Exhibit 10g
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AMERITECH CORPORATION
1999 STOCK OPTION AGREEMENT
WITH DIVIDEND EQUIVALENTS
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Participant: ___________________________________
Number of Shares of Common Stock: _____________________
Option Price: ___________________________________
Date of Agreement: ___________________________________
Option Becomes Exercisable:
No. of Shares
Date Exercisable
Prior to _______________________ None
On _______________________ ______________
On _______________________ ______________
On _______________________ ______________
Option Term Expiration Date: __________________________________
1. Grant. In accordance with, and subject to, the
provisions of the Ameritech Corporation Long-Term Stock Incentive
Plan (the "Plan"), Ameritech Corporation, a Delaware corporation
(the "Company"), hereby grants to the above-named participant
(the "Participant") a Non-Qualified Stock Option to purchase the
number of shares of Common Stock of the Company set forth above
(the "Option Shares") at a price per share equal to the option
price set forth above (the "Option Price").
2. Exercisability. (a) General. Except as otherwise
provided in this paragraph 2, the Non-Qualified Stock Option
granted by this Agreement (this "Option") shall first become
exercisable on the date or dates set forth above as to the
respective number of Option Shares set forth opposite each such
date.
(b) Acceleration upon Change in Control. This Option shall
become exercisable as to all of the Option Shares upon the
occurrence of a Change in Control (as defined in the Plan).
3. Term and Termination of Option. (a) Normal Option
Expiration. Unless terminated earlier pursuant to any of the
following provisions of this paragraph 3 or paragraph 6 of this
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Agreement, this Option shall expire on the date shown above as
the Option Term Expiration Date (the "Option Term Expiration
Date").
(b) Retirement. If the Participant's employment terminates
by reason of any Retirement (as defined below) which constitutes
a Qualifying Retirement (as defined below), then (i) any portion
of this Option which is either exercisable as of the date of the
Participant's Qualifying Retirement, or which will become
exercisable, pursuant to the regular exercisability schedule for
this Option set forth above, within 120 days following the date
of the Participant's Qualifying Retirement shall terminate on the
earlier of (A) the Option Term Expiration Date, or (B) if the
Participant is not in Corporate Resource grade 5 (CR5) or
equivalent or higher at such date of Qualifying Retirement, five
years after the date of the Participant's Qualifying Retirement,
and (ii) the balance of this Option as to all remaining Option
Shares shall terminate as of the date of the Participant's
Qualifying Retirement. For purposes of this paragraph 3(b),
"Retirement" shall mean any employment termination by reason of
retirement which occurs either (I) on or after the date on which
the Participant reaches age 65 or, if later, the fourth
anniversary of the date the Participant commenced participation
in Ameritech Management Pension Plan ("Normal Retirement") or
(II) under the Ameritech Management Pension Plan, with the
Company's approval, on or after the date on which the
Participant's combined age and service (in years and months)
while participating in the Ameritech Management Pension Plan (or
the Ameritech Pension Plan if the Participant previously accrued
a benefit under the Ameritech Pension Plan for which eligibility
was transferred to the Ameritech Management Pension Plan) equals
75 ("Approved Early Retirement" and, together with Normal
Retirement, "Retirement"). For purposes of this paragraph 3(b),
"Qualifying Retirement" means any Retirement which occurs on or
after [December 31, ______ or the first anniversary of the date
of this Agreement]. Any portion of this Option which is not
exercisable as of the date of the Participant's Qualifying
Retirement, but would become so within 120 days following such
date, will first become exercisable on the normal exercisability
date therefor set forth above, in accordance with paragraph 2(a)
hereof.
(c) Resignation or Certain Other Non-Cause Terminations of
Employment. If the Participant's employment by the Company and
its subsidiaries terminates voluntarily (for example, upon the
Participant's resignation) or involuntarily for any reason or
under any circumstances other than those covered by paragraphs
3(b), 3(d), 3(e) or 3(f) hereof, this Option shall terminate (i)
on the date which is 30 days after the date of such employment
termination, but in no event after the Option Term Expiration
Date, as to the portion of this Option which is exercisable as of
the date of such employment termination, and (ii) upon such
employment termination, as to any and all remaining Option Shares
for which this Option is not exercisable as of such time.
(d) Employment Termination Without Cause Following Change
in Control. If the Participant's employment by the Company and
subsidiaries is involuntarily terminated without Cause (as
defined below) during the portion of the calendar year which
remains following a Change in Control or the two immediately
subsequent calendar years, the Participant may exercise this
Option at any time during the five years commencing on the date
of Participant's termination of employment (or, if less, the
period remaining on the original term of this Option). Solely
for purposes of the preceding sentence, the term "Cause" means
the Participant's willfully engaging in conduct materially
injurious to the Company or any subsidiary or the willful and
continual failure by the Participant to substantially perform the
duties assigned to the Participant (other than any
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failure resulting from the Participant's incapacity due to
physical injury or illness or mental illness), which failure
has not been corrected by the Participant within 30 days after
receipt of a written notice from the Chief Executive Officer or
Board of Directors of the Participant's employer (or, if the
Participant's employer does not have a Board of Directors and is
managed by its shareholder or shareholders, then from such
shareholder or shareholders owning a majority of the voting stock
of the Participant's employer) specifying the manner in which the
Participant has failed to perform such duties. No act, or
failure to act, by the Participant shall be deemed "willful"
unless done, or omitted to be done, not in good faith and without
reasonable belief that such action or omission was in the best
interest of the Company and its subsidiaries.
(e) Termination of Employment for Cause. If the
Participant's employment by the Company and its subsidiaries is
terminated for Cause (as determined by the Company, in its sole
judgment) prior to the Option Term Expiration Date, this Option
shall terminate upon such employment termination as to any and
all Option Shares then remaining subject to this Option.
(f) Employment Termination due to Participant's Death or
Long-Term Disability. The portion of this Option which is
exercisable as of the date on which the Participant's employment
is terminated by reason of the Participant's death or disability
shall terminate on the earlier of (i) the Option Term Expiration
Date or (ii) one year after the date of such employment
termination by death or disability.
4. Manner of Exercise. This Option may be exercised, in
whole or in part, (a) in the case of "cashless exercises"
(including so-called "sell enough to cover" transactions), by
providing such notice as may be required by the "cashless
exercise" procedures established by the Committee (as defined in
the Plan) from time to time and then in effect, and (b) as to all
other forms of option exercise, by filing a written notice (in
the form attached hereto) with the person then designated by the
Company as the appropriate Stock Option Administrator with
respect to the Participant, in either case prior to the date this
Option expires or earlier terminates. Such notice shall specify
the number of shares of Common Stock with respect to which this
Option is being exercised. Unless shares (or a portion of the
proceeds, in the case of a cashless exercise) are retained in
satisfaction of applicable income and employment tax withholding,
the Participant will, upon request of the Company, submit a check
for an amount equal to the amount required to be withheld by the
Company on account of FICA taxes and federal, state, and local
income taxes. Payment of the Option Price shall be by cash, by
certified or cashier's check payable to the Company, by delivery
or attestation of ownership of shares of Common Stock having an
aggregate fair market value which is equal to the amount of cash
which would be required (unless otherwise provided by rules
established by the Committee from time to time) or by compliance
with the cashless exercise procedures established by the
Committee.
5. Non-Transferability. This Option is not transferable
except, upon the Participant's death, either to a beneficiary or
beneficiaries previously designated by the Participant in
accordance with procedures established from time to time by the
Committee (a "Designated Beneficiary") or, if there is no such
Designated Beneficiary, by will or the laws of descent and
distribution. This Option may be exercised during the lifetime
of the Participant only by the Participant and after the
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death of the Participant by a Designated Beneficiary or, if there
is no such Designated Beneficiary, by the legal representative of
the estate of the Participant.
6. Forfeiture for Certain Participant Actions.
Notwithstanding any other provision of this Agreement, this
Option shall terminate immediately and the Participant shall
forfeit all rights hereunder if the Participant, without the
consent of the Company, either (i) becomes associated with, is
employed by, renders services to or owns more than two percent
(2%) of the stock of any business that competes with the Company
or any of its subsidiaries or affiliates in any market in which
the Company or any such subsidiary or affiliate then does
business, or (ii) divulges or appropriates to the Participant's
own use or to the use of any other person any secret or
confidential information or knowledge pertaining to the business
of the Company or any of its subsidiaries or affiliates obtained
by the Participant while employed by any of them.
7. Dividend Equivalents. The Participant will be entitled
to Dividend Equivalents to the extent provided by this paragraph
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(a) Book Account. The Company shall establish a book
account for the benefit of the Participant (the Participant's
"Account"). As of each Record Date during the Dividend Crediting
Period, Stock Units shall be credited to the Participant's
Account to reflect the dividends payable for that Record Date
with respect to Covered Shares (as those terms are defined
below). The number of Stock Units to be credited to the
Participant's Account as of a Record Date shall be determined by
dividing the aggregate amount of the cash dividend that would
have been paid on the number of Covered Shares (as of such Record
Date) by the Average Value of a share of the Company's Common
Stock (as of such Record Date). To the extent that stock options
under the Plan are adjusted in accordance with the Plan to
reflect a corporate transaction (e.g., a stock split) with
respect to the Company, a corresponding adjustment shall be made
with respect to the Participant's Account.
(b) Interim Distributions. If, during the Dividend
Crediting Period, the Participant has exercised all or any
portion of the Option, then, as of the Interim Distribution Date
next following the end of the calendar quarter in which such
exercise occurs, the Participant shall receive an "Interim
Distribution" of shares of the Company's Common Stock equal to
the number of Stock Units credited to the Participant's Account
as of the Interim Distribution Date, multiplied by a fraction,
(A) the numerator of which shall be the total number of shares of
Company Stock as to which the Option was exercised during the
calendar quarter; and (B) the denominator of which shall be equal
to the sum of: (i) the number of shares of Company Stock subject
to the Option at the beginning of the calendar quarter in which
such exercise occurs; plus (ii) the number of shares, if any, of
the Company's Common Stock covered by any other prior exercise(s)
of the Option as to which Interim Distributions or Deferred
Interim Distributions have not been made. As of the date of such
distribution, the Participant's Account shall be reduced by the
number of Stock Units equal to the number of shares distributed.
(c) Deferred Distribution. If, as of the Interim
Distribution Date with respect to the exercise of the Option in
accordance with paragraph (b) above, the Fair Market Value of the
Company's
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Common Stock is equal to or less than the Option Price,
distribution with respect to that exercise shall be deferred
until the earlier of the next Interim Distribution Date on which
the Fair Market Value of the Company's Common Stock exceeds the
Option Price or the Final Distribution Date (as defined in
paragraph 7(d)). If, by reason of the limitations of this
paragraph (c), distribution with respect to any Option exercise
is deferred, (i) the number of Stock Units as to which
distribution would otherwise have occurred will remain credited
to the Participant's Account, and will, while remaining credited
to the Participant's Account, be included in the determination of
Covered Shares during the Dividend Crediting Period, and (ii) the
number of Stock Units to be distributed on a subsequent Interim
Distribution Date shall be determined by multiplying the number
of Stock Units credited to the Participant's Account as of the
Interim Distribution Date by the fraction determined in
accordance with paragraph 7(b).
(d) Final Distribution. As of the Final Distribution Date,
the Participant shall receive a "Final Distribution" of shares of
the Company's Common Stock equal to the number of Stock Units
then credited to the Participant's Account. The "Final
Distribution Date" shall be the date that is five years from the
date of this Agreement; provided that if the Fair Market Value of
the Company's Common Stock is equal to or less than the Option
Price on that date, the "Final Distribution Date" shall be
deferred until the first day of the next calendar quarter (i.e.,
July 1, October 1, January 1 and April 1) during the Option Term
(as set forth in paragraph 3(a)) on which the Fair Market Value
on such date exceeds the Option Price. Upon the Final
Distribution with respect to the Participant's Account, the Stock
Units credited to that Account shall be reduced to zero.
(e) Distribution following Termination of Employment. If
the Participant's employment terminates for any reason other than
Cause (as determined in accordance with paragraph 3(e)), the
number of Stock Units in the Participant's Account as of the date
of termination shall be multiplied by a fraction, the numerator
of which shall be the number of Option Shares canceled
immediately upon the Participant's termination of employment
pursuant to paragraph 3(b), 3(c), 3(d), and 3(f) and the
denominator of which shall be the sum of (i) total number of
shares then subject to the Option (whether or not then
exercisable) plus (ii) the number of shares, if any, of the
Company's Common Stock covered by any other prior exercise(s) of
the Option as to which Interim Distributions or Deferred Interim
Distributions have not been made. The number of Stock Units in
the Participant's Account equal to the number resulting from such
multiplication (if any) shall be canceled. The number of Stock
Units remaining in the Participant's Account after such
cancellation (if any) shall remain subject to this Agreement and
be available for Interim Distributions and the Final Distribution
for 120 days beyond the period determined in accordance with
paragraphs 3(b), 3(c), 3(d), and 3(f) during which the Option
remains exercisable following termination of employment in
accordance with this Agreement (or the period during which the
Option would remain exercisable in accordance with paragraph
3(b), 3(c), 3(d), and 3(f), even if, following termination of
employment, there is no unexercised portion of the Option that
has become exercisable on or before termination of employment).
Notwithstanding the above, on the ten-year anniversary of this
Agreement, all Stock Units remaining in the Participant's
Account, if any, shall be canceled. If the Participant's
employment is terminated for Cause, all Stock Units credited to
the Participant's Account shall immediately be canceled.
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(f) Withholding. If tax withholding is required with
respect to the Participant's Account, and unless shares are
retained in satisfaction of applicable income and employment tax
withholding, the Participant will, upon request of the Company,
submit a check for an amount equal to the amount required to be
withheld by the Company on account of FICA taxes and federal,
state, and local income taxes.
(g) Definitions. For purposes of this paragraph 7, the
terms listed below shall have the definitions indicated:
(i) The "Average Value" of a share of the Company's Common Stock
as of any Record Date shall be the average of the Fair Market
Values on the first and last trading days of the calendar quarter
immediately preceding the payment date of the dividends for such
Record Date.
(ii) The number of "Covered Shares" as of any Record Date shall
equal the sum of the number of shares then subject to the Option
(the "Shares") and the number of Stock Units then credited to the
Participant's Account.
(iii) The "Dividend Crediting Period" shall be the period
beginning with the first day after the date of this Agreement,
and ending five years from the date of this Agreement.
(iv) The "Fair Market Value" of a share of the Company's Common
Stock means the average of the highest and lowest prices at which
a share of the Company's Common Stock is traded on the date as of
which the determination is made, or, if the Company's Common
Stock is not traded on that date, the average of the highest and
lowest prices on the next preceding day on which the Company's
Common Stock was traded, as quoted on the New York Stock Exchange
- Composite Transactions or, if the Company's Common Stock is not
so quoted, on another principal market quotation system selected
by the Company.
(v) The "Interim Distribution Date" shall be the first day of
the second month of each calendar quarter occurring after the
date of this Agreement, and prior to the Final Distribution Date.
(vi) The "Record Date" shall be any date on which a record of
the Company's stockholders is taken for the purpose of payment of
a cash dividend on the Company's Common Stock.
8. Deferral of Distributions. Notwithstanding the
foregoing provisions of this Agreement to the contrary, the
Participant may elect to defer receipt of Option gains, and defer
the Interim Distributions and Final Distribution otherwise
provided in paragraph 7, as provided for and in accordance with
the provisions of the Corporate Resource Deferral Plan.
9. No Collateral Rights. Nothing herein contained shall
confer on the Participant any right with respect to continuation
of employment by the Company or its subsidiaries, or interfere
with the right of the Company or its subsidiaries to terminate at
any time the employment of the Participant or, except as to
shares of Company Common Stock actually delivered upon any
exercise of this Option, confer any rights as a stockholder upon
the holder hereof or any other person.
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10. Administration. The authority to manage and control
the operation and administration of this Agreement shall be
vested in the Committee or its delegates (subject to the
discretionary assumption of such authority by the Company's Board
of Directors, as provided in the Plan), and the Committee shall
have the same powers and authority with respect to this Agreement
as it has with respect to the Plan. Any interpretation of this
Agreement by the Committee and any decision made by it with
respect to this Agreement shall be final and binding with respect
to the Participant and all other persons.
11. Relationship to the Plan. This Agreement may contain
terms which are in additions to or supplement the terms of the
Plan, but the terms of this Agreement shall be subject to the
terms of the Plan. This Agreement also is subject to all
interpretations, amendments, rules and regulations adopted by the
Committee from time to time pursuant to the Plan.
12. Miscellaneous. The headings of this Agreement are
included for convenience of reference only, and shall not be used
in interpreting this Agreement. Any notice provided for in this
Agreement or in the Plan shall be in writing and shall be given
by hand delivery, facsimile, overnight courier or postage paid,
first class mail. Any notice shall be directed (a) if to the
Participant, to the Participant's address as then reflected on
the Company's records, and (b) if to the Company, to the person
then designated by the Company as the appropriate Stock Option
Administrator with respect to the Participant or to such other
persons and in accordance with such other procedures as the
Committee from time to time may establish.
AMERITECH CORPORATION
By: ______________________
Its Corporate Secretary
