[FORM 5-LTIP OPTION AGREEMENT]
[1999 LTIP VERSION]
MEDIAONE GROUP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
GRANT # _______
THIS AGREEMENT is made between MediaOne Group, Inc. (the "Company") and
the Optionee ("Optionee") named in the schedule attached to and made part of
this Agreement (the "Schedule"), as of the date set forth in the Schedule.
Pursuant to the MediaOne Group, Inc. Amended 1994 Stock Plan (the
"Plan"), the Human Resources Committee of the Company's Board of Directors
(the "Committee") has approved the granting to Optionee of an option to
purchase shares of Common Stock (the "Option") on the terms and conditions
set forth in this Agreement, as a matter of separate inducement in connection
with Optionee's engagement with the Company or a Related Entity, in addition
to and not in lieu of salary or other compensation for Optionee's services.
The Option shall not be treated as an incentive stock option.
In consideration of the foregoing and of the mutual covenants set forth
herein, and other good and valuable consideration, the Company and Optionee
agree as follows:
1. INCORPORATION OF PLAN AND DEFINED TERMS. The Option is granted
pursuant to the Plan, the terms of which are incorporated by reference and
apply to this Agreement as if they were fully set forth herein. Terms used
in this Agreement and not otherwise defined shall have the meanings set forth
in the Plan.
2. SHARES OPTIONED; OPTION PRICE. Optionee may purchase all or any
part (in whole shares) of an aggregate of the number of shares of Common
Stock, at a purchase price per share (which is not less than the Fair Market
Value on the date of this Agreement) as specified in the Schedule, on the
terms and conditions set forth herein.
BEST PAYMENT PROVISO: IN THE EVENT THAT THE VESTING OF THE OPTION TOGETHER
WITH ALL OTHER PAYMENTS AND THE VALUE OF ANY BENEFIT RECEIVED OR TO BE RECEIVED
BY OPTIONEE (UNDER THIS OR ANY OTHER ARRANGEMENT) WOULD RESULT IN ALL OR A
PORTION OF SUCH TOTAL PAYMENTS TO BE SUBJECT TO EXCISE TAX UNDER SECTION 4999 OF
THE CODE, THEN OPTIONEE'S PAYMENTS UNDER THIS AGREEMENT AND ALL OTHER
ARRANGEMENTS SHALL BE EITHER (A) THE FULL PAYMENT OR (B) SUCH LESSER AMOUNT
WHICH WOULD RESULT IN NO PORTION OF THE PAYMENT BEING SUBJECT TO EXCISE TAX
UNDER SECTION 4999 OF THE CODE, WHICHEVER OF THE FOREGOING AMOUNTS, TAKING INTO
ACCOUNT THE APPLICABLE FEDERAL, STATE, AND LOCAL EMPLOYMENT TAXES, INCOME TAXES,
AND THE EXCISE TAX IMPOSED BY SECTION 4999 OF THE CODE, RESULTS IN THE RECEIPT
BY OPTIONEE, ON AN AFTER-TAX BASIS, OF THE GREATEST AMOUNT OF THE PAYMENT
NOTWITHSTANDING THAT ALL OR SOME PORTION OF THE PAYMENT MAY BE TAXABLE UNDER
SECTION 4999 OF THE CODE; PROVIDED, HOWEVER, THAT OPTIONEE WILL BE ENTITLED TO
RECEIVE THE FULL
PAYMENT ONLY IF THE EXCESS OF (C) THE "PARACHUTE PAYMENTS" AS DEFINED IN
SECTION 280G(B)(2) OF THE CODE, OVER (D) 2.99 TIMES OPTIONEE'S "BASE AMOUNT"
AS DEFINED IN SECTION 280G(B)(3) OF THE CODE EXCEEDS THE SUM OF (X) FIVE
PERCENT (5%) OF THE AMOUNT IN CLAUSE (C), ABOVE, PLUS (Y) THE EXCISE TAX
IMPOSED UNDER SECTION 4999 OF THE CODE, PLUS (Z) THE APPLICABLE FEDERAL,
STATE, AND LOCAL EMPLOYMENT TAXES AND INCOME TAXES IMPOSED ON THE EXCESS OF
(i) THE "PARACHUTE PAYMENTS" AS DEFINED IN SECTION 280G(B)(2) OF THE CODE,
OVER (ii) 2.99 TIMES OPTIONEE'S "BASE AMOUNT" AS DEFINED IN SECTION
280G(B)(3) OF THE CODE. ALL DETERMINATIONS REQUIRED TO BE MADE UNDER THIS
PARAGRAPH SHALL BE MADE IN THE SOLE OPINION OF A TAX CONSULTANT SELECTED BY
THE COMPANY AND REASONABLY ACCEPTABLE TO OPTIONEE (THE "TAX CONSULTANT").
THE COMPANY SHALL CAUSE THE TAX CONSULTANT TO PROVIDE DETAILED SUPPORTING
CALCULATIONS OF ITS DETERMINATIONS TO THE COMPANY AND OPTIONEE. NOTICE MUST
BE GIVEN TO THE TAX CONSULTANT WITHIN FIFTEEN (15) BUSINESS DAYS AFTER AN
EVENT ENTITLING OPTIONEE TO A PAYMENT UNDER THIS AGREEMENT. ALL FEES AND
EXPENSES OF THE TAX CONSULTANT SHALL BE BORNE SOLELY BY THE COMPANY. THE TAX
CONSULTANT'S DETERMINATIONS MUST BE MADE WITH SUBSTANTIAL AUTHORITY (WITHIN
THE MEANING OF SECTION 6662 OF THE INTERNAL REVENUE CODE). FOR PURPOSES OF
THIS BEST PAYMENT PROVISO, THE TERM "PAYMENT" SHALL MEAN ANY AMOUNT THAT
WOULD BE CONSIDERED A "PARACHUTE PAYMENT" UNDER SECTION 280G(b)(2) OF THE
CODE.
3. OPTION TERM; VESTING; TIMES OF EXERCISE. The Option shall become
Vested in one-third increments upon each of the first three (3) annual
anniversaries from the date of this Agreement. The vesting of any such
increment shall be subject to the continuous employment of Optionee until the
anniversary date on which such increment is scheduled to vest, and provided
further that the Option shall expire and shall no longer be exercisable after
ten (10) years from the date of this Agreement (the "Expiration Date").
Except as otherwise specifically set forth below and elsewhere in this
Agreement, the Option shall become Vested only to the extent that the
foregoing continuous employment requirement is satisfied, regardless of the
circumstances under which Optionee's employment is terminated.
(i) DEATH. In the event of the death of Optionee, the Option shall
become Vested immediately and (i) the estate of Optionee, (ii) Optionee's
transferees by last will and testament or the laws of descent and
distribution, or (iii) in the event Optionee transfers the Option under the
limited circumstances specified in Paragraph 5 below, Transferee(s) (as
defined in Paragraph 5 below), shall have the right, at any time and from
time to time consistent with rules established by the Committee for the
administration of the Plan, within one (1) year after the date of death or
such longer period, if any, as the Committee in its sole discretion shall
determine (but not after the Expiration Date), to exercise all or any
portion of the Option.
(ii) DISABILITY. Except as otherwise set forth in this Agreement, if
the employment of Optionee is terminated because of Disability, the Option
shall be retained by Optionee, and the Option, if not then Vested, shall
become Vested as set forth in the vesting schedule in Paragraph 3 of this
Agreement. Upon vesting, Optionee shall have the right to exercise the
Option, at any time and from time to time, but not after the Expiration
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Date, unless otherwise provided in this Agreement.
(iii) RETIREMENT. Except as otherwise set forth in this Agreement,
upon Optionee's Retirement, the Option shall be retained by Optionee, and
the Option, if not then Vested, shall become Vested as set forth in the
vesting schedule in Paragraph 3 of this Agreement, unless the Committee, in
its sole discretion, determines otherwise; provided, however, that the
continuation of vesting shall be contingent upon Optionee's execution and
delivery to the Company, on or prior to the effective date of Optionee's
Retirement, of the Company's standard form of "Waiver & Release" of claims,
available from the Human Resources Department of the Company. Upon
vesting, Optionee shall have the right to exercise the Option, at any time
and from time to time, but not after the Expiration Date, unless otherwise
provided in this Agreement. NOTWITHSTANDING ANY OTHER TERMS OF THIS
PARAGRAPH 3(III), IF OPTIONEE'S RETIREMENT OCCURS BEFORE THE FIRST
ANNIVERSARY OF THE DATE OF OPTION GRANT SET FORTH IN THE SCHEDULE, ALL
OPTION RIGHTS AS TO ONE-HALF (1/2) OF THE NUMBER OF SHARES OF COMMON STOCK
WITH RESPECT TO WHICH OPTIONS ARE GRANTED SHALL BE FORFEITED EXCEPT AS TO
THOSE OPTIONS ALREADY EXERCISED PRIOR TO SUCH RETIREMENT.
(iv) TERMINATION FOR CAUSE. Notwithstanding any other provision in
this Agreement, if Optionee's employment is terminated by the Company or
any Related Entity "for cause," as such term is defined in the Plan,
Optionee shall forfeit immediately all rights under the Option except as to
the shares of Common Stock already purchased prior to such termination.
(v) OTHER TERMINATION. If Optionee's employment with the Company or a
Related Entity is terminated for any reason other than for death,
Disability or Retirement and other than "for cause," as such term is
defined in the Plan, Optionee shall have the right to exercise all or any
portion of the Option, if the Option is then Vested, at any time and from
time to time within three (3) months of termination or such other period,
if any, as the Committee in its sole discretion shall determine (but not
after the Expiration Date).
(vi) EXECUTIVE SEVERANCE AGREEMENT. If Optionee has executed an
Executive Severance Agreement with the Company, the Option will be Vested
in accordance with
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the terms of the Executive Severance Agreement if: (1) Optionee becomes
entitled to the receipt of "Severance Benefits," as set forth in that
Executive Severance Agreement; and (2) sixteen (16) calendar days have
passed following (i) the execution of a standard form of "Waiver &
Release" of claims and (ii) compliance with the "Conditions" by Optionee
as set forth in the Company's standard Executive Severance Agreement.
(vii) CHANGE OF CONTROL. Upon the occurrence of a Change of Control,
the Option shall be Vested immediately. For purposes of this paragraph,
"Change of Control" shall have the identical meaning as set forth in the
Change of Control Agreement, if any, that Optionee has executed with the
Company. To ensure parallel application, for purposes of this paragraph
only, defined terms contained in the definition of "Change of Control" set
forth in Optionee's Change of Control Agreement shall have the same meaning
here as set forth in that Change of Control Agreement. If Optionee has not
executed any such Change of Control Agreement, "Change of Control" shall
have the same meaning as set forth in Stock Plan.
4. EXERCISE: PAYMENT FOR AND DELIVERY OF STOCK. The Option shall be
exercisable only by: (i) Optionee; (ii) Optionee's guardian or legal
representative, (iii) Optionee's estate; (iv) Optionee's transferee(s) by
last will and testament or the laws of descent and distribution or, (v) in
the event Optionee transfers the Option under the limited circumstances
specified in Paragraph 5 below, by Transferee(s). The Option may be
exercised by giving notice of exercise to the Company, specifying the number
of shares to be purchased (minimum of 100, unless the unexercised balance of
the Option is less than 100) and the total purchase price. The purchase
price shall be payable: (i) in cash or by an equivalent means; (ii) by
delivery, constructive or otherwise, to the Company of shares of Common Stock
owned by Optionee; or (iii) any combination of the
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foregoing. Any shares of Common Stock so tendered shall be valued as of the
Option exercise date.
5. NON-TRANSFERABILITY OF OPTION. Except as specifically set forth in
this Paragraph 5, the Option is not transferable other than by last will and
testament or the laws of descent and distribution, and the Option shall not
be assigned, transferred, pledged, hypothecated, or otherwise disposed of in
any way, whether by operation of law or otherwise, and shall not be subject
to execution, attachment or similar process. The Option shall not be
assignable or transferable pursuant to a domestic relations order. In
limited circumstances, with the prior approval of the Senior Vice President -
Human Resources, in full compliance with Section 16 of the Securities
Exchange Act of 1934, as amended, and the rules promulgated thereunder, and
after Optionee has satisfied the Company's executive stock ownership goal
then in effect and set by the Committee, Optionee may transfer the Option, in
whole or in part, to one or more member(s) of his or her family (as that term
is defined in Internal Revenue Code Reg. Section 25.2701-2(d)) ("Member(s) of
the Family") or to trusts maintained for the benefit of such Member(s) of the
Family (together, "Transferee(s)"). Any such transfer shall be contingent
upon the execution by both Optionee and Transferee(s) of a "Stock Option
Transfer Agreement," in the form provided by the Company ("Transfer
Agreement"). The Option shall not be transferable by Transferee(s). Upon
any attempt to assign, transfer, pledge, hypothecate or otherwise dispose of
the Option other than as specifically set forth in this Paragraph 5, or upon
the levy of any execution, attachment or similar process upon the Option, the
Option shall immediately terminate and become null and void.
6. PERFORMANCE FOR COMPETITORS. If at any time following the date of
this Agreement and before the Option is Vested, regardless of whether
Optionee has Retired, Optionee directly or indirectly receives payment for
services rendered to, or is otherwise employed by, any person, firm or
corporation that is in competition with the Company or a Related Entity or
engaged in providing any goods or services that are substantially the same as
any goods or services provided or under development by the Company or a
Related Entity, Optionee immediately shall forfeit all rights under the
Option, unless: 1) the Committee in its sole discretion determines
otherwise; or 2) the only services rendered by Optionee to any such person,
firm or corporation are those of an outside director and Optionee is in full
compliance with the Company's Policy on Service on Outside Boards of
Directors (as if Optionee remained an employee of the Company or a Related
Entity), as interpreted solely by the Company's Senior Management Compliance
Committee. If at any time Optionee renders services to or becomes otherwise
employed by any person, firm or corporation that is in competition with the
Company or a Related Entity or engaged in providing any goods or services
that are substantially the same as goods or services provided or under
development by the Company or a Related Entity, Optionee shall have three (3)
months after the date of such employment to exercise any Vested and
non-expired Option. Any determination under this Paragraph 6, including
whether a person, firm or corporation is "in competition with" the Company or
a Related Entity or providing "substantially the same" goods or services as
the Company or a Related Entity provides or is developing, will be subject to
the sole discretion of the Committee.
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7. NON-SOLICITATION OF EMPLOYEES. Optionee agrees that he or she will
not for a period of one (1) year immediately following the termination of his
or her employment with the Company or a Related Entity for any reason, either
on Optionee's own account or in conjunction with or on behalf of any other
person or entity whatsoever, directly or indirectly induce, solicit, or
entice away any person who, at any time during the three (3) months
immediately preceding Optionee's termination of employment, is a managerial
level employee of the Company or a Related Entity (including, but not limited
to, any Officer, Executive Director or Director-level employee, or any
equivalent or successor term for any such employees). If Optionee engages in
any conduct contrary to the provisions of this Paragraph 7, Optionee shall
forfeit the Option to the extent the Option has not Vested, unless the
Committee determines otherwise. Such forfeiture is in addition to any other
remedies available to the Company by law.
8. INTELLECTUAL PROPERTY OWNERSHIP AND PROTECTION. Optionee agrees
that any inventions, discoveries, creations (including without limitation
software, writings, drawings and other works), improvements, confidential
information or other intellectual property that he or she may develop or
create, or assist in developing or creating, during his or her employment
with the Company, whether or not patentable or eligible for copyright, that
relate to the actual, planned, or foreseeable business or other activities of
the Company, or that result from his or her work for the Company, are the
exclusive property of the Company. Optionee agrees to disclose promptly such
property to the Company and will, both during and after his or her
employment, and without additional compensation, execute all assignments and
other documents and do all things reasonably necessary to secure and enforce
U.S. and foreign intellectual property rights for the Company, including
patents and copyrights.
Optionee is not obligated to assign any intellectual property to Company
that Optionee created prior to Optionee's employment with the Company. To
avoid any confusion, Optionee must identify in writing on Attachment A any
such intellectual property that has not been patented or published and
forward it along with this letter.
Optionee agrees that Optionee will hold in confidence and will not,
during or after his or her employment, disclose or use for the benefit of any
person or entity other than Company, any Company confidential information
that was developed or received during his or her employment. "Company
confidential information" shall include all trade secrets, research and
development information, product and marketing plans, business or legal
strategies, personnel or financial data, product and service specifications,
prototypes, software, customer lists and other confidential information or
materials of Company or of others with whom Company has a confidential
relationship. Optionee will promptly return all such information and
materials to Company when his or her employment ends.
If Optionee fails to comply with the provisions of this Paragraph 8, Optionee
shall forfeit the Option to the extent the Option has not vested, unless the
Committee determines otherwise. Such forfeiture is in addition to any other
remedies available to the Company.
9. DECISIONS OF COMMITTEE. Any decision, interpretation or other
action made or taken in good faith by the Committee or its designee arising
out of or in connection with the Plan or the
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Option shall be final, binding and conclusive on the Company and Optionee and
any respective heir, executor, administrator, successor or assign.
10. ARBITRATION. Optionee agrees that any claim, controversy or
dispute that may arise directly or indirectly in connection with Optionee's
employment or termination of employment with MediaOne Group, and/or any
associated or related disputes arising therefrom involving MediaOne Group
and/or any employee(s), Director(s), officer(s), or agent(s) of MediaOne
Group, whether arising in contract, statute, tort, fraud, misrepresentation,
discrimination, common law or any other legal theory, including, but not
limited to: Disputes relating to the making, performance or interpretation
of this Agreement; and claims or other disputes arising under Title VII of
the Civil Rights Act of 1964, as amended; the Civil Rights Act of 1991; the
Age Discrimination in Employment Act of 1967, as amended; 42 U.S.C. Section
1981, Section 1981a, Section 1983, Section 1985, or Section 1988; the
Family and Medical Leave Act of 1993; the Americans with Disabilities Act of
1990, as amended; the Rehabilitation Act of 1973, as amended; the Fair Labor
Standards Act of 1938, as amended; the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"); the Colorado Anti-Discrimination Act; or
any other similar federal, state or local law or regulation, whenever
brought, shall be resolved by arbitration. If, however, Optionee would
otherwise be legally required to exhaust administrative remedies to obtain
legal relief, Optionee can and must exhaust such administrative remedies
prior to pursuing arbitration. The only legal claims between Optionee and
MediaOne Group that are not included for arbitration within this Agreement
are claims for workers' compensation or unemployment compensation benefits.
BY SIGNING THIS AGREEMENT, OPTIONEE VOLUNTARILY, KNOWINGLY AND INTELLIGENTLY
WAIVES ANY RIGHT OPTIONEE MAY OTHERWISE HAVE TO SEEK REMEDIES IN COURT OR
OTHER FORUMS, INCLUDING THE RIGHT TO A JURY TRIAL. MEDIAONE GROUP ALSO
HEREBY VOLUNTARILY, KNOWINGLY, AND INTELLIGENTLY WAIVES ANY RIGHT IT MIGHT
OTHERWISE HAVE TO SEEK REMEDIES AGAINST OPTIONEE IN COURT OR OTHER FORUMS,
INCLUDING THE RIGHT TO A JURY TRIAL. The Federal Arbitration Act, 9 U.S.C.
Sections 1-16 ("FAA") shall govern the arbitrability of all claims, provided
that they are enforceable under the FAA, as it may be amended from time to
time. In the event the FAA does not govern, the Colorado Uniform Arbitration
Act shall apply. Additionally, the substantive law of Colorado, to the
extent it is consistent with the terms stated in this Agreement for
arbitration, shall apply to any common law claims. This Agreement for
arbitration supersedes any prior arbitration agreement between Optionee and
MediaOne Group to the extent they are inconsistent.
A single arbitrator engaged in the practice of law shall conduct the
arbitration under the applicable rules and procedures of the American
Arbitration Association ("AAA"), unless otherwise agreed to by the parties.
Any dispute, that relates directly or indirectly to Optionee's employment
with MediaOne Group or to the termination of Optionee's employment will be
conducted under the AAA National Rules for the Resolution of Employment
Disputes, effective June 1, 1997. The arbitrator shall be chosen from a
state other than Optionee's state of residence and other than Colorado.
Other than as set forth herein, the arbitrator shall have no authority to add
to, detract from, change, amend, or modify existing law. The arbitrator
shall have the authority to order such discovery as is necessary for a fair
resolution of the dispute. The arbitrator may award punitive damages, as
allowed by Title VII of the Civil Rights Act of 1964, as amended; the Civil
Rights Act of 1991; the Age Discrimination in Employment Act of 1967, as
amended; and the Americans with Disabilities Act of 1990, as amended,
regardless of any
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limitations imposed by federal, state, or local laws regarding amounts that
may be awarded in arbitration proceedings. All arbitration proceedings,
including without limitation, settlements under this Agreement, will be
confidential. Optionee shall not be required to pay more than One Hundred
Fifty Dollars ($150.00) of the arbitrator's hourly fees and expenses. The
prevailing party in any arbitration shall be entitled to receive reasonable
attorneys' fees as provided by law. The arbitrator's decision and award
shall be final and binding, as to all claims that were, or could have been,
raised in the arbitration, and judgment upon the award rendered by the
arbitrator may be entered to any court having jurisdiction thereof. If any
party hereto files a judicial or administrative action asserting claims
subject to this arbitration provision, and another party successfully stays
such action and/or compels arbitration of such claims, the party filing said
action shall pay the other party's costs and expenses incurred in seeking
such stay and/or compelling arbitration, including reasonable attorneys' fees
not to exceed Two Thousand Five Hundred Dollars ($2,500.00).
11. MISCELLANEOUS.
(i) NOTICES. Any notice to be given to the Company shall be
personally delivered to or addressed to its Senior Vice President - Human
Resources, and any notice to be given to Optionee shall be addressed to him
or her at the address given beneath his or her signature below or such other
address as the Company reasonably believes to be his or her most current
address. Any notice to the Company is deemed given when received on behalf
of the Company by the Senior Vice President - Human Resources of the Company
at 000 Xxxxxxxxx Xxxxx Xxxx, 0xx Xxxxx, Xxxxxxxxx, XX 00000. Any notice to
Optionee is deemed given when personally delivered or enclosed in a properly
sealed envelope addressed as described above and deposited, postage prepaid,
in a post office or branch post office regularly maintained by the United
States Postal Service.
(ii) EMPLOYMENT. THE COMPANY OR A RELATED ENTITY MAY
TERMINATE OPTIONEE'S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE, UNLESS
THE TERM OF EMPLOYMENT IS COVERED BY SEPARATE CONDITIONS CONTAINED IN ANOTHER
AUTHORIZED WRITTEN AGREEMENT SIGNED BY THE COMPANY AND THE OPTIONEE. NOTHING
CONTAINED IN THIS AGREEMENT CREATES OR IMPLIES AN EMPLOYMENT CONTRACT OR TERM
OF EMPLOYMENT OR ANY PROMISE OF SPECIFIC TREATMENT UPON WHICH THE OPTIONEE
MAY RELY.
(iii) GOVERNING LAW. This Agreement shall be construed and
enforced in accordance with the laws of the State of Colorado.
(iv) AMENDMENTS. The Company may at any time propose to amend this
Agreement, but any such alteration or amendment shall be effective only if in
writing, signed by a duly authorized officer of the Company and by Optionee.
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MediaOne Group, Inc.
By
/s/ [ILLEGIBLE]
OPTIONEE
CHAIRMAN, CEO & PRESIDENT
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Full Name
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Address
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City, State, Zip
Social Security Number:
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[NAME]
DATE
ATTACHMENT A
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INTELLECTUAL PROPERTY THAT HAS NOT BEEN PATENTED OR PUBLISHED
1.
2.
3.
