EXHIBIT 10.1
NTL INCORPORATED
1993 STOCK OPTION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JUNE 3, 1997)
1. PURPOSE; CONSTRUCTION.
This NTL Incorporated 1993 Stock Option Plan, as amended and restated
effective June 3, 1997 (the "Plan"), is intended to encourage stock ownership by
employees of NTL Incorporated (the "Corporation") and its divisions and
subsidiary and parent corporations and other affiliates, so that they may
acquire or increase their proprietary interest in the Corporation, and to
encourage such employees and directors (who are employees) to remain in the
employ of the Corporation or its affiliates and to put forth maximum efforts for
the success of the business. It is further intended that options ("Options")
granted by the Committee pursuant to Section 6 of this Plan shall constitute
"incentive stock options" ("Incentive Stock Options") within the meaning of
Section 422 of the Internal Revenue Code of 1986, as amended, and the
regulations issued thereunder (the "Code"), and options granted by the Committee
pursuant to Section 7 of this Plan shall constitute "nonqualified stock options"
("Nonqualified Stock Options")
2. DEFINITIONS.
As used in this Plan, the following words and phrases shall have the
meanings indicated;
(a) "DISABILITY" shall mean an Optionee's inability to engage in any
substantial gainful activity by reason of any medically determinable
physical or mental impairment that can be expected to result in death or
that has lasted or can be expected to last for a continuous period of not
less than twelve (12) months.
(b) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(c) "FAIR MARKET VALUE" per share as of a particular date shall mean
(i) if the shares of common stock, par value $.01 per share, of the
Corporation ("Common Stock") are then traded on an over-the-counter market,
the average of the closing bid and asked prices for the shares of Common
Stock in such over-the-counter market on such date or on the last preceding
date on which there was a sale of Common Stock in such market, (ii) if the
shares of Common Stock are then admitted to quotation on the National
Association of Securities Dealers Automated Quotation System ("NASDAQ") or
other comparable quotation system and have been designated as a National
Market System ("NMS") security, or if the shares of Common Stock are then
listed on a national securities exchange, the closing sales price per share
on such
date or on the last preceding date on which there was a sale of such Common
Stock on such exchange, or (iii) if the shares of Common Stock are not then
traded in an over-the-counter market, admitted to quotation on NASDAQ or
other comparable quotation system, or listed on a national securities
exchange, such value as the Committee in its discretion may determine.
(d) "OPTIONEE" shall mean a person who has been granted an Option
under the Plan.
(e) "PARENT CORPORATION" shall mean any corporation (other than the
Corporation) in an unbroken chain of corporations ending with the employer
corporation if, at the time of granting an Option, each of the corporations
other than the employer corporation owns stock possessing fifty percent
(50%) or more of the total combined voting power of all classes of stock in
one of the other corporations in such chain.
(f) "RULE 16b-3" shall mean Rule 16b-3 promulgated under Section 16 of
the Exchange Act (or any other comparable provisions in effect at the time
or times in question)
(g) "SUBSIDIARY CORPORATION" shall mean any corporation (other than
the Corporation) in an unbroken chain of corporations beginning with the
employer corporation if, at the time of granting an Option, each of the
corporations other than the last corporation in the unbroken chain owns
stock possessing fifty percent (50%) or more of the total combined voting
power of all classes of stock in one of the other corporations in such
chain.
(h) "TEN PERCENT STOCKHOLDER" shall mean an Optionee who, at the time
an Incentive Stock Option is granted, owns stock possessing more than ten
percent (10%) of the total combined voting power of all classes of stock of
the Corporation or of its Parent or Subsidiary Corporations.
3. ADMINISTRATION.
The Plan shall be administered by the Compensation and Option Committee of
the Corporation's Board of Directors or such other committee appointed either by
the Board of Directors of the Corporation (the "Board") or by such Compensation
and Option Committee (the "Committee"); provided, however, to the extent
determined necessary to satisfy the requirements for exemption from Section
16(b) of the Exchange Act with respect to the acquisition or disposition of
securities hereunder, action by the Committee may be by a subcommittee of a
committee of the Board
2
composed solely of two or more " non-employee directors," within the meaning of
Rule 16b-3, appointed by the Board or by the Compensation and Option Committee
of the Board, or by a committee composed solely of two or more "non-employee
directors," within the meaning of Rule 16b-3, as a result of the recusal of
those members who do not qualify as non-employee directors; and, provided
further, to the extent determined necessary to satisfy the requirements for the
exception for qualified performance- based compensation under Section 162(m) of
the Code and the treasury regulations thereunder, action by the Committee may be
by a committee comprised solely of two or more "outside directors, " within the
meaning of Section 162(m) of the Code and the treasury regulations thereunder,
appointed by the Board or by the Compensation and Option Committee.
Notwithstanding anything in the Plan to the contrary, and to the extent
determined to be necessary to satisfy an exemption under Rule 16b-3 with respect
to a grant hereunder (and, as applicable, with respect to the disposition to the
Corporation of a security hereunder), or as otherwise determined advisable by
the Committee, the terms of such grant and disposition under the Plan shall be
subject to the prior approval of the Board. Any prior approval of the Board, as
provided in the preceding sentence, shall not otherwise limit or restrict the
authority of the Committee to make grants under the Plan, including, but not
limited to, the authority of the Committee to make grants qualifying for the
performance-based compensation exception under Section 162(m) of the Code and
the treasury regulations thereunder.
The Committee shall have the authority in its discretion, subject to and
not inconsistent with the express provisions of the Plan, to administer the Plan
and to exercise all the powers and authorities either specifically granted to it
under the Plan or necessary or advisable in the administration of the Plan,
including, without limitation, the authority to grant Options; to determine
which Options shall constitute Incentive Stock Options and which Options shall
constitute Nonqualified Stock Options; to determine the purchase price of the
shares of Common Stock covered by each Option (the "Option Price"); to determine
the persons to whom, and the time or times at which, Options shall be granted;
to determine the number of shares to be covered by each Option; to interpret the
Plan; to prescribe, amend and rescind rules and regulations relating to the
Plan; to determine the terms and provisions of the Option Agreements (which need
not be identical) entered into in connection with Options granted under the
Plan; and to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Committee may delegate to one or more of its
members or to one or more agents such administrative duties as it may deem
advisable, and the Committee or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Committee or such person may
3
have under the Plan.
The Board shall fill all vacancies, however caused, in the Committee. The
Board may from time to time appoint additional members to the Committee, and may
at any time remove one or more Committee members and substitute others. One
member of the Committee may be selected by the Board as chairman. The Committee
shall hold its meetings at such times and places as it shall deem advisable. All
determinations of the Committee shall be made by a majority of its members
either present in person or participating by conference telephone at any meeting
or by written consent. The Committee may appoint a secretary and make such rules
and regulations for the conduct of its business as it shall deem advisable, and
shall keep minutes of its meetings.
No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Option granted
hereunder.
4. ELIGIBILITY.
Options may be granted (i) to employees (including, without limitation,
officers and directors who are employees) of the Corporation, its present or
future divisions and Subsidiary Corporations and Parent Corporations and (ii) in
the case of Nonqualified Stock Options, also to employees of an affiliated
entity of the Corporation (an "Affiliated Entity") which is designated by the
Board to participate in the Plan. In determining the persons to whom Options
shall be granted and the number of shares to be covered by each Option, the
Committee shall take into account the duties of the respective persons, their
present and potential contributions to the success of the Corporation and such
other factors as the Committee shall deem relevant in connection with
accomplishing the purpose of the Plan.
An Optionee shall be eligible to receive more than one grant of an Option
during the term of the Plan, but only on the terms and subject to the
restrictions hereinafter set forth.
5. STOCK.
The stock subject to Options hereunder shall be shares of the Corporation's
Common Stock. Such shares may, in whole or in part, be authorized but unissued
shares or shares that shall have been or that may be reacquired by the
Corporation. The aggregate number of shares of Common Stock as to which Options
may be granted from time to time under the Plan shall not exceed 6,653,333. The
limitation established by the preceding sentence shall be subject to adjustment
as provided in Section 8(j) hereof.
4
In the event that any outstanding Option under the Plan for any reason
expires or is canceled, surrendered or otherwise terminated without having been
exercised in full, the shares of Common Stock allocable to the unexercised
portion of such Option shall (unless the Plan shall have been terminated) become
available for subsequent grants of Options under the Plan. Notwithstanding the
foregoing, the expiration, cancellation, surrender or termination of an Option,
to the extent consistent with Section 162(m) of the Code and the treasury
regulations thereunder, shall not be disregarded for purposes of applying the
individual limit on the maximum number of shares, as provided in Section 8(f),
that may be purchased in connection with Options granted under the Plan with
respect to any individual.
6. INCENTIVE STOCK OPTIONS.
Options granted pursuant to this Section 6 are intended to constitute
Incentive Stock Options and shall be subject to the following special terms and
conditions, in addition to the general terms and conditions specified in Section
8 hereof.
(a) VALUE OF SHARES. Any options granted as Incentive Stock Options
shall be traded as Nonqualified Stock Options to the extent that the
aggregate Fair Market Value (determined as of the date the Incentive Stock
Option is granted) of the shares of Common Stock with respect to which such
Options granted under this Plan and all other option plans of the
Corporation and any Parent or Subsidiary Corporation which would become
exercisable for the first time by such Optionee during any calendar year
exceeds $100, 000.
(b) TEN PERCENT STOCKHOLDER. In the case of an Incentive Stock Option
granted to a Ten Percent Stockholder, (I) the Option Price shall not be
less than one hundred ten percent (110%) of the Fair Market Value of the
shares of Common Stock of the Corporation on the date of grant of such
Incentive Stock Option, and (ii) the exercise period shall not exceed five
(5) years from the date of grant of such Incentive Stock Option.
7. NONQUALIFIED STOCK OPTIONS.
Options granted pursuant to this Section 7 are intended to constitute
Nonqualified Stock Options and shall be subject only to the general terms and
conditions specified in Section 8 hereof.
5
8. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to the Plan shall be evidenced by a written
agreement (an "Option Agreement") between the Corporation and the Optionee,
which agreement shall comply with and be subject to the following terms and
conditions:
(a) NUMBER OF SHARES. Each Option Agreement shall state the number of
shares of Common Stock to which the Option relates.
(b) TYPE OF OPTION. Each Option Agreement shall specifically identify
the portion, if any, of the Option which constitutes an Incentive Stock
Option and the portion, if any, constitutes a Nonqualified Stock Option.
(c) OPTION PRICE. Each Option Agreement shall state the Option Price,
which, in the case of Incentive Stock Options, shall be not less than one
hundred percent (100%) of the Fair Market Value of the shares of Common
Stock of the Corporation on the date of grant of the Option, and which, in
the case of Nonqualified Stock Options, shall be determined by the
Committee. The Option Price shall be subject to adjustment as provided in
Section 8(i) hereof. An Option shall be considered to be granted on the
later of the date the Committee adopts a resolution expressly granting such
Option or the date the Plan is approved by the Stockholders of the Company.
(d) MEDIUM AND TIME OF PAYMENT. Options may be exercised in whole or
in part at any time during the option period by giving written notice of
exercise to the Corporation specifying the number of shares to be
purchased, accompanied by payment of the purchase price. Payment of the
purchase price shall be made in such manner as the Committee may provide in
the Option Agreement, which may include cash (including cash equivalents,
such as by certified or bank check payable to the Corporation), delivery of
unrestricted shares of Common Stock that have been owned by the Optionee
or, as applicable, a permissible transferee (as provided in Section 8 (i) )
for at least six months, any other manner permitted by law as determined by
the Committee, or any combination of the foregoing.
(e) TERM AND EXERCISE OF OPTIONS. Options shall be exercisable over
the exercise period as and at the times and upon the conditions that the
Committee may determine, as reflected in the Option Agreement; provided,
however, that the Committee shall have the authority to accelerate the
exercisability of any outstanding Option at such time and under such
circumstances as it, in its sole discretion,
6
deems appropriate; and further provided, however, this such exercise period
shall not exceed ten (10) years from the date of grant of such Option. The
exercise period shall be subject to earlier termination as provided in
Sections 8(g) and 8(h) hereof. An Option may be exercised, as to any or all
full shares of Common Stock as to which the Option has become exercisable,
by giving written notice of such exercise to the Committee or to such
individual(s) as the Committee may from time to time designate.
(f) LIMITATION ON AWARDS. Commencing with the 1996 calendar year,
grants of options under the Plan to any individual in any calendar year
shall be limited to Options to purchase no greater than 300,000 shares of
Common Stock.
(g) TERMINATION. Except as provided in this Section 8(g) and in
Section 8(h) hereof, an Option may not be exercised by the Optionee to whom
it was granted or by a transferee to whom such Option was terminated (as
provided in Section 6(j)) unless the Optionee is then in the employ of the
Corporation or a division or any corporation which was, at the time of
grant of such Option, a Subsidiary Corporation or Parent Corporation
thereof (or a corporation or a Parent or Subsidiary Corporation of such
corporation issuing or assuming the Option in a transaction to which
Section 424(a) of the Code applies) or an affiliated entity, and unless the
Optionee has remained continuously so employed since the date of grant of
the Option. In the event that the employment of an Optionee shall terminate
(other than by reason of death, Disability or, in the case of Non-qualified
Stock Options, retirement), all Options granted to such Optionee or
transferred by such Optionee (as provided in Section 8(i)) that are
exercisable at the time of such termination may, unless earlier terminated
in accordance with their terms, be exercised by the Optionee or by a
transferee within three (3) months after such termination; provided,
however, that if the employment of an Optionee shall terminate for cause,
all Options theretofore granted to such Optionee or transferred by such
Optionee (as provided in Section 8 (i) ) shall, to the extent not
theretofore exercised, terminate forthwith. Nothing in the Plan or in any
Option granted pursuant hereto shall confer upon an individual any right to
continue in the employ of the Corporation or any of its divisions, Parent
or Subsidiary Corporations or Affiliated entities or interfere in any way
with the right of the Corporation or any such division, Parent or
Subsidiary Corporation or affiliated entity to terminate such employment.
(h) DEATH, DISABILITY OR RETIREMENT OF OPTIONEE. If an Optionee shall
die while employed by the Corporation or a
7
division thereof or any corporation which was, at the time of grant of such
Option, a Subsidiary Corporation or Parent Corporation thereof (or a
corporation or a Parent or Subsidiary Corporation of such corporation
issuing or assuming the Option in a transaction to which Section 424 (a) of
the Code applies) or an Affiliated Entity, or within three (3) months after
the termination of such Optionee' s employment, other than for cause, or if
the Optionee's employment shall terminate by reason of Disability or, in
the case of Nonqualified Stock Options, retirement, all Options theretofore
granted to such Optionee or transferred by such Optionee (as provided in
Section 8(i)), to the extent otherwise exercisable at the time of death or
termination of employment, may, unless earlier terminated in accordance
with their terms, be exercised by the Optionee or by the Optionee's estate
or by a person who acquired the right to exercise such Option by bequest or
inheritance or otherwise by reason of the death or Disability of the
Optionee, or by a transferee (as provided in Section 8 (i) ), at any time
within one year after the date of death, Disability or retirement of the
Optionee.
(i) NONTRANSFERABILITY OF OPTIONS. Except as provided in this Section
8(i), no Option granted hereunder shall be transferable by the Optionee to
whom granted, other than by will or the laws of descent and distribution,
and the Option may be exercised during the lifetime of such Optionee only
by the Optionee or such Optionee's guardian or legal representative. To the
extent the Option Agreement so provides, and subject to such conditions as
the Committee may prescribe, an Optionee may, upon providing written notice
to the General Counsel of the Corporation, elect to transfer the
Nonqualified Stock Options granted to such Optionee pursuant to such
agreement, without consideration therefor, to members of his or her
"immediate family" (as defined below), to a trust or trusts maintained
solely for the benefit of the Optionee and/or the members of his or her
immediate family, or to a partnership or partnerships whose only partners
are the Optionee and/or the members of his or her immediate family. Any
purported assignment, alienation, pledge, attachment, sale, transfer, or
encumbrance that does not qualify as a permissible transfer under this
Section 8(1) shall be void and unenforceable against the Plan and the
Corporation. For purposes of this Section 8(i), the term "immediate family"
shall mean, with respect to a particular Optionee, the Optionee's spouse,
children or grandchildren, and such other persons as may be determined by
the Committee. The terms of any such Option and the Plan shall be binding
upon a permissible transferee, and the beneficiaries, executors,
administrators, heirs and successors of the Optionee and, as applicable, a
permissible
8
transferee.
(j) EFFECT OF CERTAIN CHANGES.
(1) If there is any change in the number of shares of Common
Stock through the declaration of stock or cash dividends, or
recapitalization resulting in stock splits, or combinations or
exchanges of such shares, or other corporate transactions affecting
the capitalization of the Corporation, the aggregate number of shares
of Common Stock available for Options, the aggregate number of shares
of Common Stock available for distribution under the Plan to any
single individual with respect to Options granted hereunder, the
number of such shares covered by outstanding Options, and the price
per share of such Options shall be proportionately adjusted by the
Committee to reflect any increase or decrease in the number of issued
shares of Common Stock; provided, however, that any fractional shares
resulting from such adjustment shall be rounded to the nearest whole
share. In the event of any other extraordinary corporate transaction,
including but not limited to distributions of cash or other property
to the Corporation's shareholders, the Committee may equitably adjust
outstanding Options as it deems appropriate.
(2) In the event of the proposed dissolution or liquidation of
the Corporation, in the event of any corporate separation or division,
including, but not limited to, split-up, split-off or spin-off, or in
the event of a merger or consolidation of the Corporation with another
corporation, the Committee may provide that the holder of each Option
then exercisable shall have the right to exercise such Option (at its
then Option Price) solely for the kind and amount of shares of stock
and other securities, property, cash or any combination thereof
receivable upon such dissolution, liquidation, or corporate separation
or division, or merger or consolidation by a holder of the number of
shares of Common Stock for which such Option might have been exercised
immediately prior to such dissolution, liquidation, or corporate
separation or division, or merger or consolidation; or the Committee
may provide, in the alternative, that each Option granted under the
Plan shall terminate as of a date to be fixed by the Committee;
provided, however, that not less than thirty (30) days' written notice
of the date so fixed shall be given to each Optionee, who shall have
the right, during the period of thirty (30) days preceding such
termination, to exercise the Options (unless earlier terminated in
accordance with their terms) as to all or any part of the shares of
Common Stock covered thereby, including shares as to which such
Options would not otherwise be exercisable; provided, further, that
9
failure to provide such notice shall not invalidate or affect the
action with respect to which such notice was required.
(3) If while unexercised Options remain outstanding under the
Plan --
(i) any corporation, person or other entity (other than the
Corporation) makes a tender or exchange offer for shares of the
Common Stock pursuant to which purchases are made ("Offer"), or
(ii) the stockholders of the Corporation approve a
definitive agreement to merge or consolidate the Corporation with
or into another corporation or to sell or otherwise dispose of
all or substantially all of its assets, or adopt a plan of
liquidation, or
(iii) the "beneficial ownership" (as defined in Rule 13d-3
under the Exchange Act) of securities representing more than 15%
of the combined voting power of the Corporation is acquired by
any "person" as defined in section 13(d) and 14(d) of the
Exchange Act, or
(iv) during any period of two consecutive years, individuals
who at the beginning of such period were members of the Board
cease for any reason to constitute at least a majority thereof
(unless the election, or the nomination for election by the
Corporation's stockholders, of each new director was approved by
a vote of at least two-thirds of the directors then still in
office who were directors at the beginning of such period),
then from and after the date of the first purchase of Common Stock
pursuant to such Offer, or the date of any such stockholder approval
or adoption, or the date on which public announcement of the
acquisition of such percentage shall have been made, or the date on
which the change in the composition of the Board set forth above shall
have occurred, whichever is applicable (the applicable date being
referred to hereinafter as the "Acceleration Date") , all Options
shall be exercisable in full, whether or not otherwise exercisable.
Following the Acceleration Date, the Committee shall, in the case of a
merger, consolidation or sale or disposition of assets, promptly make
an appropriate adjustment to the number and class of shares of Common
Stock available for Options, and to the amount and kind of shares or
other securities or property receivable upon exercise of any
outstanding Options after the effective date of such
10
transaction, and the price thereof.
(4) Paragraphs (2) and (3) of this Section 8(j) shall not apply
to a merger or consolidation in which the Corporation is the surviving
corporation and shares of Common Stock are not converted into or
exchanged for stock, securities of any other corporation, cash or any
other thing of value. Notwithstanding the preceding sentence, in case
of any consolidation or merger of another corporation into the
Corporation in which the Corporation is the surviving corporation and
in which there is a reclassification or change (including a change to
the right to receive cash or other property) of the shares of Common
Stock (other than a change in par value, or from par value to no par
value, or as a result of a subdivision or combination, but including
any change in such shares into two or more classes or series of
shares), the Committee may provide that the holder of each Option then
exercisable shall have the right to exercise such Option solely for
the kind and amount of shares of stock and other securities (including
those of any new direct or indirect parent of the Corporation),
property, cash or any combination thereof, receivable upon such
reclassification, change, consolidation or merger by the holder of the
number of shares of Common Stock for which such Option might have been
exercised.
(5) In the event of a change in the Common Stock of the
Corporation as presently constituted, which is limited to a change of
all of its authorized shares with par value into the same number of
shares with a different par value or without par value, the shares
resulting from any such change shall be deemed to be the Common Stock
within the meaning of the Plan.
(6) To the extent that the foregoing adjustments relate to stock
or securities of the Corporation, such adjustments shall be made by
the Committee, whose determination in that respect shall be final,
binding and conclusive, provided that each Incentive Stock Option
granted pursuant to this Plan shall not be adjusted in a manner that
causes such option to fail to continue to qualify as an Incentive
Stock Option within the meaning of Section 422 of the Code.
(7) Except as hereinbefore expressly provided in this Section
8(j), the Optionee shall have no rights by reason of any subdivision
or consolidation of shares of stock of any class or the payment of any
stock dividend or any other increase or decrease in the number of
shares of stock of any class or by reason of any dissolution,
liquidation, merger, or consolidation or spin-off of assets
11
or stock of another corporation; and any issue by the Corporation of
shares of stock of any class, or securities convertible into shares of
stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares
of Common Stock subject to the Option. The grant of an Option pursuant
to the Plan shall not affect in any way the right or power of the
Corporation to make adjustments, reclassifications, reorganizations or
changes of its capital or business structures or to merge or to
consolidate or to dissolve, liquidate or sell, or transfer all or part
of its business or assets.
(k) RIGHTS AS A STOCKHOLDER. An Optionee or a transferee of an Option
shall have no rights as a stockholder with respect to any shares covered by
the Option until the date of the issuance of a stock certificate to him for
such shares. No adjustment shall be made for dividends (ordinary or
extraordinary, whether in cash, securities or other property) or
distribution of other rights for which the record date is prior to the date
such stock certificate is issued, except as provided in Section 8(j)
hereof.
(1) RIGHTS AS AN EMPLOYEE. Nothing in the Plan or in any instrument
executed pursuant to the Plan will confer upon any Optionee any right to
continue in the employ of the Corporation or affect the right of the
Corporation to terminate the employment of any Optionee at any time with or
without cause.
(m) OTHER PROVISIONS. The Option Agreements authorized under the Plan
shall contain such other provisions, including, without limitation, (i) the
imposition of restrictions upon the exercise of an Option, and (ii) in the
case of an Incentive Stock Option, the inclusion of any condition not
inconsistent with such Option qualifying as an Incentive Stock Option, as
the Committee shall deem advisable.
9. AGREEMENT BY OPTIONEE REGARDING WITHHOLDING TAXES.
If the Committee shall so require, as a condition of exercise, each
Optionee shall agree that --
(a) no later than the date of exercise of any Option granted
hereunder, the Optionee will pay to the Corporation or make arrangements
satisfactory to the Committee regarding payment of any federal, state or
local taxes of any kind required by law to be withheld upon the exercise of
such Option, and
(b) the Corporation shall, to the extent permitted or
12
required by law, have the right to deduct federal, state and local and
employment taxes of any kind required by law to be withheld upon the exercise of
such Option from any payment of any kind required by law to be withheld upon the
exercise of such Option from any payment of any kind otherwise due to the
Optionee.
10. TERM OF PLAN.
Options may be granted pursuant to the Plan from time to time within a
period of ten (10) years from the date the Plan is adopted by the Board, or the
date the Plan is approved by the stockholders of the Corporation, whichever is
earlier.
11. AMENDMENT AND TERMINATION OF THE PLAN.
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan; provided, however, that no amendment that requires
stockholder approval under applicable Delaware law, under the rules or
regulations of any securities exchange or regulatory agency, or in order for the
Plan to continue to comply with Rule 16b-3 or, if applicable, to comply with the
exception for qualified performance-based compensation under Code Section 162
(in) , or in order for Options intended to constitute Incentive Stock Options to
satisfy the requirements of Section 422 of the Code shall be effective unless
the same shall be approved by the requisite vote of the stockholders of the
Corporation. Except as provided in Section 8 hereof, no suspension, termination,
modification or amendment of the Plan may adversely affect any Option previously
granted, unless the written consent of the Optionee or, as applicable, a
permissible transferee (as provided in Section 8(i)) is obtained.
12. INTERPRETATION.
The Plan is designed and intended to comply with Rule 16b-3 and, to the
extent applicable, Sections 162(m) and 422 of the Code, and all provisions
hereof shall be construed in a manner to so comply.
13. APPROVAL AND RATIFICATION BY STOCKHOLDERS.
The Plan shall take effect as set forth in Section 16 upon its adoption by
the Board of Directors, but shall be subject to its approval and ratification by
the holders of a majority of the issued and outstanding shares of Common Stock
of the Corporation, which approval and ratification must occur within twelve
months after the date that the Plan is adopted by the Board.
13
14. EFFECT OF HEADINGS.
The section and subsection headings contained herein are for convenience
only and shall not affect the construction hereof.
15. GOVERNING LAW.
The Plan shall be governed by the laws of the State of Delaware.
16. EFFECTIVE DATE OF PLAN.
The effective date of the Plan is the date the Plan is adopted by the
Board.
14
NTL INCORPORATED
1993 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN
(AS AMENDED AND RESTATED EFFECTIVE JUNE 3, 1997)
1. PURPOSE; CONSTRUCTION.
The purpose of this NTL Incorporated 1993 Non-Employee Directors Stock
Option Plan, as amended and restated effective June 3, 1997 (the "Plan"), is to
encourage stock ownership by non-employee directors of NTL Incorporated (the
"Corporation") in order to increase their identification with the interests of
the Corporation's shareholders, and to encourage such directors to remain in the
service of the Corporation and to put forth maximum efforts for the success of
the business.
2. DEFINITIONS.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "BOARD" shall mean the Board of Directors of the Corporation.
(b) "CODE" shall mean the Internal Revenue Code of 1986, as amended.
(c) "COMMON STOCK" shall mean the common stock, par value $.01 per share,
of the Corporation.
(d) "DISABILITY" shall mean an Optionee's inability to engage in any
substantial gainful activity by reason of any medically determinable physical or
mental impairment that can be expected to result in death or that has lasted or
can be expected to last for a continuous period of not less than twelve (12)
months.
(e) "FAIR MARKET VALUE" per share as of a particular date shall mean (i) if
the Common Stock is then traded on an over-the-counter market, the average of
the closing bid and asked prices for the Common Stock in such over-the-counter
market on such date or on the last preceding date on which there was a sale of
such Common Stock in such market, (ii) if the Common Stock is then admitted to
quotation on the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") or other comparable quotation system and has been designated
as a National Market System ("NMS") security, or if the Common Stock is then
listed on a national securities exchange, the closing sales price per share on
such date or on the last preceding date on which there was a sale of such Common
Stock on such exchange, or (iii) if the Common Stock is not then traded in an
over-the-counter market, admitted to quotation on NASDAQ or other comparable
quotation system, or listed on a national securities exchange, such value as the
Committee in its discretion may determine.
(f) "OPTION" shall mean a stock option granted pursuant to the Plan.
(g) "OPTIONEE" shall mean a person to whom an Option has been granted under
the Plan.
3. ADMINISTRATION.
The Plan shall be administered by the Compensation and Option Committee
(the "Committee") established by the Board.
The Committee shall have the powers vested in it by the terms of the Plan,
such powers to include the authority to prescribe the form of the agreements
embodying awards of Options made under the Plan. The Committee shall, subject to
and not inconsistent with the express provisions of the Plan, have the authority
to administer the Plan and to exercise all the powers and authorities either
specifically granted to it under the Plan or necessary or advisable in the
administration of the Plan, including, without limitation, the authority to
prescribe, amend and rescind rules and regulations relating to the Plan; and to
make all other determinations deemed necessary or advisable for the
administration of the Plan.
The Committee may delegate to one or more of its members or to one or more
agents such administrative duties as it may deem advisable, and the Committee or
any person to whom it has delegated duties as aforesaid may employ one or more
persons to render advice with respect to any responsibility the Committee or
such person may have under the Plan.
The Board shall fill all vacancies, however caused, in the Committee. The
Board may from time to time appoint additional members to the Committee, and may
at any time remove one or more Committee members and substitute others. One
member of the Committee may be selected by the Board as chairman. The Committee
shall hold its meetings at such times and places as it shall deem advisable. All
determinations of the Committee shall be made by a majority of its members
either present in person or participating by conference telephone at any meeting
or by written consent. The Committee may appoint a secretary and make such rules
and regulations for the conduct of its business as it shall deem advisable, and
shall keep minutes of its meetings.
No member of the Board or Committee shall be liable for any action taken or
determination made in good faith with respect to the Plan or any Option granted
hereunder.
4. ELIGIBILITY.
Each member of the Board who is not an employee of the Corporation or any
of its affiliates (a "Non-Employee Director") shall be granted Options in
accordance with Section 6 hereof. The adoption of this Plan shall not be deemed
to give any director any right to be granted an Option to purchase shares of
Common Stock, other than in accordance with the terms of this Plan.
2
5. STOCK.
The stock subject to Options granted hereunder shall be shares of the
Corporation's Common Stock. Such shares may, in whole or in part, be authorized
but unissued shares or shares that shall have been or that may be reacquired by
the Corporation. The aggregate number of shares of Common Stock as to which
Options may be granted from time to time under the Plan shall not exceed
320,000. The limitation established by the preceding sentence shall be subject
to adjustment as provided in Section 6(k) hereof.
In the event that any outstanding Option under the Plan for any reason
expires or is cancelled, surrendered or otherwise terminated without having been
exercised in full, the shares of Common Stock allocable to the unexercised
portion of such Option shall (unless the Plan shall have been terminated) become
available for subsequent grants of Options under the Plan.
6. TERMS AND CONDITIONS OF OPTIONS.
Each Option granted pursuant to the Plan shall be evidenced by a written
agreement between the Corporation and the Optionee in such form as the Committee
shall prescribe from time to time, which agreement shall comply with and be
subject to the following terms and conditions:
(a) INITIAL FORMULA GRANTS. On May 26, 1993 the ("Initial Grant Date"),
each Non-Employee Director as of such date shall be granted automatically,
without action by the Committee, an Option to purchase 34,667 shares of Common
Stock. In addition, each Non-Employee Director who, after the Initial Grant Date
but prior to June 3, 1997, is elected to the Board for the first time will, at
the time such Director is elected and duly qualified, be granted automatically,
without action by the Committee, an Option to purchase 34,667 shares of Common
Stock.
(b) FORMULA GRANTS TO CONTINUING DIRECTORS. On the date of each of the
first, second and third annual meetings of stockholders at least six months
subsequent to the Initial Grant Date, each continuing Director (i.e., a
Non-Employee Director not being elected by stockholders for the first time) will
be granted automatically, without action by the Committee, an Option to purchase
1,333 shares of Common Stock.
(c) DISCRETIONARY GRANTS. After the third annual meeting of stockholders at
least six months subsequent to the Initial Grant Date, the remaining options
available for grant under this plan shall be granted to the Non-Employee
Directors in the amounts and on such date as determined by the Committee or by
the Board of Directors.
(d) TYPE OF OPTION. Each Option granted under the Plan shall be a stock
option which is not intended to qualify as an "incentive stock option" under
Section 422 of the Code.
3
(e) OPTION PRICE. The Option Price of each Option granted under the Plan
shall be equal to one hundred percent (100%) of the Fair Market Value of the
shares of Common Stock subject to such Option on the date of grant thereof. The
Option Price shall be subject to adjustment as provided in Section 6(k) hereof.
(f) MEDIUM AND TIME OF PAYMENT. Options may be exercised in whole or in
part at any time during the option period by giving written notice of exercise
specifying the number of shares to be purchased, accompanied by payment of the
purchase price. Payment of the purchase price may be made in cash (including
cash equivalents, such as by certified or bank check payable to the
Corporation), by delivery of unrestricted shares of Common Stock that have been
owned by the Optionee or, as applicable, a permissible transferee (as provided
in Section 6(j)) for at least six months, or in any combination of the
foregoing.
(g) TERM AND EXERCISE OF OPTIONS. Options granted under the Plan shall
become exercisable as to twenty percent (20%) of the shares subject thereto on
the date of grant thereof and as to an additional twenty percent (20%) of the
shares subject thereto on each of the first, second, third and fourth
anniversaries of the date of grant thereof. An Option shall be exercisable for a
period of ten (10) years from the date of grant of such Option; provided,
however, that, except as provided in this Section 6(g), the exercise period
shall be subject to earlier termination as provided in Sections 6(h) and 6(i)
hereof. An Option may be exercised, as to any or all full shares of Common Stock
as to which the Option has become exercisable, by giving written notice of such
exercise to the Committee, or to such individual(s) as the Committee may from
time to time designate. Notwithstanding anything in the Plan to the contrary, in
the case of the termination of service of an Optionee as a director, the
Committee or, to the extent determined necessary to satisfy the requirements for
an exemption from Section 16(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), the Board, in its sole discretion, may determine
that all or a portion of the Options that are then held by the Optionee (or, as
applicable, by a permissible transferee of such Options (as provided in Section
6(j)) shall, to the extent not then exercisable, become exercisable in
accordance with the first sentence of this Section 6(g) or as provided in
Section 6(k) and that all or a portion of the Options held by the Optionee or by
a transferee at the time of the Optionee's termination of service may be
exercised by the Optionee or, as applicable, by a transferee (or, as applicable,
by their beneficiaries, executors, administrators, heirs and successors) during
such period as determined by the Committee (or, as applicable, the Board),
provided that such period shall terminate no earlier than the end of the
exercise period that otherwise would apply under Section 6(h) or Section 6(i)
following such termination of service under the Plan and no later than the end
of the applicable Option term.
(h) TERMINATION. Except as provided in this Section 6(h) and in Section
6(i) hereof, an Option may not be exercised by the Optionee to whom it was
granted or by a transferee to whom such Option was transferred (as provided in
Section 6(j)) unless the Optionee is then in service as a director of the
Corporation and unless the Optionee has remained continuously in the
Corporation's service as a director since the date of grant of the Option. In
the event
4
that the service of an Optionee as a director shall terminate (other than by
reason of death, Disability or retirement), all Options granted to such Optionee
or transferred by such Optionee (as provided in Section 6(j)) that are
exercisable at the time of such termination may, unless earlier terminated in
accordance with their terms, be exercised by the Optionee or by a transferee
within three (3) months after such termination; provided, however, that if the
service of an Optionee as a director of the Corporation shall terminate for
cause, all Options theretofore granted to such Optionee or transferred by such
Optionee (as provided in Section 6(j)), shall, to the extent not theretofore
exercised, terminate forthwith. Nothing in the Plan or in any Option granted
pursuant hereto shall confer upon an individual any right to continue in service
as a director of the Corporation or interfere in any way with the right of the
Corporation to terminate such service.
(i) DEATH, DISABILITY OR RETIREMENT OF OPTIONEE. If an Optionee shall die
while in service as a director of the Corporation or within three (3) months
after the termination of such Optionee's service, other than for cause, or if
the Optionee's service as a director shall terminate by reason of Disability or
retirement, all Options theretofore granted to such Optionee or transferred by
such Optionee (as provided in Section 6(j)), to the extent otherwise exercisable
at the time of death or termination of service, may, unless earlier terminated
in accordance with their terms, be exercised by the Optionee or by the
Optionee's estate or by a person who acquired the right to exercise such Option
by bequest or inheritance or otherwise by reason of the death or Disability of
the Optionee, or by a transferee at any time within one year after the date of
death, Disability or retirement of the Optionee.
(j) NONTRANSFERABILITY OF OPTIONS. Except as provided in this Section 6(j),
no Option granted hereunder shall be transferable by the Optionee to whom
granted, other than by will or the laws of descent and distribution, and the
Option may be exercised during the lifetime of such Optionee only by the
Optionee or such Optionee's guardian or legal representative. To the extent the
Option Agreement so provides, and subject to such conditions as the Committee
may prescribe (provided such prescription of conditions does not cause the
acquisition or disposition of securities hereunder to fail to qualify for an
exemption under Section 16(b) of the Exchange Act), an Optionee may, upon
providing written notice to the General Counsel of the Corporation, elect to
transfer the stock options granted to such Optionee pursuant to such agreement,
without consideration therefor, to members of his or her "immediate family" (as
defined below), to a trust or trusts maintained solely for the benefit of the
Optionee and/or the members of his or her immediate family, or to a partnership
or partnerships whose only partners are the Optionee and/or the members of his
or her immediate family. Any purported assignment, alienation, pledge,
attachment, sale, transfer, or encumbrance that does not qualify as a
permissible transfer under this Section 6(j), shall be void and unenforceable
against the Plan and the Corporation. For purposes of this Section 6(j), the
term "immediate family" shall mean, with respect to a particular Optionee, the
Optionee's spouse, children or grandchildren, and such other persons as may be
determined by the Committee. The terms of any such Option and the Plan shall be
binding upon a permissible transferee, and the beneficiaries, executors,
administrators, heirs and successors of the Optionee and, as applicable, a
permissible transferee.
5
(k) EFFECT OF CERTAIN CHANGES. (1) If there is any change in the number of
shares of Common Stock through the declaration of stock or cash dividends, or
recapitalization resulting in stock splits, or combinations or exchanges of such
shares, the aggregate number of shares of Common Stock available for Options,
the number of such shares covered by outstanding Options, and the exercise price
per share of such Options shall be proportionately adjusted by the Committee to
reflect any increase or decrease in the number of issued shares of Common Stock;
provided, however, that any fractional shares resulting from such adjustment
shall be rounded to the nearest whole share. In the event of any other
extraordinary corporate transaction, including, but not limited to,
distributions of cash or other property to the Corporation's shareholders, the
Committee shall equitably adjust outstanding Options to preserve, but not
increase, the benefits of such Options.
(2) In the event of the proposed dissolution or liquidation of the
Corporation, in the event of any corporate separation or division,
including, but not limited to, split-up, split-off or spin-off, or in the
event of a merger or consolidation of the Corporation with another
corporation, the Committee shall provide that the holder of each Option
then exercisable shall have the right to exercise such Option (at its then
Option Price) solely for the kind and amount of shares, of stock and other
securities, property, cash or any combination thereof receivable upon such
dissolution, liquidation, or corporate separation or division, or merger or
consolidation by a holder of the number of shares of Common Stock for which
such Option might have been exercised immediately prior to such
dissolution, liquidation, or corporate separation or division, or merger or
consolidation.
(3) If while unexercised Options remain outstanding under the Plan--
(i) any corporation, person or other entity (other than the
Corporation) makes a tender or exchange offer for shares of Common
Stock pursuant to which purchases are made ("Offer"), or
(ii) the stockholders of the Corporation approve a definitive
agreement to merge or consolidate the Corporation with or into another
corporation or to sell or otherwise dispose of all or substantially
all of its assets, or adopt a plan of liquidation, or
(iii) the "beneficial ownership" (as defined in Rule 13d-3 under
the Exchange Act) of securities representing more than 15% of the
combined voting power of the Corporation is acquired by any "person"
as defined in sections 13(d) and 14(d) of the Exchange Act, or
(iv) during any period of two consecutive years, individuals who
at the beginning of such period were members of the Board cease for
any reason to constitute at least a majority thereof (unless the
election, or the nomination for election by the Corporation's
stockholders, of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at
the beginning of such
6
period),
then from and after the date of the first purchase of Common Stock pursuant
to such Offer, or the date of any such stockholder approval or adoption, or
the date on which public announcement of the acquisition of such percentage
shall have been made, or the date on which the change in the composition of
the Board set forth above shall have occurred, whichever is applicable (the
applicable date being referred to hereinafter as the "Acceleration Date"),
all Options shall be exercisable in full, whether or not otherwise
exercisable. Following the Acceleration Date, the Committee shall, in the
case of a merger, consolidation or sale or disposition of assets, promptly
make an appropriate adjustment to the number and class of shares of Common
Stock available for Options, and to the amount and kind of shares or other
securities or property receivable upon exercise of any outstanding Options
after the effective date of such transaction, and the price thereof.
(4) Paragraphs (2) and (3) of this Section 6(k) shall not apply to a
merger or consolidation in which the Company is the surviving corporation
and shares of Common Stock are not converted into or exchanged for stock,
securities of any other corporation, cash or any other thing of value.
Notwithstanding the preceding sentence, in case of any consolidation or
merger of another corporation into the Corporation in which the Corporation
is the surviving corporation and in which there is a reclassification or
change (including a change to the right to receive cash or other property)
of the shares of Common Stock (other than a change in par value, or from
par value to no par value, or as a result of a subdivision or combination,
but including any change in such shares into two or more classes or series
of shares), the Committee shall provide that the holder of each Option then
exercisable shall have the right to exercise such Option solely for the
kind and amount of shares of stock and other securities (including those of
any new direct or indirect parent of the Corporation), property, cash or
any combination thereof receivable upon such reclassification, change,
consolidation or merger by the holder of the number of shares of Common
Stock for which such Option might have been exercised.
(5) In the event of a change in the Common Stock of the Corporation as
presently constituted, which is limited to a change of all of its
authorized shares with par value into the same number of shares with a
different par value or without par value, the shares resulting from any
such change shall be deemed to be the Common Stock within the meaning of
the Plan.
(6) To the extent that the foregoing adjustments relate to stock or
securities of the Corporation, such adjustments shall be made by the
Committee, whose determination in that respect shall be final, binding and
conclusive.
(7) Except as hereinbefore expressly provided in this Section 6(k),
the Optionee shall have no rights by reason of any subdivision or
consolidation of shares of stock of any class or the payment of any stock
dividend or any other increase or decrease in the number of shares of stock
of any class or by reason of any dissolution, liquidation, merger, or
consolidation
7
or spinoff of assets or stock of another corporation; and any issue by the
Corporation of shares of stock of any class, or securities convertible into
shares of stock of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or price of shares of
Common Stock subject to the Option. The grant of an Option pursuant to the
Plan shall not affect in any way the right or power of the Corporation to
make adjustments, reclassifications, reorganizations or changes of its
capital or business structures or to merge or to consolidate or to
dissolve, liquidate or sell, or transfer all or part of its business or
assets.
(l) RIGHTS AS A STOCKHOLDER. An Optionee or a transferee of an Option shall
have no rights as a stockholder with respect to any shares covered by the Option
until the date of the issuance of a stock certificate to him or her for such
shares. No adjustment shall be made for dividends (ordinary or extraordinary,
whether in cash, securities or other property) or distribution of other rights
for which the record date is prior to the date such stock certificate is issued,
except as provided in Section 6(k) hereof.
(m) OTHER PROVISIONS. The Option Agreements authorized under the Plan shall
contain such other provisions, including, without limitation, the imposition of
restrictions upon the exercise of an Option, unless the inclusion of such
provisions would cause the acquisition or disposition of shares of Common Stock
in connection with such Option Agreements to fail to qualify for an exemption
from Section 16(b) of the Exchange Act.
7. TERM OF PLAN.
Options may be granted pursuant to the Plan from time to time within a
period of ten (10) years from the date the Plan is adopted by the Board, or the
date the Plan is approved by the stockholders of the Corporation, whichever is
earlier.
8. AMENDMENT AND TERMINATION OF THE PLAN.
The Board at any time and from time to time may suspend, terminate, modify
or amend the Plan; provided, however, that no amendment that requires
stockholder approval under applicable Delaware law, under the rules or
regulations of any securities exchange or regulatory agency, or in order for the
Plan to continue to comply with Rule 16b-3 (as promulgated under Section 16(b)
of the Exchange Act) shall be effective unless the same shall be approved by the
requisite vote of the stockholders of the Corporation. Except as provided in
Section 6 hereof, no suspension, termination, modification or amendment of the
Plan may adversely affect any Option previously granted, unless the written
consent of the Optionee or, as applicable, a permissible transferee (as provided
in Section 6(j)) is obtained.
8
9. APPROVAL AND RATIFICATION BY STOCKHOLDERS.
The Plan shall take effect as set forth in Section 12 upon its adoption by
the Board of Directors, but shall be subject to its approval and ratification by
the holders of a majority of the issued and outstanding shares of Common Stock
of the Corporation, which approval and ratification must occur within twelve
months after the date that the Plan is adopted by the Board.
10. EFFECT OF HEADINGS.
The section and subsection headings contained herein are for convenience
only and shall not affect the construction hereof.
11. GOVERNING LAW.
The Plan shall be governed by the laws of the State of Delaware.
12. EFFECTIVE DATE OF PLAN.
The effective date of the Plan is the date the Plan is adopted by the
Board.
9