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EXHIBIT 10.39
1996 PLAN
TCIVA 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 "TCIVA Option Price"), the
number of shares of Series A TCI Ventures Group Common Stock ("TCIVA") set forth
on said Schedule 1 (the "TCIVA Option Shares"). The TCIVA Option Price and TCIVA
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
"TCIVA Option."
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2. GRANT OF STOCK APPRECIATION RIGHTS. Subject to the terms and
conditions herein and in tandem with the TCIVA 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
TCIVA Option Share (individually, a "TCIVA Tandem SAR" and collectively, the
"TCIVA Tandem SARs"). Upon exercise of a TCIVA 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 TCIVA Option Share on the date of
exercise exceeds the TCIVA Option Price; and
(b) payment of the amount determined in accordance with clause
(i) shall be made in shares of TCIVA (valued at their Fair Market Value
as of the date of exercise of such TCIVA 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 TCIVA.
3. REDUCTION UPON EXERCISE. The exercise of any number of TCIVA
Tandem SARs shall cause a corresponding reduction in the number of TCIVA Option
Shares which shall apply against the TCIVA Option Shares then available for
purchase. The exercise of the TCIVA Option to purchase any number of TCIVA
Option Shares shall cause a corresponding reduction in the number of TCIVA
Tandem SARs.
4. CONDITIONS OF EXERCISE. Unless otherwise determined by the
Committee in its sole discretion, the TCIVA Option and TCIVA 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 TCIVA Option shall not
be exercisable until July 23, 1998 and the TCIVA Option may only be
exercised to the extent the TCIVA Option Shares have become available
for purchase in accordance with the following schedule:
Percentage of TCIVA 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%
Notwithstanding the foregoing, all TCIVA Option Shares shall become
available for purchase on the date of Grantee's termination of
employment if (i) Grantee's employment
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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 TCIVA Tandem SAR with respect to an TCIVA Option Share
shall be exercisable only if the TCIVA Option Share is then available
for purchase in accordance with subparagraph (a).
(c) To the extent the TCIVA Option or TCIVA Tandem SARs become
exercisable, such TCIVA Option or TCIVA 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 TCIVA Tandem SARs and that the exercise by
Grantee of the TCIVA 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 TCIVA Option or a TCIVA Tandem SAR shall
be considered exercised (as to the number of TCIVA Option Shares or TCIVA 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
TCIVA Option Shares to be purchased and/or the number of TCIVA Tandem
SARs to be exercised;
(b) If the TCIVA Option is to be exercised, payment of the TCIVA
Option Price for each TCIVA 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 TCIVA (or, if applicable, shares of Series
B TCI Ventures Group Common Stock ("TCIVB")) delivered in payment of
the TCIVA 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
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date of exercise, and provided, further, that, notwithstanding clause
(v) of Section 6.6(a) of the Plan, TCIVA Option Shares may not be
withheld in payment or partial payment of the TCIVA 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 TCIVA otherwise
payable or deliverable upon exercise of the TCIVA Option or a TCIVA Tandem SAR
an amount of cash and/or number of shares of TCIVA (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 TCIVA purchased by exercise of the
TCIVA Option and for the number of shares of TCIVA to which the Grantee is
entitled by the exercise of TCIVA Tandem SARs and any cash payment to which the
Grantee is entitled by the exercise of TCIVA Tandem SARs. If delivery is by
mail, delivery of shares of TCIVA 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 TCIVA Option and TCIVA
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 TCIVA Option and all TCIVA
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 TCIVA Option and
TCIVA Tandem SARs remain exercisable as provided in paragraph (a), the
TCIVA Option and all TCIVA 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 TCIVA Option and all TCIVA 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 TCIVA Option and all TCIVA
Tandem SARs shall terminate immediately upon such termination of
Grantee's employment.
In any event in which the TCIVA Option and TCIVA Tandem SARs
remain exercisable for a period of time following the date of termination of
Grantee's employment as provided above, the TCIVA Option and TCIVA 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
TCIVA Option and all TCIVA Tandem SARs shall in any event terminate upon the
expiration of the Option Term.
9. AUTOMATIC EXERCISE OF TCIVA TANDEM SARS. Immediately prior to the
termination of the TCIVA Option, as provided in paragraph 8 above, or the
expiration of the Option Term, all remaining TCIVA Tandem SARs shall be deemed
to have been exercised by the Grantee.
10. NONTRANSFERABILITY OF TCIVA OPTION AND TCIVA TANDEM SARS. During
Grantee's lifetime, the TCIVA Option and TCIVA 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 TCIVA Option and TCIVA 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 TCIVA Option and TCIVA Tandem SARs shall
pass by will or the laws of descent and distribution. Following Grantee's death,
the TCIVA Option and any TCIVA 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 TCIVA 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 TCIVA Option and TCIVA Tandem SARs shall be subject to
adjustment (including, without limitation, as to the number of TCIVA
Option Shares and the TCIVA 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 TCIVA Option and all TCIVA Tandem SARs shall
become exercisable in full without regard to paragraph 4(a); provided,
however, that to the extent not theretofore exercised the TCIVA Option
and all TCIVA Tandem SARs shall terminate upon the first to occur of
the consummation of the Approved Transaction, the expiration of the
TCIVA Option Term or the earlier termination of the TCIVA Option and
TCIVA Tandem SARs pursuant to paragraph 8 hereof. Notwithstanding the
foregoing, the Committee may, in its discretion, determine that the
TCIVA Option and TCIVA 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 TCIVA 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
TCIVA Option or any TCIVA Tandem SAR and that the Company will not be obligated
to deliver any shares of TCIVA 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 securities exchange
or association upon which the TCIVA is listed or quoted. The Company shall in no
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event be obligated to take any affirmative action in order to cause the exercise
of the TCIVA Option or any TCIVA Tandem SAR or the resulting delivery of shares
of TCIVA 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 TCIVA
Option or any TCIVA 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 TCIVA Options and TCIVA Tandem SARs and
replaces and makes null and void any prior agreements between Grantee and the
Company regarding the TCIVA 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 Ventures Group
Common Stock ("TCIVA"), $_____ 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 "Beneficiary") of
Name
_______________________________________________________________________________,
Street Address City State Zip Code
who is my ____________________________________________, shall be entitled to the
Relationship to Grantee
TCIVA Option, TCIVA 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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