Exhibit 10.1
CORPORATE OFFICER
TELEPHONE AND DATA SYSTEMS,
INC.
2004 LONG-TERM INCENTIVE
PLAN
<<YEAR>> STOCK OPTION
AWARD AGREEMENT
Telephone and Data
Systems, Inc., a Delaware corporation (the
“Company”), hereby grants to
<<NAME>> (the “Optionee”), as of
<<DATE>> (the “Option Date”),
pursuant to the provisions of the Telephone and Data
Systems, Inc. 2004 Long-Term Incentive Plan (As Amended and
Restated) (the “Plan”), a Non-Qualified Stock Option
(the “Option”) to purchase from the Company
<<NUMBER>> shares of Special Common Stock at the
price of $ <<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
. Except as otherwise provided in this Award Agreement, the
Option shall become exercisable (i) on the first annual
anniversary of the Option Date with respect to one-third of the
number of shares of Special Common Stock subject to the Option on
the Option Date; (ii) on the second annual anniversary of the
Option Date with respect to an additional one-third of the number
of shares of Special Common Stock subject to the Option on the
Option Date; and (iii) on the third annual anniversary of the
Option Date with respect to the remaining one-third of the number
of shares of Special Common Stock subject to the Option on the
Option Date. Except as otherwise provided in this Award
Agreement, in no event may the Option be exercised, in whole or in
part, after <<TENTH ANNIVERSARY OF OPTION DATE>>
(the “Expiration Date”).
(b) Disability .
If the Optionee ceases to be employed by or of service to the
Employers and Affiliates 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
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 exercise period and (ii) the 180
day anniversary of the Optionee’s death.
(c) Special Retirement
. If the Optionee ceases to be employed by or of service to
the Employers and Affiliates by reason of Special Retirement (as
defined below), the Option immediately shall become exercisable in
full if (i) the Optionee has attained age 66 as of the
effective date of the Optionee’s Special Retirement and
(ii) the effective date of the Optionee’s Special
Retirement occurs on or after January 1, <<CALENDAR
YEAR COMMENCING AFTER OPTION DATE>> . If the
Optionee ceases to be employed by or of service to the Employers
and Affiliates by reason of Special Retirement and either
(i) the Optionee has not attained age 66 as of the effective
date of the Optionee’s Special Retirement or (ii) the
effective date of the Optionee’s Special Retirement occurs
before January 1, <<CALENDAR YEAR COMMENCING AFTER
OPTION DATE>> , the Option shall be exercisable only to
the extent it is exercisable on the effective date of the
Optionee’s Special Retirement. The Option, to the
extent then exercisable, may be exercised
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by the Optionee (or the
Optionee’s Legal Representative) for a period of 12 months
after the effective date of the Optionee’s Special Retirement
or until the Expiration Date, whichever period is shorter. If
the Optionee shall die within such 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 exercise period and (ii) the 180 day anniversary 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 ceases to be employed by or of service to the
Employers and Affiliates by reason of Retirement (as defined
below), the Option immediately shall become exercisable in full if
(i) the Optionee has attained age 66 as of the effective date
of the Optionee’s Retirement and (ii) the effective date
of the Optionee’s Retirement occurs on or after
January 1, <<CALENDAR YEAR COMMENCING AFTER OPTION
DATE>> . If the Optionee ceases to be employed by
or of service to the Employers and Affiliates by reason of
Retirement and either (i) the Optionee has not attained age 66
as of the effective date of the Optionee’s Retirement or
(ii) the effective date of the Optionee’s Retirement
occurs before January 1, <<CALENDAR YEAR COMMENCING
AFTER OPTION DATE>> , the Option shall be exercisable
only to the extent it is exercisable on the effective date of the
Optionee’s Retirement. The Option, to the extent then
exercisable, may be exercised by the Optionee (or the
Optionee’s Legal Representative) for a period of 90
days
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after the effective date of the
Optionee’s Retirement or until the Expiration Date, whichever
period is shorter. If the Optionee shall die within such
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 180 day
anniversary of the Optionee’s death. 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 ceases to be
employed by or of service to the Employers and Affiliates by reason
of the Optionee’s resignation of employment or service at any
age with the prior consent of the board of directors of such
Optionee’s Employer (as evidenced in the Employer’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 such effective date or until the Expiration Date,
whichever period is shorter. If the Optionee shall die within
such 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 180
day anniversary of the Optionee’s death.
(f) Death . If
the Optionee ceases to be employed by or of service to the
Employers and Affiliates by reason of death, the Option shall be
exercisable only to the extent it is exercisable on the date of
death, and may be exercised by the beneficiary or beneficiaries
duly designated by the Optionee for a period ending on the 180 day
anniversary
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of the Optionee’s
death.
(g) Other Termination of
Employment or Service . If the Optionee ceases to be
employed by or of service to the Employers and Affiliates for any
reason other than Disability, Special Retirement, Retirement,
resignation of employment or service with the prior consent of the
board of directors of the Optionee’s Employer (as evidenced
in the Employer’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 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 exercise period, the Option shall be
exercisable only to the extent it is exercisable on the date of
death and may be exercised by the beneficiary or beneficiaries duly
designated by the Optionee for a period ending on the 180 day
anniversary of the Optionee’s death. Notwithstanding
any provision in this Award Agreement to the contrary, 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 with the Employers and
Affiliates terminates, unless such Option terminates earlier
pursuant to Section 1.2.
(h) Expiration of Option
During Blackout Period . If the Option shall expire under
any of subsections (a) through (g) of this
Section 1.1 during a period when the Optionee and family
members or other persons living in the household of such persons
are prohibited from trading in securities of the Company pursuant
to the Telephone and Data
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Systems, Inc. Policy Regarding
Insider Trading and Confidentiality (or any successor policy
thereto) (a “Blackout Period”), the period during which
the Option is exercisable shall be extended to the date that is 30
days after the date of the termination of the Blackout
Period.
(i) Expiration of Option
During Suspension Period . If the Option shall expire
under any of subsections (a) through (g) of this
Section 1.1 during a period when the exercise of the Option
would violate applicable securities laws (a “Suspension
Period”), the period during which the Option is exercisable
shall be extended to the date that is 30 days after the date of the
termination of the Suspension Period.
1.2.
Termination of Option and Forfeiture of Option Gain Upon
Competition or Misappropriation of Confidential Information
. Notwithstanding any other provision herein, the Option
granted pursuant to this Award Agreement shall not be exercisable
on or after any date on which 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 Company in its sole discretion. 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.
In the event of such competition or misappropriation, the Optionee
shall pay the Company, within five business days of receipt by the
Optionee of a written demand therefor, 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 or withheld by
the Company pursuant to Section 1.3 or 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
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price per share of Stock set forth
in the first paragraph of this Award Agreement. The Optionee
acknowledges and agrees that the Option, by encouraging stock
ownership and thereby increasing an employee’s proprietary
interest in the Company’s success, is intended as an
incentive to participating employees to remain in the employ of an
Employer or other Affiliate. The Optionee acknowledges and
agrees that this Section 1.2 is therefore fair and reasonable,
and not a penalty.
For purposes of the preceding
paragraph, 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 with 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, (ii) directly or indirectly,
individually or in conjunction with any person, firm or
corporation, becomes employed in the business or engages in the
business of providing wireless, telephone or broadband products or
services in any geographic territory in which an Employer or other
Affiliate offers such products or services or has plans to do so
within the next twelve months or (iii) 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
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Affiliate, as the case ma
