CenturyTel Form 8-K 12/20/05
  


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 8-K



Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

December 20, 2005
(December 14, 2005)



CenturyTel, Inc.
(Exact name of registrant as specified in its charter)

 

Louisiana
1-7784
72-0651161
(State or other jurisdiction of
(Commission File Number)
(I.R.S. Employer
incorporation or organization)
 
Identification No.)
 
 
 

 
100 CenturyTel Drive, Monroe, Louisiana 71203
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (318) 388-9000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
   
[ ]
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240. 14a-12)
   
[ ]
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
   
[ ]
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))


 
Item 1.01. Entry Into a Material Definitive Agreement

On December 14, 2005, the Compensation Committee of the Board of Directors of CenturyTel, Inc. (the “Company”) approved accelerating the vesting of all unvested stock options outstanding (which as of December 14, 2005 totaled 1,474,571) under the Company’s management incentive compensation plans, effective as of December 31, 2005. The options are held by executive officers, officers and employees and have a range of exercise prices between $26.51 and $35.79 per share and a weighted average exercise price of $30.68 per share. The closing price per share of the Company’s common stock on December 14, 2005 was $34.25. All other terms of the options remained unchanged.

The Committee accelerated the vesting period to eliminate the Company’s recognition of compensation expense associated with these options under Statement of Financial Accounting Standards No. 123(R), Share-Based Payment, which will apply to the Company beginning in the first quarter of 2006. The Company’s aggregate pre-tax compensation expense that will be avoided is approximately $4.9 million, of which approximately $4.1 million would have been recognized in 2006. The Company will recognize additional pre-tax compensation expense in the fourth quarter of 2005 as a result of accelerating the vesting of these options; however, such amount is expected to be less than $300,000.

Of the total number of options accelerated, executive officers of the Company hold options to purchase an aggregate of  709,646 shares of common stock. In order to offset unintended personal benefit to the executive officers, shares of the Company’s common stock received upon exercise of an accelerated option by an executive officer may not be sold or otherwise transferred prior to the expiration of the option’s original vesting period. The following table sets forth the grant date, the number of options accelerated and the exercise prices of each such option held by the Company’s executive officers.
 
     
Number of
  Option
 
 
 
Options
  Exercise
Executive Officer
Position
Grant Date
Accelerated
 Price
         
         
Glen F. Post, III
Chairman of the Board
February 2003
106,664
$27.48
 
and Chief Executive Officer
February 2004
53,332
28.34
 
 
February 2005
133,332
33.40
         
Karen Puckett
President and Chief Operating Officer
February 2003
49,999
27.48
 
February 2004
24,999
28.34
   
February 2005
49,999
33.40
         
R. Stewart Ewing, Jr.
Executive Vice President
February 2003
26,999
27.48
 
and Chief Financial Officer
February 2004
20,832
28.34
   
February 2005
41,666
33.40
         
David D. Cole
Senior Vice President -
February 2003
26,999
27.48
 
Operations Support
February 2004
13,499
28.34
   
February 2005
26,999
33.40
         
Stacey W. Goff
Senior Vice President,
March 2003
9,666
26.95
 
General Counsel and Secretary
August 2003
16,666
34.20
 
 
February 2004
13,499
28.34
   
February 2005
26,999
33.40
         
Michael Maslowski
Senior Vice President and
February 2003
26,999
27.48
 
Chief Information Officer
February 2004
13,499
28.34
   
February 2005
26,999
33.40


SIGNATURE

Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

 
 
CenturyTel, Inc.
   
Date: December 20, 2005
/s/ Neil A. Sweasy
 
Neil A. Sweasy
 
Vice President and Controller
 
(Principal Accounting Officer)