EXHIBIT 10.3
THE DIRECTV GROUP, INC.
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED
STOCK OPTION AGREEMENT (“
Agreement ”), dated as of August 13,
2007 (“ Effective Date ”), is
entered into between The DIRECTV Group, Inc. a Delaware
corporation (“ DIRECTV ”), and
Chase Carey (“ Executive
”).
WHEREAS ,
at its meeting on August 8, 2007, the Compensation Committee
of DIRECTV’s Board of Directors (the “
Committee ”) approved the grant to
Executive of nonqualified stock options to purchase shares of
DIRECTV’s common stock, $.01 par value per share (the
“ Common Stock ”), upon the
terms and conditions set forth herein and subject to the
terms and conditions of the Amended and Restated 2004 Stock
Plan of DIRECTV (as it may be amended from time to time, the
“ Plan ”); and
WHEREAS ,
at its meeting on August 8, 2007, the Board of Directors of
DIRECTV (“ Board ”) ratified the
grant to Executive of the non-qualified stock options
referred to above, upon the terms and conditions set forth
herein and subject to the terms and conditions of the Plan;
and
WHEREAS ,
the Committee and the Board each has also approved the terms
and conditions of an employment agreement with Executive
effective as of August 9, 2007 (such agreement, as it may be
amended from time to time, is referred to herein as the
“ Employment Agreement ”);
and
WHEREAS ,
both the Committee and the Board authorized the Chairman of
the Committee to execute this Agreement on behalf of DIRECTV,
in accordance with the resolutions adopted by each of the
Committee and the Board at their respective meetings on
August 8, 2007.
NOW,
THEREFORE , in consideration of the services
rendered and to be rendered by Executive and the mutual
promises made herein and the mutual benefits to be derived
there from, DIRECTV and Executive agree as
follows:
1.
Defined Terms . Any capitalized term
used herein and not otherwise defined shall have the meaning
assigned to such term in the Plan.
2.
Grant of Options . DIRECTV hereby grants
to Executive the right and option to purchase, on the terms and
conditions set forth herein, to the extent exercisable, all or any
part of an aggregate of One Million Two Hundred-Nine Thousand Four
Hundred (1,209,400) shares of Common Stock at a price (“
Grant Price ”) of $22.43 per share of Common
Stock, subject to the provisions of this Agreement and the Plan
(the “ Option ”).
3.
Exercisability of Option . The Option
shall vest and become exercisable as to one-third (rounded to the
nearest whole share) of the aggregate number of shares of Common
Stock subject to the Option (subject to adjustment as provided in
Section 8 or in accordance with Section 14 of the Plan), on each of
December 31, 2008, 2009 and 2010, subject to the applicable
provisions of the Plan and this Agreement. The Option
may be exercised only to the extent it shall have vested and is
exercisable, and, during Executive’s lifetime, only by
Executive. In no event may the Executive exercise the
Option, in whole or in part, after the tenth anniversary of the
Effective Date (the “ Expiration Date
”).
(a)
Cumulative Exercisability . To the
extent Executive does not, at the time of a particular exercise,
purchase all the shares of Common Stock that Executive may then
purchase, Executive has the right cumulatively thereafter to
purchase any of such shares of Common Stock not so purchased until
the Expiration Date or, if applicable, the earlier termination of
the Option.
(b)
No Fractional Shares; Minimum Exercise
. Fractional share interests shall be disregarded, but
may be cumulated. No fewer than 100 shares of Common
Stock may be purchased at any one time, unless the number purchased
is the total number at the time exercisable under the
Option.
4.
Exercise of Option . To the extent
vested and exercisable, the Option may be exercised by the delivery
to DIRECTV of a written exercise notice stating the number of
shares of Common Stock to be purchased pursuant to the Option
accompanied by payment of the Grant Price multiplied by the
aggregate number of shares of Common Stock to be purchased (such
payment to be made in accordance with Section 5) and the payment or
provision for any applicable employment or other taxes or
withholding for taxes thereon. Subject to Section 7
below, such Option shall be deemed to be exercised upon receipt and
approval by DIRECTV of such written exercise notice accompanied by
the aggregate Grant Price and any other payments so required, as
permitted pursuant to Section 5.
5.
Method of Payment of Option . Payment of
the aggregate Grant Price shall be by any of the following, or a
combination thereof, at the election of Executive:
(a)
in
cash or by electronic funds transfer, or by check payable to the
order of DIRECTV, in the full amount of the purchase price of the
shares of Common Stock so purchased and the amount (if any)
required to satisfy any applicable withholding taxes;
(b)
by
delivery of shares of Common Stock that have been held by Executive
for at least six months, in accordance with Section 7(e) of the
Plan, subject to compliance with applicable law;
(c)
payment
may be made in accordance with the cashless exercise program, if
any, of DIRECTV in effect at the time of exercise; or
(d)
in
a combination of payments under clauses (a), (b) and
(c).
Other
payment methods may be permitted only if expressly authorized
by the Committee consistent with the terms of the
Plan.
6.
Continuance of Employment Required . The
vesting schedule requires continued service through each applicable
vesting date as a condition to the vesting of the applicable Option
and rights and benefits under this Agreement except as otherwise
provided in Section 7. Partial service, even if
substantial, during any vesting period will not entitle Executive
to any proportionate vesting or avoid or mitigate a termination of
rights and benefits upon or following a termination of employment
or service except as provided in Section 7 or 9 below or under the
Plan.
7.
Effect of Termination of Employment on Exercise
Period . If Executive’s employment by
DIRECTV terminates, the following provisions shall apply with
respect to vesting and exercise of the Option after the date of
such termination (the “ Termination Date
”), except that in no event may any portion of the Option be
exercised after the Expiration Date:
(a)
If
DIRECTV terminates Executive’s employment without Cause (as
defined in the Employment Agreement), or if Executive’s
employment terminates as a result of Executive’s death or
Disability (as defined in the Employment Agreement) or due to
Executive’s resignation for an Effective Termination (as
defined in the Employment Agreement) or due to Executive’s
resignation or retirement at any time after December 31, 2010, all
unvested Options shall vest as of the Termination Date and
Executive (or Executive’s Personal Representative or
Beneficiary, as the case may be) may exercise the Option, in whole
or in part, at any time on or prior to the Expiration
Date.
(b)
If
DIRECTV terminates Executive’s employment for Cause, or if
Executive resigns prior to December 31, 2010, other than for an
Effective Termination, any un
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