[This Form of Nonqualified Stock Option Agreement is being used to evidence the
stock option grants referred to in the response to Question 46 in the Offer
Circular. This form will not be used for any award grants pursuant to the
Exchange Offer.]
FORM OF NON-QUALIFIED STOCK OPTION AGREEMENT
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This Option Agreement (the "Agreement") is made as of the ______ day of October,
2001, between Qwest Communications International Inc., a Delaware Corporation
(the "Company"), ________________ (the "Optionee").
WHEREAS, pursuant to the Qwest Communications International Inc. Equity
Incentive Plan, the Company desires to afford the Optionee the opportunity to
purchase shares of Common Stock, par value $.01 per share (the "Common Shares"),
of the Company.
NOW, THEREFORE, in connection with the mutual covenants hereinafter set forth
and for other good and valuable consideration, the receipt and adequacy of which
is hereby acknowledged, the parties hereto agree as follows:
1. DEFINITIONS: CONFLICTS.
Capitalized terms used and not otherwise defined herein shall have the meanings
given thereto in the Plan. The terms and provisions of the Plan are incorporated
herein by reference. In the event of a conflict or inconsistency between the
terms and provisions of the Plan and the terms and provisions of this Agreement,
the terms and provisions of the Plan shall govern and control.
2. GRANT OF OPTIONS.
The Company hereby grants to the Optionee the right and option (the "Option" or
"Options") to purchase up to, but not exceeding in the aggregate, ___________
Common Shares, on the terms and conditions herein set forth.
3. PURCHASE PRICE.
The purchase price of each Common Share covered by the Option shall be
$__________ (the "Purchase Price").
4. TERM OF OPTIONS.
The term of the Option shall be ten (10) years from the date hereof, subject to
earlier termination as provided in Sections 6 and 8 hereof.
5. VESTING OF OPTIONS.
The Option, subject to the terms, conditions and limitations contained herein,
shall vest and become exercisable with respect to the Common Shares in the
following schedule: _____________________________________________; provided
that, with respect to each such installment, the Optionee has remained in
continuous employment with the Company from the date hereof through the date
such installment is designated to vest.
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Notwithstanding the vesting schedule set forth above, the Options will vest and
become immediately exercisable in the event of the Optionee's death or
Disability and under the circumstances described in Section 7 below.
Notwithstanding anything to the contrary in any other agreement, plan or other
document, the Optionee agrees that no provision in any severance, separation,
change of control, retention, employment or other plan or agreement between the
Optionee and any of U S WEST, Inc. and its subsidiaries or of which the Optionee
was a beneficiary shall affect the terms of the Option granted hereunder.
6. TERMINATION OF EMPLOYMENT.
(a) Except as set forth in the Plan, in the event the Optionee's
employment with the Company is terminated for reasons other
than due to death, Disability, or cause, the Option shall
remain exercisable for a period of up to three months after
cessation of employment, to the extent exercisable at the time
of cessation of employment. In the event the Optionee's
employment with the Company terminates by reason of death or
Disability, the Option shall remain exercisable for a period
of up to twenty-four (24) months after cessation of
employment, to the extent exercisable at the time of cessation
of employment. In the event the Optionee's employment with the
Company is terminated by the Company for cause, the Option
shall immediately lapse as of the date of such termination
whether or not exercisable on such date. Upon any cessation of
the Optionee's employment with the Company, the Option shall
lapse as to any Common Shares for which it has yet to become
exercisable as of the date of cessation of employment.
(b) For purposes of this Agreement, "cause" shall mean willful
misconduct, a willful failure to perform the Optionee's
duties, insubordination, theft, dishonesty, conviction of a
felony or any other willful conduct that is materially
detrimental to the Company or such other cause as the Board of
Directors of the Company in good faith reasonably determines
provides cause for the discharge of the Optionee.
7. CHANGE OF CONTROL
(a) For purposes of this Agreement, "change in control" shall have
the meaning set forth in the Plan.
(b) In the event there is both a change in control and subsequent
termination by the Company of the Optionee's employment with
the Company for reasons other than cause, the Option shall
vest in full and become immediately exercisable on the date of
such termination, and shall remain vested and exercisable
during the remaining term thereof.
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8. FORFEITURE OF OPTION.
Notwithstanding any other provision of this Agreement, if the Optionee engages
in any activity in competition with any activity of the Company, or otherwise
contrary or harmful to the interests of the Company, including but not limited
to (i) conduct related to the Optionee's employment for which either criminal or
civil penalties against the Optionee may be sought, (ii) violation of Company
policies, including without limitation, the Company's xxxxxxx xxxxxxx policy,
(iii) accepting employment with or serving as a consultant, or advisor or in any
other capacity to an employer that is in competition with or acting against the
interests of the Company, including employing or recruiting any present, former
or future employee of the Company, (iv) disclosing or misusing any confidential
information or material concerning the Company, or (v) participating in a
hostile takeover attempt, then this Option shall become void, shall be forfeited
and shall terminate effective the date on which the Optionee enters into such
activity, unless the Option was terminated sooner by operation of another term
or condition of this Agreement or the Plan.
9. TRANSFERABILITY OF OPTION.
Except to the extent permitted by the Committee in accordance with the
provisions of the Plan, the Optionee may not voluntarily or involuntarily
pledge, hypothecate, assign, sell or otherwise transfer the Option except by
will or the laws of descent and distribution, and during the Optionee's
lifetime, the Option shall be exercisable only by the Optionee.
10. NO RIGHTS AS A SHAREHOLDER.
The Optionee shall have no rights as a shareholder with respect to any Common
Shares until the date of issuance to the Optionee of a certificate evidencing
such Common Shares. No adjustments, other than as provided in Article IV of the
Plan, shall be made for dividends (ordinary or extraordinary, whether in cash,
securities or other property) or distributions for which the record date is
prior to the date the certificate for such Common Shares is issued.
11. REGISTRATION: GOVERNMENTAL APPROVAL.
The Option granted hereunder is subject to the requirement that, if at any time
the Committee determines, in its discretion, that the listing, registration, or
qualifications of Common Shares issuable upon exercise of the Option is required
by any securities exchange or under any state or Federal law, rule or
regulation, or the consent or approval of any governmental regulatory body or
other person is necessary or desirable as a condition of, or in connection with,
the issuance of Common Shares, no Common Shares shall be issued, in whole or in
part, unless such listing, registration, qualification, consent or approval has
been effected or obtained free of any conditions or with such conditions as are
acceptable to the Committee.
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12. METHOD OF EXERCISING OPTION.
Subject to the terms and conditions of this Agreement, the Option may be
exercised by written notice to the Company, Attention: Manager, Stock
Administration. Such notice shall state the election to exercise the Option and
the number of Common Shares in respect of which the Option is being exercised,
shall be signed by the person or persons so exercising the Option and shall be
accompanied by payment in full of the Purchase Price for such Common shares.
Payment of such Purchase Price shall be made in United States dollars by
certified check or bank cashier's check payable to the order of the Company or
by wire transfer to such account as may be specified by the Company for this
purpose. Subject to such procedures and rules as may be adopted from time to
time by the Committee, the Optionee may also pay such Purchase Price by (i)
tendering to the Company Common Shares with an aggregate Fair Market Value on
the date of exercise equal to such Purchase Price provided that such Common
Shares must have been held by the Optionee for more than six (6) months, (ii)
delivery to the Company of a copy of irrevocable instructions to a stockbroker
to sell Common Shares or to authorize a loan from the stockbroker to the
Optionee and to deliver promptly to the Company an amount sufficient to pay such
Purchase Price, or (iii) any combination of the methods of payment described in
clauses (i) and (ii) and in the preceding sentence. The certificate for Common
Shares as to which the Option shall have been so exercised shall be registered
in the name of the person or persons so exercising the Option. All Common Shares
purchased upon the exercise of the Option as provided herein shall be fully paid
and non-assessable.
13. INCOME TAX WITHHOLDING.
The Company may make such provisions and take such steps as it may deem
necessary or appropriate for the withholding of all federal, state, local and
other taxes required by law to be withheld with respect to the exercise of the
Option and the issuance of the Common Shares, including, but not limited to,
deducting the amount of any such withholding taxes from any other amount then or
thereafter payable to the Optionee, or requiring the Optionee, or the
beneficiary or legal representative of the Optionee, to pay to the Company the
amount required to be withheld or to execute such documents as the Company deems
necessary or desirable to enable it to satisfy its withholding obligations.
14. NON-QUALIFIED STOCK OPTION.
The Option granted hereunder is not intended to be an "incentive stock option"
within the meaning of Section 422 of the Code.
15. BINDING EFFECT.
This Agreement shall be binding upon the heirs, executors, administrators and
successors of the parties hereto.
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16. GOVERNING LAW.
This Agreement shall be construed and interpreted in accordance with the laws of
the State of Delaware.
17. HEADINGS.
Headings are for the convenience of the parties and are not deemed to be part of
this Agreement.
18. EXECUTION.
This Agreement is voidable by the Company if the Optionee does not execute the
Agreement within 30 days of execution by the Company.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date and year first written above.
QWEST COMMUNICATIONS INTERNATIONAL INC.
By:
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OPTIONEE:
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