AMENDED AND RESTATED 1986 STOCK OPTION PLAN
OF
GENERAL COMMUNICATION, INC.
AS OF JUNE 27, 2005
TABLE OF CONTENTS
Page
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1. PURPOSE AND TERM OF PLAN..........................................................................1
1.1 Restatement of Plan......................................................................1
1.2 Purpose..................................................................................1
1.3 Term of Plan.............................................................................1
2. DEFINITIONS AND CONSTRUCTION......................................................................1
2.1 Definitions..............................................................................1
2.2 Construction.............................................................................4
3. ADMINISTRATION....................................................................................4
3.1 Administration by the Committee..........................................................4
3.2 Administration with Respect to Insiders..................................................4
3.3 Committee Complying with Section 162(m)..................................................4
3.4 Powers of the Committee..................................................................5
3.5 Indemnification..........................................................................5
4. SHARES SUBJECT TO PLAN............................................................................6
4.1 Maximum Number of Shares Issuable........................................................6
4.2 Adjustments for Changes in Capital Structure.............................................6
5. ELIGIBILITY AND AWARD LIMITATIONS.................................................................7
5.1 Persons Eligible for Awards..............................................................7
5.2 Participation............................................................................7
5.3 Award Limits.............................................................................7
6. TERMS AND CONDITIONS OF OPTIONS...................................................................7
6.1 Exercise Price...........................................................................8
6.2 Exercisability and Term of Options.......................................................8
6.3 Payment of Exercise Price................................................................8
6.4 Effect of Termination of Service.........................................................9
6.5 Transferability of Options...............................................................10
6.6 Incentive Stock Option Limitations.......................................................11
7. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS...................................................12
7.1 Purchase Price...........................................................................12
7.2 Vesting..................................................................................12
7.3 Restrictions on Transfer.................................................................12
7.4 Voting Rights; Dividends and Distributions...............................................12
7.5 Effect of Termination of Service.........................................................12
7.6 Exercise of Rights.......................................................................13
8. STANDARD FORMS OF AWARD AGREEMENT.................................................................13
8.1 Award Agreements.........................................................................13
8.2 Authority to Vary Terms..................................................................13
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9. COMPLIANCE WITH SECURITIES LAW....................................................................13
10. TAX WITHHOLDING...................................................................................13
10.1 Tax Withholding in General...............................................................13
10.2 Withholding in Shares....................................................................14
11. AMENDMENT OR TERMINATION OF PLAN..................................................................14
12. MISCELLANEOUS PROVISIONS..........................................................................14
12.1 Repurchase Rights........................................................................14
12.2 Provision of Information.................................................................15
12.3 Rights as Employee, Consultant or Director...............................................15
12.4 Rights as a Shareholder..................................................................15
12.5 Other Awards and Compensation............................................................15
12.6 Fractional Shares........................................................................15
12.7 Termination of Right of Action...........................................................15
12.8 Severability.............................................................................15
12.9 Choice of Law............................................................................16
12.10 Effectiveness of the Plan................................................................16
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Amended and Restated 1986 Stock Option Plan
of General Communication, Inc.
1. PURPOSE AND TERM OF PLAN.
1.1 Restatement of Plan. The Amended and Restated 1986 Stock Option
Plan of General Communication, Inc. (the "Plan") hereby is restated in its
entirety by this document effective as of June 27, 2005, the date of its
approval by the shareholders of the Company (the "Effective Date").
1.2 Purpose. The purpose of the Plan is to provide a special incentive
to selected officers, directors and other employees of, and consultants and
advisors to, General Communication, Inc. and its present and future subsidiaries
in order to promote the business of the Company and to encourage such persons to
accept or continue their relationship with the Company. Accordingly, the Plan
seeks to achieve this purpose by providing for Options and Restricted Stock
Awards.
1.3 Term of Plan. The Plan shall continue in effect until the earlier
of its termination by the Board or the date on which all of the shares of Stock
available for issuance under the Plan have been issued and all restrictions on
such shares under the terms of the Plan and the agreements evidencing Awards
granted under the Plan have lapsed.
2. DEFINITIONS AND CONSTRUCTION.
2.1 Definitions. As used in the Plan, the following terms shall have
the indicated meanings:
"Award" means any Option or Restricted Stock Award
granted under the Plan.
"Award Agreement" means a written agreement between
the Company and a Participant setting forth the terms, conditions and
restrictions of the Award granted to the Participant. An Award Agreement may be
an "Option Agreement" or a "Restricted Stock Agreement."
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as
amended, and any applicable regulations promulgated
thereunder.
"Committee" means the Compensation Committee or other
committee of the Board duly appointed to administer the Plan and having such
powers as shall be specified by the Board. If no committee of the Board has been
appointed to administer the Plan, the Board shall exercise all of the powers of
the Committee granted herein, and, in any event, the Board may in its discretion
exercise any or all of such powers.
"Company" means General Communication, Inc., an
Alaska corporation, or any successor corporation thereto.
"Consultant" means a person engaged to provide
consulting or advisory services (other than as an Employee or a member of the
Board) to the Company or a Subsidiary.
"Director" means a member of the Board.
"Disability" means the permanent and total disability
of the Participant, within the meaning of Section 22(e)(3) of the Code.
"Employee" means any person treated as an employee
(including an Officer or a member of the Board who is
also treated as an employee) in the records of the Company or a Subsidiary and,
with respect to any Incentive Stock Option granted to such person, who is an
employee for purposes of Section 422 of the Code; provided, however, that
neither service as a member of the Board nor payment of a director's fee shall
be sufficient to constitute employment for purposes of the Plan. The Company
shall determine in good faith and in the exercise of its discretion whether an
individual has become or has ceased to be an Employee and the effective date of
such individual's employment or termination of employment, as the case may be.
For purposes of an individual's rights, if any, under the Plan as of the time of
the Company's determination, all such determinations by the Company shall be
final, binding and conclusive, notwithstanding that the Company or any court of
law or governmental agency subsequently makes a contrary determination.
"Exchange Act" means the Securities Exchange Act of
1934, as amended.
"Fair Market Value" means the closing price of the
Stock on the principal exchange on which the stock is
traded or, if the Stock is not traded on an exchange, as reported by Nasdaq, or,
if the closing price of the Stock is not reported by Nasdaq, the fair market
value of the Stock as determined by the Committee in good faith by any
reasonable means, in each case, on such date of determination.
"Incentive Stock Option" means an Option intended to
be (as set forth in the applicable Award Agreement) and which qualifies as an
incentive stock option within the meaning of Section 422(b) of the Code.
"Insider" means an Officer, a Director or any other
person whose transactions in Stock are subject to Section 16 of the Exchange
Act.
"ISO-Qualifying Corporation" means the Company or a
Subsidiary that is a "subsidiary corporation" of the Company as defined in
Section 424(f) of the Code.
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"Nonstatutory Stock Option" means an Option not
intended to be (as set forth in the applicable Award
Agreement) an incentive stock option within the meaning of Section 422(b) of the
Code.
"Officer" means any person designated by the Board as
an officer of the Company.
"Option" means the right to purchase Stock at a
stated price for a specified period of time granted to a Participant pursuant to
Section 6 of the Plan. An Option may be either an Incentive Stock Option or a
Nonstatutory Stock Option.
"Participant" means any person to whom an Award may
be granted pursuant to Section 5 of the Plan and to whom one or more Awards has
been granted.
"Restricted Stock" means Stock issued to a
Participant subject to vesting conditions.
"Restricted Stock Award" means an Award of Restricted
Stock pursuant to Section 7 of the Plan.
"Rule 16b-3" means Rule 16b-3 under the Exchange Act,
as amended from time to time, or any successor rule
or regulation.
"Section 162(m)" means Section 162(m) of the Code.
"Securities Act" means the Securities Act of 1933, as
amended.
"Service" means a Participant's employment or service
with the Company or a Subsidiary, whether in the
capacity of an Employee, a Director or a Consultant. A Participant's Service
shall not be deemed to have terminated merely because of a change in the
capacity in which the Participant renders such Service or a change in the entity
for which the Participant renders such Service, provided that there is no
interruption or termination of the Participant's Service. Furthermore, a
Participant's Service shall not be deemed to have terminated if the Participant
takes any military leave, sick leave, or other bona fide leave of absence
approved by the Company. However, if any such leave taken by a Participant
exceeds 90 days, then on the 181st day following the commencement of such leave
any Incentive Stock Option held by the Participant shall cease to be treated as
an Incentive Stock Option and instead shall be treated thereafter as a
Nonstatutory Stock Option, unless the Participant's right to return to Service
with the Company or a Subsidiary is guaranteed by statute or contract.
Notwithstanding the foregoing, unless otherwise designated by the Company or
required by law, a leave of absence shall not be treated as Service for purposes
of determining vesting under the Participant's Award Agreement. A Participant's
Service shall be deemed to have terminated either upon an actual termination of
Service or upon the entity for which the Participant performs Service ceasing to
be a Subsidiary. Subject to the foregoing, the Company, in its discretion, shall
determine whether the Participant's Service has terminated and the effective
date of such termination.
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"Stock" means the Class A common stock of the
Company.
"Subsidiary" means any entity in which the Company
owns, directly or indirectly, more than 50% of the total
voting power.
"Ten Percent Owner" means a Participant who, at the
time an Option is granted to the Participant, owns stock possessing more than
10% of the total combined voting power of all classes of stock of all
ISO-Qualifying Corporations within the meaning of Section 422(b)(6) of the Code.
"Vesting Conditions" mean those conditions
established in Section 7 of the Plan prior to the satisfaction
of which shares subject to a Restricted Stock Award remain subject to forfeiture
in favor of the Company upon the Participant's termination of Service.
2.2 Construction. Captions and titles contained herein are for
convenience only and shall not affect the meaning or interpretation of any
provision of the Plan. Except when otherwise indicated by the context, the
singular shall include the plural and the plural shall include the singular. Use
of the term "or" is not intended to be exclusive, unless the context clearly
requires otherwise.
3. ADMINISTRATION.
3.1 Administration by the Committee. The Plan shall be administered by
the Committee. A majority of the members of the Committee shall constitute a
quorum, and all decisions, determinations and interpretations of the Committee
shall be made by a majority of such quorum. All questions of interpretation of
the Plan or of any Award shall be determined by the Committee, and such
determinations shall be final and binding upon all persons having an interest in
the Plan or such Award. Any decision, determination or interpretation of the
Committee under the Plan in writing signed by all members of the Committee shall
be fully effective as if it had been made by a majority vote at a meeting duly
called and held.
3.2 Administration with Respect to Insiders. Unless otherwise
determined by the Board, with respect to participation by Insiders in the Plan,
at any time that any class of equity security of the Company is registered
pursuant to Section 12 of the Exchange Act, the Plan shall be administered in
compliance with the requirements, if any, of Rule 16b-3.
3.3 Committee Complying with Section 162(m). If the Company is a
"publicly held corporation" within the meaning of Section 162(m), the Board may
establish a Committee of "outside directors" within the meaning of Section
162(m) to approve the grant of any Award which might reasonably be anticipated
to result in the payment of employee remuneration that would otherwise exceed
the limit on employee remuneration deductible for income tax purposes pursuant
to Section 162(m).
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3.4 Powers of the Committee. In addition to any other powers set forth
in the Plan and subject to the provisions of the Plan, the Committee shall have
the full and final power and authority, in its discretion:
(a) to determine the persons to whom, and the time or times at
which, Awards shall be granted and the number of shares of Stock to be subject
to each Award;
(b) to determine the type of Award granted and to designate
Options as Incentive Stock Options or Nonstatutory Stock Options;
(c) to determine the Fair Market Value of shares of Stock or
the fair market value of any other property;
(d) to determine the terms, conditions and restrictions
applicable to each Award (which need not be identical) and any shares acquired
pursuant thereto, including, without limitation, (i) the exercise or purchase
price of shares purchased pursuant to any Award, (ii) the method of payment for
shares purchased pursuant to any Award, (iii) the method for satisfaction of any
tax withholding obligation arising in connection with an Award, including by the
withholding or delivery of shares of Stock, (iv) the timing, terms and
conditions of the exercisability or vesting of any Award or any shares acquired
pursuant thereto, (v) the time of the expiration of any Award, (vi) the effect
of the Participant's termination of Service on any of the foregoing, and (vii)
all other terms, conditions and restrictions applicable to any Award or shares
acquired pursuant thereto not inconsistent with the terms of the Plan;
(e) to approve one or more forms of Award Agreement;
(f) to amend, modify, extend, cancel or renew any Award or to
waive any restrictions or conditions applicable to any Award or any shares
acquired pursuant thereto;
(g) to accelerate, continue, extend or defer the
exercisability or vesting of any Award or any shares acquired pursuant thereto,
including with respect to the period following a Participant's termination of
Service;
(h) to decide all questions and settle all controversies and
disputes which may arise in connection with the Plan; and
(i) to correct any defect, supply any omission or reconcile
any inconsistency in the Plan or any Award Agreement, to interpret the Plan and
to make all other determinations and take such other actions with respect to the
Plan or any Award as the Committee may deem advisable to the extent not
inconsistent with the provisions of the Plan or applicable law.
3.5 Indemnification. In addition to such other rights of
indemnification as they may have as members of the Board or the
5
Committee or as officers or employees of the Company or any Subsidiary, members
of the Board or the Committee shall be indemnified by the Company against all
reasonable expenses, including attorneys' fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in
connection with any appeal therein, to which they or any of them may be a party
by reason of any action taken or failure to act under or in connection with the
Plan, or any right granted hereunder, and against all amounts paid by them in
settlement thereof (provided such settlement is approved by independent legal
counsel selected by the Company) or paid by them in satisfaction of a judgment
in any such action, suit or proceeding, except in relation to matters as to
which it shall be adjudged in such action, suit or proceeding that such person
is liable for gross negligence, bad faith or intentional misconduct in duties;
provided, however, that within 60 days after the institution of such action,
suit or proceeding, such person shall offer to the Company, in writing, the
opportunity at its own expense to handle and defend the same.
4. SHARES SUBJECT TO PLAN.
4.1 Maximum Number of Shares Issuable. Subject to adjustment as
provided in Section 4.2, the maximum aggregate number of shares of Stock that
may be issued under the Plan shall be 13,200,000 and shall consist of authorized
but unissued or reacquired shares of Stock or any combination thereof. If an
outstanding Award for any reason expires or is terminated or canceled without
having been exercised or settled in full, or if shares of Stock acquired
pursuant to an Award subject to forfeiture are forfeited, the shares of Stock
allocable to the terminated portion of such Award or such forfeited shares of
Stock shall again be available for issuance under the Plan. Shares of Stock
withheld or reacquired by the Company in satisfaction of tax withholding
obligations pursuant to Section 10.2 shall not be deemed to have been issued
pursuant to the Plan. If the exercise price of an Option is paid by tender to
the Company of shares of Stock owned by the Participant, the number of shares
available for issuance under the Plan shall be reduced by the net number of
shares for which the Option is exercised.
4.2 Adjustments for Changes in Capital Structure. In the event of a
stock dividend, stock split or other change in corporate structure or
capitalization affecting the Stock, the number and kind of shares of stock on
which Awards may be granted hereunder, the number and kind of shares of stock
remaining subject to each Award outstanding at the time of such change and the
Award price shall be appropriately adjusted by the Committee, whose
determination shall be binding on all parties concerned. Subject to any required
action by the shareholders, if the Company shall be the surviving corporation in
any merger or consolidation (other than a merger or consolidation in which the
Company survives but its outstanding shares are converted into securities of
another corporation or exchanged for other consideration), any Award granted
hereunder shall pertain and apply to the securities which a holder of the number
of shares of Stock then subject to the Award should have been entitled to
receive. A dissolution or liquidation of the Company or a merger or
consolidation in which the Company is not the surviving corporation or its
outstanding shares are so converted or exchanged shall cause every option
hereunder to terminate, but at least 20 days prior to the effective date of any
such dissolution or liquidation (or if earlier any related sale of all or
substantially all assets) or of any such merger or consolidation, the Committee
shall either make all Awards outstanding hereunder immediately exercisable or
arrange that
6
the successor or surviving corporation, if any, grant replacement Awards. The
Committee in its sole discretion, also may make such adjustments in the terms of
any Award to reflect, or related to, such changes in the capital structure of
the Company or distributions as it deems appropriate, including modification of
any performance criteria or performance period applicable to such award.
5. ELIGIBILITY AND AWARD LIMITATIONS.
5.1 Persons Eligible for Awards. Awards may be granted only to
Employees, Consultants and Directors. For purposes of the foregoing sentence,
"Employees," "Consultants" and "Directors" shall include prospective Employees,
prospective Consultants and prospective Directors to whom Awards are granted in
connection with written offers of an employment or other service relationship
with the Company or a Subsidiary; provided, however, that no Stock subject to
any such Award shall vest, become exercisable or be issued prior to the date on
which such person commences Service.
5.2 Participation. Awards are granted solely at the discretion of the
Committee. Eligible persons may be granted more than one Award.
5.3 Award Limits.
(a) Maximum Number of Shares Issuable as ISOs Under Plan.
Subject to adjustment as provided in Section 4.2, the maximum aggregate number
of shares of Stock that may be issued under the Plan pursuant to the exercise of
Incentive Stock Options is13,200,000 shares, but no more than the total number
of shares available for grant as Awards.
(b) Maximum Number of Shares Issuable to any Individual Under
Plan. The maximum number of shares that may be issued under Awards granted to
any individual in a calendar year may not exceed 500,000 shares of Stock.
(c) Section 162(m) Award Limits. The following limits shall
apply to the grant of any Award if, at the time of grant, the Company is a
"publicly held corporation" within the meaning of Section 162(m).
(i) Options. Subject to adjustment as provided in
Section 4.2, no Employee shall be granted within any fiscal year of the Company
one or more Options which in the aggregate are for more than 500,000 shares of
Stock.
(ii) Restricted Stock Awards. Subject to adjustment
as provided in Section 4.2, no Employee shall be granted within any fiscal year
of the Company one or more Restricted Stock Awards for more than 500,000 shares
of Stock.
6. TERMS AND CONDITIONS OF OPTIONS.
Options shall be evidenced by Award Agreements specifying the
number of shares of Stock covered thereby, in such form as the Committee shall
from time to
7
time establish. No Option or purported Option shall be a valid and binding
obligation of the Company unless evidenced by a fully executed Award Agreement.
Award Agreements evidencing Options may incorporate all or any of the terms of
the Plan by reference and shall comply with and be subject to the following
terms and conditions:
6.1 Exercise Price. The exercise price for each Option shall be
established in the discretion of the Committee; provided, however, that no
Incentive Stock Option granted to a Ten Percent Owner shall have an exercise
price per share less than 110% of the Fair Market Value of a share of Stock on
the effective date of grant of the Option.
6.2 Exercisability and Term of Options. Options shall be exercisable at
such time or times, or upon such event or events, and subject to such terms,
conditions, performance criteria and restrictions as shall be determined by the
Committee and set forth in the Award Agreement evidencing such Option; provided,
however, that (a) no Option shall be exercisable after the expiration of 10
years after the effective date of grant of such Option, and (b) no Incentive
Stock Option granted to a Ten Percent Owner shall be exercisable after the
expiration of five years after the effective date of grant of such Option.
6.3 Payment of Exercise Price.
(a) Forms of Consideration Authorized. Except as otherwise
provided below, payment of the exercise price for the number of shares of Stock
being purchased pursuant to any Option shall be made (i) in cash, by check or in
cash equivalent, (ii) by tender to the Company of shares of Stock owned by the
Participant having a Fair Market Value not less than the exercise price, (iii)
by delivery of a properly executed notice of exercise together with irrevocable
instructions to a broker providing for the assignment to the Company of the
proceeds of a sale or loan with respect to some or all of the shares being
acquired upon the exercise of the Option (including, without limitation, through
an exercise complying with the provisions of Regulation T as promulgated from
time to time by the Board of Governors of the Federal Reserve System) (a
"Cashless Exercise"), (iv) by such other consideration as may be approved by the
Committee from time to time to the extent permitted by applicable law, or (v) by
any combination thereof. The Committee may at any time or from time to time
grant Options which do not permit all of the foregoing forms of consideration to
be used in payment of the exercise price or which otherwise restrict one or more
forms of consideration.
(b) Limitations on Forms of Consideration.
(i) Tender of Stock. Notwithstanding the foregoing,
an Option may not be exercised by tender to the Company of shares of Stock to
the extent such tender would constitute a violation of the provisions of any
law, regulation or agreement restricting the redemption of the Company's stock.
Unless otherwise provided by the Committee, an Option may not be exercised by
tender to the Company of shares of Stock unless such shares either have been
owned by the Participant for more than 6 months or were not acquired, directly
or indirectly, from the Company.
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(ii) Cashless Exercise. The Company reserves, at any
and all times, the right, in the Company's sole and absolute discretion, to
establish, decline to approve or terminate any program or procedures for the
exercise of Options by means of a Cashless Exercise, including with respect to
one or more Participants specified by the Company notwithstanding that such
program or procedures may be available to other Participants.
6.4 Effect of Termination of Service.
(a) Option Exercisability. Subject to earlier termination of
the Option as otherwise provided herein and unless otherwise provided by the
Committee in the grant of an Option and set forth in the Award Agreement, an
Option shall be exercisable after a Participant's termination of Service only
during the applicable time period determined in accordance with this Section and
thereafter shall terminate:
(i) Disability. If the Participant's Service
terminates because of the Disability of the Participant, the Option, to the
extent unexercised and exercisable on the date on which the Participant's
Service terminated, may be exercised by the Participant (or the Participant's
guardian or legal representative) at any time prior to the expiration of 12
months after the date on which the Participant's Service terminated, but in any
event no later than the date of expiration of the Option's term as set forth in
the Award Agreement evidencing such Option (the "Option Expiration Date").
(ii) Death. If the Participant's Service terminates
because of the death of the Participant, the Option, to the extent unexercised
and exercisable on the date on which the Participant's Service terminated, may
be exercised by the Participant's legal representative or other person who
acquired the right to exercise the Option by reason of the Participant's death
at any time prior to the expiration of 12 months after the date on which the
Participant's Service terminated, but in any event no later than the Option
Expiration Date. The Participant's Service shall be deemed to have terminated on
account of death if the Participant dies within three months after the
Participant's termination of Service.
(iii) Other Termination of Service. If the
Participant's Service terminates for any reason other than Disability, death, or
for Cause, the Option, to the extent unexercised and exercisable by the
Participant on the date on which the Participant's Service terminated, may be
exercised by the Participant at any time prior to the expiration of 30 days
after the date on which the Participant's Service terminated, but in any event
no later than the Option Expiration Date.
(iv) Termination for Cause. If the Participant's
Service terminates for cause, then all Options held by the Participant as of
such termination (whether or not exercisable) shall be terminated and canceled
and the Participant shall have no further rights under this Plan. For purposes
of this Section 6.4(a)(iv), "cause" shall have the meaning ascribed thereto in
any employment agreement with the Company or any Subsidiary to which such
Participant is a party or, in the
9
absence thereof, shall include but not be limited to an illegal or negligent
action by the Participant that materially adversely affects the Company or any
Subsidiary or, engaging in misconduct involving serious moral turpitude, or the
failure or refusal to perform one's duties and responsibilities for any reason
other than illness or incapacity; provided, however, that if such termination
occurs within 12 months after a change of control of the Company (as determined
by the Committee, in its sole discretion), "cause" shall mean only a felony
conviction for fraud, misappropriation or embezzlement.
(b) Extension if Exercise Prevented by Law. Notwithstanding
the foregoing, if the exercise of an Option within the applicable time periods
set forth in Section 6.4(a) is prevented by the provisions of Section 9 below,
the Option shall remain exercisable until three months (or such longer period of
time as determined by the Committee, in its discretion) after the date the
Participant is notified by the Company that the Option is exercisable, but in
any event no later than the Option Expiration Date.
(c) Extension if Participant Subject to Section 16(b).
Notwithstanding the foregoing, if a sale within the applicable time periods set
forth in Section 6.4(a) of shares acquired upon the exercise of the Option would
subject the Participant to suit under Section 16(b) of the Exchange Act, the
Option shall remain exercisable until the earliest to occur of (i) the 10th day
following the date on which a sale of such shares by the Participant would no
longer be subject to such suit, (ii) the 190th day after the Participant's
termination of Service, or (iii) the Option Expiration Date.
6.5 Transferability of Options. Except as otherwise provided in this
Section 6.5, during the lifetime of the Participant, an Option shall be
exercisable only by the Participant or the Participant's guardian or legal
representative. Prior to the issuance of shares of Stock upon the exercise of an
Option, the Option shall not be subject in any manner to anticipation,
alienation, sale, exchange, transfer, assignment, pledge, encumbrance, or
garnishment by creditors of the Participant or the Participant's beneficiary,
except transfer by will or by the laws of descent and distribution.
Notwithstanding the foregoing, the Participant, with the approval of the
Committee, may transfer the Option for no consideration to or for the benefit of
the Participant's immediate family (including, without limitation, to a trust
for the benefit of the Participant's immediate family or to a partnership or
limited liability company for one or more members of the Participant's immediate
family), subject to such limits as the Committee may establish, and the
transferee shall remain subject to all the terms and conditions applicable to
the Option prior to such transfer. The foregoing right to transfer the Option
shall apply to the right to consent to amendments to this Plan and the Award
Agreement and, in the discretion of the Committee, shall also apply to the right
to transfer ancillary rights associated with the Option. The term "immediate
family" shall mean the Participant's spouse, parents, children, stepchildren,
adoptive relationships, sisters, brothers and grandchildren (and, for this
purpose, shall also include the Participant). In addition, notwithstanding the
foregoing, to the extent permitted by the Committee, in its discretion, and set
forth in the Award Agreement evidencing such Option, a Nonstatutory Stock Option
shall be assignable or transferable subject to the applicable limitations, if
any, described in the General Instructions to Form S-8
10
Registration Statement under the Securities Act. Any attempted assignment,
transfer, pledge, hypothecation or other disposition of any option contrary to
the provisions of the Plan, and any levy of any attachment or similar process
upon an option will be null and void and without effect, and the Committee may,
in its discretion, upon the happening of any such event, terminate an option
forthwith.
6.6 Incentive Stock Option Limitations.
(a) Persons Eligible. An Incentive Stock Option may be granted
only to a person who, on the effective date of grant, is an Employee of an
ISO-Qualifying Corporation. Any person who is not an Employee of an
ISO-Qualifying Corporation on the effective date of the grant of an Option to
such person may be granted only a Nonstatutory Stock Option. An Incentive Stock
Option granted to a prospective Employee upon the condition that such person
become an Employee of an ISO-Qualifying Corporation shall be deemed granted
effective on the date such person commences Service with an ISO-Qualifying
Corporation, with an exercise price determined as of such date in accordance
with Section 6.1.
(b) Fair Market Value Limitation. To the extent that options
designated as Incentive Stock Options (granted under all stock option plans of
the Company, including the Plan) become exercisable by a Participant for the
first time during any calendar year for stock having a Fair Market Value greater
than $100,000, the portion of such options which exceeds such amount shall be
treated as Nonstatutory Stock Options. For purposes of this Section, options
designated as Incentive Stock Options shall be taken into account in the order
in which they were granted, and the Fair Market Value of stock shall be
determined as of the time the option with respect to such stock is granted. If
the Code is amended to provide for a limitation different from that set forth in
this Section, such different limitation shall be deemed incorporated herein
effective as of the date and with respect to such Options as required or
permitted by such amendment to the Code. If an Option is treated as an Incentive
Stock Option in part and as a Nonstatutory Stock Option in part by reason of the
limitation set forth in this Section, the Participant may designate which
portion of such Option the Participant is exercising. In the absence of such
designation, the Participant shall be deemed to have exercised the Incentive
Stock Option portion of the Option first. Upon exercise, shares issued pursuant
to each such portion shall be separately identified.
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7. TERMS AND CONDITIONS OF RESTRICTED STOCK AWARDS.
Restricted Stock Awards shall be evidenced by Award Agreements
specifying the number of shares of Stock subject to the Award, in such form as
the Committee shall from time to time establish. No Restricted Stock Award or
purported Restricted Stock Award shall be a valid and binding obligation of the
Company unless evidenced by a fully executed Award Agreement. Award Agreements
evidencing Restricted Stock Awards may incorporate all or any of the terms of
the Plan by reference and shall comply with and be subject to the following
terms and conditions:
7.1 Purchase Price. No monetary payment (other than applicable tax
withholding) shall be required as a condition of receiving shares of Stock
pursuant to a Restricted Stock Award, the consideration for which shall be
services actually rendered to the Company or a Subsidiary or for its benefit.
Notwithstanding the foregoing, the Participant shall furnish consideration in
the form of cash or past services rendered to the Company or a Subsidiary or for
its benefit having a value not less than the par value of the shares of Stock
subject to such Restricted Stock Award.
7.2 Vesting. Shares of Restricted Stock issued pursuant to any
Restricted Stock Award shall be subject to the vesting conditions described in
the Award Agreement.
7.3 Restrictions on Transfer. Until shares subject to a Restricted
Stock Award have vested, such shares may not be sold, exchanged, transferred,
pledged, assigned or otherwise disposed of by the Participant. Upon request by
the Company, each Participant shall execute an agreement evidencing such
transfer restrictions prior to the receipt of shares of Stock hereunder and
shall promptly present to the Company any and all certificates representing
shares of Stock acquired hereunder for the placement on such certificates of
appropriate legends evidencing any such transfer restrictions.
7.4 Voting Rights; Dividends and Distributions. Except as provided in
this Section and any Award Agreement, the Participant shall have all of the
rights of a shareholder of the Company with respect to unvested shares of
Restricted Stock, including the right to vote such shares and to receive all
dividends and other distributions paid with respect to such shares. However, in
the event of a dividend or distribution paid in shares of Stock or any other
adjustment made upon a change in the capital structure of the Company as
described in Section 4.2, any and all new, substituted or additional securities
or other property (other than normal cash dividends) to which the Participant is
entitled by reason of such unvested shares shall be immediately subject to the
same vesting conditions as the unvested shares with respect to which such
dividends or distributions were paid or adjustments were made.
7.5 Effect of Termination of Service. Unless otherwise provided in the
Award Agreement, if a Participant's Service terminates for any reason, whether
voluntarily or involuntarily (including the Participant's death or disability),
then the Participant shall forfeit to the Company any shares of Restricted Stock
which remain unvested as of the date of the Participant's termination of
Service.
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7.6 Exercise of Rights. All rights with respect to a Restricted Stock
Award granted to a Participant hereunder shall be exercisable during his or her
lifetime only by such Participant or the Participant's guardian or legal
representative.
8. STANDARD FORMS OF AWARD AGREEMENT.
8.1 Award Agreements. Each Award shall comply with and be subject to
the terms and conditions set forth in the appropriate form of Award Agreement
approved by the Committee and as amended from time to time. Any Award Agreement
may be in form or forms, including electronic media, as the Committee may
approve from time to time.
8.2 Authority to Vary Terms. The Committee shall have the authority
from time to time to vary the terms of any standard form of Award Agreement
either in connection with the grant or amendment of an individual Award or in
connection with the authorization of a new standard form or forms; provided,
however, that the terms and conditions of any such new, revised or amended
standard form or forms of Award Agreement are not inconsistent with the terms of
the Plan.
9. COMPLIANCE WITH SECURITIES LAW.
The grant of Awards and the issuance of shares of Stock
pursuant to any Award shall be subject to compliance with all applicable
requirements of federal, state and foreign law with respect to such securities
and the requirements of any stock exchange or market system upon which the Stock
may then be listed. In addition, no Award may be exercised or shares issued
pursuant to an Award unless (a) a registration statement under the Securities
Act shall at the time of such exercise or issuance be in effect with respect to
the shares issuable pursuant to the Award or (b) in the opinion of legal counsel
to the Company, the shares issuable pursuant to the Award may be issued in
accordance with the terms of an applicable exemption from the registration
requirements of the Securities Act. The inability of the Company to obtain from
any regulatory body having jurisdiction the authority, if any, deemed by the
Company's legal counsel to be necessary to the lawful issuance and sale of any
shares hereunder shall relieve the Company of any liability in respect of the
failure to issue or sell such shares as to which such requisite authority shall
not have been obtained. As a condition to issuance of any Stock, the Company may
require the Participant to satisfy any qualifications that may be necessary or
appropriate, to evidence compliance with any applicable law or regulation and to
make any representation or warranty with respect thereto as may be requested by
the Company.
10. TAX WITHHOLDING.
10.1 Tax Withholding in General. The Company shall have the right to
deduct from any and all payments made under the Plan, or to require the
Participant, through payroll withholding, cash payment or otherwise, including
by means of a Cashless Exercise of an Option, to make adequate provision for,
the federal, state, local and foreign taxes, if any, required by law to be
withheld by the Company or a Subsidiary
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with respect to an Award or the shares acquired pursuant thereto. The Company
shall have no obligation to deliver shares of Stock, to release shares of Stock
from an escrow established pursuant to an Award Agreement, or to make any
payment in cash under the Plan until such tax withholding obligations have been
satisfied by the Participant.
10.2 Withholding in Shares. The Company shall have the right, but not
the obligation, to deduct from the shares of Stock issuable to a Participant
upon the exercise or settlement of an Award, or to accept from the Participant
the tender of, a number of whole shares of Stock having a Fair Market Value, as
determined by the Company, equal to all or any part of the tax withholding
obligations of the Company and its Subsidiaries. The Fair Market Value of any
shares of Stock withheld or tendered to satisfy any such tax withholding
obligations shall not exceed the amount determined by the applicable minimum
statutory withholding rates.
11. AMENDMENT OR TERMINATION OF PLAN.
The Company may amend, suspend or terminate the Plan at any
time. However, without the approval of the Company's shareholders, there shall
be (a) no increase in the maximum aggregate number of shares of Stock that may
be issued under the Plan (except by operation of the provisions of Section 4.2),
(b) no change in the class of persons eligible to receive Incentive Stock
Options, and (c) no other amendment of the Plan that would require approval of
the Company's shareholders under any applicable law, regulation or rule. No
amendment, suspension or termination of the Plan shall affect any then
outstanding Award unless expressly provided by the Committee. In any event, no
amendment, suspension or termination of the Plan may adversely affect any then
outstanding Award without the consent of the Participant unless expressly
authorized by the Plan or necessary to comply with any applicable law,
regulation or rule. The Committee may at any time or times amend any outstanding
Award for the purpose of satisfying the requirements of any changes in
applicable laws or regulations and, with the consent of the Participant, the
Committee may make such modifications or amendments to any outstanding Award as
it shall deem advisable.
12. MISCELLANEOUS PROVISIONS.
12.1 Repurchase Rights. Stock issued under the Plan may be subject to
one or more repurchase options, or other conditions and restrictions as
determined by the Committee in its discretion at the time the Award is granted.
The Company shall have the right to assign at any time any repurchase right it
may have, whether or not such right is then exercisable, to one or more persons
as may be selected by the Company. Upon request by the Company, each Participant
shall execute any agreement evidencing such transfer restrictions prior to the
receipt of shares of Stock hereunder and shall promptly present to the Company
any and all certificates representing shares of Stock acquired hereunder for the
placement on such certificates of appropriate legends evidencing any such
transfer restrictions.
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12.2 Provision of Information. Each Participant shall be given access
to information concerning the Company equivalent to that information generally
made available to the Company's common shareholders.
12.3 Rights as Employee, Consultant or Director. No person, even though
eligible pursuant to Section 5, shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.
Nothing in the Plan or any Award granted under the Plan shall confer on any
Participant a right to remain an Employee, Consultant or Director or interfere
with or limit in any way any right of the Company or a Subsidiary to terminate
the Participant's Service at any time. To the extent that an Employee of a
Subsidiary receives an Award under the Plan, that Award shall in no event be
understood or interpreted to mean that the Company is the Employee's employer or
that the Employee has an employment relationship with the Company.
12.4 Rights as a Shareholder. A Participant shall have no rights as a
shareholder with respect to any shares covered by an Award until the date of the
issuance of such shares (as evidenced by the appropriate entry on the books of
the Company or of a duly authorized transfer agent of the Company). No
adjustment shall be made for dividends, distributions or other rights for which
the record date is prior to the date such shares are issued, except as provided
in Section 4.2 or another provision of the Plan.
12.5 Other Awards and Compensation. The Plan shall not restrict the
authority of the Company, acting directly or by authorization to any committee,
for proper corporate purposes, to grant or assume stock options or replacements
or substitutions therefore, other than under the Plan, whether in connection
with any acquisition or otherwise, and with respect to any employee or other
person, or to award bonuses or other benefits to Participants under the Plan in
connection with exercises under the Plan or otherwise or to maintain or
establish other compensation or benefit plans or practices.
12.6 Fractional Shares. The Company shall not be required to issue
fractional shares upon the exercise or settlement of any Award.
12.7 Termination of Right of Action. Every right of action arising out
of or in connection with the Plan by or on behalf of the Company or any
Subsidiary, or by any shareholder of the Company against any past, present or
future member of the Board or against any employee, or by an employee (past,
present or future) against the Company or any Subsidiary shall, irrespective of
the place where an action may be brought and irrespective of the place or
residence of any such shareholder, director or employee, cease and be barred by
the expiration of three years from the date of the act or omission with respect
to which such right of action is alleged to have arisen.
12.8 Severability. If any one or more of the provisions (or any part
thereof) of this Plan shall be held invalid, illegal or unenforceable in any
respect, such provision shall be modified so as to make it valid, legal and
enforceable, and the validity, legality and enforceability of the remaining
provisions (or any part thereof) of the Plan shall not in any way be affected or
impaired thereby.
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12.9 Choice of Law. Except to the extent governed by applicable federal
law, the validity, interpretation, construction and performance of the Plan and
each Award Agreement shall be governed by the laws of the State of Alaska,
without regard to its conflict of law rules.
12.10 Effectiveness of the Plan. The Plan originally became effective
on December 20, 1986, and has been amended and restated, the most recent
amendment and restatement of which shall, subject to approval by the
shareholders of the Company at a meeting of shareholders duly called and held,
or by written consent duly given, be effective on the Effective Date.
IN WITNESS WHEREOF, General Communication, Inc. has executed this
Amended and Restated 1986 Stock Option Plan of General Communication, Inc.
effective June 27, 2005.
GENERAL COMMUNICATION, INC.
By: /s/ Ronald A. Duncan
Title: President & CEO
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