**Exhibit 10.11.1**

***Execution Copy***

** **

**NONQUALIFIED STOCK OPTION AGREEMENT**

**UNDER THE HORIZON PCS, INC.**

**2004 STOCK INCENTIVE PLAN**

 

ThisNONQUALIFIED STOCK OPTION AGREEMENT (this **“Agreement”**) ,made as of this 21st day of October, 2004, by and between Horizon PCS, Inc.(the **“Company”**) and Alan Morse (the **“Participant”**) who is an employee of the Company.

 

WITNESSETH:

 

WHEREAS,pursuant to the Company’s 2004 Stock Incentive Plan (the **“Plan”**),the Company desires to afford the Participant the opportunity to acquire, orenlarge, his ownership of the Company’s common stock (**“Stock”**),so that he may have a direct proprietary interest in the Company’s success.

 

NOW,THEREFORE, in consideration of the covenants and agreements herein contained,the parties hereto hereby agree as follows:

 

1.             **Grant ofOption**.  Subject to theterm and conditions set forth herein and in the Plan, which is attached heretoas Exhibit A, the Company hereby grants to the Participant, during the periodcommencing on the date of this Agreement and ending on the close of business onthe day of the tenth anniversary of the date hereof (the **“Expiration Date”**), the right and option (the **“Option”**) to purchase from the Company, at aprice of $17.76 per share (the **“Option Price”**), an aggregate of100,000 shares of Stock (the **“Option Shares”**).

 

2.             **Limitationon Exercise of Option**. Subject to the terms and conditions set forth herein and in the Plan,the Option will become vested and exercisable with respect to 16.67% of theshares subject to the Option on the six (6) month anniversary of the date ofgrant and as to an additional 16.67% on each six (6) month anniversarythereafter (each, an **“Installment”**)until the Option is 100% vested; provided, that, the Participantis then employed by the Company.  Notwithstandingthe foregoing, subject to the limitations of the Plan, the Committee mayaccelerate the vesting and exercisability of all or part of the Option at anytime and for any reason.

 

3.             **Terminationof Employment**.  Upon atermination of employment, the Option shall remain exercisable as follows:

 

#### (a)          Except as provided in clause (c)below, upon termination of the Participant’s employment by the Company withoutCause or by the Participant for Good Reason (as such terms are defined below),the unvested portion of the Option shall terminate and cease to be exercisable;provided, that, the Installment that would have vested on thenext vesting date shall become vested in an amount equal to the Installmentmultiplied by a fraction, the numerator of which is the number of calendar dayswhich have elapsed from the beginning of the Installment period until theParticipant’s termination date and the denominator of which is the number ofcalendar days in the Installment period, rounded down to the nearest number ofwhole shares, and the Participant may exercise the vested portion of the Optionuntil the earlier of the

 

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Expiration Date or the last day of the 90-day period following suchtermination of employment, and the Option shall thereafter terminate and ceaseto be exercisable.

####  

#### (b)           Upon termination of the Participant’semployment with the Company for any other reason not otherwise specified inclause (a) above, the unvested portion of the Option shall terminate and ceaseto be exercisable and the Participant or his estate or legal beneficiaries inthe case of his death, as applicable, may exercise the vested portion of theOption, but only to the extent the Option was exercisable immediately prior totermination of employment, until the earlier of the Expiration Date or the lastday of the thirty (30) day period following termination of employment (or one(1) year period in the event his termination of employment is as a result ofhis death), and the Option shall thereafter terminate and cease to beexercisable.

####  

#### (c)           If the Participant’s employment withthe Company is terminated by the Company without Cause or by the Participantfor Good Reason concurrent with or within six (6) months following a Change inControl (as defined in the Plan) which occurs prior to September 30, 2005, andthe effective date of such termination occurs before the Participant has becomevested in the first two (2) Installments of the Option, the Participant shallbecome 100% vested in such first two (2) Installments, and the Participant mayexercise the vested portion of the Option until the earlier of the ExpirationDate or the last day of the 90-day period following such termination ofemployment, and the Option shall thereafter terminate and cease to beexercisable.

####  

(d)           Participant acknowledges and agreesthat the continued vesting of the Option granted hereunder is premised upon hisprovision of future services to the Company and the vesting of such Optionshall not accelerate upon his termination of employment for any reason unlessspecifically provided for herein.

 

4.             **Time and****Method of Exercising Option**.  The Option, to the extent vested,may be exercised, in whole or in part, by giving written notice of exercise tothe Company specifying the number of whole shares of Stock to bepurchased.  Such notice shall beaccompanied by the payment in full of the Option Price.  Such payment shall be made either: (i) incash at the time of purchase, (ii) by tendering shares of Stock (either byactual delivery of shares or by attestation) that are acceptable to theCommittee and have been held by the Participant for at least six months priorto the exercise, and were valued at Fair Market Value as of the day the sharesare tendered, (iii) in any combination of cash, shares, or attestedshares, as determined by the Committee in its sole discretion or (iv) to theextent permitted by applicable law, Participant may elect to pay the OptionPrice upon the exercise of an Option by irrevocably authorizing a third partyto sell shares of Stock (or a sufficient portion of the shares) acquired uponexercise of the Option and remit to the Company a sufficient portion of thesale proceeds to pay the entire Option Price and any tax withholding resultingfrom such exercise.

 

5.             **Issuance ofShares**.  Except as otherwise provided in the Plan, andsubject to applicable law, as promptly as practical after receipt of suchwritten notification of exercise and full payment of the Option Price and anyrequired income tax withholding, the Company shall issue or transfer to theParticipant the number of Option Shares with respect to which Options have beenso exercised (less shares withheld in satisfaction of tax withholdingobligations, if any), and shall deliver to the Participant a certificate orcertificates therefore, registered in the

 

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Participant’s name.

 

6.             **Non-Transferability**.  The Option shall not be transferable by theParticipant other than by will or by the laws of descent and distribution, andthe Option shall be exercisable during the lifetime of the Participant only bythe Participant or his guardian or legal representative.  The terms of the Option shall be final, bindingand conclusive upon the beneficiaries, executors, administrators, heirs andsuccessors of the Participant.  Until theOption has vested, shares subject to the Option shall not be sold, transferredor otherwise disposed of, shall not be pledged or otherwise hypothecated andshall not be subject to the claims of creditors.

 

7.             **Adjustments**.  Options may be adjusted or terminated in anymanner as contemplated by the Plan.

 

8.             **Rights asShareholder**.  TheParticipant or a transferee of the Options shall have no rights as ashareholder with respect to any Option Shares until he shall have become theholder of record of such shares, and no adjustment shall be made for dividendsor distributions or other rights in respect of such Option Shares for which therecord date is prior to the date upon which he shall become the holder ofrecord thereof.

 

9.             **Compliancewith Law**.  Notwithstandingany of the provisions hereof, the Participant hereby agrees that he will notexercise the Option, and that the Company will not be obligated to issue ortransfer any shares to the Participant hereunder, if the Committee determines,in its sole discretion, that the exercise of the Option or the issuance ortransfer of the Option Shares constitutes a violation by the Participant or theCompany of any provisions of any law or regulation of any governmentalauthority.  Such determination by theCommittee shall be final, binding and conclusive.  The Company shall in no event be obliged toregister any securities pursuant to the Securities Act of 1933 (as now ineffect or as hereafter amended) or to take any other action in order to causethe exercise of the Option or the issuance or transfer of Option Sharespursuant thereto to comply with any law or regulation of any governmentalauthority.

 

10.           **Taxes**.  At such time as the Participant recognizestaxable income in connection with the receipt of shares or cash hereunder (a **“Taxable Event”**), the Participant shall pay to the Companyan amount equal to the minimum federal, state and local income taxes and otheramounts as may be required by law to be withheld by the Company in connectionwith the Taxable Event (the **“Withholding Taxes”**)prior to the issuance of such shares or the payment of such cash.  The Committee, in its discretion, and subjectto such requirements as the Committee may impose prior to the occurrence ofsuch withholding, may permit such withholding obligations to be satisfiedthrough cash payment by the Participant, through the surrender of shares ofStock which the Participant already owns, or through the surrender of shares ofStock to which the Participant is otherwise entitled under the Plan, but onlyto the extent of the Withholding Taxes.

 

11.           **Notice**.  Every notice or other communication relatingto this Agreement shall be in writing, and shall be mailed to or delivered tothe party for whom it is intended at such address as may from time to time bedesignated by it in a notice mailed or delivered to the other party as

 

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herein provided; provided, that, unless and until someother address be so designated, all notices or communications by theParticipant to the Company shall be mailed or delivered to the Company at itsprincipal executive office, and all notices or communications by the Company tothe Participant may be given to the Participant personally or may be mailed tohim at his address as recorded in the records of the Company.  Notwithstanding the foregoing, at such timeas the Company institutes a policy for delivery of notice by e-mail, notice maybe given in accordance with such policy.

 

12.           **Nonqualified Stock Option**.  The Option granted hereunder is not intendedto be an “incentive stock option” within the meaning of Section 422 of the Code(**“ISO”**).

 

13.           **Binding Effect**.  Subject to Section 6 hereof, this Agreementshall be binding upon the heirs, executors, administrators and successors ofthe parties hereto.

 

14.           **No Right to ContinuedEmployment**.  Nothing inthis Agreement or in the Plan shall confer upon the Participant any right tocontinue in the service of the Company or shall interfere with or restrict inany way the rights of the Company, which are hereby expressly reserved, toterminate the services of or discharge the Participant at any time for anyreason.

 

15.           **Governing Law**.  Except to the extent governed by the DelawareGeneral Corporation Law, this Agreement shall be governed by, and construed andenforced in accordance with, the laws of the State of Ohio without regard toits conflict of law principles.

 

16.           **Plan**.  The terms and provisions of the Plan areincorporated herein by reference, and the Participant hereby acknowledgesreceiving a copy of the Plan.  In theevent of a conflict or inconsistency between the terms and provisions of thePlan and the provisions of this Agreement, the Plan shall govern andcontrol.  All capitalized terms notdefined herein shall have the meaning ascribed to them as set forth in thePlan.

 

17.           **Successors and Assigns**.  The Company may assign any of its rightsunder this Agreement.  This Agreementshall be binding upon and inure to the benefit of the successors and assigns ofthe Company.  Subject to the restrictionson transfer set forth herein, this Agreement shall be binding upon theParticipant and the Participant’s heirs, executors, administrators, and legalrepresentatives.

 

18.           **Gender and Number**.  The masculine pronoun shall be deemed toinclude the feminine, and words in the singular shall be deemed to include theplural and the plural shall be deemed to include the singular, unless adifferent meaning is plainly required by the context.

 

19.           **Definitions**.

 

## (a)          The term **“Company”**as used in this Agreement with reference toemployment shall include the Company and its Subsidiaries, as appropriate.

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## (b)         Whenever the word **“Participant”** is used in any provision of thisAgreement under circumstances where the provision should logically be construedto apply to

 

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the beneficiaries, the executors, the administrators, or the person orpersons to whom the Options may be transferred by will or by the laws ofdescent and distribution, the word **“Participant”**shall be deemed to include such person or persons.

##  

## (c)           The term **“Cause”** means (i) Participant’s conviction of, or plea ofguilty or no contest to: (A) any felony or other criminal offense that couldresult in imprisonment of at least 1 year or (B) a crime involving fraud,theft, misappropriation, dishonesty or embezzlement under either federal orstate law; (ii) Participant’s dishonesty in communications to the Company’s Boardof Directors (the “Board”), any member of the Board or any other superiorofficer or superior employee he is required to report to in the course offulfilling Participant’s material employment duties; (iii) Participant’s provencommission of intentional or grossly negligent acts that materially impair thegoodwill or business of the Company or cause material damage to its property,goodwill or business; or (iv) Participant’s willful failure to performParticipant’s employment duties in any material respect (other than as a resultof Participant’s short term disability or medical emergency involving a memberof Participant’s immediate family, or as the result of any Company approvedleave).

##  

 (d)          Theterm **“Good Reason”** means (i) any reductionin Participant’s annual base salary or target incentive bonus opportunity; (ii)any requirement by the Company that Participant’s services be renderedprimarily at a location or locations other than within 35 miles of Participant’scurrent office location for other than a de minimis period of time, withoutParticipant’s prior written consent; provided, that, Participantshall not have Good Reason if he is required to engage in reasonable amounts oftravel on Company business; or (iii) a material adverse alteration in thenature and status of Participant’s responsibilities unless such alteration isremedied within thirty days following written notification by Participant tothe Company of the alleged material adverse alteration.  Participant shall not have Good Reason toterminate his employment under clause (d)(iii) if the Company is acquired by ormerged with, a Sprint PCS affiliate (excluding Sprint FON Group in suchaffiliated group) and Participant reports to the chief executive officer of thenew entity and is the chief operating officer or has another senior leveltransition responsibility for the acquired or merged entity at the time of suchacquisition or merger.

 

[Signature Page Follows]

 

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IN WITNESS WHEREOF, the parties hereto haveexecuted this Agreement as of the day and year first above written.

 
|   |   | HORIZON PCS, INC. |
|--------|--------|-------------------|
|   |   |              |
|   |   |              |
|   |   | By:               |      /s/ William  A. McKell |   |
|   |   |              | Name: |  William A. McKell |
|   |   |              | Title: |  President & Chief Executive   Officer |
|   |   |              |
|   |   |              |
|   |   | PARTICIPANT       |
|   |   |              |
|   |   |              |
|   |   | /s/ Alan G. Morse |   |
|   |   | Alan G. Morse     |
|        |        |                   |  |  |  |  |

 

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