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Exhibit 10.4
NTL INCORPORATED
1998 NON-QUALIFIED STOCK OPTION PLAN
AS AMENDED AND RESTATED OCTOBER 1998
1. Purpose; Construction.
This NTL Incorporated 1998 Stock Option Plan (the "Plan"), is intended to
encourage stock ownership by employees and directors 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 to remain in the employ of the Corporation or its
affiliates and to put forth maximum efforts for the success of the
business. Services of directors will be considered employment for purposes
of this Plan.
2. Definitions.
As used in this Plan, the following words and phrases shall have the
meanings indicated:
(a) "AFFILIATE" shall have the meaning set forth in Rule 12b-2 under
Section 12 of the Exchange Act.
(b) "BENEFICIAL OWNER" shall have the meaning set forth in Rule 13d-3
under the Exchange Act, except that a Person shall not be deemed to
be the Beneficial Owner of any securities which are properly filed
on a Form 13-G.
(c) "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.
(d) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
(e) "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 in a stock exchange,
on an over-the-counter market, or otherwise, the average of the
highest and lowest quoted selling prices for the shares of Common
Stock in such market on such date or, if there were no such sales
on the particular date, but there were such sales of Common Stock
on dates within a reasonable period both before and after the
particular date, the weighted average of the means between the
highest and lowest sales on the nearest date before and nearest
date after the particular date, (ii) if the provisions of (i) of
this subsection (e) are inapplicable because actual sales are
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not available during a reasonable period beginning before and ending
after the particular date, the average between the bona fide bid and
asked prices on the particular date, or if none, the weighted
average of the means between the bona fide bid and asked prices on
the nearest trading date before and the nearest trading date after
the particular date, if both such nearest dates are within a
reasonable period, (iii) if the provisions of (i) and (ii) of this
subsection (e) are inapplicable because no actual sale prices or
bona fide bid and asked prices are available on a date within a
reasonable period before the particular date, but such prices are
available on a date within a reasonable period after the valuation
date, or vice versa, then the average between the highest and lowest
available sales prices or bid and asked prices, or (iv) if the
Committee believes the value of the Common Stock determined under
(i), (ii) or (iii) of this subsection (e) does not reflect the fair
market value on the particular date, such value as the Committee in
its discretion may determine.
(f) "OPTION" shall mean an option to purchase shares of common stock of
the corporation.
(g) "OPTIONEE" shall mean a person who has been granted an Option under
the Plan.
(h) "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.
(i) "PERSON" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d)
thereof, except that such term shall not include (i) the
Corporation or any of its Affiliates, (ii) a trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation or any of its subsidiaries, (iii) an underwriter
temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by
the stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation.
(j) "RULE 16b-3" shall mean Rule 16b-3 promulgated under Section 16 of
the Exchange Act (or any other comparable
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provisions in effect at the time or times in question).
(k) "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.
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 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 refusal of those members who do not qualify as non-employee directors.
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.
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 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
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prescribe, amend and rescind rules and regulations relating to the Plan;
to determine the terms and provisions of the Option Notices (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 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) and directors (who are not
employees) of the Corporation, its present or future divisions and
Subsidiary Corporations and Parent Corporations and (ii) 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.
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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 15,000,000. The limitation established by the preceding
sentence shall be subject to adjustment as provided in Section 8(j)
hereof.
In the event that any outstanding Option under the Plan for any reason
expires or is canceled, surrendered, exchanged 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. Automatic Option Grants.
(a) MARCH GRANTS. Each employee of the Corporation, or a Subsidiary
Corporation the ("Employer") who has completed at least one year of
employment on or prior to March 2, 1998 and remains in the
continual employ of Employer shall be granted an Option to
purchased 100 shares of Common Stock (the "March Automatic Grants")
on the first business day in March each year (the "March Grant
Date") beginning in 1998 and continuing through March 2002 provided
however, that an employee otherwise eligible for a grant under this
Section 6(a) will not be granted the March Automatic Grant in any
given year if such employee received a grant pursuant to Section 7
hereof on or during the twelve-month period immediately preceding
the relevant March Grant Date.
(b) ANNIVERSARY GRANTS. Each employee of the Employer who does not
qualify for the March Automatic Grants under Section 6(a) above and
remains in the continual employ of the Employer shall be granted an
Option to purchase 100 shares of Common Stock (The "Anniversary
Automatic Grants", and together with the March Automatic Grants,
the "Automatic Grants") on the first business day in the month
following the month that contains the anniversary date of such
employee's employment (the "Anniversary Grant Date" and, together
with the March Grant Date, the "Grant Date") beginning one year
following the employee's
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first day of employment and continuing through December 2002
provided however, that an employee otherwise eligible for a grant
under this Section 6(b) will not be granted the Anniversary
Automatic Grant in any given year if such employee received a grant
pursuant to Section 7 hereof on or during the twelve-month period
immediately preceding the relevant Anniversary Grant Date.
Notwithstanding anything herein to the contrary, no Anniversary
Automatic Grants shall be made until such date as the Plan has
received approval from the Inland Revenue of the United Kingdom (the
"Approval"). Once the Approval has been obtained, all grants that
would have been made pursuant to this section 6(b) (the "Delayed
Grants") will be made as soon as practicable following such approval
(the "Delayed Grant Date" and, together with the March Grant Date
and the Anniversary Grant Date, the "Grant Date").
(c) TERMS OF AUTOMATIC GRANTS. In the event that the Optionee's
Employer ceases to be a direct or indirect subsidiary of the
Corporation or in the event of an Acceleration Event (as defined in
Section 8(j)) no further Automatic Grants will be made to such
Optionee pursuant to this Section 6. The Automatic Grants shall be
at the Fair Market Value on the relevant Grant Date and shall
become exercisable as to 20% on the Grant Date and as to 20% on
each anniversary of the Grant Date, until fully exercisable, as
further described in the Option Notice. The Delayed Grants shall
become exercisable as to 20% on the Delayed Grant Date and as to
20% on each anniversary of the date that would have been the
Anniversary Grant Date, until fully exercisable. The Automatic
Grants and the Delayed Grants shall be subject to the terms set out
in this Plan and in the Option Notice reflecting the grant. For
the avoidance of doubt, this Section 6 may be suspended,
terminated, modified or amended at any time by the Board, subject
to Section 11 hereof.
7. Discretionary Option Grants.
The Committee may make discretionary option grants under this Plan. Such
grants will be subject to the terms set forth in the Option Notice and in
the Plan. The Committee shall determine eligibility for option grants
pursuant to this Section 7 in its sole discretion.
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8. Terms and Conditions of Options.
Each Option granted pursuant to the Plan shall be evidenced by a written
notice (an "Option Notice") from the Corporation to the Optionee, which
Notice shall comply with and be subject to the following terms and
conditions:
(a) NUMBER OF SHARES. Each Option Notice shall state the number of
shares of Common Stock to which the Option relates.
(b) TYPE OF OPTION. Each Option Notice shall specifically identify the
Option as a nonqualified stock option.
(c) OPTION PRICE. Each Option Notice shall state the Option Price, which
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 date the Committee adopts a
resolution expressly granting such Option.
(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 Notice, 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 Notice;
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, deems
appropriate; and further provided, however, that 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
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giving written notice of such exercise to the Committee or to such
individual(s) as the Committee may from time to time designate.
(f) Intentionally Left Blank
(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
transferred (as provided in Section 8(i)) 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 corporate
transaction) 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 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 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 corporate
transaction) 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 retirement (as determined by the
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Committee in its sole discretion), 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 Notice 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(i) 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 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
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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 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.
(3) If there is an "Acceleration Event" while unexercised Options
remain outstanding under the Plan then from and after the date
of the Acceleration Event (the "Acceleration Date"), all
Options that have not expired or terminated in accordance with
the Plan or the Option Notice 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
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exercise of any outstanding Options after the effective date
of such transaction, and the price thereof.
An "Acceleration Event" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs
shall have occurred:
(i) Any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the
Corporation (not including in the securities
beneficially owned by such Person any securities
acquired directly from the Corporation or its
Affiliates) representing 20% or more of the combined
voting power of the Corporation's then outstanding
securities, excluding any Person who becomes such a
Beneficial Owner in connection with a transaction
described in clause (a) of Paragraph (iii) below; or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then
serving: individuals who, on the date hereof,
constitute the Board and any new director (other than a
director whose initial assumption of office is in
connection with an actual or threatened election
contest, including but not limited to a consent
solicitation, relating to the election of directors of
the Corporation) whose appointment or election by the
Board or nomination for election by the Corporation's
stockholders was approved or recommended by a vote of
at least two-thirds (2/3) of the directors then still
in office who either were directors on the date hereof
or whose appointment, election or nomination for
election was previously so approved or recommended; or
(iii) there is consummated a merger or consolidation of the
Corporation or any direct or indirect subsidiary of the
Corporation with any other corporation, other than (a) a
merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately
prior to such merger or consolidation continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity
or any parent thereof) at least 60% of the
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combined voting power of the securities of the
Corporation or such surviving entity or any parent
thereof outstanding immediately after such merger or
consolidation, or (b) a merger or consolidation effected
to implement a recapitalization of the Corporation (or
similar transaction) in which no Person is or becomes
the Beneficial Owner, directly or indirectly, of
securities of the Corporation (not including in the
securities beneficially owned by such Person any
securities acquired directly from the Corporation or its
Affiliates) representing 20% or more of the combined
voting power of the Corporation's then outstanding
securities; or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation
or there is consummated an agreement for the sale or
disposition by the Corporation of all or substantially
all of the Corporation's assets, other than a sale or
disposition by the Corporation of all or substantially
all of the Corporation's assets to an entity, at least
60% of the combined voting power of the voting
securities of which are owned by the stockholders of the
Corporation in substantially the same proportions as
their ownership of the Corporation immediately prior to
such sale.
Notwithstanding the foregoing, an "Acceleration Event" shall
not be deemed to have occurred by virtue of the consummation
of any transaction or series of integrated transactions
immediately following which the record holders of the common
stock of the Corporation immediately prior to such transaction
or series of transactions continue to have substantially the
same proportionate ownership in an entity which owns all or
substantially all of the assets of the Corporation immediately
following such transaction or series of transactions.
(4) 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.
(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
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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.
(l) 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 Notices authorized under the Plan shall
contain such other provisions, including, without limitation, the
imposition of restrictions upon the exercise of an Option and the
inclusion of any condition as the Committee shall deem advisable.
9. Agreement by Optionee Regarding Withholding Taxes.
As a condition of exercise, each Optionee agrees 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 including, without limitation, any
income tax payable by deduction in the United Kingdom; and
(b) the Corporation shall, to the extent permitted or 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 including, without limitation, any income tax payable
by deduction in the United Kingdom, 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.
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. Except as provided in
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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. No amendment to this
Plan shall become effective to the extent that it applies to Approved
Options (as defined in the addendum hereto)unless it is approved by the UK
Inland Revenue.
12. Interpretation.
The Plan is designed and intended to comply with Rule 16b-3 and all
provisions hereof shall be construed in a manner to so comply.
13. Effect of Headings.
The section and subsection headings contained herein are for convenience
only and shall not affect the construction hereof.
14. Governing Law.
The Plan shall be governed by the laws of the State of Delaware.
15. Effective Date of Plan.
The effective date of the Plan is the date the Plan is adopted by the
Board.
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ADDITIONAL SECTIONS FOR UK
16. Purpose.
(a) The purpose of these additional sections for UK Participants is to
obtain Approved Share Option Scheme Status for UK Participants under
the Plan as modified by these additional sections ("the Subplan").
These sections are to be read as a continuation of the Plan and only
modify the Plan as it relates to the Stock Options granted under the
Plan to UK Participants. These sections do not apply to or modify
the Plan in respect of any other participants.
(b) The Board has adopted these additional sections in accordance
with Section 11.
17. Definitions.
(a) The following additional capitalized definitions shall have the
respective meanings set forth below:-
"APPROVED OPTION" means a stock option granted under the Subplan to
a UK Participant while the Subplan is approved by the UK Inland
Revenue under the Taxes Act.
"CONTROL" has the meaning given by Section 840 of the Taxes Act.
"LIMIT" means the limit of (pound)30,000 (thirty thousand pounds
sterling) on the aggregate Fair Market Value of all the Common Stock
or shares which a UK Participant may acquire on the exercise in full
of all unexercised Approved Options granted to him under this
Subplan and other share option plans (other than a savings-related
share option plan) adopted by the Company or any associated company
(as defined by s416 of the Taxes Act) and approved by the UK Inland
Revenue under the Taxes Act or such other amount as may from time to
time be specified by paragraph 28(I) of Schedule 9 to the Taxes Act.
"TAXES ACT" means the (UK) Income and Corporation Taxes Act 1988.
"UK PARTICIPANTS" means a full-time director (that is to say is
required to work not less than 25 hours per week (excluding meal
breaks)) or employee of the Company or its Subsidiaries who has been
selected by the Committee to receive an Approved Option under the
Subplan and is
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not ineligible to participate (that is to say be granted or to
exercise Approved Options) in the Subplan by virtue of paragraph 8
of Schedule 9 to the Taxes Act.
(b) The following definitions in Section 2 shall be modified as set
forth below in relation to Approved Options only and shall be so
construed throughout the Subplan:-
"SUBSIDIARY" means any business entity in which the Corporation owns
directly or indirectly more than fifty per cent (50%) of the total
combined voting power.
"COMMON STOCK" means Common Stock of the Corporation which satisfies
the provisions of paragraphs 10 to 14 inclusive of Schedule 9 to the
Taxes Act.
"FAIR MARKET VALUE" means the market value of Stock determined in
accordance with the provisions of Part VIII of the Taxation of
Chargeable Gains Act 1992 and agreed in advance for the purposes of
the Subplan with the Inland Revenue Shares Valuation Division.
"OPTION" means Approved Options only.
18. Eligibility.
Section 4 of the Plan shall be modified in relation to Approved Options
so that:-
All UK Participants are eligible to participate in the Plan.
19. Terms and Conditions of Options.
(a) Section 8(b) shall be modified in relation to Approved Options to
read:-
"Each Option Notice shall specifically identify the Approved Option
as an "Approved Option"."
(b) Section 8(c) shall be modified in relation to Approved Options to
read:-
"Each Option Notice shall state the Option Price which:-
(1) shall not be less than the nominal value of the Common
Stock; and
(2) subject to Section 8(j) shall not be less than the Fair Market
Value on the date of grant of the Option. An Option shall be
considered to be expressly granted on the date the Committee
adopts a
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resolution expressly granting such Option."
(c) Section 8(d) shall be modified in relation to Approved Options by
replacing the following words:-
"Payment of the purchase price shall be made ......... as determined
by the Committee, or any combination of the foregoing"
with the following words:-
"Within 30 days of the exercise of an Approved Option the Committee
shall allot or procure the transfer of the shares of Common Stock in
respect of which the Option has been validly exercised."
(d) Section 8(f) shall be modified in relation to Approved Options by
inserting the following:-
"No Approved Options shall be granted to UK Participants in excess
of the Limit."
(e) Section 8(g) shall be deleted in relation to Approved Options and be
replaced with the following:-
"Save as otherwise provided in this Subplan, an Approved Option may
not be exercised by the Optionee 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,
and the Optionee has remained continuously so employed since the
date of grant of the Option."
(f) Section 8(h) shall be deleted in relation to Approved Options and be
replaced with the following:-
"(1) An Approved Option may be exercised by the personal
representatives of a deceased UK Participant within the period
of one year following the date of his death provided that such
deceased UK Participant is not precluded by Paragraph 8 of
Schedule 9 from exercising such Approved
Option.
(2) If a UK Participant ceases to be a director or employee of the
Corporation or any Subsidiary on account of injury,
ill-health, disability, redundancy or retirement or any other
reason which the Committee reasonably considers justifies the
exercise of the Approved Option, the Approved Option may be
exercised within the period of three months following such
cessation or, at the discretion of
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the Committee, not later than three months after the first
date following such cessation upon which the Approved Option
could be exercised in circumstances in which section 185(3) of
the Taxes Act would apply."
(g) Section 8(i) shall be deleted in relation to Approved Options and be
replaced with the following:-
"No Option may be transferred, assigned or charged and any purported
transfer assignment or charge shall cease the Option to lapse
forthwith."
(h) Section 8(j)(1) shall be deleted in relation to Approved Options and
be replaced with the following:-
"In the event of any variation of the share capital of the
Corporation by way of capitalization or rights issue, consolidation,
sub-division or reduction of capital or otherwise, the number of
shares of Common Stock subject to any Approved Option and the option
price for each of these shares shall be adjusted in such manner as
the Committee is satisfied is fair and reasonable provided that:-
(1) the aggregate amount payable on the exercise of an Approved
Option in full is not increased;
(2) the option price for a share of Common Stock is not reduced
below its nominal value;
(3) no adjustment shall be made without the prior approval of the
Board of the Inland Revenue; and
(4) following the adjustment the shares of Common Stock continue
to satisfy the conditions specified in Paragraphs 10 to 14
inclusive of Schedule 9."
(i) Section 8(j)(3) shall be modified in relation to Approved Options by
inserting the following:-
"If any company ("the Acquiring Company"):
(1) obtains Control of the Corporation as a result either of
making a general offer to acquire the whole of the issued
share capital of the Corporation which is made on a condition
such that if it is satisfied the person making the offer will
have Control of the Corporation, or making an offer to acquire
all the common stock in the Corporation which is of the same
class as the Common Stock; or
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(2) obtains Control of the Corporation in pursuance of a
compromise or arrangement sanctioned by the court under
section 425 of the (UK) Companies Act 1985 (or legislation
that the Inland Revenue agrees is the overseas equivalent
thereof); or
(3) becomes bound or entitled to acquire common stock in the
Corporation under sections 428 to 430 of the (UK) Companies
Act 1985 (or legislation that the Inland Revenue agrees is the
overseas equivalent thereof);
any UK participant may at any time within:
(4) the period of six months following the offerer obtaining
Control of the Corporation and the satisfaction of any
condition to which the offer was made pursuant to subsection
(1) above;
(5) the period of six months following the court sanctioning the
compromise or arrangement pursuant to subsection (2) above; or
(6) the period during which the Acquiring Company remains bound or
entitled to acquire the Common Stock pursuant to subsection
(3) above;
by agreement with the Acquiring Company release his old Approved
Option ("the Old Option") in consideration of the grant to him of a
new Approved Option ("the New Option") which:
(7) relates to shares in a different company (whether the
Acquiring Company itself or some other company) which on the
assumption that the Acquiring Company were the grantor of the
Approved Option would be a company falling within Paragraph
10(b) or (c) of Schedule 9;
(8) is a right to acquire such number of shares as on acquisition
of the New Option has an aggregate Fair Market Value equal to
the aggregate Fair Market Value of the shares of Common Stock
subject to the Old Option on its release;
(9) has an acquisition price per share such that the aggregate
price payable on complete exercise equals the aggregate option
price which would have been payable on complete exercise of
the Old Option; and
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(10) is otherwise equivalent to the Old Option (as defined in
Paragraph 15(3) of Schedule 9).
The New Option shall, for all other purposes of this Plan, be
treated as having been acquired at the same time as the Old Option
and, following release of the Old Option and the grant of the New
Option, for the purposes of applying these rules thereto:
(11) "Corporation" and "shares" in relation to the New Options
shall be construed as if references to the Corporation and to
the shares of Common Stock were references to the Acquiring
Company and to shares in the Acquiring Company or (as the case
may be) to the other company to which the New Options relate
and to the shares in that other company; and
(12) "Committee" shall mean the board of directors of the Acquiring
Company or that other company or any committee designated to
administer the Plan under Section 3.
(j) Section 8(m) shall be modified in relation to Approved Options so
that the word "objective" is inserted before "condition".
20. Administration of Plans and Amendments.
In relation to Approved Options, Section 11 shall be read as if the
following sentence had been added at the end thereof:-
(a) "No amendments to the Subplan or to the Plan insofar as it applies
to Approved Options shall become effective until they are approved
by the UK Inland Revenue.
(b) No Approved Options may be granted unless and until the Subplan is
approved by the UK Inland Revenue."
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Users/Hochman/General/NTL 1998 Non-Qualified Stock Option Plan
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