EXHIBIT 10(l)
Dated June 12, 1998
U S WEST 1998 BROAD BASED STOCK OPTION PLAN
I. Purpose.
The U S WEST 1998 Broad Based Stock Option Plan (the "Plan"), is intended to
promote the long term success of U S WEST, Inc. (the "Company"), by affording
certain Eligible Employees of the Company with an opportunity to acquire a
proprietary interest in the Company, in order to provide incentives to employees
and to align the financial interests of these employees with the shareholders of
the Company. This Plan is a successor plan of the U S WEST Communications Group
1997 Stock Option Plan (the "Predecessor Plan"). This Plan is effective only
upon consummation of the Separation (as defined herein).
II. Separate Plan.
The Plan is separate and distinct from the U S WEST 1998 Stock Plan.
III. Definitions.
The following defined terms are used in this Plan:
A. "Agreement" shall mean the agreement accepted by the
Participant as described in Section VIII of this Prospectus between the
Company and a Participant, under which the Participant receives an
Option pursuant to the Plan.
B. "Board" or "Board of Directors" shall mean the Board of
Directors of the Company.
C. "Change of Control" shall mean any of the following:
1. any "person" (as such term is used in Sections
13(d) and 14(d)(2) of the Exchange Act) who is or becomes a
beneficial owner of (or otherwise has the authority to vote),
directly or indirectly, securities representing twenty percent
(20%) or more of the total voting power of all of the
Company's then outstanding voting securities, unless through a
transaction arranged by, or consummated with the prior
approval of the Board of Directors;
2. any period of two (2) consecutive calendar years
during which there shall cease to be a majority of the Board
of Directors comprised as follows: individuals who at the
beginning of such period constitute the Board of Directors and
any new director(s) whose election by the Board of Directors
or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at
the beginning of the period or whose election or nomination
for election was previously so approved; or
3. the Company becomes a party to a merger or
consolidation in which either (i) the Company will not be the
surviving corporation or (ii) the Company will be the
surviving corporation and any outstanding shares of Common
Stock of the Company will be converted into shares of any
other company (other than a reincorporation or the
establishment of a holding company involving no change of
ownership of the Company) or other securities or cash or other
property (excluding payments made solely for fractional
shares); or
4. any other event that a majority of the Board of
Directors, in its sole discretion, shall determine constitutes
a Change of Control.
D. "Code" shall mean the Internal Revenue Code of 1986, as
amended.
E. "Committee" shall mean the Employee Benefits Committee or
its delegates, as applicable, pursuant to provisions of Section IV of
this Prospectus.
F. "Common Stock" shall mean the common stock, $.01 par value,
issued by the Company.
G. "Company" shall mean U S WEST, Inc., a Delaware corporation
(previously known as "USW-C, Inc."), and any successor thereof.
H. "Disabled" or "Disability" shall mean long-term disability
as determined under the provisions of any U S WEST disability plan
maintained for the benefit of Eligible Employees of the Company or any
Related Entity.
I. "Eligible Employee" shall mean any employee of the Company
or any Related Entity, excluding Officers, who the Committee selects to
receive an Option and who is so employed on the date of the grant of an
Option.
J. "Employee Benefits Committee" shall mean a committee of the
Company which shall administer the Plan as provided in Section IV
hereof, and consisting of employees of the Company or any Related
Entity who are appointed by the Human Resources Committee.
K. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
L. "Fair Market Value" shall mean the closing price of a share
of stock as reported on the New York Stock Exchange for the applicable
date, or if there were no sales on such date, on the last day on which
there were sales.
M. "Human Resources Committee" shall mean the Human Resources
Committee of the Board.
N. "Nonqualified Option" shall mean an Option that does not
qualify as an incentive stock option under Section 422 of the Code.
O. "Officer" shall mean any executive of the Company or any
Related Entity who is eligible to participate in the Company's
executive compensation programs.
P. "Option" shall mean an option granted by the Company to
purchase Common Stock pursuant to the provisions of this Prospectus.
Q. "Optionee" shall mean a Participant to whom one or more
Options have been granted.
R. "Option Price" shall mean the price per share payable to
the Company for shares of Common Stock upon the exercise of an Option.
S. "Parent Corporation" shall mean any corporation within the
meaning of Section 424(e) of the Code.
T. "Participant" shall mean an Eligible Employee.
U. "Plan" shall mean the U S WEST 1998 Broad Based Stock
Option Plan, as described in this Prospectus.
V. "Related Entity" shall mean any Parent Corporation or
Subsidiary of the Company.
W. "Retirement" shall mean, with respect to any Eligible
Employee, that such person has terminated employment with the Company
or any Related Entity other than "for cause" (as defined in subsection
IX.C.(v)) and (i) such person is eligible to receive an immediate
service pension benefit under the U S WEST Pension Plan or (ii) such
person would be eligible to receive an immediate service pension
benefit under the U S WEST Pension Plan, as amended and restated
effective January 1, 1993, had that plan not been amended and restated
effective January 1, 1997 or (iii) such person specifically is treated
as "retired" for purposes of the Plan under any individually
negotiated, custom, written agreement or arrangement between the
Company or any Related Entity and the Eligible Employee. "Retirement"
shall not apply to any Eligible Non-Employee.
X. "Securities Act" shall mean the Securities Act of 1933 as
amended.
Y. "Subsidiary" shall mean any corporation, joint venture or
partnership in which the Company owns, directly or indirectly, (i) with
respect to a corporation, stock possessing twenty percent (20%) or more
of the total combined voting power of all classes of stock in the
corporation or (ii) in the case of a joint venture or partnership, the
Company possesses a twenty percent (20%) interest in the capital or
profits of such joint venture or partnership.
Z. "Vested" shall mean the status that results with respect to
an Option that may be exercised immediately under the terms of the
Agreement granting such Option pursuant to the provisions of the Plan
or by action of the Committee.
IV. Administration.
A. The Plan shall be administered by the Committee. The Committee may
adopt such rules, regulations and guidelines as it determines necessary for the
administration of the Plan.
B. The Committee may delegate to one or more of its members, or to one
or more agents, such duties as it may deem advisable, and may itself or through
its delegate employ an advisor to render advice with respect to any
responsibility it may have under the Plan. The Committee may employ such legal
or other counsel, consultants and agents as it may deem desirable for the
administration of the Plan and may rely upon any opinion or computation received
from any such counsel, consultant or agent. Expenses incurred in the engagement
of such counsel, consultant or agent shall be paid by the Company or such
Related Entity whose employees have benefited from the Plan, as determined by
the Committee. The Company shall indemnify members of the Committee and any
agent of the Committee who is an employee of the Company or a Related Entity
against any and all liabilities or expenses to which they may be subjected by
reason of any act or failure to act with respect to their duties on behalf of
the Plan, except in circumstances involving such person's gross negligence or
willful misconduct.
C. In furtherance of and not in limitation of the Committee's
discretionary authority, the Committee shall have the authority to:
1. determine the Participants to whom Options shall be granted
and the number of and terms and conditions upon which Options shall be
granted (which need not be the same for all Options);
2. determine the time when Options shall be granted, the
Option Price of each Option, the period(s) during which Options shall
be exercisable (whether in whole or in part), the restrictions to be
applicable to Options, and the other terms and provisions of Options;
3. modify grants of Options pursuant to Paragraph D of this
Section IV or rescind grants of Options pursuant to Section IX(C)(v),
respectively;
4. provide the establishment of a procedure whereby a number
of shares of Common Stock or other securities may be withheld from the
total number of shares of Common Stock to be issued upon exercise of an
Option, to meet the obligation of withholding for income tax, social
security and other taxes incurred by a Participant upon such exercise
or required to be withheld by the Company in connection with such
exercise;
5. adopt, modify and rescind rules, regulations and guidelines
relating to the Plan;
6. adopt modifications to the Plan and procedures as may be
necessary to comply with provisions of the laws and applicable
regulatory rulings of countries in which the Company or a Related
Entity operates to assure the legality of Options granted under the
Plan to Participants who reside in such countries;
7. make all determinations, perform all other acts, exercise
all other powers and establish any other procedures determined by the
Committee to be necessary, appropriate or advisable in administering
the Plan and to maintain compliance with any applicable law.
D. The Committee may at any time, in its sole discretion, accelerate
the exercisability of any Options and waive or amend any and all restrictions
and conditions of any Options.
V. Decisions Final.
Any decision, interpretation or other action made or taken in good faith by
the Committee arising out of or in connection with the Plan shall be final,
binding and conclusive on the Company and all Participants and their respective
heirs, executors, administrators, successors and assigns.
VI. Arbitration.
Any agreement may contain, among other things, provisions that require
binding arbitration of any and all disputes between a Participant and the
Company or any Related Entity, in a form or forms acceptable to the Committee,
in its sole discretion.
VII. Shares Available _ Limitations.
A. Up to 6,000,000 shares of Common Stock may be granted under the
Plan.
VIII. Stock Option Agreements.
Each grant of an Option under this Plan shall be evidenced by an
Agreement dated as of the date of the grant of the Option. Agreements under the
Predecessor Plan are hereby assumed by the Company and shall be deemed
Agreements under this Plan. Such Agreement shall set forth the terms and
conditions of the Option, as may be determined by the Committee. Each grant of
an Option is conditioned upon the acceptance by the Participant of the terms of
the Agreement. Unless otherwise extended by the Committee, a Participant shall
have ninety (90) days from the date of the Agreement to accept its terms.
IX. Option Terms.
A. Term of Option. No Option shall be exercisable after the
expiration of ten (10) years from the date of grant of the Option.
B. Exercise of Stock Option. Each Option shall be exercisable
in one or more installments as the Committee in its sole discretion may
determine at the time of the Option grant and as provided in the
Agreement. The right to purchase shares shall be cumulative so that
when the right to purchase any shares has accrued such shares or any
part thereof may be purchased at any time thereafter until the
expiration or termination of the Option. The Option Price shall be
payable (i) in cash or by an equivalent means acceptable to the
Committee, (ii) by delivery (constructive or otherwise) to the Company
of shares of Common Stock owned by the Optionee or (iii) by any
combination of the above as provided in the Agreement. Shares delivered
to the Company in payment of the Option Price shall be valued at the
Fair Market Value on the date of the exercise of the Option.
C. Vesting. The Agreement shall specify the date or dates on
which the Optionee may begin to exercise all or a portion of his
Option. Subsequent to such date or dates, the Option shall be deemed
Vested and fully exercisable.
(i) Death. In the event of the death of any Optionee,
all Options held by such Optionee on the date of his or her
death shall become Vested Options and the estate of such
Optionee, shall have the right, at any time and from time to
time within one year after the date of death, or such other
period, if any, as the Committee in its sole discretion may
determine, to exercise the Options of the Optionee (but not
after the expiration date of the Option).
(i) Disability. If the employment of any Optionee is
terminated because of Disability, all Options held by such
Optionee on the date of his or her termination shall be
retained by such Optionee, and such Options that are not yet
Vested Options shall become Vested Options in accordance with
the vesting schedule established at the time such Options were
issued. The Optionee shall have the right to exercise Vested
Options at any time and from time to time, but not after the
expiration date of the Option.
(iii) Retirement. Upon an Optionee's Retirement, all
Options held by such Optionee on the date of his or her
Retirement shall be retained by such Optionee, and such
Options that are not yet Vested Options shall become Vested
Options in accordance with the vesting schedule established at
the time such Options were issued, unless the Committee, in
its sole discretion, determines otherwise. The Optionee shall
have the right to exercise Vested Options at any time and from
time to time, but not after the expiration date of the Option.
(iv) Other Termination. If the employment with the
Company or a Related Entity of an Optionee is terminated for
any reason other than for death, Disability or Retirement and
other than "for cause" as defined in subparagraph (v) below,
such Optionee shall have the right, in the case of a Vested
Option, for a period of three (3) months after the date of
such termination or such longer period as determined by the
Committee, to exercise any such Vested Option, but in any
event not after the expiration date of any such Option.
(v) Termination For Cause. Notwithstanding any other
provision of the Plan to the contrary, if the Optionee's
employment is terminated by the Company or any Related Entity
"for cause" (as defined below), such Optionee immediately
shall forfeit all rights under his or her Options except as to
the shares of Common Stock already purchased prior to such
termination. Termination "for cause" shall mean (unless
another definition is agreed to in writing by the Company and
the Optionee) termination by the Company because of: (a) the
Optionee's willful and continued failure substantially to
perform his or her duties (other than any such failure
resulting from the Optionee's incapacity due to physical or
mental impairment) after a written demand for substantial
performance is delivered to the Optionee by the Company, which
demand specifically identifies the manner in which the Company
believes the Optionee has not substantially performed his or
her duties, (b) the willful conduct of the Optionee that is
demonstrably and materially injurious to the Company or
Related Entity, monetarily or otherwise, or (c) the conviction
of the Optionee for a felony by a court of competent
jurisdiction.
X. Foreign Options and Rights.
The Committee may grant Options to Eligible Employees who are subject to the
tax laws of nations other than the United States, which Options may have terms
and conditions as determined by the Committee as necessary and appropriate to
comply with applicable foreign laws. The Committee may take any action which it
deems advisable to obtain approval of such Option by the appropriate foreign
governmental entity; provided, however, that no such Option may be granted
pursuant to this Section X and no action may be taken that would result in a
violation of the Exchange Act, the Code or any other applicable law.
XI. Change of Control Acceleration.
Upon the occurrence of a Change of Control each outstanding Option
automatically and immediately shall become fully exercisable by the Participant.
XII. Adjustment of Shares.
In the event there is any change in the Common Stock by reason of any
consolidation, combination, liquidation, reorganization, recapitalization, stock
dividend, stock split, split-up, split-off, spin-off, combination of shares,
exchange of shares or other like change in capital structure of the Company, the
number or kind of shares or interests subject to an Option and the per share
price or value thereof shall be adjusted by the Committee appropriately at the
time of such event, provided that each Participant's economic position with
respect to the Option shall not, as a result of such adjustment, be worse than
it had been immediately prior to such event. Any fractional shares or interests
resulting from such adjustment shall be rounded up to the next whole share of
Common Stock.
XIII. Miscellaneous Provisions.
A. Assignment or Transfer. No grant of any "derivative security" (as defined by
Rule 16a-1(c) under the Exchange Act) made under the Plan or any rights or
interests therein shall be assignable or transferable by a Participant except by
last will and testament or the laws of descent and distribution and except to
the extent it is otherwise permissible under the Exchange Act. No grant of any
"derivative security" shall be assignable or transferable pursuant to a domestic
relations order. During the lifetime of a Participant, Options granted hereunder
shall be exercisable only by the Participant, the Participant's guardian or his
or her legal representative.
B. Investment Representation; Legends. No shares of Common Stock shall be
issued pursuant to an Option until all applicable securities law and other legal
and stock exchange requirements have been satisfied. The Committee may require
the placing of stop-orders and restrictive legends on certificates for Common
Stock as it deems appropriate.
C. Withholding Taxes. The Company, as a condition of the distribution of Common
Stock hereunder, may require the payment (through withholding from the
Participant's salary, payment of cash by the Participant, reduction of the
number of shares of Common Stock or other securities to be issued, or otherwise)
of any federal, state, local or foreign taxes required by law to be withheld
with respect to such distribution.
D. Costs and Expenses. The costs and expenses of administering the Plan shall
be borne by the Company and shall not be charged against any Option or against
any Participant receiving an Option.
E. Other Incentive Plans. The adoption of the Plan does not preclude the
adoption by appropriate means of any other incentive plan for employees.
F. Effect on Employment. Nothing contained in this Plan or any related
agreement or referred to in the Plan shall affect, or be construed as affecting,
the terms of employment of any Participant except to the extent specifically
provided. Nothing contained in the Plan or any agreement related hereto or
referred to herein shall impose, or be construed as imposing, an obligation on
(i) the Company or any Related Entity to continue the employment of any
Participant or (ii) any Participant to remain in the employ of the Company or
any Related Entity.
G. Noncompetition. Any Agreement may contain, among other things, provisions
prohibiting Participants from competing with the Company or any Related Entity
in a form or forms acceptable to the Committee, in its sole discretion.
H. Governing Law. This Plan and actions taken in connection herewith shall be
governed and construed in accordance with the laws of the State of Colorado.
XIV. Amendment or Termination of Plan.
The Committee shall have the right to amend, modify, suspend or terminate
the Plan at any time.
DESCRIPTION OF SEPARATION
This Plan is effective only upon consummation of the separation of U S
WEST, Inc. ("Old U S WEST") into two independent companies (the "Separation").
Old U S WEST currently conducts its business through two groups, the U S WEST
Communications Group and the U S WEST Media Group. Upon consummation of the
Separation, USW-C, Inc. (to be renamed "U S WEST, Inc." at Separation and
referred to in this Prospectus as "U S WEST" or the Company) will become a
separately-traded company and will conduct the business of the U S WEST
Communications Group and the domestic directories business of the U S WEST Media
Group. The Separation is expected to occur in June of 1998.