RESTRICTED STOCK AGREEMENT
Exhibit 10.3
EXECUTION COPY
RESTRICTED STOCK AGREEMENT,
dated as of 3 July 2009, between Virgin Media Inc., a Delaware corporation
(the “Company”), and
Xxxxx X. Xxxxxx (the “Executive”), effective as of
1 May 2009.
WHEREAS,
the Executive is employed by the Company under the Second Amended & Restated
Employment Agreement, effective as of 1 May 2009 (the “Employment Agreement”) and
which has a term thereunder which expires on 30 December 2010 (such term, as may
be extended by amendment of the Employment Agreement, the “Term”);
WHEREAS,
the Compensation Committee of the Board of Directors of the Company (the “Compensation Committee”) has
reviewed and approved the terms of this Agreement and the Employment
Agreement;
WHEREAS,
the Company wishes to grant to the Executive, and the Executive wishes to accept
from the Company, shares of common stock of the Company, par value $0.01 per
share (the “Restricted
Stock”), to be granted pursuant to the Virgin Media Inc. 2006 Stock
Incentive Plan (the “Plan”);
NOW,
THEREFORE, the parties hereto agree as follows:
1. Grant of Restricted
Stock. The Company hereby grants to the Executive, and the
Executive hereby accepts from the Company, 625,000 shares of Restricted Stock on
the terms and conditions set forth in this Agreement. This Agreement
is also subject to the terms and conditions set forth in the
Plan. Capitalized terms used but not defined herein shall have the
meanings set forth in the Plan.
2. Rights of Executive. Except
as otherwise provided in this Agreement, the Executive shall be entitled, at all
times on and after the date that the shares of Restricted Stock are issued, to
exercise all the rights of a stockholder with respect to the shares of
Restricted Stock (whether or not the Transfer Restrictions thereon shall have
lapsed), including the right to vote the shares of Restricted Stock and the
right, subject to Section 6 hereof, to receive dividends
thereon. Notwithstanding the foregoing, prior to the “Release Date”
(as defined in Section 4.1), the Executive shall not be entitled to transfer,
sell, pledge, hypothecate, assign or otherwise dispose of or encumber, the
shares of Restricted Stock (collectively, the “Transfer Restrictions”),
except that, as provided in Section 4.1, the Executive may sell such number of
shares as is reasonably necessary to pay for any US federal or state income tax
that may apply as a result of vesting upon the occurrence of the relevant Lapse
Date but in no event more than 45% of such shares.
3. Vesting and Lapse of
Transfer Restrictions. The Transfer Restrictions on the
Restricted Stock shall lapse and the Restricted Stock granted hereunder shall
vest as follows:
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(i)
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Annual Group Simple Cash
Flow. As to the number of shares set forth below if performance
conditions relating to annual group simple cash flow attributable to each
of the Company’s fiscal years shown below, established by the Compensation
Committee in respect of the Company’s 2009-2011 long-term incentive plan,
have been met, so long as the Executive has remained continuously employed
by the Company from the date of commencement of his employment through
December 31 of the relevant fiscal year shown
below:
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No of Shares
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Relevant Fiscal Year
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Lapse Date
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187,500
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2009
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May
15, 2010
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125,000
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2010
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May
15,
2011
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Notwithstanding
anything to the contrary provided in the Plan or otherwise, the Transfer
Restrictions on all of these shares of Restricted Stock which are then
outstanding shall not lapse and such shares of Restricted Stock shall not
vest solely due to the occurrence of an Acceleration
Event.
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(ii)
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Comprehensive List of
Objectives. As to the number of shares set forth below
if performance conditions relating to a comprehensive list of objectives
established by the Compensation Committee in respect of the Company’s
fiscal year below have been met, so long as the Executive has remained
continuously employed by the Company from the date of commencement of his
employment through December 31 of the relevant fiscal year shown
below:
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No of Shares
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Relevant Fiscal Year
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Lapse Date
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187,500
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2009
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May
15, 2010
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125,000
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2010
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May
15, 2011
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Notwithstanding
anything to the contrary provided in the Plan or otherwise, the Transfer
Restrictions on all of these shares of Restricted Stock which are then
outstanding shall not lapse and such shares of Restricted Stock shall not
vest solely due to the occurrence of an Acceleration
Event.
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The
Compensation Committee shall meet to determine whether such performance
conditions have been met promptly after the completion by the Company of the
financial reports or other information in respect of an applicable fiscal year
necessary to make such determination. The restrictions on the shares
of Restricted Stock subject to this Section 3.1 shall lapse on the date that the
Compensation Committee determines that the applicable performance conditions
have been met in respect of an applicable fiscal year (such date, the “Lapse Date”), and the shares
of Restricted Stock shall be forfeited if the Compensation Committee determines
that such performance conditions have not been met. In no event shall
the date of such determination occur later than the last day of the fiscal year
immediately following the fiscal year to which the performance conditions
relate.
4. Escrow and Delivery of
Shares.
4.1 Certificates
representing the shares of Restricted Stock shall be issued and held by the
Company in escrow and shall remain in the custody of the Company until the
earlier of (i) the final Lapse Date (May 15, 2011) or (ii) the date of the
Executive’s termination of employment with respect to shares of Restricted Stock
that would vest on such date pursuant to the terms of the Employment Agreement
(the earlier of (i) and (ii), the “Release Date”); provided, that in
connection with any Lapse Date, the Company shall deliver to the Executive a
sufficient number of shares that have become vested on such Lapse Date with a
value equal to the Withholding Tax requirements, if any (but in no event more
than 45% of such vested shares) (the “Withholding
Shares”). As soon as practicable after the Release Date, the
shares of Restricted Stock that have become vested pursuant to Section 3 hereof
that have not previously been delivered to the Executive shall be delivered to
the Executive or the Executive’s estate, subject to the delivery of any
documents which the Company in its discretion may require as a condition to the
issuance of shares, and so long as the Executive has satisfied all applicable
Withholding Tax requirements with respect to the Restricted Stock.
4.2 The
Executive shall receive, hold, sell, or otherwise dispose of those shares
delivered to the Executive pursuant to Section 4.1 free and clear of the
Transfer Restrictions, but subject to compliance with all federal and state
securities laws.
4.3 Prior
to the Release Date (or such earlier date that is applicable to the Withholding
Shares), each stock certificate shall bear a legend in substantially the
following form:
“This
certificate and the shares of stock represented hereby are subject to the terms
and conditions (including forfeiture, restrictions against transfer and rights
of repurchase, if applicable) contained in the Restricted Stock Agreement (the
“Agreement”) between the registered owner of the shares represented hereby and
the Company. Release from such terms and conditions shall be made
only in accordance with the provisions of the Agreement, a copy of which is on
file in the office of the Secretary of Virgin Media Inc.”
5. Effect of Termination of
Employment for any Reason. Upon termination of the Executive’s
employment with the Company and its Affiliates, if applicable, for any reason,
the Executive shall forfeit the shares of Restricted Stock which are then
subject to the Transfer Restrictions, and, from and after such forfeiture, such
shares of Restricted Stock shall cease to be outstanding and the Executive shall
have no rights with respect thereto; provided, that, if
the Executive’s employment shall terminate after the end of a fiscal year of the
Company and prior to the date of the determination as to whether the performance
conditions applicable to such fiscal year have been met, the shares of
Restricted Stock subject to vesting in respect of such fiscal year shall remain
outstanding following the termination of the Executive’s employment and shall
vest or be forfeited when such determination is made, in either case based on
such determination; and provided, further,
that the shares of Restricted Stock shall be subject to vesting to the extent
provided in the Employment Agreement.
6. Dividend
Rights. All dividends declared and paid by the Company on
shares of Restricted Stock shall be deferred until the lapsing of the Transfer
Restrictions pursuant to Section 3 hereof (and shall be subject to forfeiture
upon forfeiture of the shares of Restricted Stock as to which such deferred
dividends relate). The deferred dividends shall be held by the
Company for the account of the Executive. Upon the Lapse Date, the
dividends allocable to the shares of Restricted Stock as to which the Transfer
Restrictions have lapsed shall be paid to the Executive (without
interest). The Company may require that the Executive invest any cash
dividends received in additional Restricted Stock which shall be subject to the
same conditions and restrictions as the Restricted Stock granted under this
Agreement.
7. No Right to Continued Employment. Nothing
in this Agreement shall be interpreted or construed to confer upon the Executive
any right with respect to continuance of employment by the Company or any of its
Affiliates, nor shall this Agreement interfere in any way with the right of the
Company or any such Affiliate to terminate the Executive’s employment at any
time.
8. Withholding of Taxes. The
Executive shall pay to the Company, or the Company and the Executive shall agree
on such other arrangements necessary for the Executive to pay, the applicable
federal, state and local income taxes required by law to be withheld (the “Withholding Taxes”), if any,
upon the vesting and delivery of the shares. The Company shall have
the right to deduct from any payment of cash to the Executive an amount equal to
the Withholding Taxes in satisfaction of the Executive’s obligation to pay
Withholding Taxes.
9. Modification
of Agreement. This Agreement may be modified, amended,
suspended or terminated, and any terms or conditions may be waived, but only by
a written instrument executed by the parties hereto.
10. Severability. Should
any provision of this Agreement be held by a court of competent jurisdiction to
be unenforceable or invalid for any reason, the remaining provisions of this
Agreement shall not be affected by such holding and shall continue in full force
and effect in accordance with their terms.
11. Governing
Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York without giving effect to the conflicts of laws principles
thereof.
12. Successors in Interest;
Transfer. This Agreement shall inure to the benefit of and be
binding upon any successor to the Company. This Agreement shall inure
to the benefit of the Executive’s heirs, executors, administrators and
successors. All obligations imposed upon the Executive and all rights
granted to the Company under this Agreement shall be binding upon the
Executive’s heirs, executors, administrators and successors. This
Agreement is not assignable by the Executive.
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remainder of this page is intentionally blank.]
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/s/ Xxxxx X. Xxxx
Name: Xxxxx
X. Xxxx
Title: Secretary
and General Counsel
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EXECUTIVE
/s/ Xxxxx X. Xxxxxx
Xxxxx
X. Xxxxxx
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