentives may be
granted under the Plan later than May 9, 2012, which is ten years
after the Plan was approved by the Company's shareholders; provided,
however, that Incentives granted prior to such date shall remain in
effect until all such Incentives granted under this Plan have either
been satisfied by the issuance of shares of Common Stock or the
payment of cash or been terminated under the terms of this Plan or the
applicable Incentive Agreement and all restrictions imposed on shares
of Common Stock in connection with their issuance under this Plan have
lapsed.
9.2 Transferability of Incentives. No Incentive granted
hereunder may be transferred, pledged, assigned or otherwise
encumbered by the holder thereof except:
(a) by will;
(b) by the laws of descent and distribution; or
(c) pursuant to a domestic relations order, as
defined in the Code; or
(d) in the case of stock options only, if permitted
by the Committee and so provided in the Incentive Agreement or
an amendment thereto, (i) to Immediate Family Members (as
defined below), (ii) to a partnership in which the participant
and/or Immediate Family Members, or entities in which the
participant and/or Immediate Family Members are the sole
owners, members or beneficiaries, as appropriate, are the sole
partners, (iii) to a limited liability company in which the
participant and/or Immediate Family Members, or entities in
which the participant and/or Immediate Family Members are the
sole owners, members or beneficiaries, as appropriate, are the
sole members, (iv) to a trust for the sole benefit of the
participant and/or Immediate Family Members, or (v) to
non-Immediate Family Members following the death of the Plan
participant to whom the stock option was granted. "Immediate
Family Members" means the spouse and natural or adopted
children or grandchildren of the participant and their
respective spouses. To the extent that an incentive stock
option is permitted to be transferred during the lifetime of
the participant, it shall be treated thereafter as a
non-qualified stock option.
Any attempted assignment, transfer, pledge, hypothecation or
other disposition of an Incentive, or levy of attachment or similar
process upon the Incentive not specifically permitted herein, shall be
null and void and without effect.
9.3 Dividend Equivalents. In the sole and complete discretion
of the Committee, an Incentive may provide the holder thereof with
dividends or dividend equivalents, payable in cash, shares, other
securities or other property on a current or deferred basis.
9.4 Effect of Termination of Employment or Death. In the event
that a participant ceases to be an employee of the Company for any
reason, including death, disability, early retirement or normal
retirement, any Incentives may be exercised, shall vest or shall
expire at such times as may be determined by the Committee and set
forth in the Incentive Agreement.
9.5 Additional Condition. Anything in this Plan to the contrary
notwithstanding: (a) the Company may, if it shall determine it
necessary or desirable for any reason, at the time of award of any
Incentive or the issuance of any shares of Common Stock pursuant to any
Incentive, require the recipient of the Incentive, as a condition to
the receipt thereof or to the receipt of shares of Common Stock issued
pursuant thereto, to deliver to the Company a written representation of
present intention to acquire the Incentive or the shares of Common
Stock issued pursuant thereto for his own account for investment and
not for distribution; and (b) if at any time the Company further
determines, in its sole discretion, that the listing, registration or
qualification (or any updating of any such document) of any Incentive
or the shares of Common Stock issuable pursuant thereto 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 award of any Incentive, the issuance of shares of
Common Stock pursuant thereto, or the removal of any restrictions
imposed on such shares, such Incentive shall not be awarded or such
shares of Common Stock shall not be issued or such restrictions shall
not be removed, as the case may be, 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 the
Company.
9.6 Incentive Agreements. An Incentive under this Plan shall be
subject to such terms and conditions, not inconsistent with this Plan,
as the Committee may, in its sole discretion, prescribe and set forth
in the Incentive Agreement. Such terms and conditions may provide for
the forfeiture of an Incentive or the gain associated with an
Incentive under certain circumstances to be set forth in the Incentive
Agreement, including if the participant competes with the Company or
engages in other activities that are harmful to the Company. All terms
and conditions of any Incentive shall be reflected in such form of
Incentive Agreement as is determined by the Committee. A copy of such
document shall be provided to the participant, and the Committee may,
but need not, require that the participant duly execute and deliver to
the Company a copy of such document as a condition precedent to the
effectiveness of the grant of the Incentive. Such document is referred
to in this Plan as an "Incentive Agreement" regardless of whether a
participant's signature is required.
9.7 Withholding.
(a) The Company shall have the right to withhold from any
payments or stock issuances under this Plan, or to collect as a
condition of payment, any taxes required by law to be withheld.
(b) Any participant may, but is not required to, satisfy
his or her withholding tax obligation in whole or in part by
electing (the "Election") to deliver currently owned shares of
Common Stock or to have the Company withhold from the shares the
participant otherwise would receive shares of Common Stock having
a value equal to the minimum amount required to be withheld. The
value of the shares to be delivered or withheld shall be based on
the Fair Market Value of the Common Stock on the date that the
amount of tax to be withheld shall be determined (the "Tax
Date"). Each Election must be made prior to the Tax Date. The
Committee may disapprove of any Election, may suspend or
terminate the right to make Elections, or may provide with
respect to any Incentive that the right to make Elections shall
not apply to such Incentive.
9.8 No Continued Employment. No participant under this Plan
shall have any right, because of his or her participation, to continue
in the employ of the Company for any period of time or to any right to
continue his or her present or any other rate of compensation.
9.9 Deferral Permitted. Payment of cash or distribution of any
shares of Common Stock to which a participant is entitled under any
Incentive shall be made as provided in the Incentive Agreement.
Payment may be deferred at the option of the participant if provided
in the Incentive Agreement.
9.10 Amendment or Discontinuance of this Plan. The Board may
amend or discontinue this Plan at any time; provided, however, that no
such amendment may:
(a) without the approval of the shareholders, (i) increase,
subject to adjustments permitted herein, the maximum number of
shares of Common Stock that may be issued through this Plan,
(ii) materially increase the benefits accruing to participants
under this Plan, (iii) materially expand the classes of
persons eligible to participate in this Plan, or (iv) amend
Section 5.6 to permit repricing of options, or
(b) materially impair, without the consent of the
recipient, an Incentive previously granted, except that the
Company retains all rights under Section 9.13 hereof.
9.11 Definition of Fair Market Value. Whenever the "Fair Market
Value" of Common Stock or some other specified security must be
determined for purposes of this Plan, it shall be determined as
follows: (i) if the Common Stock or other security is listed on an
established stock exchange or any automated quotation system that
provides sale quotations, the closing sale price for a share thereof
on such exchange or quotation system on the applicable date and if
shares are not traded on such day, on the next preceding trading date,
(ii) if the Common Stock or other security is not listed on any
exchange or quotation system, but bid and asked prices are quoted and
published, the mean between the quoted bid and asked prices on the
applicable date and if bid and asked prices are not available on such
day, on the next preceding day on which such prices were available;
and (iii) if the Common Stock or other security is not regularly
quoted, the fair market value of a share thereof on the applicable
date as established by the Committee in good faith.
9.12 Loans. In order to assist a participant in acquiring shares
of Common Stock pursuant to an Incentive granted under this Plan, the
Committee may authorize, at either the time of the grant of the
Incentive, at the time of the acquisition of Common Stock pursuant to
the Incentive, or at the time of the lapse of restrictions on shares
of restricted stock granted under this Plan, the extension of a loan
to the participant by the Company. The terms of any loans, including
the interest rate, collateral and terms of repayment, will be subject
to the discretion of the Committee. The maximum credit available
hereunder shall be equal to the aggregate purchase price of the shares
of Common Stock to be acquired pursuant to the Incentive plus the
maximum tax liability that may be incurred in connection with the
Incentive.
9.13 Change of Control
(a) A Change of Control shall mean:
(i) the acquisition by any person of beneficial
ownership of 30% or more of the outstanding shares of the
Common Stock or 30% or more of the combined voting power of
CenturyTel's then outstanding securities entitled to vote
generally in the election of directors; provided, however,
that for purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control:
(A) any acquisition (other than a Business
Combination (as defined below) which constitutes a
Change of Control under Section 9.13(a)(iii) hereof)
of Common Stock directly from the Company,
(B) any acquisition of Common Stock by the
Company,
(C) any acquisition of Common Stock by any
employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation
controlled by the Company, or
(D) any acquisition of Common Stock by any
corporation pursuant to a Business Combination that
does not constitute a Change of Control under
Section 9.13(a)(iii) hereof; or
(ii) individuals who, as of January 1, 2002,
constituted the Board of Directors of CenturyTel (the
"Incumbent Board") cease for any reason to constitute at
least a majority of the Board of Directors; provided,
however, that any individual becoming a director subsequent
to such date whose election, or nomination for election by
CenturyTel's shareholders, was approved by a vote of at
least two-thirds of the directors then comprising the
Incumbent Board shall be considered a member of the
Incumbent Board, unless such individual's initial assumption
of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of
directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than
the Incumbent Board; or
(iii) consummation of a reorganization, share
exchange, merger or consolidation (including any such
transaction involving any direct or indirect subsidiary of
CenturyTel) or sale or other disposition of all or
substantially all of the assets of the Company (a "Business
Combination"); provided, however, that in no such case shall
any such transaction constitute a Change of Control if
immediately following such Business Combination:
(A) the individuals and entities who were
the beneficial owners of CenturyTel's
outstanding Common Stock and CenturyTel's
voting securities entitled to vote generally
in the election of directors immediately prior
to such Business Combination have direct or
indirect beneficial ownership, respectively,
of more than 50% of the then outstanding
shares of common stock, and more than 50% of
the combined voting power of the then
outstanding voting securities entitled to vote
generally in the election of directors of the
surviving or successor corporation, or, if
applicable, the ultimate parent company thereof
(the "Post-Transaction Corporation"), and
(B) except to the extent that such ownership
existed prior to the Business Combination, no person
(excluding the Post-Transaction Corporation and any
employee benefit plan or related trust of either
CenturyTel, the Post-Transaction Corporation or any
subsidiary of either corporation) beneficially owns,
directly or indirectly, 20% or more of the then
outstanding shares of common stock of the corporation
resulting from such Business Combination or 20% or
more of the combined voting power of the then
outstanding voting securities of such corporation, and
(C) at least a majority of the members of the
board of directors of the Post-Transaction Corporation
were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the
action of the Board of Directors, providing for such
Business Combination; or
(iv) approval by the shareholders of CenturyTel
of a complete liquidation or dissolution of CenturyTel.
For purposes of this Section 9.13, the term "person" shall
mean a natural person or entity, and shall also mean the group
or syndicate created when two or more persons act as a
syndicate or other group (including, without limitation, a
partnership or limited partnership) for the purpose of
acquiring, holding, or disposing of a security, except that
"person" shall not include an underwriter temporarily holding
a security pursuant to an offering of the security.
(b) Upon a Change of Control of the type described in
clause (a)(i) or (a)(ii) of this Section 9.13 or upon the
approval by the Board of Directors of CenturyTel of any Change of
Control of the type described in clause (a)(iii) or (a)(iv) of
this Section 9.13, all outstanding Incentives granted pursuant to
this Plan shall automatically become fully vested and
exercisable, all restrictions or limitations on any Incentives
shall automatically lapse and, unless otherwise provided in the
applicable Incentive Agreement, all performance criteria and
other conditions relating to the payment of Incentives shall be
deemed to be achieved or waived by CenturyTel without the
necessity of action by any person.
(c) No later than 30 days after a Change of Control of
the type described in subsections (a)(i) or (a)(ii) of this
Section 9.13 and no later than 30 days after the approval by the
Board of a Change of Control of the type described in subsections
(a)(iii) or (a)(iv) of this Section 9.13, the Committee, acting
in its sole discretion without the consent or approval of any
participant (and notwithstanding any removal or attempted removal
of some or all of the members thereof as directors or Committee
members), may act to effect one or more of the alternatives
listed below, which may vary among individual participants and
which may vary among Incentives held by any individual
participant:
(i) require that all outstanding options or Other
Stock-Based Awards be exercised on or before a specified
date (before or after such Change of Control) fixed by the
Committee, after which specified date all unexercised
options and Other Stock-Based Awards and all rights of
participants thereunder shall terminate,
(ii) make such equitable adjustments to Incentives
then outstanding as the Committee deems appropriate to
reflect such Change of Control (provided, however, that the
Committee may determine in its sole discretion that no
adjustment is necessary),
(iii) provide for mandatory conversion or exchange
of some or all of the outstanding options or Other
Stock-Based Awards held by some or all participants as of a
date, before or after such Change of Control, specified by
the Committee, in which event such options and Other
Stock-Based Awards shall be deemed automatically cancelled
and the Company shall pay, or cause to be paid, to each such
participant an amount of cash per share equal to the excess,
if any, of the Change of Control Value of the shares subject
to such option or Other Stock-Based Award, as defined and
calculated below, over the per share exercise price of such
options or the per share exercise or base price of such
Other Stock-Based Awards or, in lieu of such cash payment,
the issuance of Common Stock or securities of an acquiring
entity having a Fair Market Value equal to such excess, or
(iv) provide that thereafter, upon any exercise of
an option or Other Stock-Based Award that entitles the
holder to receive Common Stock, the holder shall be entitled
to purchase or receive under such option or Other
Stock-Based Award, in lieu of the number of shares of Common
Stock then covered by such option or Other Stock-Based
Award, the number and class of shares of stock or other
securities or property (including, without limitation, cash)
to which the holder would have been entitled pursuant to the
terms of the agreement providing for the reorganization,
share exchange, merger, consolidation or asset sale, if,
immediately prior to such Change of Control, the holder had
been the record owner of the number of shares of Common
Stock then covered by such option or Other Stock-Based
Award.
(d) For the purposes of conversions or exchanges under
paragraph (iii) of Section 9.13(c), the "Change of Control Value"
shall equal the amount determined by whichever of the following
items is applicable:
(i) the per share price to be paid to holders of
Common Stock in any such merger, consolidation or other
reorganization,
(ii) the price per share offered to holders of
Common Stock in any tender offer or exchange offer whereby
a Change of Control takes place, or
(iii) in all other events, the fair market value of
a share of Common Stock, as determined by the Committee as
of the date determined by the Committee to be the date of
conversion or exchange.
(e) In the event that the consideration offered to
shareholders of CenturyTel in any transaction described in this
Section 9.13 consists of anything other than cash, the Committee
shall determine the fair cash equivalent of the portion of the
consideration offered that is other than cash.
* * * * * * * * * *
IN WITNESS WHEREOF, the undersigned Secretary of CenturyTel, Inc.
hereby certifies that the foregoing CenturyTel 2002 Management Incentive
Compensation Plan was (i) recommended to the Board of Directors of CenturyTel,
Inc. (the "Board") by its Compensation Committee at a meeting of the
Compensation Committee duly held on February 25, 2002, (ii) approved by the
Board at a meeting duly held on February 26, 2002, (iii) approved by the
affirmative vote of the holders of a majority of the voting power present at the
2002 Annual Meeting of Shareholders of the Company held on May 9, 2002, (iv)
amended by the Board on May 29, 2003, and (v) amended and restated by the Board
at a meeting duly held on February 25, 2004.
Dated February 25, 2004 /s/ Stacey W. Goff
-------------------
Stacey W. Goff
Secretary