AT&T Latin America 2000 Long Term Incentive Plan Non-Statutory Stock Option Agreement

Summary

This agreement grants an employee of AT&T Latin America Corp. non-statutory stock options to purchase shares of the company's Class A common stock under the 2000 Long Term Incentive Plan. The options vest after three years, with specific rules for exercise, payment, and forfeiture if the employee is terminated for cause or competes with the company. Early vesting may occur in certain cases, and the options are generally non-transferable except by inheritance. The agreement outlines the employee's rights and obligations regarding the options.

EX-10.5 7 g77776exv10w5.txt FORM OF STOCK OPTION Exhibit 10.5 [FORM OF OPTION AGREEMENT UNDER THE AT&T LATIN AMERICA 2000 LONG TERM INCENTIVE PLAN] AT&T Latin America 2000 Long Term Incentive Plan NON-STATUTORY STOCK OPTION AGREEMENT (CAPITALIZED TERMS NOT OTHERWISE DEFINED HEREIN SHALL HAVE THE SAME MEANINGS AS IN THE PLAN) Pursuant to the AT&T Latin America 2000 LONG TERM INCENTIVE PLAN (the "PLAN") of AT&T Latin America Corp. ("ATTL"), a copy of which has been delivered to you, you have been granted non-statutory options (the "OPTIONS") to purchase shares of ATTL Class A common stock from ATTL ("SHARES") in accordance with and subject to the terms of this Non-statutory Stock Option Agreement (this "AGREEMENT"). The Options and this Agreement are also subject to the terms and conditions of the Plan, which is made a part of and incorporated into this Agreement. [Name] OPTIONEE ID SOCIAL SECURITY NUMBER (US ONLY) PLAN ID ================================================================================ GRANT DATE [ ] EXERCISE PRICE [ ] NUMBER OF OPTIONS GRANTED [ ] GRANT EXPIRATION DATE [ ] (This date is the date upon which this Option expires unless sooner terminated upon certain terminations of your employment as provided in the Plan and this Agreement.) - -------------------------------------------------------------------------------- VESTING AND EXERCISABILITY Except as otherwise provided in this Agreement, the Options shall vest and become exercisable on the third anniversary of the grant date. FRACTIONAL SHARES ROUNDED At vesting, fractional shares will be DOWN ON VESTING rounded down to the nearest whole share and all fractional shares that have been rounded down will become exercisable in the final vesting period. METHOD OF EXERCISE The Options or any portion thereof may be exercised only upon payment of the exercise price thereof in full and in accordance with procedures established by the ATTL Board of Directors or the Committee. Payment shall be made: (i) in cash; (ii) by way of a broker-assisted cashless exercise method authorized by the Committee; (iii) by surrender of the Shares which (a) in the case of Shares acquired upon exercise of an Option, have been owned by you for more than six (6) months on the date of surrender, and (b) have a Fair Market Value on the date of surrender equal to the aggregate exercise price of the Shares on which the Option is being exercised; (iv) a combination of these methods; or (v) any other method authorized by the Committee. Exercise of the Option shall take effect as soon as practicable after the date that (i) the notice of exercise and the payment of the exercise price are actually received by ATTL in accordance with the procedures established by the ATTL Board of Directors or the Committee and (ii) you have made arrangements to pay any "tax related items" as described in the section entitled "Tax Reporting and Payment Liability." - -------------------------------------------------------------------------------- DELIVERY OF SHARES Within a reasonable period after the Option is exercised, ATTL will deliver to you or your legal representative a statement reflecting ownership of Shares, if any, in the form of book entry ("OWNERSHIP STATEMENT") or certificates for the number of Shares with respect to the Options you exercised. Neither you nor your legal representative shall be, or have any of the rights and privileges of, a shareholder of ATTL in respect of any Shares purchasable upon the exercise of this Option, in whole or in part, unless and until the Ownership Statement or certificates for such Shares have been issued to you or your legal representative. - -------------------------------------------------------------------------------- FORFEITURE OF OPTIONS If at any time, the Committee determines FOR CAUSE that, either during or after your employment with ATTL or an ATTL subsidiary ("Subsidiary"), you engaged in conduct that constitutes "Cause" (as defined below), all of the Options that are outstanding at such time shall immediately terminate and be cancelled upon such determination by the Committee. For purposes of this provision, "Cause" means: (a) fraudulent or dishonest conduct (as determined by a finding, order, judgment or decree in any court or administrative agency of competent jurisdiction, in any action or proceeding, whether civil, criminal, administrative or investigative); - -------------------------------------------------------------------------------- ================================================================================ IMPORTANT: CONTINUED ON NEXT PAGE. ================================================================================ 1 ================================================================================ FORFEITURE OF OPTIONS (b) conviction of, or entering into, a FOR CAUSE plea of nolo contendere to a felony (CONTINUED) criminal offense or to a comparable crime in any jurisdiction that uses different nomenclature; (c) gross negligence in the performance of your material employment-related duties or responsibilities; (d) willful refusal to perform your material employment-related duties or responsibilities or intentionally or knowingly engaging in any activity that is in material conflict with or is materially adverse to the business interests of ATTL or any of its Subsidiaries, or their respective businesses; or (e) breach of any material provision of any employment, confidentiality or similar agreement. Upon such a determination by the Committee, ATTL may disregard any attempted exercise of the Options by notice delivered prior to such determination (in which case, ATTL shall only be obligated to return to you any amounts remitted in order to exercise such Options) and you shall be obligated to repay to ATTL the net gain realized by you with respect to any Options exercised within the six-month period preceding the Committee's determination. - -------------------------------------------------------------------------------- ACCELERATION OF VESTING Your Options may vest early (accelerate) and become exercisable upon the first of any of the following events to occur: (i) your employment with ATTL or any Subsidiary terminates by reason of a Qualifying Termination of Employment. In that event, one-hundred percent (100%) of your outstanding Options shall accelerate and become exercisable as of the date of your termination of employment. If your employment with ATTL or any Subsidiary terminates for any reason other than as a result of a Qualifying Termination of Employment or for Cause, all unvested options shall terminate and be cancelled as of the date of your termination of employment. Any Options that have not been terminated and cancelled shall remain exercisable to the extent vested, until the earlier of three (3) months from your date of termination, or the original grant expiration date. A transfer within the consolidated entities of ATTL does not constitute a Qualifying Termination of Employment. (ii) [VARIES DEPENDING ON TERMS OF OPTION GRANT] - -------------------------------------------------------------------------------- COMPETITION These Options shall be forfeited and cancelled if, without the consent of ATTL or any Subsidiary, you establish a relationship with a competitor of ATTL or a competitor of any Subsidiary or engage in any activity which is in conflict with or adverse to the interest of ATTL or any Subsidiary while employed by ATTL or any Subsidiary, or after termination of employment, as determined in accordance with the AT&T Latin America Non-Competition Guideline, a copy of which has been provided to you. - -------------------------------------------------------------------------------- TRANSFERABILITY This Option is not transferable by you except by will or the laws of descent and distribution, unless otherwise authorized by the Committee or its designee pursuant to the terms of the Plan. During your lifetime the Option may be exercised only by you or your guardian or legal representative, unless otherwise authorized by the Committee pursuant to the terms of the Plan. - -------------------------------------------------------------------------------- ACKNOWLEDGEMENT AND By entering into this Agreement and LIMITATION ON RIGHTS: NO accepting the grant of the Option evidenced RIGHT TO FUTURE GRANTS; hereby, you acknowledge that: EXTRAORDINARY ITEM OF (i) the Plan is wholly discretionary in COMPENSATION nature and may be modified, suspended or terminated by ATTL at any time; (ii) the grant of the Option is a one-time benefit which does not create any contractual or other right to receive future grants of options, or benefits in lieu of options; (iii) all determinations with respect to any future grants, including, but not limited to, the times when options shall be granted, the number of shares subject to each option, the option price, and the time or times when each option shall be exercisable, will be at the sole discretion of ATTL; (iv) your participation in the Plan is voluntary; (v) the value of the Option is an extraordinary item of compensation which is outside the scope of your employment contract, if any; (vi) the Option is not part of normal or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, termination indemnities, or similar payments; (vii) the vesting of the Option ceases upon termination of employment for any reason (including without limitation breach of contract), except as may otherwise be explicitly provided in the Plan and/or this Agreement; (viii) benefits are available only while you are employed by ATTL or any Subsidiary as provided in the Plan; (ix) the future value of the underlying Shares is unknown and cannot be predicted with certainty; (j) your participation in the Plan shall not create a right to further employment with your employer and shall not interfere with the ability of your employer to terminate your employment with or without cause; and (k) if the underlying Shares do not increase in value, the Option will have no value. - -------------------------------------------------------------------------------- ================================================================================ IMPORTANT: CONTINUED ON NEXT PAGE. ================================================================================ 2 DATA PRIVACY CONSENT You hereby request and permit ATTL to access, store, process and transfer various personal and employment data concerning and relating to you, including the data identified below (the "DATA"), as often as necessary, to ATTL for the purpose of implementing, administering and managing your participation in the Plan. You further authorize ATTL, to the extent permitted by law, to transfer the Data to legitimate third parties who are or will be assisting ATTL in the implementation, administration and management of the Plan, including, but not limited to the following third parties: Salomon Smith Barney, Equiserve and their successors, if any. You further authorize ATTL, Salomon Smith Barney, Equiserve and other legitimate third parties, including without limitation any other broker or third party plan administrator, if any, to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administrating and managing your participation in the Plan. - -------------------------------------------------------------------------------- TAX REPORTING AND ATTL will determine the tax, social PAYMENT LIABILITY insurance and any other payroll tax withholding and reporting required in connection with the Option ("TAX-RELATED ITEMS"), including the grant, vesting or exercise of the Option or sale of shares acquired pursuant to such exercise. These requirements may change from time to time as laws or interpretations change. Regardless of ATTL's actions in this regard, you hereby acknowledge and agree that the ultimate liability for any and all tax-related items is and remains your responsibility and liability and that ATTL (i) makes no representations nor undertakings regarding treatment of any tax-related items in connection with any aspect of the Option, including the grant, vesting or exercise of the Option and the subsequent sale of Shares, if any, acquired pursuant to such exercise; and (ii) does not commit to structure the terms of the grant or any aspect of the Option to reduce or eliminate your liability regarding tax-related items. In the event ATTL determines that it must withhold any tax-related items as a result of your participation in the Plan, you agree, as a condition of the grant of the Option, to make arrangements satisfactory to ATTL to enable ATTL to satisfy all withholding requirements, including, but not limited to, withholding any applicable tax-related items from the proceeds of the Option exercise. Additionally, you authorize ATTL to withhold all applicable withholding taxes from your wages. Furthermore, you shall pay ATTL any amount of taxes ATTL may be required to withhold as a result of your participation in the Plan or your purchase of Shares, if any, that cannot be satisfied by deduction from your wages or other cash compensation paid to you by ATTL. - -------------------------------------------------------------------------------- OTHER CORPORATE PROVISIONS The issuance of the Shares under this Agreement is subject to all applicable laws, rules and regulations. No Shares shall be issued upon exercise of any Options if the exercise would result in a violation of applicable laws, rules and regulations and unless and until ATTL is satisfied that the actions required to be taken in respect of the applicable laws, rules and regulations have been or will be taken. Without limiting the generality of the foregoing, if ATTL shall determine that the listing, registration or qualification of the Shares upon any securities exchange or under any state or federal law, or the consent or approval of any governmental or regulatory agency or authority or national securities exchange, is necessary or desirable as a condition of, or in connection with, the exercise of the Option, no portion of the Option may be exercised until or unless such listing, registration, qualification, consent or approval shall have been effected or obtained. Any determinations or decisions made or actions taken arising out of or in connection with the interpretation and administration of this Agreement and the Plan by the ATTL Board of Directors or the Committee shall be final and conclusive. This Agreement may be amended by each of the ATTL Board of Directors or the Committee in its sole discretion provided that no such amendment shall impair your rights hereunder without your consent. You will be given written notice of any such amendment as promptly as practicable after its adoption. The validity, construction and effect of this Agreement shall be determined in accordance with the laws of the State of Delaware, without giving effect to any principles or rules relating to conflicts of laws. ================================================================================ By your signature below, you agree that these Options are granted under and governed by the AT&T Latin America 2000 Long Term Incentive Plan, the AT&T Latin America Non-Competition Guideline, a copy of which has been given to you, and this Agreement. Accepted By: AT&T Latin America Corp. - ------------------------ ---------- ---------------------- ------------- Employee Date By: Date 3