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EXHIBIT 10.38
1996 PLAN
TCOMA NQSO/SAR
7/23/97 GRANT
TELE-COMMUNICATIONS, INC.
1996 INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AND
STOCK APPRECIATION RIGHTS AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 23rd day of
July, 1997 (the "Grant Date"), by and between TELE-COMMUNICATIONS, INC., a
Delaware corporation (the "Company"), and the person signing adjacent to the
caption "Grantee" on the signature page hereof (the "Grantee").
The Company has adopted the Tele-Communications, Inc. 1996
Incentive Plan (the "Plan"), a copy of which is appended to this Agreement as
Exhibit A and by this reference made a part hereof, for the benefit of eligible
employees of the Company and its Subsidiaries. Capitalized terms used and not
otherwise defined herein shall have the meaning ascribed thereto in the Plan.
Pursuant to the Plan, the Compensation Committee of the Board
(the "Committee"), which has been assigned responsibility for administering the
Plan, has determined that it would be in the interest of the Company and its
stockholders to grant the options and rights provided herein in order to
provide Grantee with additional remuneration for services rendered, to
encourage Grantee to remain in the employ of the Company or its Subsidiaries
and to increase Grantee's personal interest in the continued success and
progress of the Company.
The Company and Grantee therefore agree as follows:
1. GRANT OF OPTION. Subject to the terms and conditions herein,
the Company grants to the Grantee during the period commencing on July 23, 1997
and expiring at 5:00 p.m., Denver, Colorado time ("Close of Business") on July
23, 2007 (the "Option Term"), subject to earlier termination as provided in
paragraphs 8 and 12(b) below, an option to purchase from the Company, at the
price per share set forth on Schedule 1 hereto (the "TCOMA Option Price"), the
number of shares of Series A TCI Group Common Stock ("TCOMA") set forth on said
Schedule 1 (the "TCOMA Option Shares"). The TCOMA Option Price and TCOMA
Option Shares are subject to adjustment pursuant to paragraph 12 below. This
option is as a "Nonqualified Stock Option" and is hereinafter referred to as
the "TCOMA Option."
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2. GRANT OF STOCK APPRECIATION RIGHTS. Subject to the terms and
conditions herein and in tandem with the TCOMA Option, the Grantee shall also
have, during the Option Term, subject to earlier termination as provided in
paragraphs 8 and 12(b) below, a stock appreciation right with respect to each
TCOMA Option Share (individually, a "TCOMA Tandem SAR" and collectively, the
"TCOMA Tandem SARs"). Upon exercise of a TCOMA Tandem SAR in accordance with
this Agreement, the Company shall, subject to paragraph 6 below, make payment
as follows:
(a) the amount of payment shall equal the amount, if any,
by which the Fair Market Value of the TCOMA Option Share on the date
of exercise exceeds the TCOMA Option Price; and
(b) payment of the amount determined in accordance with
clause (i) shall be made in shares of TCOMA (valued at their Fair
Market Value as of the date of exercise of such TCOMA Tandem SAR), or,
in the sole discretion of the Compensation Committee of the Board of
Directors of the Company (the "Committee"), in cash, or partly in cash
and partly in shares of TCOMA.
3. REDUCTION UPON EXERCISE. The exercise of any number of TCOMA
Tandem SARs shall cause a corresponding reduction in the number of TCOMA Option
Shares which shall apply against the TCOMA Option Shares then available for
purchase. The exercise of the TCOMA Option to purchase any number of TCOMA
Option Shares shall cause a corresponding reduction in the number of TCOMA
Tandem SARs.
4. CONDITIONS OF EXERCISE. Unless otherwise determined by the
Committee in its sole discretion, the TCOMA Option and TCOMA Tandem SARs are
exercisable only in accordance with the conditions stated in this paragraph.
(a) Except as otherwise provided in paragraph 12(b) below
or in the last sentence of this subparagraph (a), the TCOMA Option
shall not be exercisable until July 23, 1998 and the TCOMA Option may
only be exercised to the extent the TCOMA Option Shares have become
available for purchase in accordance with the following schedule:
Percentage of TCOMA Option
Date Shares Available for Purchase
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July 23, 1998 20%
July 23, 1999 40%
July 23, 2000 60%
July 23, 2001 80%
July 23, 2002 100%
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Notwithstanding the foregoing, all TCOMA Option Shares shall become
available for purchase on the date of Grantee's termination of
employment if (i) Grantee's employment with the Company and its
Subsidiaries shall terminate by reason of Disability or good reason
(as defined herein) or (ii) Grantee dies while employed by the Company
or a Subsidiary.
(b) A TCOMA Tandem SAR with respect to an TCOMA Option
Share shall be exercisable only if the TCOMA Option Share is then
available for purchase in accordance with subparagraph (a).
(c) To the extent the TCOMA Option or TCOMA Tandem SARs
become exercisable, such TCOMA Option or TCOMA Tandem SARs may be
exercised in whole or in part (at any time or from time to time,
except as otherwise provided herein) until expiration of the Option
Term or earlier termination thereof.
(d) Grantee acknowledges and agrees that the Committee
may, in its discretion and as contemplated by Section 7.5 of the Plan,
adopt rules and regulations from time to time after the date hereof
with respect to the exercise of TCOMA Tandem SARs and that the
exercise by Grantee of the TCOMA Tandem SARs will be subject to the
further condition that such exercise is made in accordance with all
such rules and regulations as the Committee may determine are
applicable thereto.
"Good reason" for purposes of the Agreement shall be deemed to
have occurred upon the relocation of the office location as assigned to Grantee
by the Company, without the Grantee's consent, to a location outside of the
Denver and Boulder-Longmont Primary Metropolitan Statistical Areas (as so
designated on the Grant Date), but only if Grantee's office location on the
date of grant is in either such area.
5. MANNER OF EXERCISE. The TCOMA Option or a TCOMA Tandem SAR
shall be considered exercised (as to the number of TCOMA Option Shares or TCOMA
Tandem SARs specified in the notice referred to in subparagraph (a) below) on
the latest of (i) the date of exercise designated in the written notice
referred to in subparagraph (a) below, (ii) if the date so designated is not a
business day, the first business day following such date or (iii) the earliest
business day by which the Company has received all of the following:
(a) Written notice, in such form as the Committee may
require, designating, among other things, the date of exercise, the
number of TCOMA Option Shares to be purchased and/or the number of
TCOMA Tandem SARs to be exercised;
(b) If the TCOMA Option is to be exercised, payment of
the TCOMA Option Price for each TCOMA Option Share to be purchased in
cash or in such other form, or combination of forms, of payment
contemplated by Section 6.6(a) of the Plan as the Committee may
permit; provided, however, that any shares of TCOMA (or, if
applicable, shares of Series B TCI Group Common Stock ("TCOMB"))
delivered in payment of the
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TCOMA Option Price, if such form of payment is so permitted by the
Committee, shall be shares that the Grantee has owned for a period of
at least six months prior to the date of exercise, and provided,
further, that, notwithstanding clause (v) of Section 6.6(a) of the
Plan, TCOMA Option Shares may not be withheld in payment or partial
payment of the TCOMA Option Price; and
(c) Any other documentation that the Committee may
reasonably require.
6. MANDATORY WITHHOLDING FOR TAXES. Grantee acknowledges and
agrees that the Company shall deduct from the cash and/or shares of TCOMA
otherwise payable or deliverable upon exercise of the TCOMA Option or a TCOMA
Tandem SAR an amount of cash and/or number of shares of TCOMA (valued at their
Fair Market Value on the date of exercise) that is equal to the amount of all
federal, state and local taxes required to be withheld by the Company upon such
exercise, as determined by the Committee.
7. DELIVERY BY THE COMPANY. As soon as practicable after receipt
of all items referred to in paragraph 5, and subject to the withholding
referred to in paragraph 6, the Company shall deliver to the Grantee
certificates issued in Grantee's name for the number of shares of TCOMA
purchased by exercise of the TCOMA Option and for the number of shares of TCOMA
to which the Grantee is entitled by the exercise of TCOMA Tandem SARs and any
cash payment to which the Grantee is entitled by the exercise of TCOMA Tandem
SARs. If delivery is by mail, delivery of shares of TCOMA shall be deemed
effected for all purposes when a stock transfer agent of the Company shall have
deposited the certificates in the United States mail, addressed to the Grantee,
and any cash payment shall be deemed effected when a Company check, payable to
Grantee and in an amount equal to the amount of the cash payment, shall have
been deposited in the United States mail, addressed to the Grantee.
8. EARLY TERMINATION OF OPTION AND TANDEM SARS. Unless otherwise
determined by the Committee in its sole discretion, the TCOMA Option and TCOMA
Tandem SARs shall terminate, prior to the expiration of the Option Term, at the
time specified below:
(a) Subject to paragraph 8(b), if Grantee's employment
with the Company and its Subsidiaries terminates other than (i) by the
Company for "cause" (as defined in Section 11.2(b) of the Plan) or
(ii) by reason of death or Disability, then the TCOMA Option and all
TCOMA Tandem SARs shall terminate at the Close of Business on the
first business day following the expiration of the 90-day period which
began on the date of termination of Grantee's employment;
(b) If Grantee dies while employed by the Company or a
Subsidiary, or prior to the expiration of a period of time following
termination of Grantee's employment during which the TCOMA Option and
TCOMA Tandem SARs remain exercisable as provided in paragraph (a), the
TCOMA Option and all TCOMA Tandem SARs shall terminate at the Close of
Business on the first business day following the expiration of the
one-year period which began on the date of death;
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(c) Subject to paragraph 8(b), if Grantee's employment
with the Company and its Subsidiaries terminates by reason of
Disability, then the TCOMA Option and all TCOMA Tandem SARs shall
terminate at the Close of Business on the first business day following
the expiration of the one-year period which began on the date of
termination of Grantee's employment;
(d) If Grantee's employment with the Company and its
Subsidiaries is terminated by the Company for "cause" (as defined in
Section 11.2(b) of the Plan), then the TCOMA Option and all TCOMA
Tandem SARs shall terminate immediately upon such termination of
Grantee's employment.
In any event in which the TCOMA Option and TCOMA Tandem SARs
remain exercisable for a period of time following the date of termination of
Grantee's employment as provided above, the TCOMA Option and TCOMA Tandem SARs
may be exercised during such period of time only to the extent the same were
exercisable as provided in paragraph 4 above on such date of termination of
Grantee's employment. A change of employment is not a termination of
employment within the meaning of this paragraph 8 provided that, after giving
effect to such change, the Grantee continues to be an employee of the Company
or any Subsidiary. Notwithstanding any period of time referenced in this
paragraph 8 or any other provision of this paragraph that may be construed to
the contrary, the TCOMA Option and all TCOMA Tandem SARs shall in any event
terminate upon the expiration of the Option Term.
9. AUTOMATIC EXERCISE OF TCOMA TANDEM SARS. Immediately prior to
the termination of the TCOMA Option, as provided in paragraph 8 above, or the
expiration of the Option Term, all remaining TCOMA Tandem SARs shall be deemed
to have been exercised by the Grantee.
10. NONTRANSFERABILITY OF TCOMA OPTION AND TCOMA TANDEM SARS.
During Grantee's lifetime, the TCOMA Option and TCOMA Tandem SARs are not
transferable (voluntarily or involuntarily) other than pursuant to a domestic
relations order and, except as otherwise required pursuant to a domestic
relations order, are exercisable only by the Grantee or Grantee's court
appointed legal representative. The Grantee may designate a beneficiary or
beneficiaries to whom the TCOMA Option and TCOMA Tandem SARs shall pass upon
Grantee's death and may change such designation from time to time by filing a
written designation of beneficiary or beneficiaries with the Committee on the
form annexed hereto as Exhibit B or such other form as may be prescribed by the
Committee, provided that no such designation shall be effective unless so filed
prior to the death of Grantee. If no such designation is made or if the
designated beneficiary does not survive the Grantee's death, the TCOMA Option
and TCOMA Tandem SARs shall pass by will or the laws of descent and
distribution. Following Grantee's death, the TCOMA Option and any TCOMA Tandem
SARs, if otherwise exercisable, may be exercised by the person to whom such
option or right passes accordingly to the foregoing and such person shall be
deemed the Grantee for purposes of any applicable provisions of this Agreement.
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11. NO SHAREHOLDER RIGHTS. The Grantee shall not be deemed for
any purpose to be, or to have any of the rights of, a stockholder of the
Company with respect to any shares of TCOMA as to which this Agreement relates
until such shares shall have been issued to Grantee by the Company.
Furthermore, the existence of this Agreement shall not affect in any way the
right or power of the Company or its stockholders to accomplish any corporate
act, including, without limitation, the acts referred to in Section 11.18 of
the Plan.
12. ADJUSTMENTS.
(a) The TCOMA Option and TCOMA Tandem SARs shall be
subject to adjustment (including, without limitation, as to the number
of TCOMA Option Shares and the TCOMA Option Price per share) in the
sole discretion of the Committee and in such manner as the Committee
may deem equitable and appropriate in connection with the occurrence
of any of the events described in Section 4.2 of the Plan following
the Grant Date.
(b) In the event of any Approved Transaction, Board
Change or Control Purchase, the TCOMA Option and all TCOMA Tandem SARs
shall become exercisable in full without regard to paragraph 4(a);
provided, however, that to the extent not theretofore exercised the
TCOMA Option and all TCOMA Tandem SARs shall terminate upon the first
to occur of the consummation of the Approved Transaction, the
expiration of the TCOMA Option Term or the earlier termination of the
TCOMA Option and TCOMA Tandem SARs pursuant to paragraph 8 hereof.
Notwithstanding the foregoing, the Committee may, in its discretion,
determine that the TCOMA Option and TCOMA Tandem SARs will not become
exercisable on an accelerated basis in connection with an Approved
Transaction and/or will not terminate if not exercised prior to
consummation of the Approved Transaction, if the Board or the
surviving or acquiring corporation, as the case may be, shall have
taken or made effective provision for the taking of such action as in
the opinion of the Committee is equitable and appropriate to
substitute a new Award for the Award evidenced by this Agreement or to
assume this Agreement and the Award evidenced hereby and in order to
make such new or assumed Award, as nearly as may be practicable,
equivalent to the Award evidenced by this Agreement as then in effect
(but before giving effect to any acceleration of the exercisability
hereof unless otherwise determined by the Committee), taking into
account, to the extent applicable, the kind and amount of securities,
cash or other assets into or for which the TCOMA may be changed,
converted or exchanged in connection with the Approved Transaction.
13. RESTRICTIONS IMPOSED BY LAW. Without limiting the generality
of Section 11.9 of the Plan, the Grantee agrees that Grantee will not exercise
the TCOMA Option or any TCOMA Tandem SAR and that the Company will not be
obligated to deliver any shares of TCOMA or make any cash payment, if counsel
to the Company determines that such exercise, delivery or payment would violate
any applicable law or any rule or regulation of any governmental authority or
any rule or regulation of, or agreement of the Company with, any
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securities exchange or association upon which the TCOMA is listed or quoted.
The Company shall in no event be obligated to take any affirmative action in
order to cause the exercise of the TCOMA Option or any TCOMA Tandem SAR or the
resulting delivery of shares of TCOMA or other payment to comply with any such
law, rule, regulation or agreement.
14. NOTICE. Unless the Company notifies the Grantee in writing of
a different procedure, any notice or other communication to the Company with
respect to this Agreement shall be in writing and shall be:
(a) delivered personally to the following address:
Tele-Communications, Inc.
0000 XXX Xxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000-0000
or
(b) sent by first class mail, postage prepaid and
addressed as follows:
Tele-Communications, Inc.
c/o General Counsel, Tele-Communications,
Inc.
X.X. Xxx 0000
Xxxxxx, Xxxxxxxx 00000
Any notice or other communication to the Grantee with respect to this Agreement
shall be in writing and shall be delivered personally, or shall be sent by
first class mail, postage prepaid, to Grantee's address as listed in the
records of the Company on the Grant Date, unless the Company has received
written notification from the Grantee of a change of address.
15. AMENDMENT. Notwithstanding any other provisions hereof, this
Agreement may be supplemented or amended from time to time as approved by the
Committee as contemplated by Section 11.8(b) of the Plan. Without limiting the
generality of the foregoing, without the consent of the Grantee,
(a) this Agreement may be amended or supplemented (i) to
cure any ambiguity or to correct or supplement any provision herein
which may be defective or inconsistent with any other provision
herein, or (ii) to add to the covenants and agreements of the Company
for the benefit of Grantee or surrender any right or power reserved to
or conferred upon the Company in this Agreement, subject, however, to
any required approval of the Company's stockholders and, provided, in
each case, that such changes or corrections shall not adversely affect
the rights of Grantee with respect to the Award evidenced hereby, or
(iii) to make such other changes as the Company, upon advice of
counsel, determines are necessary or advisable because of the adoption
or promulgation of, or change in or of the interpretation of, any law
or governmental rule or regulation, including any applicable federal
or state securities laws; and
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(b) subject to Section 11.8(b) of the Plan and any
required approval of the Company's stockholders, the Award evidenced
by this Agreement may be canceled by the Committee and a new Award
made in substitution therefor, provided that the Award so substituted
shall satisfy all of the requirements of the Plan as of the date such
new Award is made and no such action shall adversely affect the TCOMA
Option or any TCOMA Tandem SAR to the extent then exercisable.
16. GRANTEE EMPLOYMENT. Nothing contained in this Agreement, and
no action of the Company or the Committee with respect hereto, shall confer or
be construed to confer on the Grantee any right to continue in the employ of
the Company or any of its Subsidiaries or interfere in any way with the right
of the Company or any employing Subsidiary to terminate the Grantee's
employment at any time, with or without cause; subject, however, to the
provisions of any employment agreement between the Grantee and the Company or
any Subsidiary.
17. GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the internal laws of the State of Delaware.
18. CONSTRUCTION. References in this Agreement to "this
Agreement" and the words "herein," "hereof," "hereunder" and similar terms
include all Exhibits and Schedules appended hereto, including the Plan. This
Agreement is entered into, and the Award evidenced hereby is granted, pursuant
to the Plan and shall be governed by and construed in accordance with the Plan
and the administrative interpretations adopted by the Committee thereunder.
All decisions of the Committee upon questions regarding the Plan or this
Agreement shall be conclusive. Unless otherwise expressly stated herein, in
the event of any inconsistency between the terms of the Plan and this
Agreement, the terms of the Plan shall control. The headings of the paragraphs
of this Agreement have been included for convenience of reference only, are not
to be considered a part hereof and shall in no way modify or restrict any of
the terms or provisions hereof.
19. DUPLICATE ORIGINALS. The Company and the Grantee may sign any
number of copies of this Agreement. Each signed copy shall be an original, but
all of them together represent the same agreement.
20. RULES BY COMMITTEE. The rights of the Grantee and obligations
of the Company hereunder shall be subject to such reasonable rules and
regulations as the Committee may adopt from time to time hereafter.
21. ENTIRE AGREEMENT. This Agreement is in satisfaction of and in
lieu of all prior discussions and agreements, oral or written, between the
Company and Grantee regarding the subject matter hereof. Grantee and the
Company hereby declare and represent that no promise or agreement not herein
expressed has been made and that this Agreement contains the entire agreement
between the parties hereto with respect to the TCOMA Options and TCOMA Tandem
SARs and replaces and makes null and void any prior agreements between Grantee
and the Company regarding the TCOMA Options.
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22. GRANTEE ACCEPTANCE. Grantee shall signify acceptance of the
terms and conditions of this Agreement by signing in the space provided at the
end hereof and returning a signed copy to the Company.
TELE-COMMUNICATIONS, INC.
By:
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Name: Xxxxxxx X. Xxxxx
Title: Executive Vice President
ACCEPTED:
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Schedule 1 to Non-Qualified Stock Option
and Stock Appreciation Rights Agreement
dated as of July 23, 1997
TELE-COMMUNICATIONS, INC. 1996 INCENTIVE PLAN
Grantee:
Grant Date: July 23, 1997
Option Price: $_____ per share
Option Shares: __________ shares of Series A TCI Group Common Stock
("TCOMA"), $_____ par value per share.
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Exhibit B to Non-Qualified Stock Option
and Stock Appreciation Rights Agreement
dated as of July 23, 1997
TELE-COMMUNICATIONS, INC. 1996 INCENTIVE PLAN
DESIGNATION OF BENEFICIARY
I, ___________________________________________ (the "Grantee"), hereby
declare that upon my death __________________________________________ (the
Name
"Beneficiary") of _____________________________________________________________,
Street Address City State Zip Code
who is my _________________________________________________, shall be entitled
Relationship to Grantee
to the TCOMA Option, TCOMA Tandem SARs and all other rights accorded the Grantee
by the above-referenced grant agreement (the "Agreement").
It is understood that this Designation of Beneficiary is made pursuant
to the Agreement and is subject to the conditions stated herein, including the
Beneficiary's survival of the Grantee's death. If any such condition is not
satisfied, such rights shall devolve according to the Grantee's will or the
laws of descent and distribution.
It is further understood that all prior designations of beneficiary
under the Agreement are hereby revoked and that this Designation of Beneficiary
may only be revoked in writing, signed by the Grantee, and filed with the
Company prior to the Grantee's death.
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Date Grantee
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