Document:

Exhibit
10.2

 

 

 

2013 LONG-TERM
INCENTIVE PLAN

[____] STOCK OPTION AWARD AGREEMENT

 

United States Cellular Corporation, a Delaware
corporation (the “Company”), hereby grants to Kenneth R. Meyers (the
“Optionee”), as of  [____] (the “Option Date”), pursuant to the provisions of
the United States Cellular Corporation 2013 Long-Term Incentive Plan (the
“Plan”), a Non-Qualified Stock Option (the “Option”) to purchase from the
Company <<# OF SHARES>> shares of 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.  Except as otherwise provided in this Award
Agreement, the Option shall become exercisable according to the following
vesting schedule:

·       
1/3 of grant vests on [One year anniversary]

·       
1/3 of grant vests on [Two year anniversary]

·       
Remaining 1/3 of grant vests on [Three year anniversary]

In no event may
the Option be exercised, in whole or in part, after [Ten year anniversary] (the
“Expiration Date”).

1.2.             
Termination of Employment after June 22, 2019. 

(a)                
Termination without Cause.  If the Optionee’s employment with the
Employers and Affiliates terminates after June 22, 2019 without Cause (as
defined in the Letter Agreement between the Optionee and the Company executed
on July 25, 2013 (the “Letter Agreement”) and determined by the Company in its
sole discretion), regardless of whether such termination is due to death,
disability, resignation or other reason, then after such date the Option may be
exercised by the Optionee (or the Optionee’s Legal Representative or duly
designated beneficiary or beneficiaries, as applicable) until the third annual
anniversary of the effective date of the Optionee’s termination of employment,
or until the Expiration Date, whichever period is shorter (the “Post-Retirement
Exercise Period”).  If the Optionee shall die following his termination of
employment after June 22, 2019 and during the Post-Retirement Exercise Period,
then 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 the Post-Retirement Exercise Period and (ii) the 180 day
anniversary of the Optionee’s death (but in no event later than the Expiration
Date).

(b)                
Termination with Cause.  If the Optionee’s employment with the
Employers and Affiliates is terminated by the Employers and Affiliates after
June 22, 2019 for Cause (as defined in the Letter Agreement and determined by
the Company in its sole discretion), then the Option shall terminate
immediately and be forfeited upon such termination of employment, unless such
Option terminates earlier pursuant to Section 1.6.

 

 

 

 

(c)                
Failure to Satisfy Equity Conditions.  Notwithstanding the
foregoing provisions of this Section 1.2 and any other provision of this Award
Agreement, the Option shall terminate immediately and be forfeited upon the
failure by the Optionee during the Post-Retirement Exercise Period to satisfy
the Equity Conditions (as defined in the Letter Agreement and determined by the
Company in its sole discretion).

1.3.             
Termination of Employment On or Prior to June 22, 2019. 

(a)                
Disability.  If the Optionee’s employment by the Employers and
Affiliates terminates on or prior to June 22, 2019 by reason of Disability (as
defined below), then the Option shall be exercisable only to the extent it is
exercisable on the effective date of the Optionee’s termination of employment
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 until the Expiration Date, whichever
period is shorter (the “Disability Exercise Period”).  If the Optionee shall
die within the Disability Exercise Period, then 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 the Disability
Exercise Period and (ii) the 180 day anniversary of the Optionee’s death (but
in no event later than the Expiration Date).  For
purposes of this Award Agreement, “Disability” shall mean a total physical
disability which, in the Committee’s judgment, prevents the Optionee from
performing substantially his or her employment duties and responsibilities for
a continuous period of at least six months.

(b)                
Special Retirement.  If the Optionee’s employment by the
Employers and Affiliates terminates on or prior to June 22, 2019 by reason of
Special Retirement (as defined below), then 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
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 (the “Special Retirement
Exercise Period”).  If the Optionee shall die within the Special Retirement
Exercise Period, then 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 the Special Retirement Exercise
Period and (ii) the 180 day anniversary of the Optionee’s death (but in  no
event later than the Expiration Date).  For purposes of this Award Agreement,
“Special Retirement” shall mean an Optionee’s termination of employment with
the Employers and Affiliates on or after the Optionee’s attainment of age 62.

(c)                
Resignation with Prior Consent of the Board.  If the Optionee’s
employment by the Employers and Affiliates terminates on or prior to June 22,
2019 by reason of the Optionee’s resignation of employment with the prior
consent of the Board (as evidenced in the Company’s minute book), then 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 the effective date of the Optionee’s resignation, or until the
Expiration Date, whichever period is shorter (the “Resignation Exercise
Period”).  If the Optionee shall die within the Resignation Exercise Period,
then 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
earlier of (i) the 180 day anniversary of the Optionee’s death and (ii) the
Expiration Date.

(d)                
Death.  If the Optionee’s employment by the Employers and
Affiliates terminates on or prior to June 22, 2019 by reason of death, then the
Option shall be exercisable only to the extent it is exercisable on the date of
death and after such date may be exercised by the beneficiary or beneficiaries
duly designated by the Optionee for a period ending on the earlier of (i) the
180 day anniversary of the Optionee’s death and (ii) the Expiration Date.

(e)                
Other Termination of Employment.  If the Optionee’s employment by
the Employers and Affiliates terminates on or prior to June 22, 2019 for any
reason other than Disability, Special Retirement, resignation of employment
with the prior consent of the Board (as evidenced in the Company’s minute book)
or death, then the Option shall be exercisable only to the extent it is
exercisable on the effective date of the Optionee’s termination of employment
and after such date 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 until the Expiration Date, whichever
period is shorter (the “Other Termination Exercise Period”).  If the Optionee
shall die within the Other Termination Exercise Period, then 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 earlier of (i) the 180
day anniversary of the Optionee’s death and (ii) the Expiration Date.  Notwithstanding
any other provision in this Award Agreement, if the Optionee’s employment is
terminated by the Employers and Affiliates for Cause (as defined in the Letter
Agreement and determined by the Company in its sole discretion), then the
Option shall terminate immediately and be forfeited upon such termination of
employment, unless such Option terminates earlier pursuant to Section 1.6.

 

 

 

 

1.4.             
Expiration of Option during Blackout Period.  If the Option shall
expire under Section 1.2 or 1.3 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
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 (but in no event later than the
Expiration Date).

1.5.             
Expiration of Option during Suspension Period.  If the Option
shall expire under Section 1.2 or 1.3 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 (but
in no event later than the Expiration Date).

1.6.             
Termination of Option and Forfeiture of Option Gain upon Competition
or Misappropriation of Confidential Information.  (a)  Notwithstanding any
other provision herein, if the Optionee enters into competition with the
Company or an Affiliate or misappropriates confidential information of the
Company or an Affiliate, in each case as determined by the Company in its sole
discretion, then (i) 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 and
(ii) the Optionee shall pay the Company, within five business days of receipt
by the Optionee of a written demand therefore, an amount in cash determined by
multiplying the number of shares of Common 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 Common
Stock delivered by the Optionee or withheld by the Company pursuant to Section
1.7 or Section 2.4) by the difference between (i) the Fair Market Value of a
share of Common Stock on the date of such exercise and (ii) the purchase price
per share of Common 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 the Company or an Affiliate.  The Optionee
acknowledges and agrees that this Section 1.6(a) is therefore fair and
reasonable, and not a penalty.

(b)                
The Optionee may be released from the Optionee's obligations under this
Section 1.6 only if and to the extent the Committee determines in its sole
discretion that such release is in the best interests of the Company.

(c)                
The Optionee agrees that by executing this Award Agreement the Optionee
authorizes the Employers and any Affiliate to deduct any amount owed by the
Optionee pursuant to Section 1.6(a) from any amount payable by the Employers or
any Affiliate to the Optionee, including, without limitation, any amount
payable to the Optionee as salary, wages, vacation pay or bonus.  This right of
setoff shall not be an exclusive remedy and an Employer’s or an Affiliate’s
election not to exercise this right of setoff with respect to any amount
payable to the Optionee shall not constitute a waiver of this right of setoff
with respect to any other amount payable to the Optionee or any other remedy. 
For purposes of this Award Agreement, the Optionee shall be treated as entering
into competition with the Company or an Affiliate if the Optionee (i) directly
or indirectly, individually or in conjunction with any Person, has contact with
any customer of the Company or an Affiliate or with any prospective customer
which has been contacted or solicited by or on behalf of the Company or an
Affiliate for the purpose of soliciting or selling to such customer or
prospective customer any competing product or service, except to the extent
such contact is made on behalf of the Company or an Affiliate; (ii) directly or
indirectly, individually or in conjunction with any Person, becomes employed in
the business or engages in the business of providing wireless, telephone,
broadband or information technology products or services in any geographic
territory in which the Company or an Affiliate offers such products or services
or has plans to do so within the next twelve months or (iii) otherwise competes
with the Company or an Affiliate in any manner or otherwise engages in the
business of the Company or an Affiliate.  The Optionee shall be treated as
misappropriating confidential information of the Company or an Affiliate if the
Optionee (i) uses confidential information (as defined below) for the benefit
of anyone other than the Company or an Affiliate, as the case may be, or
discloses the confidential information to anyone not authorized by the Company
or an Affiliate, as the case may be, to receive such information; (ii) upon
termination of employment, makes any summaries of, takes any notes with respect
to or memorizes any confidential information or takes any confidential
information or reproductions thereof from the facilities of the Company or an
Affiliate or (iii) upon termination of employment or upon the request of the
Company or an Affiliate, fails to return all confidential information then in
the Optionee’s possession.  “Confidential information” shall mean any
confidential and proprietary drawings, reports, sales and training manuals,
customer lists, computer programs and other material embodying trade secrets or
confidential technical, business or financial information of the Company or an
Affiliate.

 

 

 

 

1.7.             
Method of Exercise.  The Option may be exercised by the holder of
the Option (a) by giving notice to the Chief Financial Officer of the Company
(or such other Person as may be designated by him or her) at least seven (7)
days prior to the exercise date specified in such notice (or in accordance with
such shorter period of prior notice consented to by the Chief Financial Officer
of the Company (or such other Person as may be designated by him or her)),
which notice shall specify the number of whole shares of Common Stock to be
purchased and (b) by executing such documents and taking any other actions as
the Company may reasonably request.  The holder of the Option may pay for the
shares of Common Stock to be purchased (i) by authorizing the Company to
withhold whole shares of Common Stock which otherwise would be delivered to the
holder having an aggregate Fair Market Value, determined as of the date of
exercise, equal to the aggregate purchase price payable by reason of such
exercise or (ii) by delivery (either actual delivery or by attestation
procedures established by the Company) to the Company of previously-owned whole
shares of Common Stock having an aggregate Fair Market Value, determined as of
the date of exercise, equal to the aggregate purchase price payable by reason
of such exercise.  Any fraction of a share of Common Stock which would be
required to satisfy the aggregate of such purchase price and the withholding
taxes with respect to the Option, as described in Section 2.4, shall be
disregarded and the remaining amount due shall be paid in cash by the holder. 
No share of Common Stock shall be issued or delivered until the full purchase
price therefore and the withholding taxes thereon, as described in Section 2.4,
have been paid (or arrangement has been made for such payment to the Company’s
satisfaction).

2.                 
Additional Terms and Conditions of Option

2.1.             
Option subject to Acceptance of Award Agreement.  The Option
shall become null and void unless the Optionee shall accept this Award
Agreement by executing it in the space provided at the end hereof and returning
it to the Company.

2.2.             
Transferability of Option.  The Option may not be transferred
other than (i) pursuant to a beneficiary designation on a form prescribed by
the Company and effective on the Optionee’s death or (ii) by gift to a
Permitted Transferee.  During the Optionee’s lifetime, the Option is exercisable
only by the Optionee (or the Optionee’s Legal Representative) or a Permitted
Transferee, and during a Permitted Transferee’s lifetime, the Option is
exercisable only by the Permitted Transferee (or the Permitted Transferee’s
Legal Representative).  Except as permitted by the foregoing, the Option may
not be sold, transferred, assigned, pledged, hypothecated, encumbered or
otherwise disposed of (whether by operation of law or otherwise) or be subject
to execution, attachment or similar process.  Upon any attempt to so sell,
transfer, assign, pledge, hypothecate, encumber or otherwise dispose of the
Option, the Option and all rights hereunder shall immediately become null and
void.  

By accepting the Option, the Optionee agrees that if all
beneficiaries designated on a form prescribed by the Company predecease the
Optionee or, in the case of corporations, partnerships, trusts or other
entities which are designated beneficiaries, are terminated, dissolved, become
insolvent or are adjudicated bankrupt prior to the date of the Optionee’s
death, or if the Optionee fails to properly designate a beneficiary on a form
prescribed by the Company, then the Optionee hereby designates the following
Persons in the order set forth herein as the Optionee’s beneficiary or
beneficiaries:  (i) the Optionee’s spouse, if living, or if none, (ii) the
Optionee’s then living descendants, per stirpes, or if none, (iii) the
Optionee’s estate.

 

2.3.             
Agreement by Holder.  As a condition precedent to the issuance or
delivery of any shares of Common Stock upon any exercise of the Option, the
holder shall comply with all regulations and requirements of any regulatory
authority having control of or supervision over the issuance or delivery of the
shares and, in connection therewith, shall execute any documents which the
Committee shall in its sole discretion deem necessary or advisable.

2.4.             
Tax Withholding.  As a condition precedent to the issuance or
delivery of any shares of Common Stock upon the exercise of the Option, the
holder shall pay to the Company in addition to the purchase price of the shares
of Common Stock, such amount as the Company may be required, under all
applicable federal, state, local or other laws or regulations, to withhold and
pay over as income or other withholding taxes (the “Required Tax Payments”)
with respect to such exercise of the Option.  The holder may elect to satisfy
his or her obligation to advance the Required Tax Payments by (i) authorizing
the Company to withhold whole shares of Common Stock which otherwise would be
delivered to the holder upon the exercise of the Option, the aggregate Fair
Market Value of which shall be determined as of the date of exercise or (ii)
delivery (either actual delivery or by attestation procedures established by
the Company) to the Company of previously-owned whole shares of Common Stock,
the aggregate Fair Market Value of which shall be determined as of the date of
exercise.  Shares of Common Stock to be withheld or delivered may not have an
aggregate Fair Market Value in excess of the amount determined by applying the
minimum statutory withholding rate.  Any fraction of a share of Common Stock
which would be required to satisfy the aggregate of the tax withholding
obligation and the purchase price of the shares of Common Stock shall be
disregarded and the remaining amount due shall be paid in cash by the holder. 
No share of Common Stock shall be delivered until the Required Tax Payments
have been satisfied in full (or arrangement has been made for such payment to
the Company’s satisfaction).    

 

 

 

 

2.5.             
Adjustment.  In the event of any equity restructuring (within the
meaning of Financial Accounting Standards Board Accounting Standards
Codification Topic 718, Compensation—Stock Compensation) that causes the per
share value of shares of Common Stock to change, such as a stock dividend,
stock split, spinoff, rights offering or recapitalization through an
extraordinary dividend, the number and class of shares of Common Stock subject
to the Option and the purchase price per share shall be appropriately and
equitably adjusted by the Committee, such adjustment to be made without an
increase in the aggregate purchase price and in accordance with Section 409A of
the Code.  In the event of any other change in corporate capitalization,
including a merger, consolidation, reorganization, or partial or complete
liquidation of the Company, such adjustment described in the foregoing sentence
may be made as determined to be appropriate or equitable by the Committee to
prevent dilution or enlargement of rights of participants.  In either case,
such adjustment shall be final,
binding and conclusive.  If such adjustment would result in a fractional share
being subject to the Option, the Company shall pay the holder of the Option, in
connection with the first exercise of the Option in whole or in part occurring
after such adjustment, an amount in cash determined by multiplying (i) the
fraction of such share (rounded to the nearest hundredth) by (ii) the excess,
if any, of (A) the Fair Market Value on the exercise date over (B) the purchase
price of such Option.

2.6.             
Change in Control.  (a)  In General.  Notwithstanding any
provision of the Plan or any other provision of this Award Agreement, in the
event of a Change in Control, the Board (as constituted prior to the Change in
Control) may in its discretion, but shall not be required to, make such
adjustments to the Option as it deems appropriate, including, without
limitation: (i) causing the Option to immediately become exercisable in whole
or in part and/or (ii) substituting for some or all of the shares of Common
Stock subject to the Option the number and class of shares into which each
outstanding share of Common Stock shall be converted pursuant to the Change in
Control, with an appropriate and equitable adjustment to the Option as
determined by the Committee in accordance with Section 2.5; and/or (iii)
requiring that the Option, in whole or in part, be surrendered to the Company
by the holder thereof and immediately canceled by the Company and providing for
the holder of the Option to receive, within sixty (60) days following the
occurrence of the Change in Control, (X) a cash payment in an amount equal to
the number of shares of Common Stock then subject to the portion of the Option
surrendered, to the extent the Option is then exercisable or becomes
exercisable pursuant to this Section 2.6(a), multiplied by the excess, if any,
of the Fair Market Value of a share of Common Stock on the date of the Change
in Control, over the purchase price per share of Common Stock subject to the Option;
(Y) shares of capital stock of the corporation resulting from or succeeding to
the business of the Company pursuant to the Change in Control, or a parent
corporation thereof, having a fair market value not less than the amount
determined under clause (X) above; or (Z) a combination of the payment of cash
pursuant to clause (X) above and the issuance of shares pursuant to clause (Y)
above.

(b)                
Definition of Change in Control.  For purposes of the Plan and
this Award Agreement, “Change in Control” shall mean:

(1)             
the acquisition by any Person, including any “person” within the meaning
of section 13(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange Act, of the
then outstanding securities of the Company (the “Outstanding Voting
Securities”) (x) having sufficient voting power of all classes of capital stock
of the Company to elect at least 50% or more of the members of the Board or (y)
having 50% or more of the combined voting power of the Outstanding Voting
Securities entitled to vote generally on matters (without regard to the
election of directors), excluding, however, the following:  (i) any acquisition
directly from the Company or an Affiliate (excluding any acquisition resulting
from the exercise of an exercise, conversion or exchange privilege, unless the
security being so exercised, converted or exchanged was acquired directly from
the Company or an Affiliate), (ii) any acquisition by the Company or an
Affiliate, (iii) any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or an Affiliate, (iv) any acquisition by
any corporation pursuant to a transaction which complies with clauses (i), (ii)
and (iii) of subsection (3) of this Section 2.6(b), or (v) any acquisition by
the following Persons:  (A) LeRoy T. Carlson or his spouse, (B) any child of
LeRoy T. Carlson or the spouse of any such child, (C) any grandchild of LeRoy
T. Carlson, including any child adopted by any child of LeRoy T. Carlson, or
the spouse of any such grandchild, (D) the estate of any of the Persons
described in clauses (A)-(C), (E) any trust or similar arrangement (including
any acquisition on behalf of such trust or similar arrangement by the trustees
or similar Persons) provided that all of the current beneficiaries of
such trust or similar arrangement are Persons described in clauses (A)-(C) or
their lineal descendants, or (F) the voting trust which expires on June 30,
2035, or any successor to such voting trust, including the trustees of such
voting trust on behalf of such voting trust (all such Persons, collectively,
the “Exempted Persons”);

(2)             
individuals who, as of March 6, 2013, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least a majority of
such Board; provided that any individual who becomes a director of the
Company subsequent to March 6, 2013, and whose election or nomination for
election by the Company’s stockholders was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board, shall be deemed
a member of the Incumbent Board; and provided further, that any
individual who was initially elected as a director of the Company as a result
of an actual or threatened solicitation by a Person other than the Board for
the purpose of opposing a solicitation by any other Person with respect to the
election or removal of directors, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other than
the Board shall not be deemed a member of the Incumbent Board;

 

 

 

 

(3)             
consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Corporate Transaction"), excluding, however, a Corporate Transaction
pursuant to which (i) all or substantially all of the Persons who are the
beneficial owners of the Outstanding Voting Securities immediately prior to
such Corporate Transaction will beneficially own, directly or indirectly, (x)
sufficient voting power to elect at least a majority of the members of the
board of directors of the corporation resulting from the Corporate Transaction
and (y) more than 50% of the combined voting power of the outstanding
securities which are entitled to vote generally on matters (without regard to
the election of directors) of the corporation resulting from such Corporate
Transaction (including in each of clauses (x) and (y), without limitation, a
corporation which as a result of such transaction owns, either directly or
indirectly, the Company or all or substantially all of the Company's assets),
in substantially the same proportions relative to each other as the shares of
Outstanding Voting Securities are owned immediately prior to such Corporate
Transaction, (ii) no Person (other than the following Persons:  (v) the Company
or an Affiliate, (w) any employee benefit plan (or related trust) sponsored or
maintained by the Company or an Affiliate, (x) the corporation resulting from
such Corporate Transaction, (y) the Exempted Persons, and (z) any Person which
beneficially owned, immediately prior to such Corporate Transaction, directly
or indirectly, 50% or more of the Outstanding Voting Securities) will
beneficially own, directly or indirectly, 50% or more of the combined voting
power of the outstanding securities of such corporation entitled to vote
generally on matters (without regard to the election of directors) and (iii)
individuals who were members of the Incumbent Board will constitute at least a
majority of the members of the board of directors of the corporation resulting
from such Corporate Transaction; or

(4)             
approval by the stockholders of the Company of a plan of complete
liquidation or dissolution of the Company.

2.7.             
Compliance with Applicable Law.  The Option is subject to the
condition that if the listing, registration or qualification of the shares of
Common Stock subject to the Option upon any securities exchange or under any
law, the consent or approval of any governmental body or the taking of any
other action is necessary or desirable as a condition of, or in connection
with, the delivery of shares, such shares will not be delivered, in whole or in
part, unless such listing, registration, qualification, consent, approval or
other action shall have been effected or obtained, free of any conditions not
acceptable to the Company.  The Company agrees to use reasonable efforts to
effect or obtain any such listing, registration, qualification, consent,
approval or other action.

2.8.             
Delivery of Shares.  Upon the exercise of the Option, in whole or
in part, the Company shall, subject to Section 2.4, deliver or cause to be
delivered to the holder the shares of Common Stock purchased against full
payment therefore.  The Company may require that the shares of Common Stock
delivered pursuant to the Option bear a legend indicating that the sale,
transfer or other disposition thereof by the holder is prohibited except in
compliance with the Securities Act of 1933, as amended, and the rules and
regulations thereunder.  The holder of the Option shall pay all original issue
or transfer taxes and all fees and expenses incident to such delivery, unless
the Company in its discretion elects to make such payment.

2.9.             
Option Confers No Rights as a Stockholder.  The holder of the
Option shall not be entitled to any privileges of ownership with respect to
shares of Common Stock subject to the Option unless and until such shares are
purchased and delivered upon an exercise of the Option and the holder becomes a
stockholder of record with respect to such delivered shares.  The holder shall
not be considered a stockholder of the Company with respect to any shares not
so purchased and delivered.

 

 

 

 

2.10.          
Company to Reserve Shares.  The Company shall at all times prior
to the expiration or termination of the Option reserve and keep available,
either in its treasury or out of its authorized but unissued shares of Common
Stock, the full number of shares subject to the Option from time to time.

2.11.          
Option subject to Clawback.  The Option and any shares of Common
Stock delivered pursuant to the Option are subject to forfeiture, recovery by
the Company or other action pursuant to any clawback or recoupment policy which
the Company may adopt from time to time, including without limitation any such
policy which the Company may be required to adopt under the Dodd-Frank Wall
Street Reform and Consumer Protection Act and implementing rules and
regulations thereunder, or as otherwise required by law.

 

3.                 
Miscellaneous Provisions

3.1.             
Option Confers No Rights to Continued Employment or Service.  In
no event shall the granting of the Option or the acceptance of this Award
Agreement and the Option by the Optionee give or be deemed to give the Optionee
any right to continued employment by or service with the Company or any of its
subsidiaries or affiliates.

3.2.             
Decisions of Committee.  The Committee shall have the right to
resolve all questions which may arise in connection with the Option or its
exercise.  Any interpretation, determination or other action made or taken by
the Committee regarding the Plan or this Award Agreement shall be final,
binding and conclusive.

3.3.             
Award Agreement subject to the Plan.  This Award Agreement is
subject to the provisions of the Plan, as it may be amended from time to time,
and shall be interpreted in accordance therewith.  The Optionee hereby
acknowledges receipt of a copy of the Plan.

3.4.             
Successors.  This Award Agreement shall be binding upon and inure
to the benefit of any successor or successors of the Company and any Person or
Persons who shall, upon the death of the Optionee or transfer of such Option,
acquire any rights hereunder.

3.5.             
Notices.  All notices, requests or other communications provided
for in this Award Agreement shall be made in writing either (a) by actual
delivery to the party entitled thereto, (b) by mailing in the
United States mails to the last known address of the party entitled
thereto, via certified or registered mail, postage prepaid and return receipt
requested, (c) by electronic mail, utilizing notice of undelivered electronic
mail features or (d) by telecopy with confirmation of receipt.  The notice,
request or other communication shall be deemed to be received (a) in case of
delivery, on the date of its actual receipt by the party entitled thereto, (b)
in case of mailing by certified or registered mail, five days following the date
of such mailing, (c) in case of electronic mail, on the date of mailing, but
only if a notice of undelivered electronic mail is not received or (d) in case
of telecopy, on the date of confirmation of receipt.

3.6.             
Governing Law.  The Option, this Award Agreement and all
determinations made and actions taken pursuant thereto, to the extent otherwise
not governed by the Code or the laws of the United States, shall be governed by
the laws of the State of Delaware and construed in accordance therewith without
giving effect to principles of conflicts of laws.

 

 

 

 

3.7.             
Counterparts.  This Award Agreement may be executed in two
counterparts each of which shall be deemed an original and both of which
together shall constitute one and the same instrument.

 

	
    

  	
  UNITED STATES
  CELLULAR CORPORATION

  
	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  
	
    

  	
  By:

  	
    

  
	
    

  	
    

  	
  LeRoy T.
  Carlson, Jr.

  
	
    

  	
    

  	
  Chairman

  
	
    

  	
    

  	
    

  
	
  Accepted this
  __ day of _______, 20__.

  	
    

  	
    

  
	
    

  	
    

  	
    

  
	
    

  	
    

  	
    

  
	
  Kenneth R.
  MeyersDGII-EX10.B.i_2014.3.31-10Q

Exhibit No. 10 (b)(i)

	
		
	 
	 

	Notice of Grant of Stock Options and Option Agreement
	Digi International Inc.
ID:  41-1532464
11001 Bren Road East
Minnetonka, MN  55343

	[Optionee]
[Address]
[City, State, County, Zip Code]
	Option Number:
Plan:                         2014 Omnibus Incentive Plan
ID:

Effective [date], you have been granted a Non-Qualified Stock Option to buy [number of shares] shares of Digi International Inc. (the Company) stock at $[per share exercise price] per share.

The total option price of the shares granted is $[aggregate exercise price]

Shares in each period will become fully vested on the date shown.

	
							
	Shares
	 
	Vest Type
	 
	Full Vest
	 
	Expiration

	 
	 
	 
	 
	 
	 
	 

	By your signature and the Company's signature below, you and the Company agree that these options are granted under and governed by the terms and conditions of the Company's Stock Option Plan as amended and the Option Agreement, all of which are attached and made a part of this document.

	_______________________________________________

Digi International Inc.
	 
	__________________________________________

Date

	_______________________________________________

[Optionee]
	 
	__________________________________________

Date

DIGI INTERNATIONAL INC.
2014 OMNIBUS INCENTIVE PLAN
Terms and Conditions of an Award
These are the terms and conditions applicable to the INCENTIVE PLAN AWARD AGREEMENT between Digi International Inc., a Delaware corporation (the "Company"), and the participant (the "Participant") listed on the cover page hereof (the "Cover Page") effective as of the date of award. The Cover Page together with these terms and conditions of Incentive Plan Award Agreement constitute the "Incentive Plan Award Agreement."
WHEREAS, the Company desires to carry out the purposes of its Digi International Inc. 2014 Omnibus Incentive Plan as amended from time to time (the "Plan"), by affording the Participant an opportunity to purchase  Stock of the Company, par value $.01 per share (the " Shares"), according to the terms set forth herein and on the Cover Page;
NOW THEREFORE, the Company hereby awards this Option to the Participant under the terms and conditions as follows:
1.Award of Option.  Subject to the terms of the Plan, the Company hereby awards to the Participant the right and option (the "Option") to purchase the number of Shares specified on the Cover Page, on the terms and conditions hereinafter set forth. The Option is not intended by the Company to be an "incentive stock option" within the meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the "Code").

2.Purchase Price. The purchase price of each of the Shares subject to the Option shall be the exercise price per share specified on the Cover Page, which price has been specified in accordance with the Plan and shall not be less than the Fair Market Value (as defined in paragraph 2.1(1) of the Plan) of a Share as of the date of grant.

3.Option Period.
(a)    Subject to the provisions of paragraphs 5(a), 6(a) and 6(b) hereof, the Option shall become exercisable as to the number of Shares and on the dates specified in the exercise schedule on the Cover Page. The exercise schedule shall be cumulative; thus, to the extent the Option has not already been exercised and has not expired, terminated or been canceled, the Participant may at any time, and from time to time, purchase all or any portion of the  Shares then purchasable under the exercise schedule.
(b)    The Option and all rights to purchase Shares thereunder shall cease on the earliest of:
(i)the expiration date specified on the Cover Page 
(which date shall not be more than eight years after the date of grant);

(ii)the expiration of the period after the termination of 
the Participant's employment (as defined in paragraph 6.4 of the Plan) within which the Option is exercisable as specified in paragraph 5(a); or

(iii)the date, if any, fixed for cancellation pursuant to 
paragraph 6(b) hereof.
Notwithstanding any other provision in this Incentive Plan Award Agreement, in no event may anyone exercise the Option, in whole or in part, after its original expiration date.
4.    Manner of Exercising Option.

Subject to the terms and conditions of this Incentive Plan Award Agreement, the Option may be exercised online with E*Trade at www.etrade.com/stockplans or by such other means as the Committee shall approve. In accordance with present practice, when your Option is awarded, a letter or email will be sent to you from E*Trade with instructions on how to activate your account with E*Trade so that you can view and exercise your Option online. If you are a director or officer of the Company, then you must contact E*Trade Executive Support at 1-800-775-2793 in order to exercise your Option.
5.    Exercisability of Option After Termination of Employment.
(a)    During the lifetime of the Participant, the Option may be exercised
only while the Participant is employed (as defined in paragraph 5 of the Plan) by the Company or a parent or subsidiary thereof, and only if the Participant has been continuously so employed since the date of this Incentive Plan Award Agreement, except that:
(i)    if the Participant is not a Non-Employee Director (as defined in paragraph 2.1(q) of the Plan), the Option shall continue to be exercisable for three months after termination of the Participant's employment for any reason other than death, disability or cause, but only to the extent that the Option was exercisable immediately prior to the Participant's termination of employment;
(ii)    if the Participant is not a Non-Employee Director, in the event the Participant's employment terminates because the Participant is disabled (within the meaning of Section 22(e)(3) of the Code), the Participant or his or her legal representative may exercise the Option (to the extent specified in paragraph 6(a) of this Incentive Plan Award Agreement) within one year after the termination of the Participant's employment because of such disability;
(iii)    if the Participant is not a Non-Employee Director and if the Participant dies while employed, or within three months after his or her termination of employment, the heirs or legatees of the Participant's estate or the person who acquired the right to exercise the Option by bequest or inheritance may exercise the Option (to the extent specified in paragraph 6(a)) within one year after the death of the Participant;

(iv)    if the Participant is a Non-Employee Director, the Option shall continue to be exercisable after the Participant's employment ends for the remaining term of the Option, but shall be exercisable only to the extent that the Option was exercisable immediately prior to the end of Participant's employment, except that if the Participant's employment ends because of death or disability, or the Participant dies within three months of his or her employment ending, the Option, whether or not previously exercisable, shall become exercisable to the extent specified in paragraph 6(a) of this Incentive Plan Award Agreement and shall continue to be exercisable after the Participant's employment ends for the remaining term of the Option;

(v)    if the Participant's employment terminates due to cause (as defined in paragraph 20.1 of the Plan), the Option and all rights of the Participant hereunder shall terminate immediately; and

(vi)    if the Participant's employment terminates after a declaration pursuant to paragraph 6(b) of this Incentive Plan Award Agreement, the Participant may exercise the Option at any time permitted by such declaration.
If, during the term of the Option, the Participant's status changes to or from that of a Non-Employee Director, the provisions of this paragraph 5(a) shall be applied to the Participant based on the Participant's status as of the date the Option was awarded.
(b)    Neither the transfer of the Participant between any combination of the Company and any Affiliate, nor a leave of absence awarded to the Participant and approved by the Committee, shall be deemed a termination of employment.

    
6.    Acceleration of Option.
(a)    Disability or Death. If paragraph 5(a)(ii), 5(a)(iii) or the exception clause of paragraph 5(a)(iv) of this Incentive Plan Award Agreement is applicable, the Option, whether or not previously exercisable, shall become immediately exercisable in full if the Participant shall have been employed continuously by the Company or an Affiliate between the date the Option was granted and the date of such disability or, in the event of death, a date not more than three months prior to such death.
(b)    Dissolution, Liquidation, Merger. In the event of (i) a proposed merger or consolidation of the Company with or into any other corporation, regardless of whether the Company is the surviving corporation, unless appropriate provision shall have been made for the protection of the Option by the substitution, in lieu of the Option, of an option to purchase appropriate voting  stock (the "Survivor's Stock") of the corporation surviving any such merger or consolidation or, if appropriate, the parent corporation of the Company or such surviving corporation, or, alternatively, by the delivery of a number of shares of the Survivor's Stock which has a Fair Market Value as of the effective date of such merger or consolidation equal to the product of (A) the excess of (x) the Event Proceeds per Share (as hereinafter defined) covered by the Option as of such effective date, over (y) the Option exercise price per  Share, times (B) the number of  Shares covered by the Option, or (ii) the proposed dissolution or liquidation of the Company (such merger, consolidation, dissolution or liquidation being herein called an "Event"), the Committee shall declare, at least ten days prior to the actual effective date of an Event, and provide written notice to the Participant of the declaration, that the Option, whether or not then exercisable, shall be canceled at the time of, or immediately prior to the occurrence of, the Event (unless it shall have been exercised prior to the occurrence of the Event) in exchange for payment to the Participant, within ten days after the Event, of cash equal to the amount (if any), for each  Share covered by the canceled Option, by which the Event Proceeds per  Share (as hereinafter defined) exceeds the exercise price per  Share covered by the Option. At the time of the declaration provided for in the immediately preceding sentence, the Option shall immediately become exercisable in full and the Participant shall have the right, during the period preceding the time of cancellation of the Option, to exercise the Option as to all or any part of the Shares covered thereby. The Option, to the extent it shall not have been exercised prior to the Event, shall be canceled at the time of, or immediately prior to, the Event, as provided in the declaration, and this Plan shall terminate at the time of such cancellation, subject to the payment obligations of the Company provided in this paragraph 6(b). For purposes of this paragraph, "Event Proceeds per Share" shall mean the cash plus the fair market value, as determined in good faith by the Committee, of the non-cash consideration to be received per Share by the stockholders of the Company upon the occurrence of the Event.
7.    Limitation on Transfer.  During the lifetime of the Participant, only the Participant or his or her guardian or legal representative may exercise the Option. The Participant shall not assign or transfer the Option otherwise than by will or the laws of descent and distribution, and the Option shall not be subject to pledge, hypothecation, execution, attachment or similar process. Any attempt to assign, transfer, pledge, hypothecate or otherwise dispose of the Option contrary to the provisions hereof, and the levy of any attachment or similar process upon the Option, shall be null and void.
8.    Stockholder Rights Before Exercise.  The Participant shall have none of the rights of a stockholder of the Company with respect to any share subject to the Option until the share is actually issued to him or her upon exercise of the Option.
9.    Adjustment For Changes in Capitalization.  The Option is subject to adjustment for changes in capitalization as provided in paragraph 17 of the Plan.
10.    Tax Withholding. The parties hereto recognize that the Company or a parent or subsidiary thereof may be obligated to withhold federal and state income taxes and social security or other taxes upon the Participant's exercise of the Option. The Participant agrees that, at the time he or she exercises the Option, if the Company or a parent or subsidiary thereof is required to withhold such taxes, he or she will promptly pay in cash upon demand to the Company, or the parent or subsidiary having such obligation, such amounts as shall be necessary to satisfy such obligation; provided, however, that in lieu of all or any part of such a cash payment, the Committee 

may, but shall not be required to (or, in the case of an Participant who is a Non-Employee Director (as defined in the Plan), the Committee shall) permit the Participant to elect to cover all or any part of the required withholdings (up to the Participant's minimum required tax withholding rate) through a reduction of the number of  Shares delivered to the Participant or through a subsequent return to the Company of shares delivered to the Participant.
11.    Interpretation of this Incentive Plan Award Agreement. All decisions and interpretations made by the Committee with regard to any question arising hereunder or under the Plan shall be binding and conclusive upon the Company and the Participant. In the event that there is any inconsistency between the provisions of this Incentive Plan Award Agreement and the Plan, the provisions of the Plan shall govern.
12.    Discontinuance of Employment. This Incentive Plan Award Agreement shall not give the Participant a right to continued employment with the Company or any parent or subsidiary thereof, and the Company or any such parent or subsidiary thereof employing the Participant may terminate his or her employment and otherwise deal with the Participant without regard to the effect it may have upon him or her under this Incentive Plan Award Agreement.
13.    General.  The Company shall at all times during the term of this Option reserve and keep available such number of  Shares as will be sufficient to satisfy the requirements of this Incentive Plan Award Agreement.  This Incentive Plan Award Agreement shall be binding in all respects on the Participant's heirs, representatives, successors and assigns. This Incentive Plan Award Agreement is entered into under the laws of the State of Minnesota and shall be construed and interpreted thereunder.

DIGI INTERNATIONAL INC.
2014 OMNIBUS INCENTIVE PLAN 

Addendum I
to
Terms and Conditions of Nonstatutory Stock Option Agreement 

     Paragraph 6, entitled “Acceleration of Option,” is amended to add new subparagraph (c) which provides as follows:

     (c) Change in Control. The Option, whether or not previously exercisable, shall become immediately exercisable in full upon the occurrence of any “Change in Control”. A “Change in Control” shall be deemed to have occurred upon the occurrence of either of the following events:

     (i) any person, as defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated pursuant to the Exchange Act), directly or indirectly, of securities of the Company having 25% or more of the voting power in the election of directors of the Company, excluding, however, Participant (or a group of persons, including Participant, acting in concert); or

     (ii) the occurrence within any period, commencing immediately after an Annual Meeting of Stockholders and continuing to and including the Annual Meeting of Stockholders occurring on or about the third anniversary date of the commencement of such period, of a change in the Board of Directors of the Company with the result that the Incumbent Members (as defined below) do not constitute a majority of the Company's Board of Directors. The term “Incumbent Members” shall mean the members of the Board on the date of the commencement of such period, provided that any person becoming a director during such period whose election or nomination for election was approved by a majority of the directors who, on the date of such election or nomination for election, comprised the Incumbent Members shall be considered one of the Incumbent Members in respect of such period.

DIGI INTERNATIONAL INC.
2014 OMNIBUS INCENTIVE PLAN 

Addendum IA
to
Terms and Conditions of Nonstatutory Stock Option Agreement 

       Paragraph 6, entitled “Acceleration of Option,” is amended to add new subparagraph (c) which provides as follows:
     (c)   Change in Control and Employment Termination Event. The Option, whether or not previously exercisable, shall become immediately exercisable in full upon the occurrence of any “Change in Control” which occurs contemporaneously with, or is followed within 12 months of the Change in Control by, an “Employment Termination Event”.
A “Change in Control” shall be deemed to have occurred upon the occurrence of either of the following events:
        (i)  any person, as defined in Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934 (the “Exchange Act”), becomes the “beneficial owner” (as defined in Rule 13d-3 promulgated pursuant to the Exchange Act), directly or indirectly, of securities of the Company having 25% or more of the voting power in the election of directors of the Company, excluding, however, Participant (or a group of persons, including Participant, acting in concert); or
        (ii)  the occurrence within any period, commencing immediately after an Annual Meeting of Stockholders and continuing to and including the Annual Meeting of Stockholders occurring on or about the third anniversary date of the commencement of such period, of a change in the Board of Directors of the Company with the result that the Incumbent Members (as defined below) do not constitute a majority of the Company's Board of Directors. The term “Incumbent Members” shall mean the members of the Board on the date of the commencement of such period, provided that any person becoming a director during such period whose election or nomination for election was approved by a majority of the directors who, on the date of such election or nomination for election, comprised the Incumbent Members shall be considered one of the Incumbent Members in respect of such period.
An “Employment Termination Event” shall be deemed to have occurred upon either:
		
	(i)
	the involuntary termination of Participant's employment, for reasons other than Cause, or

		
	(ii)
	the voluntary termination of the Participant's employment for Good Reason.

For purposes of this subparagraph (c), “Cause” shall mean only the following:
		
	(i)
	 indictment or conviction of, or a plea of nolo contendere to, (A) any felony (other than any felony arising out of negligence), or any misdemeanor involving moral turpitude with respect to the Company, or (B) any crime or offense involving dishonesty with respect to the Company;

		
	(ii)
	theft or embezzlement of Company property or commission of similar acts involving dishonesty or moral turpitude;

(iii) repeated material negligence in the performance of Participant's duties after the Participant has received written notice of the same;
(iv) Participant's failure to devote substantially all of his working time and efforts during normal business hours to the Company's business;
		
	(v) 
	knowing engagement in conduct which is materially injurious to the Company; or

(vi) knowingly providing materially misleading information concerning the Company to the Company's Board of Directors, any governmental body or regulatory agency or to any lender or other financing source or proposed financing source of the Company.

For purposes of this subparagraph (c), “Good Reason” shall mean only the following:
		
	(i)
	the failure of the Company to pay any material amount due to Participant under a prevailing Employment Agreement;

		
	(ii)
	 a meaningful diminution, without Cause, as defined above, in the responsibilities or job functions of the Participant unless approved by the Participant;

		
	(iii)
	a material reduction in total compensation potential as defined by annual base salary and cash compensation targets; or

		
	(iv)
	the relocation of Participant to an office location greater than 50 miles from his/her office location at the time of a Change in Control.

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