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FORM OF 2005 LONG-TERM INCENTIVE PLAN STOCK OPTION AWARD AGREEMENT

Executive Compensation Plan Agreement

FORM OF 2005 LONG-TERM INCENTIVE PLAN STOCK OPTION AWARD AGREEMENT You are currently viewing:
This Executive Compensation Plan Agreement involves

UNITED STATES CELLULAR CO

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Title: FORM OF 2005 LONG-TERM INCENTIVE PLAN STOCK OPTION AWARD AGREEMENT
Governing Law: Delaware     Date: 3/9/2005
Industry: COMSRV     Sector: SERVIC

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Exhibit 10

 

Exhibit 10.1

FORM OF
2005 LONG-TERM INCENTIVE PLAN
«YEAR» STOCK OPTION AWARD AGREEMENT

        United States Cellular Corporation, a Delaware corporation (the "Company"), hereby grants to «NAME» (the "Optionee"), as of «DATE» (the "Option Date"), pursuant to the provisions of the United States Cellular Corporation 2005 Long-Term Incentive Plan (the "Plan"), a Non-Qualified Stock Option (the "Option") to purchase from the Company «# OF SHARES» shares of Stock at the price of «STRIKE PRICE» per share upon and subject to the terms and conditions set forth below. Capitalized terms not defined herein shall have the meanings specified in the Plan.

1.     Time and Manner of Exercise of Option

        1.1.    Exercise of Option.    (a) In general. The Option shall become exercisable according to the following vesting schedule:

1/4 of grant vests on «FIRST ANNIVERSARY OF GRANT DATE»

1/4 of grant vests on «SECOND ANNIVERSARY OF GRANT DATE»

1/4 of grant vests on «THIRD ANNIVERSARY OF GRANT DATE»

Remaining 1/4 of grant vests on «FOURTH ANNIVERSARY OF GRANT DATE»

 

        In no event may the Option be exercised, in whole or in part, after «TENTH ANNIVERSARY OF GRANT DATE» (the "Expiration Date").

        (b)    Disability.    If the Optionee's employment by or service with the Employers and Affiliates terminates by reason of Disability, the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee's termination of employment or service and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 12 months after the effective date of the Optionee's termination of employment or service, or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period ending on the later of (i) the last day of such original exercise period and (ii) 90 days after the date of the Optionee's death.

        (c)    Special Retirement.    If the Optionee's employment by or service with the Employers and Affiliates terminates by reason of Special Retirement (as defined below), the Option immediately shall become exercisable in full and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 12 months after the effective date of the Special Retirement, or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period ending on the later of (i) the last day of such original exercise period and (ii) 90 days after the date of the Optionee's death. For purposes of this Award Agreement, "Special Retirement" shall mean an Optionee's termination of employment or service with the Employers and Affiliates on or after the later of (i) the Optionee's attainment of age 62 and (ii) the Optionee's Early Retirement Date or Normal Retirement Date, as such terms are defined in the Telephone and Data Systems, Inc. Pension Plan.

        (d)    Retirement.    If the Optionee's employment by or service with the Employers and Affiliates terminates by reason of Retirement (as defined below), the Option immediately shall become exercisable in full and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 90 days after the effective date of the Retirement, or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period ending 180 days after the effective date of the Retirement. For purposes of this Award Agreement, "Retirement" shall mean an Optionee's termination of employment or service with the


Employers and Affiliates on or after the Optionee's attainment of age 65 that does not satisfy the definition of "Special Retirement" set forth in Section 1.1(c).

        (e)    Resignation with Prior Consent of the Board.    If the Optionee's employment by or service with the Employers and Affiliates terminates by reason of the Optionee's resignation of employment or service with the prior consent of the Board (as evidenced in the Company's minute book), the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee's resignation and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 90 days after the effective date of the Optionee's resignation, or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period ending 180 days after the effective date of the Optionee's resignation.

        (f)    Death.    If the Optionee's employment by or service with the Employers and Affiliates terminates by reason of death, the Option shall be exercisable only to the extent it is exercisable on the date of death and after such date may be exercised by the beneficiary or beneficiaries duly designated by the Optionee for a period of 180 days after the date of death, or until the Expiration Date, whichever period is shorter.

        (g)    Other Termination of Employment or Service.    If the Optionee's employment by or service with the Employers and Affiliates terminates for any reason other than Disability, Special Retirement, Retirement, resignation of employment or service with the prior consent of the Board (as evidenced in the Company's minute book) or death, the Option shall be exercisable only to the extent it is exercisable on the effective date of the Optionee's termination of employment or service and after such date may be exercised by the Optionee (or the Optionee's Legal Representative) for a period of 30 days after the effective date of the Optionee's termination of employment or service, or until the Expiration Date, whichever period is shorter. If the Optionee shall die within such original exercise period, the Option shall be exercisable by the beneficiary or beneficiaries duly designated by the Optionee, to the same extent the Option was exercisable by the Optionee on the date of the Optionee's death, for a period of 120 days after the date of death or until the Expiration Date, whichever period is shorter. Notwithstanding the first sentence of this subsection (g), if the Optionee ceases to be employed by or of service to the Employers and Affiliates on account of the Optionee's negligence, willful misconduct, competition with an Employer or other Affiliate or misappropriation of confidential information of an Employer or other Affiliate, the Option shall terminate on the date the Optionee's employment or service terminates, unless such Option terminates earlier pursuant to Section 1.2.

        1.2.    Termination of Option and Forfeiture of Option Gain Upon Competition or Misappropriation of Confidential Information.    (a) Notwithstanding any other provision herein, if the Optionee enters into competition with an Employer or other Affiliate or misappropriates confidential information of an Employer or other Affiliate, as determined by the Committee or the Company in its sole discretion, (i) as of the date of such competition or misappropriation, the Option granted pursuant to this Award Agreement automatically shall terminate and thereby be forfeited to the extent it has not been exercised and (ii) the Optionee shall pay the Company, within five business days of receipt by the Optionee of a written demand therefore, an amount in cash determined by multiplying the number of shares of Stock purchased pursuant to each exercise of the Option within the six months immediately preceding such competition or misappropriation (without reduction for any shares of Stock delivered by the Optionee pursuant to Section 1.3 or Section 2.4 or withheld by the Company pursuant to Section 2.4) by the difference between (i) the Fair Market Value of a share of Stock on the date of such exercise and (ii) the purchase price per share of Stock set forth in the first paragraph of this Award Agreement.

        (b)   The Optionee may be released from the Optionee's obligations under this Section 1.2 only if and to the extent the Committee determines in its sole discretion that such release is in the best interests of the Company.

        (c)   The Optionee agrees that by executing this Award Agreement the Optionee authorizes the Employers and any Affiliate to deduct any amount owed by the Optionee pursuant to Section 1.2(a) from any amount payable by the Employers or any Affiliate to the Optionee, including, without limitation, any amount payable to the Optionee as salary, wages, vacation pay or bonus. This right of setoff shall not be an exclusive remedy and an Employer's or an Affiliate's election not to exercise this right of setoff with respect to any amount payable to the Optionee shall not constitute a waiver of this right of setoff with respect to any other amount payable to the Optionee or any other remedy. For purposes of Section 1.2(a), the Optionee shall be treated as entering into competition with an Employer or other Affiliate if the Optionee (i) directly or indirectly, individually or in conjunction with any person, firm or corporation, has contact with any customer of an Employer or other Affiliate or any prospective customer which has been contacted or solicited by or on behalf of an Employer or other Affiliate for the purpose of soliciting or selling to such customer or prospective customer any product or service, except to the extent such contact is made on behalf of an Employer or other Affiliate or (ii) otherwise competes with an Employer or other Affiliate in any manner or otherwise engages in the business of an Employer or other


 

Affiliate. The Optionee shall be treated as misappropriating confidential information of an Employer or other Affiliate if the Optionee (i) uses confidential information (as described below) for the benefit of anyone other than an Employer or such Affiliate, as the case may be, or discloses the confidential information to anyone not authorized by an Employer or such Affiliate, as the case may be, to receive such information, (ii) upon termination of employment or service, makes any summaries of, takes any notes with respect to or memorizes or takes any confidential information or reproductions thereof from the facilities of an Employer or other Affiliate or (iii) upon termination of employment or service or upon the request of an Employer or other Affiliate, fails to return all confidential information then in the Optionee's possession. "Confidential information" shall mean any confidential and proprietary drawings, reports, sales and training manuals, customer lists, computer programs and other material embodying trade secrets or confidential technical, business or financial information of an Employer or other Affiliate.

        1.3.    Method of Exercise.    Subject to the limitations set forth in this Award Agreement, the Option may be exercised by the holder of the Option (a) by giving written notice to the Chief Financial Officer of the Company (or such other officer as may be designated by him or her) at least seven (7) days prior to the exercise date specified in such notice (or in accordance with such shorter period of prior notice consented to by the Chief Financial Officer of the Company (or such other officer as may be designated by him or her)), which notice shall specify the number of whole shares of Stock to be purchased and shall be accompanied by payment therefore in full (unless another arrangement for such payment which is satisfactory to the Company has been made) either (i) in cash, (ii) in previously owned whole shares of Stock (which the holder has held for at least six months prior to the delivery of such shares of Stock or which the holder purchased on the open market and for which the holder has good title free and clear of all liens and encumbrances) having a Fair Market Value, determined as of the date of exercise, equal to the aggregate purchase price payable by reason of such exercise, (iii) to the extent legally permissible, in cash by a broker-dealer acceptable to the Company to whom the holder has submitted an irrevocable notice of exercise or (iv) a combination of (i) and (ii) and (b) by executing such documents and taking any other actions as the Company may reasonably request. If holder is subject to section 16 of the Exchange Act, the Committee may require that the method of making such payment be in compliance with section 16 of the Exchange Act and the rules and regulations thereunder. Any fraction of a share of Stock which would be required to pay such purchase price shall be disregarded and the remaining amount due shall be paid in cash by the holder. No share of Stock shall be delivered until the full purchase price therefore has been paid (or arrangement has been made for such payment to the Company's satisfaction).

2.     Additional Terms and Conditions of Option

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