Exhibit 10.5
TELEWEST GLOBAL, INC.
AMENDED AND RESTATED LONG-TERM INCENTIVE PLAN
1. Purpose. The purpose of the Telewest Global, Inc. Amended and
Restated Long-Term Incentive Plan (the "Plan") is to enhance the ability of
the Company to attract, motivate, reward, and retain key employees, to
strengthen their commitment to the success of the Company and to align
their interests with those of the Company's shareholders by providing
additional compensation to designated key employees of the Company and its
subsidiaries based on the achievement of Performance Objectives. To this
end, the Plan provides a means of rewarding Participants based on the
performance of the Company during the Performance Period.
2. Administration. The Plan shall be administered by the Committee.
The Committee shall have full authority:
(i) to establish the rules and regulations relating to the Plan;
(ii) to interpret the Plan and those rules and regulations;
(iii) to select Participants in the Plan;
(iv) to determine the Performance Objectives;
(v) to calculate the total amount of the bonus pool and the amounts
to be received by Participants in the Plan (rounding such
amounts as it deems appropriate);
(vi) to decide the facts in any case arising under the Plan; and
(vii) to make all other determinations and to take all other actions
necessary or appropriate for the proper administration of the
Plan, including the delegation of such authority or power,
where appropriate.
The Committee's administration of the Plan, including all such rules
and regulations, interpretations, selections, determinations, approvals,
decisions, delegations, amendments, terminations and other actions, shall
be final, binding and conclusive on the Company, its stockholders and all
persons having or claiming an interest under the Plan. No member of the
Committee shall be liable for any action, failure to act, determination or
interpretation made with respect to the Plan or any transaction hereunder,
and the Company hereby agrees to indemnify each member of the Committee, to
the maximum extent permitted by applicable law, for any such action,
failure to act, determination or interpretation.
3. Eligible Employees. Participation in the Plan shall be limited to
those key management employees of the Company and its subsidiaries selected
by the Committee to participate in the Plan. The Committee may designate
any of such employees to participate in the Plan at the Effective Date and
from time to time thereafter, and, upon such designation, an employee so
designated shall become a Participant.
4. Determination of Performance Objectives. The Committee shall
establish the Performance Objectives not later than the Effective Date.
5. Payments Pursuant to the Bonus Pool.
(a) Creation of Bonus Pool. The satisfaction of the Performance
Objectives shall result in the creation of a bonus pool. The Committee
shall establish minimum criteria below which no bonus pool shall be created
and may (but shall not be obligated to) establish a maximum bonus pool.
(b) Entitlement to Payment; Effect of Termination of
Employment. Unless the Committee determines otherwise, (i) in order to
receive any payment under the Plan, a Participant must remain continuously
employed by the Company or one or more of its subsidiaries from the date on
which he or she becomes a Participant in the Plan through the Payment Date,
and (ii) upon termination of a Participant's employment, the Participant
shall cease to be a Participant in the Plan.
(c) Timing of Payment. As soon as practicable after December
31, 2007, the Committee shall review the Company's performance and certify
in writing the extent to which the Performance Objectives have been
achieved and the total amount of the bonus pool. Payments under the Plan,
less applicable withholding taxes, shall be made as soon as practicable
following the Committee's certification described in the preceding sentence
but in no event later than March 15, 2008 (the "Payment Date").
(d) Amount of Payment. The amount of the payment to each
Participant entitled to receive payment under the Plan shall be determined
as follows:
Step 1: The amount of a full share of the bonus pool (each
such share, a "Full Bonus Pool Share") shall be
determined by dividing the total amount of the bonus pool
by the total number of employees who have ever been
designated as Participants in the Plan (determined
without regard to the actual number of Participants in
the Plan as of the Payment Date).
Step 2: Each Participant in the Plan who remains a Participant
from the Effective Date through the Payment Date shall be
entitled to receive a Full Bonus Pool Share.
Step 3: Each Participant in the Plan who becomes a Participant in
the Plan after the Effective Date and who remains a
Participant from the date of commencement of
participation through the Payment Date shall be entitled
to receive a Pro Rata Bonus Pool Share; provided, that
the Committee may, in its sole and absolute discretion,
elect to pay any such Participant a Full Bonus Pool Share
rather than a Pro Rata Bonus Pool Share. The amount of
any such Participant's "Pro Rata Bonus Pool Share" shall
be determined by multiplying the amount of a Full Bonus
Pool Share by a fraction, the numerator of which is the
total number of days from the Participant's commencement
of participation in the Plan through December 31, 2007,
and the denominator of which is 1,095 (such fraction, the
"Pro-Ration Factor").
Step 4: The excess of the amount of a Full Bonus Pool Share over
the amount of each Pro Rata Bonus Pool Share shall be
calculated separately and then aggregated (such aggregate
excess amount, the "Aggregate Excess Amount"), and each
Participant who is entitled to receive a Full Bonus Pool
Share or a Pro Rata Bonus Pool Share shall also be
entitled to receive a portion of the Aggregate Excess
Amount determined by multiplying the Aggregate Excess
Amount by a fraction, (x) the numerator of which is (A)
in the case of a Participant who receives a Full Bonus
Pool Share, one, and (B) in the case of a Participant who
receives a Pro Rata Bonus Pool Share, the Pro-Ration
Factor used to determine his or her Pro Rata Bonus Pool
Share, and (y) the denominator of which is the sum of (A)
the total number of Participants entitled to receive a
Full Bonus Pool Share and (B) the Pro-Ration Factors
determined pursuant to Step 3 with respect to each
Participant who is entitled to receive a Pro Rata Bonus
Pool Share.
Step 5: Any amount of the bonus pool in excess of the
aggregate amount payable to the Participants pursuant to
Steps 2, 3 and 4 shall not be paid under the Plan but
shall instead be forfeited to the Company.
An example of a calculation pursuant to this Section 5(d) is attached to
the Plan for illustrative purposes only (and based on the assumptions
contained therein).
(e) Form of Payment. Payments under the Plan shall be paid in
the form of cash or Common Stock, or a combination thereof, in the
discretion of the Committee. If payments under the Plan are to be paid in
the form of Common Stock, then the number of such shares shall be
determined by dividing the portion of the payment to be so paid by the
arithmetic mean of the Fair Market Value of a share of Common Stock for the
trading days in December, 2007. A maximum of 1,000,000 shares of Common
Stock may be issued under the Plan, and, in the event that the number of
shares of Common Stock authorized to be issued hereunder is insufficient to
make payments under the bonus pool in full, any amount of the bonus pool
not satisfied in shares of Common Stock shall be satisfied in cash. Prior
to the issuance of any shares of Common Stock under the Plan, the Company
shall obtain the approval of the share issuance by the stockholders of the
Company.
6. Effect of Acceleration Event. The Committee shall have the sole
and absolute discretion to determine the amount of any payments made under
the Plan in connection with an Acceleration Event. Such payments shall
include, but shall not be limited to, the establishment of, and payment
under, a bonus pool based on the satisfaction of the Performance Objectives
through the date of the Acceleration Event (using such assumptions and
approximations as the Committee shall select). In addition, the Committee
shall have the sole and absolute discretion to determine how the Plan shall
be administered in connection with an Acceleration Event, including (A)
whether or how to adjust the Performance Objectives pursuant to Section 7,
(B) if the Plan should be continued following any payments made in
connection with the Acceleration Event, (C) whether to limit the number of
additional Participants in the Plan after the Acceleration Event and (D)
whether to modify the provisions of the Plan relating to termination of
employment such that certain Participants would be entitled to receive
payments even if their employment with the Company has been terminated. Any
action taken pursuant to this Section 6 shall be taken prior to the
consummation of the Acceleration Event and shall be final, binding and
conclusive on all persons having or claiming an interest under the Plan.
7. Adjustments. The Committee may provide for the manner in which
performance will be measured against the Performance Objectives to reflect
the impact of specified corporate transactions (such as (i) a stock split
or stock dividend or other change in capitalization or (ii) the acquisition
or disposition of one or more business units), special charges, accounting
or tax law changes, restatements or other extraordinary or nonrecurring
events. Such provision may be made at any time prior to the final
determination as to whether the Performance Objectives have been satisfied.
8. Amendment or Termination. The Committee may amend or terminate the
Plan at any time in its discretion; provided, however, that, (i) no
amendment or termination of the Plan may affect the rights of any
Participant in the Plan as of the date of such action and (ii) any increase
in the number of shares of Common Stock authorized to be issued hereunder,
and any other amendment of the Plan for which stockholder approval is
required, shall be subject to the approval of the stockholders of the
Company; provided, further, that, any amendment or termination of the Plan
that is adopted after the announcement by the Company of a transaction
that, if consummated, would constitute an Acceleration Event and prior to
the earlier of 30 days after the consummation of the Acceleration Event or
the termination of the announced transaction constituting the Acceleration
Event that may adversely affect the rights of any Participant in the Plan
shall be null and void and be of no force or effect.
9. Miscellaneous Provisions
(a) This Plan shall inure to the benefit of and be binding upon
the Company and all Participants and their respective heirs, executors,
personal representatives, estates, successors (including, without
limitation, by way of merger) and permitted assigns. The rights of
Participants under the Plan shall not be sold, transferred or otherwise
disposed of other than by will or by the laws of descent and distribution.
(b) The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund, or to make any other
segregation of assets, to assure payment hereunder.
(c) The Company shall have the right to deduct from payments
hereunder any taxes or other amounts required by law to be withheld. Each
Participant entitled to any payment hereunder shall make arrangements
satisfactory to the Company to pay all tax liabilities arising hereunder.
(d) Nothing contained in the Plan shall limit or affect in any
manner or degree the normal and usual powers of management, exercised by
the officers and the Board or committees thereof, to change the duties or
the character of employment of any employee of the Company or any of its
subsidiaries or to remove the individual from the employment of the Company
or any of its subsidiaries at any time, all of which rights and powers are
expressly reserved.
(e) Nothing in the Plan shall be interpreted or construed to
confer upon a Participant any right with respect to continuance of
employment by the Company or any of its subsidiaries, nor shall the Plan
interfere in any way with the right of the Company or any of its
subsidiaries to terminate a Participant's employment at any time. The
transfer of a Participant's employment from the Company to a subsidiary of
the Company (or vice versa) shall not constitute a termination of
employment for purpose of the Plan and shall have no effect on the rights
and obligations of the Company and any Participant under the Plan.
(f) Except as to matters of federal law, the Plan and the
rights of all persons claiming hereunder shall be construed and determined
in accordance with the laws of the State of Delaware without giving effect
to conflicts of laws principles thereof.
10. Definitions.
(a) "Acceleration Event" shall have the meaning set forth in
the Company's 2004 Stock Incentive Plan.
(b) "Board" shall mean the Board of Directors of the Company.
(c) "Committee" shall mean the Compensation Committee of the
Board or such other committee appointed by the Board from time to time to
administer the Plan and to perform the functions set forth herein.
(d) "Common Stock" shall mean the common stock, par value $0.01
per share, of the Company, and any other securities into which such shares
are changed or for which such shares are exchanged.
(e) "Company" shall mean Telewest Global, Inc. and any
successor to Telewest Global, Inc. by merger, consolidation or otherwise.
(f) "Effective Date" shall mean February 3, 2005.
(g) "Fair Market Value" shall have the meaning set forth in the
Company's 2004 Stock Incentive Plan.
(h) "Participant" shall mean a key management employee of the
Company or any of its subsidiaries selected by the Committee to participate
in the Plan.
(i) "Payment Date" shall have the meaning set forth in Section
5(c).
(j) "Performance Objectives" shall mean those performance
criteria in respect of the Performance Period as established by the
Committee.
(k) "Performance Period" shall mean the three-year period
commencing on January 1, 2005 and ending on December 31, 2007.
In addition, the following terms have the meaning set forth in Section
5(d): "Aggregate Excess Amount," "Full Bonus Pool Share," "Pro Rata Bonus
Pool Share," and "Pro-Ration Factor."
* * *
Example under the Telewest Global, Inc. Long-Term Incentive Plan
Assumptions:
o Eight employees are designated as Participants on the Effective
Date, and, of these eight Participants, the employment of two
Participants is terminated prior to the Payment Date. The
remaining six Participants are employed on the Payment Date.
o One employee is added as a Participant after the Effective Date
but his or her employment is terminated prior to the Payment
Date.
o One employee ("Employee 10") is added as a Participant on
January 1, 2006, and another employee ("Employee 11") is added
as a Participant on July 1, 2007. Both of these Participants
are employed on the Payment Date.
o The total amount of the bonus pool is (pound)1.5 million.
Calculations:
Based on the foregoing assumptions, payments of the bonus pool would be
calculated as follows:
Step 1: A Full Bonus Pool Share is equal to (pound)136,363
(determined by dividing (pound)1.5 million by 11).
Step 2: Each of the six Participants who remain employed from
the Effective Date through the Payment Date would be
entitled to receive (pound)136,363, the amount of a Full
Bonus Pool Share.
Step 3: The amount of the Pro Rata Bonus Pool Share with
respect to Employee 10 would be (pound)90,909
((pound)136,363 multiplied by a Pro-Ration Factor of
0.666667 (730/1095)). The amount of the Pro Rata Bonus
Pool Share with respect to Employee 11 would be
(pound)22,914 ((pound)136,363 multiplied by a Pro-Ration
Factor of 0.168037 (184/1095)).
Step 4: (pound)158,903, the sum of the excess of the amount of
a Full Bonus Pool Share over the amount of each of the
Pro Rata Bonus Pool Shares payable to Employee 10 and
Employee 11, would be reallocated as follows:
o (pound)23,249 to each of the six Participants who
received Full Bonus Pool Shares ((pound)158,903
multiplied by (1 divided by 6.834704)) (6.834704
being the sum of 6, 0.666667, and 0.168037);
o (pound)15,500 to Employee 10 ((pound)158,903
multiplied by (0.666667 divided by 6.834704)); and
o (pound)3,907 to Employee 11 ((pound)158,903
multiplied by (0.168037 divided by 6.834704)).
Step 5: (pound)409,096, the excess of the total bonus pool
over the amounts determined pursuant to Steps 2, 3 and 4,
would be forfeited to the Company.
(Note: The foregoing calculations do not take into
account reductions for payment of all applicable
withholding taxes.)