EXHIBIT B
CENTURY TELEPHONE ENTERPRISES, INC.
1995 INCENTIVE COMPENSATION PLAN
1. Purpose. The purpose of the 1995 Incentive Compensation
Plan (the "Plan") of Century Telephone Enterprises, Inc.
("Century") is to increase shareholder value and to advance the
interests of Century and its subsidiaries (collectively, the
"Company") by furnishing a variety of economic incentives (the
"Incentives") designed to attract, retain and motivate employees
and officers and to strengthen the mutuality of interests between
such employees and officers and Century's shareholders.
Incentives may consist of opportunities to purchase or receive
shares of common stock, $1.00 par value per share, of Century
(the "Common Stock"), on terms determined under the Plan. As
used in the Plan, the term "subsidiary" means any corporation of
which Century 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. No Incentives shall be granted hereunder
unless the Plan is first approved by the shareholders of Century.
2. Administration.
2.1 Composition. The Plan shall be administered by the
compensation committee of the Board of Directors of Century,
or by a subcommittee of the compensation committee. The
committee or subcommittee that administers the 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 "disinterested
person" under Rule 16b-3 under the Securities Exchange Act of
1934 (the "1934 Act"), as currently in effect or any
successor rule, and (b) beginning on the date of Century's
1996 annual meeting of shareholders, qualify as "outside
directors" under Section 162(m) of the Code.
2.2 Authority. The Committee shall have plenary
authority to award Incentives under the Plan, to interpret
the Plan, to establish any rules or regulations relating to
the Plan that it determines to be appropriate, to enter into
agreements with 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 the Plan. Its decisions in matters
relating to the Plan shall be final and conclusive 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 the Plan to directors in their capacities as
such.
3. Eligible Participants. Key employees of the Company
(including officers who also serve as directors of the Company)
shall become eligible to receive Incentives under the 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, the Committee may delegate to appropriate
personnel of the Company its authority to designate participants,
to determine the size and type of Incentives to be received by
those participants and to determine or modify performance
objectives for those participants.
4. Types of Incentives. Incentives may be granted under the
Plan to eligible participants in any of the following forms,
either individually or in combination, (a) incentive stock
options and non-qualified stock options; (b) stock appreciation
rights ("SARs") (c) restricted stock; and (d) performance shares.
5. Shares Subject to the Plan.
5.1. Number of Shares. Subject to adjustment as
provided in Section 10.6, a total of 2 million shares of
Common Stock are authorized to be issued under the Plan.
Incentives with respect to no more than 200,000 shares of
Common Stock may be granted through the Plan to a single
participant in one calendar year. No more than 500,000
shares may be issued through the Plan as restricted stock.
In the event that a stock option, SAR or performance share
granted hereunder expires or is terminated or cancelled prior
to exercise or payment, any shares of Common Stock that were
issuable thereunder may again be issued under the Plan. In
the event that shares of Common Stock are issued as
Incentives under the Plan 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 the Plan. If an Incentive is to be
paid in cash by its terms, the Committee need not make a
deduction from the shares of Common Stock issuable under the
Plan with respect thereto. If and to the extent that an
Incentive may be paid in cash or shares of Common Stock, the
total number of shares available for issuance hereunder shall
be debited by the number of shares payable under such
Incentive, provided that upon any payment of all or part of
such Incentive in cash, the total number of shares available
for issuance hereunder shall be credited with the appropriate
number of shares represented by the cash payment, as
determined in the sole discretion of the Committee.
Additional rules for determining the number of shares granted
under the Plan may be made by the Committee, as it deems
necessary or appropriate.
5.2. Type of Common Stock. Common Stock issued under
the Plan may be authorized and unissued shares or issued
shares held as treasury shares.
6. Stock Options. A stock option is a right to purchase
shares of Common Stock from Century. Stock options granted under
this Plan may be incentive stock options 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:
6.1. Price. The exercise price per share shall be
determined by the Committee, subject to adjustment under
Section 10.6; provided that in no event shall the exercise
price be less than the Fair Market Value of a share of Common
Stock on the date of grant.
6.2. Number. The number of shares of Common Stock
subject to the option shall be determined by the Committee,
subject to Section 5.1 and subject to adjustment as provided
in Section 10.6.
6.3. Duration and Time for Exercise. Subject to earlier
termination as provided in Section 10.4, the term of each
stock option shall be determined by the Committee. Subject
to Section 10.12, each stock option shall become exercisable
at such time or times during its term as shall be determined
by the Committee, provided, however, that, except as provided
below, no stock option granted to an officer or director of
Century who is subject to Section 16 of the 1934 Act (an
"Insider") shall be exercisable within the six-month period
immediately following the date of grant. Notwithstanding the
foregoing, the Committee may accelerate the exercisability of
any stock option at any time, except to the extent of any
automatic acceleration of stock options under Section 10.12.
6.4. Repurchase. Upon approval of the Committee, the
Company may repurchase a previously granted stock option from
a participant by mutual agreement before such option has been
exercised by payment to the participant of the amount per
share by which: (i) the Fair Market Value (as defined in
Section 10.13) of the Common Stock subject to the option on
the business day immediately preceding the date of purchase
exceeds (ii) the exercise price.
6.5. Manner of Exercise. A stock option may be exer-
cised, 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
the full purchase price for such shares. The option price
shall be payable in United States dollars and may be paid by
(a) cash; (b) uncertified or certified check; (c) unless
otherwise determined by the Committee, by delivery of shares
of Common Stock held by the optionee for at least six months,
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; (d) by the simultaneous
exercise of options and sale of the shares of Common Stock
acquired upon exercise, pursuant to a brokerage arrangement
that has been approved in advance by the Committee, with the
proceeds from such sale delivered in payment of the exercise
price; or (e) in such other manner as may be authorized from
time to time by the Committee. In the case of delivery of an
uncertified check upon exercise of a stock option, 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.
6.6. Incentive Stock Options. Notwithstanding anything
in the 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 (as such term
is defined in Section 422 of the Code):
(a) Any Incentive Stock Option agreement authorized
under the 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 is
adopted by the Board of Directors.
(c) Unless sooner exercised, all Incentive Stock
Options shall expire no later than ten years after the
date of grant.
(d) No Incentive Stock Options 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.
(e) 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 the Plan or any other plan of
Century or any of its subsidiaries) 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.
6.7 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. As
stated above, such additional options may be granted only in
connection with the exercise of options by the participant
during the term of his active employment with the Company.
The grant of such additional options under this Section 6.7
shall be made upon such other terms and conditions as the
Committee may from time to time determine.
7. Restricted Stock
7.1 Grant of Restricted Stock. The Committee may award
shares of restricted stock to such key employees as the
Committee determines to be eligible pursuant to the terms of
Section 3. 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 the Plan. To the extent
restricted stock is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet
the additional requirements imposed thereby.
7.2 The 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,
a Restricted Period of one year or more is permitted. In
addition, any participant subject to Section 16 of the 1934
Act shall be prohibited from selling or otherwise
transferring shares of restricted stock for a period of six
months from the grant thereof. The expiration of the
Restricted Period shall also occur as provided under Section
10.4 and under the conditions described in Section 10.12
hereof.
7.3 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 are subject
to the terms and conditions (including conditions of
forfeiture) contained in the Century Telephone
Enterprises, Inc. 1995 Incentive Compensation Plan
(the "Plan"), and an agreement entered into between
the registered owner and Century Telephone
Enterprises, Inc. thereunder. Copies of the Plan and
the agreement are on file at the principal office of
the Company.
7.4 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.
7.5 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 10.6 due to a recapitalization,
merger or other change in capitalization.
7.6 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
7.2 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, except any that may be imposed by law, to the
participant or the participant's estate, as the case may be.
7.7 Rights as a Shareholder. Subject to the terms and
conditions of the Plan and subject to any restrictions on the
receipt of dividends 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 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.
8. Stock Appreciation Rights. A SAR is a right to receive,
without payment to the Company, a number of shares of Common
Stock, cash or any combination thereof, the amount of which is
determined pursuant to the formula set forth in Section 8.4. A
SAR may be granted (a) with respect to any stock option granted
under the Plan, either concurrently with the grant of such stock
option or at such later time as determined by the Committee (as
to all or any portion of the shares of Common Stock subject to
the stock option), or (b) alone, without reference to any related
stock option. Each SAR granted by the Committee under the Plan
shall be subject to the following terms and conditions:
8.1 Number. Each SAR granted to any participant shall
relate to such number of shares of Common Stock as shall be
determined by the Committee, subject to Section 5.1 and
subject to adjustment as provided in Section 10.6. In the
case of a SAR granted with respect to a stock option, the
number of shares of Common Stock to which the SAR pertains
shall be reduced in the same proportion that the holder of
the option exercises the related stock option.
8.2 Duration and Time for Exercise. Subject to Section
10.12, the term and exercisability of each SAR shall be
determined by the Committee. Unless otherwise provided by
the Committee in the Incentive Agreement, each SAR issued in
connection with a stock option shall become exercisable at
the same time or times, to the same extent and upon the same
conditions as the related stock option. No SAR granted to a
person subject to Section 16 of the 1934 Act may be exercised
during the first six months of its term. Notwithstanding the
foregoing, the Committee may in its discretion accelerate the
exercisability of any SAR at any time, except to the extent
of any automatic acceleration of SARs under Section 10.12.
8.3 Exercise. A SAR may be exercised, in whole or in
part, by giving written notice to the Company, specifying the
number of SARs that the holder wishes to exercise. The
Company shall, within 30 days of receipt of notice of
exercise by the Company, deliver to the exercising holder
certificates for the shares of Common Stock or cash or both,
as determined by the Committee, to which the holder is
entitled pursuant to Section 8.4.
8.4 Payment. Subject to the right of the Committee to
deliver cash in lieu of shares of Common Stock, the number of
shares of Common Stock that shall be issuable upon the
exercise of an SAR shall be determined by dividing:
(a) the number of shares of Common Stock as to which
the SAR is exercised multiplied by the dollar amount of
the appreciation in such shares (for this purpose, the
"appreciation" shall be the amount by which the Fair
Market Value of the shares of Common Stock subject to the
SAR on the Exercise Date exceeds (1) in the case of a SAR
related to a stock option, the purchase price of the
shares of Common Stock under the stock option or (2) in
the case of a SAR granted alone, without reference to a
related stock option, an amount equal to the Fair Market
Value of a share of Common Stock on the date of grant,
which shall be determined by the Committee at the time of
grant, subject to adjustment under Section 10.6); by
(b) the Fair Market Value of a share of Common Stock
on the Exercise Date.
In lieu of issuing shares of Common Stock upon the
exercise of a SAR, the Committee may elect to pay the holder
of the SAR cash equal to the Fair Market Value on the
Exercise Date of any or all of the shares which would
otherwise be issuable. No fractional shares of Common Stock
shall be issued upon the exercise of a SAR; instead, the
holder of a SAR shall be entitled to receive a cash
adjustment equal to the same fraction of the Fair Market
Value of a share of Common Stock on the Exercise Date or to
purchase the portion necessary to make a whole share at its
Fair Market Value on the Exercise Date.
9. Performance Shares. A performance share consists of an
award that may be paid in shares of Common Stock or in cash, as
described below. The award of performance shares shall be
subject to such terms and conditions as the Committee deems
appropriate.
9.1 Performance Objectives. Each performance share
will be subject to performance objectives for Century or one
of its subsidiaries, divisions or departments to be achieved
by the end of a specified period. The number of performance
shares awarded shall be determined by the Committee and may
be subject to such terms and conditions as the Committee
shall determine. If the performance objectives are achieved,
each participant will be paid (a) a number of shares of
Common Stock equal to the number of performance shares
initially granted to that participant; (b) a cash payment
equal to the Fair Market Value of such number of shares of
Common Stock on the date the performance objectives are met
or such other date as may be provided by the Committee or (c)
a combination of shares of Common Stock and cash, as may be
provided by the Committee. If such objectives are not met,
each award of performance shares may provide for lesser
payments in accordance with a pre-established formula set
forth in the Incentive Agreement. To the extent a
performance share is intended to qualify as performance based
compensation under Section 162(m) of the Code, it must meet
the additional requirements imposed thereby.
9.2 Not a Shareholder. The award of performance shares
to a participant shall not create any rights in such partic-
ipant as a shareholder of the Company, until the payment of
shares of Common Stock with respect to an award, at which
time such stock shall be considered issued and outstanding.
9.3 Dividend Equivalent Payments. A performance share
award may be granted by the Committee in conjunction with
dividend equivalent payment rights or other such rights.
Dividend equivalent payments may be made to the participant
at the time of the payment of the dividend or issuance of the
other right or at the end of the specified performance period
or may be deemed to be invested in additional performance
shares at the Fair Market Value of a share of Common Stock on
the date of payment of the dividend or issuance of the right.
10. General.
10.1. Duration. Subject to Section 10.11, the Plan
shall remain in effect until all Incentives granted under the
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 the Plan and all restrictions imposed on shares
of Common Stock in connection with their issuance under the
Plan have lapsed.
10.2 Transferability of Incentives. Options, SARs and
performance shares granted under the Plan shall not be
transferable except: (a) by will; (b) by the laws of descent
and distribution; (c) to family members, to a trust for the
benefit of family members or to charitable institutions, if
permitted by the Committee and provided in the Incentive
Agreement, after a determination that the ability to transfer
the Incentive will not result in the grant of the Incentive
being taxable and, with respect to such Incentives to
Insiders, if permitted by Rule 16b-3 under the 1934 Act; or
(d) pursuant to a domestic relations order, as defined by the
Code. Options or SARs may be exercised during the lifetime
of a participant only by the participant or by the
participant's guardian or legal representative. 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.
10.3. Non-transferability of Common Stock. Any shares
of Common Stock awarded to an Insider as restricted stock or
in payment of a performance share award must be held for a
period of six months from the date of grant, unless otherwise
permitted to be transferred and still be in compliance with
Rule 16b-3 under the 1934 Act.
10.4. 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 in the Incentive Agreement.
10.5. 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 restric-
tions 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.
10.6. Adjustment. In the event of any recapitalization,
stock dividend, stock split, combination of shares or other
change in the Common Stock, the number of shares of Common
Stock then subject to the Plan, including shares subject to
outstanding Incentives, shall be adjusted in proportion to
the change in outstanding shares of Common Stock. In the
event of any such adjustments, the purchase price of any
option, the performance objectives of any Incentive, and the
shares of Common Stock issuable pursuant to any Incentive
shall be adjusted as and to the extent appropriate, in the
reasonable discretion of the Committee, to provide partici-
pants with the same relative rights before and after such
adjustment.
10.7. Incentive Agreements. The terms of each Incentive
shall be stated in an agreement approved by the Committee.
The Committee may also determine to enter into agreements
with holders of options to reclassify or convert certain
outstanding options, within the terms of the Plan, as
Incentive Stock Options or as non-qualified stock options.
10.8. Withholding. The Company shall have the right to
withhold from any payments made under the Plan or to collect
as a condition of payment, any taxes required by law to be
withheld.
10.9. No Continued Employment. No participant under the
Plan shall have any right, because of his or her par-
ticipation, 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.
10.10. Deferral Permitted. Payment of cash or distribu-
tion 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.
10.11. Amendment of the Plan. The Board may amend or
discontinue the Plan at any time. In addition, no amendment
or discontinuance shall, subject to adjustments permitted
under Section 10.6, change or impair, without the consent of
the recipient, an Incentive previously granted, except that
the Company retains the right to (a) convert any outstanding
Incentive Stock Option to a non-qualified stock option, or
(b) require the forfeiture of an Incentive if a participant's
employment is terminated for cause, and (c) exercise all
rights under Section 10.12.
10.12 Change of Control. Notwithstanding anything to
the contrary in the Plan or any related Incentive Agreement,
if (i) Century shall not be the surviving entity in any
merger, consolidation or other reorganization (or survives
only as a subsidiary of an entity other than a previously
wholly-owned subsidiary of the Company), (ii) the Company
sells, leases or exchanges all or substantially all of its
assets to any other person or entity (other than a wholly-
owned subsidiary of the Company), (iii) Century is to be
dissolved or liquidated, (iv) any person or entity, including
a "group" as contemplated by section 13(d)(3) of the 1934
Act, other than an employee benefit plan of the Company or a
related trust, acquires or gains ownership or control
(including, without limitation, power to vote) of more than
30% of the outstanding shares of Century's voting stock, or
(v) as a result of or in connection with a contested election
of directors, the persons who were directors of Century
before such election shall cease to constitute a majority of
the Board of Directors of Century (each such event is
referred to herein as a "Corporate Change"), then upon the
approval by the Board of Directors of Century of any
Corporate Change of the type described in clause (i) to (iii)
or upon a Corporate Change described in clause (iv) or (v),
all outstanding options and SARs shall automatically become
fully exercisable, all restrictions or limitations on any
Incentives shall lapse and all performance criteria and other
conditions relating to the payment of Incentives shall be
deemed to be achieved and waived by the Company, without the
necessity of any action by any person. In addition, no later
than (a) 30 days after the approval by the Board of Directors
of Century of any Corporate Change of the type described in
clauses (i) to (iii) or (b) 30 days after a Corporate Change
of the type described in clause (iv) or (v), 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 following alternatives, which may vary among
individual participants and which may vary among Incentives
held by any individual participant: (1) require that all
outstanding options and/or SARs be exercised on or before a
specified date (before or after such Corporate Change) fixed
by the Committee, after which specified date all unexercised
options and SARs and all rights of participants thereunder
shall terminate, (2) provide for mandatory conversion of some
or all of the outstanding options and SARs held by some or
all participants as of a date, before or after such Corporate
Change, specified by the Committee, in which event such
options and SARs 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 SAR, as defined and calculated below, over
the exercise price(s) of such options or SARs, or, in lieu of
such cash payment, the issuance of Common Stock having a Fair
Value Market equal to such excess, (3) make such equitable
adjustments to Incentives then outstanding as the Committee
deems appropriate to reflect such Corporate Change (provided,
however, that the Committee may determine in its sole
discretion that no adjustment is necessary to Incentives then
outstanding) or (4) provide that thereafter upon any exercise
of an option or SAR theretofore granted the participant shall
be entitled to purchase under such option or SAR, in lieu of
the number of shares of Common Stock then covered by such
option or SAR, the number and class of shares of stock or
other securities or property (including, without limitation,
cash) to which the participant would have been entitled
pursuant to the terms of the agreement providing for the
merger, consolidation, asset sale, dissolution or other
Corporate Change of the type described in clause (i) to (iii)
above, if, immediately prior to such Corporate Change, the
participant had been the holder of record of the number of
shares of Common Stock then covered by such options or SARs.
For the purposes of clause (2) above, the "Change of Control
Value" shall equal the amount determined by whichever of the
following items is applicable: (i) the per share price
offered to shareholders of Century in any such merger,
consolidation or other reorganization, determined as of the
date of the definitive agreement providing for such
transaction, (ii) the price per share offered to shareholders
of Century in any tender offer or exchange offer whereby a
Corporate Change takes place, or (iii) in all other events,
the Fair Market Value per share of Common Stock into which
such options or SARs being surrendered are exercisable, as
determined by the Committee as of the date determined by the
Committee to be the date of cancellation and surrender of
such options or SARs. In the event that the consideration
offered to shareholders of Century in any transaction
described herein consists of anything other than cash, the
Committee shall determine the fair cash equivalent of the
portion of the consideration offered which is other than
cash.
10.13. Definition of Fair Market Value. Whenever "Fair
Market Value" of Common Stock shall be determined for pur-
poses of this Plan, it shall be determined as follows: (i) if
the Common Stock is listed on an established stock exchange
or any automated quotation system that provides sale
quotations, the closing sale price for a share of the Common
Stock on such exchange or quotation system on the applicable
date; (ii) if the Common Stock 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 is
not regularly quoted, the fair market value of a share of
Common Stock on the applicable date as established by the
Committee in good faith.
10.14. Compliance with Section 16. It is the intent of
the Company that the Plan and Incentives hereunder satisfy
and be interpreted in a manner, that, in the case of
participants who are or may be Insiders, satisfies the
applicable requirements of Rule 16b-3, so that such persons
will be entitled to the benefits of Rule 16b-3 or other
exemptive rules under Section 16 of the 1934 Act and will not
be subjected to avoidable liability thereunder. If any
provision of the Plan or of any Incentives would otherwise
frustrate or conflict with the intent expressed in this
Section 10.14, that provision to the extent possible shall be
interpreted and deemed amended so as to avoid such conflict.
To the extent of any remaining irreconcilable conflict with
such intent, the provision shall be deemed void as applicable
to Insiders.
10.15. Loans. In order to assist a participant to
satisfy his tax liabilities arising in connection with an
Incentive granted under the Plan, the Committee may
authorize, subject to the provisions of Regulation G of the
Board of Governors of the Federal Reserve System, 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 the 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 maximum tax liability that may be incurred in
connection with the Incentive.
Adopted by the Compensation Committee: ________________, 1995.
Ratified by the Board of Directors: ________________, 1995.
Approved by the Shareholders: ________________, 1995.