This Stock Option Agreement involves
Title: FORM OF LIBERTY GLOBAL, INC. 2005 INCENTIVE PLAN NON-QUALIFIED STOCK OPTION AGREEMENT
Governing Law: Colorado Date: 8/11/2005
LIBERTY GLOBAL, INC.
2005 INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AGREEMENT
THIS NON-QUALIFIED STOCK OPTION AGREEMENT (“Agreement”) is made as of ___, 200___(the “Grant Date”), by and between LIBERTY GLOBAL, INC., a Delaware corporation (the “Company”), and the individual whose name, address and social security/payroll number appear on the signature page hereto (the “Grantee”).
The Company has adopted the Liberty Global, Inc. 2005 Incentive Plan (the “Plan”), a copy of which is attached to this Agreement as Exhibit A and by this reference made a part hereof, for the benefit of eligible employees of, and independent contractors providing services to, the Company and its Subsidiaries. Capitalized terms used and not otherwise defined herein will have the meaning given thereto in the Plan.
Pursuant to the Plan, the Compensation Committee (the “Committee”) appointed by the Board pursuant to Section 3.1 of the Plan to administer the Plan has determined that it would be in the interest of the Company and its stockholders to award an option to Grantee, subject to the conditions and restrictions set forth herein and in the Plan, in order to provide the Grantee additional remuneration for services rendered, to encourage the Grantee to continue to provide services to the Company or its Subsidiaries and to increase the Grantee’s personal interest in the continued success and progress of the Company.
The Company and the Grantee therefore agree as follows:
1. Definitions . The following terms, when used in this Agreement, have the following meanings:
“Business Day” means any day other than Saturday, Sunday or a day on which banking institutions in Denver, Colorado, are required or authorized to be closed.
“Cause” has the meaning specified for “cause” in Section 11.2(b) of the Plan.
“Close of Business” means, on any day, 5:00 p.m., Denver, Colorado time.
“Code” means the Internal Revenue Code of 1986, as it may be amended from time to time.
“Committee” has the meaning specified in the recitals to this Agreement.
“Company” has the meaning specified in the preamble to this Agreement.
“Direct Registration System” means the book-entry registration system maintained by the Company’s stock transfer agent, pursuant to which shares of LBTYA are held in non-certificated form for the benefit of the registered holder thereof.
“Exercise Price” means $ per LBTYA share.
“Grant Date” has the meaning specified in the preamble to this Agreement.
“Grantee” has the meaning specified in the preamble to this Agreement.
“LBTYA” means the Series A common stock, par value $.01 per share, of the Company.
“Option” has the meaning specified in Section 2 of this Agreement.
“Option Shares” has the meaning specified in Section 2 of this Agreement.
“Plan” has the meaning specified in the recitals of this Agreement.
“Required Withholding Amount” has the meaning specified in Section 5 of this Agreement.
[“Special Termination Period” has the meaning specified in Section 7(d) of this Agreement.]
“Term” has the meaning specified in Section 2 of this Agreement.
“Termination of Service” means the Grantee’s provision of services to the Company and its Subsidiaries as an officer, employee or independent contractor, terminates for any reason.
“Year of Continuous Service” has the meaning specified in Section 7(d) of this Agreement.
2. Grant of Options . Subject to the terms and conditions herein, pursuant to the Plan, the Company grants to the Grantee an option (the “Option”) to purchase from the Company the number of shares of LBTYA set forth on the signature page hereto (the “Option Shares”) at a purchase price per LBTYA share equal to the Exercise Price. The Option granted herein is a “Nonqualified Stock Option”. The Option, to the extent it has become exercisable in accordance with Section 3, will be exercisable in whole at any time or in part from time to time during the period commencing on the Grant Date and expiring at the Close of Business on ___, 20___(the “Term”), subject to earlier termination as provided in Section 7. The Exercise Price and number of Option Shares are subject to adjustment pursuant to Section 10. No fractional shares of LBTYA will be issuable upon exercise of an Option, and the Grantee will receive, in lieu of any fractional share of LBTYA that the Grantee otherwise would receive upon such exercise, cash equal to the fraction representing such fractional share multiplied by the Fair
Market Value of one share of LBTYA as of the date on which such exercise is considered to occur pursuant to Section 4.
3. Conditions of Exercise . Unless otherwise determined by the Committee in its sole discretion, the Option will be exercisable only in accordance with the conditions stated in this Section 3.
(a) Except as otherwise provided in Section 11.1(b) of the Plan or in the last sentence of this Section 3(a), the Option will not be exercisable until ___, 200___and may be exercised thereafter only to the extent it has become exercisable in accordance with the following schedule:
On and after ___, 200___, the Option shall be exercisable as to ___% of the Option Shares;
On each ___[, ___, ___, and ___] thereafter, the Option shall be exercisable as to the percentage of the Option Shares as to which the Option had previously become exercisable in accordance with this schedule plus an additional ___% of the Option Shares; and
On and after ___, 200___, the Option shall be exercisable as to 100% of the Option Shares.
Notwithstanding the foregoing, (x) the Option will become exercisable in full on the date of Termination of Service if the Termination of Service occurs by reason of Grantee’s death or Disability, and (y) if the Termination of Service is by the Company or a Subsidiary without Cause (as determined in the sole discretion of the Committee) more than six months after the Grant Date, the Option will become exercisable on the date of Termination of Service with respect to [the percentage of the Option Shares as to which the Option otherwise would become exercisable during the remainder of the calendar year in which the Termination of Service occurs] [the percentage of the Option Shares as to which the Option had previously become exercisable, plus the product of (x) one-third (1/3) of the additional percentage of the Option Shares as to which the Option would have become exercisable on the next following date set forth in the above schedule, times (y) the number of full months of employment completed since the most recent date of vesting specified in the foregoing schedule].
(b) To the extent the Option becomes exercisable, the Option may be exercised in whole or in part (at any time or from time to time, except as otherwise provided herein) until expiration of the Term or earlier termination thereof.
(c) The Grantee acknowledges and agrees that the Committee, in its discretion and as contemplated by Section 3.3 of the Plan, may adopt rules and regulations from time to time after the date hereof with respect to the exercise of the Option and that the
exercise by the Grantee of the Option will be subject to the further condition that such exercise is made in accordance with all such rules and regulations as the Committee may determine are applicable thereto.
4. Manner of Exercise . The Option will be considered exercised (as to the number of Option Shares specified in the notice referred to in Section 4(a) below) on the latest of (i) the date of exercise designated in the written notice referred to in Section 4(a) below, (ii) if the date so designated is not a Business Day, the first Business Day following such date or (iii) the earliest Business Day by which the Company has received all of the following:
(a) A properly executed written exercise notice, in the form attached hereto as Exhibit B or such other form as the Committee may require, containing such representations and warranties as the Committee may require and designating, among other things, the date of exercise and the number of Option Shares to be purchased;
(b) Payment of the Exercise Price for each Option Share to be purchased in any (or a combination) of the following forms:
(ii) certified check, cashier’s check or other check acceptable to the Company, payable to the order of the Company,
(iii) to the extent permitted by applicable law, the delivery of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds required to pay the Exercise Price (and, if applicable the Required Withholding Amount, as described in Section 5 below), provided that the full amount of such payment is received by the Company,
(iv) delivery to the Company of (A) certificates duly endorsed for transfer to the Company representing shares of a publicly traded series of Common Stock, (B) irrevocable instructions to the Company’s stock transfer agent to transfer to the Company shares of a publicly traded series of Common Stock held in the Direct Registration System for the benefit of Grantee or (C) evidence of transfer to the Company of shares of a publicly traded series of Common Stock held in book-entry form through The Depository Trust Company for the benefit of Grantee (in each case, which shares will be valued for this purpose at their Fair Market Value on the date of exercise), provided that the shares so delivered or transferred or as to which such transfer instructions are delivered have been held by the Grantee for more than six months or such other period as the Committee may specify, and/or
(v) any other form of payment contemplated by the Plan, as the Committee may permit; and
(c) Any other documentation that the Committee may reasonably require.
5. Mandatory Withholding for Taxes . The Grantee acknowledges and agrees that the Company will deduct from the shares of LBTYA otherwise deliverable upon exercise of the Option that number of shares of LBTYA (valued at their Fair Market Value on the date of exercise) that is equal to the amount, if any, of all national, state and local taxes required to be withheld by the Company upon such exercise, as determined by the Committee (the “Required Withholding Amount”). If the Grantee elects to make payment of the Exercise Price by delivery of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds required to pay the Exercise Price, such instructions may also include instructions to deliver the Required Withholding Amount to the Company. In such case, the Company will notify the broker promptly of the Committee’s determination of the Required Withholding Amount.
6. Payment or Delivery by the Company . As soon as practicable after receipt of all items referred to in Section 4, and subject to the withholding referred to in Section 5, the Company will deliver or cause to be delivered to or at the direction of the Grantee (i) (a) a certificate representing the number of Option Shares purchased upon exercise of the Option, (b) a statement of holdings reflecting the number of Option Shares purchased upon exercise of the Option and held through the Direct Registration System, or (c) a confirmation of deposit into the designated broker’s account of the number of Option Shares, in book-entry form, purchased upon exercise of the Option (including, without limitation, any Option Shares deliverable following the completion of the cashless exercise procedures described in Section 4(b)(iii) above), and (ii) any cash payment to which the Grantee is entitled (a) in lieu of a fractional share of LBTYA, as provided in Section 2 above, or (b) following the requested sale of its Option Shares. Any delivery of shares of LBTYA will be deemed effected for all purposes when (i) (a) a certificate representing or statement of holdings reflecting such shares has been delivered personally to the Grantee or, if delivery is by mail, when the stock transfer agent of the Company has deposited the certificate or statement of holdings in the United States mail, addressed to the Grantee, or (b) confirmation of deposit into the designated broker’s account of such shares, in written or electronic format, is first made available to Grantee, and (ii) any cash payment will be deemed effected when a check from the Company, payable to or at the direction of the Grantee and in the amount equal to the amount of the cash payment, has been delivered personally to or at the direction of the Grantee or deposited in the United States mail, addressed to the Grantee or his or her nominee.
7. Early Termination of the Option . Unless otherwise determined by the Committee in its sole discretion, the Option will terminate, prior to the expiration of the Term, at the time specified below:
(a) Subject to Section 7(b), if Termination of Service occurs other than (i) by the Company or a Subsidiary (whether for Cause or without Cause) or (ii) by reason of Grantee’s death or Disability, then the Option will terminate at the Close of Business on the first Business Day following the expiration of the 90-day period which began on the date of Termination of Service.
(b) If the Grantee dies (i) prior to Termination of Service or prior to the expiration of a period of time following Termination of Service during which the Option remains exercisable as provided in Section 7(a) or Section 7(c), as applicable, the Option will terminate at the Close of Business on the first Business Day followin