TELECORP PCS, INC.
1999 STOCK OPTION PLAN*
1. PURPOSE. The TELECORP PCS, INC. 1999 Stock Option Plan (the "Plan") is
intended to provide incentives which will attract and retain highly competent
persons as employees, officers and/or directors of TELECORP PCS, INC. or its
affiliated companies (the "Company"), by providing them opportunities to acquire
shares of Class A Common Stock of the Company ("Common Shares") pursuant to
Stock Options described herein.
2. ADMINISTRATION. The Plan will be administered by the Board of Directors
of the Company (the "Board"). The Board is authorized, subject to the provisions
of the Plan, to establish such rules and regulations as it deems necessary for
the proper administration of the Plan and to make such determinations and
interpretations and to take such action or inaction in connection with the Plan
and any Stock Options granted hereunder as it deems necessary or advisable. All
determinations and interpretations made by the Board shall be binding and
conclusive on all participants and their legal representatives. The Board may
correct any defect or supply any omission or reconcile any inconsistency in the
Plan or in any option agreement in the manner and to the extent it shall deem
expedient to effectuate the purposes of the Plan. No member of the Board, and no
officer or employee of the Company, shall be liable for any act or failure to
act hereunder, by any other member of the Board or any officer or employee or by
any agent to whom duties in connection with the administration of this Plan have
been delegated or, except in circumstances involving his bad faith, gross
negligence or fraud, for any act or failure to act by the member of the Board or
any officer or employee.
3. PARTICIPANTS. The Board, in its sole discretion may designate
employees, officers and directors of the Company and its affiliates from time to
time to receive Stock Options under the Plan. Designation of a participant in
any year shall not require the Board to designate such person to receive a Stock
Option in any other year or, once designated, to receive the same type or amount
of Stock Options as granted to the participant or any other participant in any
year. The Board shall consider such factors as it deems pertinent in selecting
participants and in determining the type and amount of their respective Stock
Options.
4. SHARES RESERVED UNDER THE PLAN. Subject to adjustment under Section 6
below, there is hereby reserved for issuance under the Plan an aggregate of
587,159 Common Shares. Such shares may be authorized but unissued shares or may
be shares issued and thereafter acquired by the Company. Any shares subject to
Stock Options may thereafter be subject to new options under this Plan if there
is a lapse, expiration or termination of any such options, or if shares are
issued under such options and thereafter are reacquired by the Company pursuant
to rights reserved by the Company upon issuance thereof.
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* Amended October 18, 1999 by the Company's Board of Directors.
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5. STOCK OPTIONS. Stock Options will consist of awards from the Company,
in the form of agreements, which will enable the holder to purchase a specific
number of Common Shares, at set terms and at a fixed purchase price. Stock
Options may be "incentive stock options" within the meaning of Section 422 of
the Internal Revenue Code ("Incentive Stock Options") or Stock Options which do
not constitute Incentive Stock Options ("Nonqualified Stock Options"). The Board
will have the authority to grant to any participant one or more Incentive Stock
Options, Nonqualified Stock Options, or both types of Stock Options. Each Stock
Option shall be subject to such terms and conditions consistent with the Plan as
the Board may impose from time to time, subject to the following limitations:
(A) EXERCISE PRICE. Subject to Paragraph (e) below, each Stock
Option granted hereunder shall have such per-share exercise price as the Board
may determine at the date of grant.
(B) PAYMENT OF EXERCISE PRICE. Options granted under the Plan may
provide for the payment of the exercise price by delivery of cash or a check to
the order of the Company in an amount equal to the exercise price of such
options, or by delivery to the Company of Common Shares already owned by the
participant having a Fair Market Value equal in amount to the exercise price of
the options being exercised or by any combination of such methods of payment.
The Fair Market Value of any Common Shares which may be delivered upon exercise
of an option shall be determined by the Board.
(C) EXERCISE PERIOD. Stock Options granted under the Plan shall be
exercisable at such times and subject to such terms and conditions as shall be
determined by the Board. In addition, Stock Options shall not be exercisable
more than ten years after the date they are granted. All Stock Options shall
terminate at such earlier times and upon such conditions or circumstances as the
Board shall in its discretion set forth in such option at the date of grant.
(D) EXERCISE OF OPTIONS. Each option granted under the Plan shall be
exercisable either in full or in installments at such time or times and during
such period as shall be set forth in the agreement evidencing such option,
subject to the provisions of paragraph (c) above. To the extent that an option
to purchase Common Shares is not exercised by an optionee when it becomes
initially exercisable, it shall not expire but shall be carried forward and
shall be exercisable, on a cumulative basis, until the expiration of the
exercise period or such earlier time as the Board shall, in its sole discretion,
set forth in such option at the date of grant.
(E) LIMITATIONS ON INCENTIVE STOCK OPTIONS. Incentive Stock Options
may be granted only to participants who are employees of the Company at the date
of grant. The aggregate Fair Market Value (determined as of the time the option
is granted) of the Common Shares with respect to which Incentive Stock Options
are exercisable for the first time by a participant during any calendar year
(under all option plans of the Company) shall not exceed $100,000. Incentive
Stock Options may not be granted to any participant who, at the time of grant,
owns stock possessing (after the application of the attribution rules of Section
424(d) of the Internal Revenue Code) more than 10% of the total combined voting
power of all classes of stock of the Company, unless the option price is fixed
at not less than 110% of the Fair Market Value of the Common Shares on the date
of grant and the exercise of such option is prohibited by its terms after the
expiration of five years from the date of grant of such option.
(F) REDESIGNATION AS NONQUALIFIED STOCK OPTIONS. Options designated
as "incentive stock options" that fail to continue to meet the requirements of
Section 422 of the Internal Revenue Code shall be redesignated as nonqualified
options for Federal income tax purposes automatically without further action by
the Board on the date of such failure to continue to meet the requirements of
Section 422 of the Internal Revenue Code.
(G) LIMITATION OF RIGHTS IN SHARES. The recipient of a Stock Option
shall not be deemed for any purpose to be a shareholder of the Company with
respect to any of the shares subject thereto except to the extent that the Stock
Option shall have been exercised and, in addition, a certificate shall have been
issued and delivered to the participant.
6. ADJUSTMENT PROVISIONS.
(A) If the Company shall at any time change the number of issued
Common Shares without new consideration to the Company (such as by stock
dividend, stock split, recapitalization, reorganization, exchange of shares,
liquidation, combination or other change in corporate structure affecting the
Common Shares) or make a distribution of cash or property which has a
substantial impact on the value of issued Common Shares, the total number of
shares available for Stock Options under this Plan shall be appropriately
adjusted, and the number of shares covered by each outstanding Stock Option and
the option exercise price of each outstanding Stock Option shall be adjusted so
that the net value of such Stock Option shall not be changed.
(B) In the case of any sale of assets, merger, consolidation,
combination or other corporate reorganization or restructuring of the Company
with or into another corporation which results in the outstanding Common Shares
being converted into or exchanged for different securities, cash or other
property, or any combination thereof (an "Acquisition"), subject to the
provisions of this Plan and any limitation applicable to the Stock Option,
including without limitation, the termination of any unexercised options upon
the sale of the Company's assets, any participant to whom a Stock Option has
been granted shall have the right thereafter and during the term of the Stock
Option, to receive upon exercise thereof the Acquisition Consideration (as
defined below). The term "Acquisition Consideration" shall mean the kind and
amount of securities, cash or other property or any combination thereof
receivable in respect of one Common Share upon consummation of an Acquisition.
(C) Notwithstanding any other provision of this Plan, the Board may
authorize the issuance, continuation or assumption of Stock Options or provide
for other equitable adjustments after changes in the Common Shares resulting
from any merger, consolidation, sale of assets, acquisition of property or
stock, recapitalization, reorganization or similar occurrence upon such terms
and conditions as it may deem equitable and appropriate.
7. NONTRANSFERABILITY. Each Stock Option granted under the Plan to a
participant shall not be transferable by him otherwise than by law or by will or
the laws of descent and distribution, and shall be exercisable, during his
lifetime, only by him (or his legal representative in the case of
incapacitation). In the event of the death of a participant while the
participant is rendering services to the Company, each Stock Option theretofore
granted to him shall be exercisable during such period after his death as the
Board shall in its discretion set forth in such option or right at the date of
grant (but not beyond the stated duration of the option or right) and then only:
(I) By the executor or administrator of the estate of the deceased
participant or the person or persons to whom the deceased participant's rights
under the Stock Option shall pass by will or the laws of descent and
distribution; and
(II) To the extent that the deceased participant was entitled to do
so at the date of his death.
8. OTHER PROVISIONS. Stock Options under the Plan may also be subject to
such other provisions (whether or not applicable to any other Stock Options
under the Plan) as the Board, in its sole discretion, determines appropriate,
including without limitation, provisions determining the effect that a
termination of employment shall have on the participant's Stock Options,
provisions for the installment purchase of Common Shares under Stock Options,
provisions to assist the participant in financing the acquisition of Common
Shares, provisions for the forfeiture of, or restrictions on resale or other
disposition of Common Shares acquired under any form of Stock Option, provisions
for the acceleration of exercisability or vesting of Stock Options in the event
of a change of control of the Company, provisions for the payment of the value
of Stock Options to participants in the event of a change of control of the
Company, provisions for the forfeiture of, or provisions to comply with Federal
and state securities laws, or understandings or conditions as to the
participant's employment in addition to those specifically provided for under
the Plan. Notwithstanding the foregoing, such additional provisions shall not
cause any Incentive Stock Option granted under the Plan to fail to qualify as an
Incentive Stock Option within the meaning of Section 422 of the Code.
9. FAIR MARKET VALUE. For purposes of this Plan and any Incentive Stock
Options awarded hereunder, Fair Market Value of Common Shares shall be the
amount determined in good faith by the Board from time to time as the fair
market value of the Common Shares of the Company.
10. WITHHOLDING. All payments or distributions or deliveries made pursuant
to the Plan shall be net of any amounts required to be withheld pursuant to
applicable federal, state and local tax withholding requirements. If the Company
is required to issue Common Shares pursuant to the exercise of Stock Options, it
may require the participant to remit to it an amount sufficient to satisfy such
tax withholding requirements prior to the delivery of any certificates for such
Common Shares. The Board may, in its discretion and subject to such rules as it
may adopt, permit a participant to pay all or a portion of the federal, state
and local withholding taxes arising in connection with the exercise of a Stock
Option, by electing to have the Company withhold Common Shares having a Fair
Market Value equal to the amount required to be withheld.
11. TENURE. A participant's right, if any, to continue to serve the
Company as an officer, employee, director or otherwise, shall not be enlarged or
otherwise affected by his designation as a participant under the Plan, nor shall
this Plan in any way interfere with the right of the Company, subject to the
terms of any separate employment agreement to the contrary, at any time to
terminate such employment or to increase or decrease the compensation of the
participant from the rate in existence at the time of the grant of a Stock
Option. Whether an authorized leave of absence, or absence in military or
government service, shall constitute termination of employment shall be
determined by the Board at the time.
12. OTHER EMPLOYEE BENEFITS. The amount of any compensation that may be
deemed to be received by an participant as a result of the grant of a Stock
Option, the vesting of a Stock Option, the exercise of a Stock Option or the
sale of Common Shares received upon such exercise will not constitute
compensation with respect to which any other participant benefits of such
employee are determined, including, without limitation, benefits under any
bonus, pension, profit sharing, life insurance or salary continuation plan,
unless separate provision to the contrary is contained in such other plan.
13. DURATION, AMENDMENT AND TERMINATION. No Stock Option shall be granted
after December 31, 2008; provided, however, that the terms and conditions
applicable to any Stock Option granted prior to such date shall continue to have
force and effect in accordance with the participant's stock option agreement,
and such agreement may thereafter be amended or modified by mutual agreement
between the Company and the participant or such other persons as may then have
an interest therein. Also, by mutual agreement between the Company and a
participant hereunder, under this Plan or under any other present or future plan
of the Company, Stock Options may be granted to such participant in substitution
and exchange for, and in cancellation of, any Stock Options previously granted
such participant under this Plan, or any other present or future plan of the
Company. The Board may amend the Plan from time to time or terminate the Plan at
any time. However, no action authorized by this Section 13 shall reduce the
amount of any existing Stock Option or change the terms and conditions thereof
without the participant's consent.
14. GOVERNING LAW. This Plan and actions taken in connection herewith
shall be governed and construed in accordance with the laws of the Commonwealth
of Virginia (regardless of the law that might otherwise govern under applicable
Virginia principles of conflict of laws).
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15. APPROVAL. The Plan was adopted by the Board of the Company on June 23,
1999.
TELECORP PCS, INC.
Date: ______________ By:_________________________
Its: ______________________
