CenturyLink 2015 Annual Report Download - page 96

payable in United States dollars and may be paid (a) in cash; (b) by check; (c) by delivery to the
Company of currently-owned shares of Common Stock (including through any attestation of
ownership that effectively transfers title), 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
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; (e) if approved by the
Committee, through a net exercise procedure whereby the optionee surrenders the option in
exchange for that number of shares of Common Stock with an aggregate Fair Market Value equal to
the difference between the aggregate exercise price of the options being surrendered and the
aggregate Fair Market Value of the shares of Common Stock subject to the option; (f) in such other
manner as may be authorized from time to time by the Committee; or (g) through any combination
of the foregoing methods.
6.5 Limitations on Repricing. Except for adjustments pursuant to Section 5.4 or actions permitted to be
taken by the Committee under Section 12 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
greater 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 or SAR with a lower exercise price, shares
of restricted stock, restricted stock units, an Other Stock-Based Award, a cash payment, or Common
Stock.
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) No incentive stock options shall be granted to any non-employee or 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
CenturyLink.
(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 the Plan or any other plan of CenturyLink or any of its subsidiaries) shall not
exceed $100,000. To the extent that such limitation is exceeded, the excess options shall be
treated as non-qualified stock options for federal income tax purposes.
7. Stock Appreciation Rights.
7.1 Grant of Stock Appreciation Rights. A stock appreciation right, or SAR, is a right to receive, without
payment to the Company, a number of shares of Common Stock, cash, or any combination thereof,
the number or amount of which is determined pursuant to the formula set forth in Section 7.5. Each
SAR granted by the Committee under the Plan shall be subject to the terms and conditions of the
Plan and the applicable Incentive Agreement.
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