U S WEST, INC.
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
THIS AGREEMENT is made between U S WEST, Inc. (the "Company" or "U S
WEST") 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 1998 U S WEST Stock Plan, as amended, (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"), without par value 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, 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.
3. Option Term; Vesting; Times of Exercise. The Option shall become
Vested in one-third increments upon each of the first three (3) anniversaries
following the date hereof. The vesting on 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 following 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.
The exercise of any option or the sale of any stock is subject to the Company's
standard blackout practices as more fully described in the Company's policies
and procedures.
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(i) Death. In the event of the death of Optionee, the Option
shall become Vested and the estate of the Optionee 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 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 Date.
(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,
until the Expiration Date, unless otherwise provided in this Agreement.
(iv) 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 ninety (90) days of termination or
such other period, if any, as the Committee in its sole discretion
shall determine (but not after the Expiration Date).
(v) Executive Severance Agreement. If Optionee has executed an
Executive Severance Agreement with the Company, the Option will be
Vested in accordance with the terms of the Executive Severance
Agreement if Optionee becomes entitled to the receipt of "Severance
Benefits," as set forth in that Executive Severance Agreement and
sixteen (16) days have passed following the execution of a standard
form of "Waiver & Release" of claims and compliance with the
"Conditions" by Optionee as set forth in the Company's standard
Executive Severance Agreement.
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(vi) 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 identical meaning as set
forth in the Stock Plan.
(vii) 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.
4. Exercise: Payment for and Delivery of Stock. The Option may be
exercised only by Optionee or his or her transferee(s) by last will and
testament or the laws of descent and distribution. The Option may be exercised
by giving notice of exercise to the Company specifying the number of shares
(minimum of 100, unless the unexercised balance of the Option is less than 100)
to be purchased 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 foregoing. Any shares of Common Stock so tendered shall
be valued as of the Option exercise date.
5. Non-Transferability of Option. The Option is not transferable
otherwise than by last will and testament or the laws of descent and
distribution. The Option shall not be otherwise transferred or assigned,
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. During the lifetime of Optionee, the Option shall be
exercisable only by Optionee, or Optionee's guardian or legal representative.
Upon any attempt to transfer the Option otherwise than by last will and
testament or the laws of descent and distribution, or to assign, pledge,
hypothecate or otherwise dispose of the Option, or upon the levy of any
execution, attachment or similar process upon the Option, the Option shall
immediately terminate and become null and void.
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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 engaged in providing any goods or services
that are substantially the same as any goods or services provided or under
development by the Company, Optionee immediately shall forfeit all rights under
the Option, unless the Committee in its sole discretion determines otherwise, or
unless Optionee is in full compliance with the Company's Policy on Service on
Outside Boards of Directors, 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 engaged in providing any goods or services that
are substantially the same as goods or services provided or under development by
the Company, Optionee shall have ninety (90) days 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 providing "substantially the same" goods or
services as the Company provides or is developing, will be subject to the sole
discretion of the Committee. The parties intend that the protection afforded to
the Company under this section shall also benefit a Related Entity of the
Company.
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 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 (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 under law. The parties intend that the protection afforded to the
Company under this section shall also benefit a Related Entity of the Company.
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.
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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 [make
sure appropriate attachment is referenced] 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.
[Use as needed, could remove depending on the circumstance i.e., no stock in the
offer]. 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. The parties intend that the protection
afforded to the Company under this section shall also benefit a Related Entity
of the Company.
9. Decisions of Committee. Any decision, interpretation or other action
made or taken in good faith by the Committee arising out of or in connection
with the Plan or the Option shall be final, binding and conclusive on the
Company and Optionee and any respective heir, executor, administrator, successor
or assign.
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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 U S WEST, and/or any associated or related
disputes arising therefrom involving U S WEST and/or any employee(s),
Director(s), officer(s), or agent(s) of U S WEST, 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. ss. 1981, ss. 1981a, ss. 1983, ss. 1985, or ss. 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 U S WEST 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. U S WEST 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. ss.ss. 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 U S WEST to the extent they are
inconsistent.
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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 U S
WEST 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 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).
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11. Miscellaneous.
(i) Notices. Any notice to be given to the Company shall be
personally delivered to or addressed to its Senior Vice President - Law
and Human Resources and Assistant Secretary, 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 - Law and Human Resources and Assistant
Secretary, of the Company at 1801 California Street, Suite 5200,
Denver, CO 80202. Any notice to Optionee is deemed given when
personally delivered or enclosed in a properly sealed envelope
addressed as aforesaid and deposited, postage prepaid, in a post office
or branch post office regularly maintained by the United States Postal
Service.
(ii) Employment. The Company 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.
U S WEST, Inc. OPTIONEE
By: /S/ CEO & PRESIDENT
CEO & President __________________________
Full Name
--------------------------
Street Address
--------------------------
City, State and Zip Code
--------------------------
Social Security Number
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INTELLECTUAL PROPERTY THAT HAS NOT BEEN PATENTED OR PUBLISHED
1.
2.
3.
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