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EXHIBIT 10.37
1996 PLAN
TCOMA
TELE-COMMUNICATIONS, INC.
1996 STOCK INCENTIVE PLAN
NON-QUALIFIED STOCK OPTION AND
STOCK APPRECIATION RIGHTS AGREEMENT
THIS AGREEMENT ("Agreement") is made as of the 13th day of
December, 1995 (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
Stock 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 December 13,
1995 and expiring at 5:00 p.m., Denver, Colorado ("Close of Business") time on
August 4, 2005 (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".
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 TCOMA 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
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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 by which
the Fair Market Value of the TCOMA Option Share on the date of
exercise if the TCOMA Tandem SAR 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. 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 August 4, 1996 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
---- -----------------------------
August 4, 1996 20%
August 4, 1997 40%
August 4, 1998 60%
August 4, 1999 80%
August 4, 2000 100%
Notwithstanding the foregoing, all TCOMA Option Shares shall become
available for purchase if Grantee's employment with the Company and
its Subsidiaries (i) shall terminate by reason of (x) termination by
the Company without cause (as defined in Section 10.2(b) of the Plan),
(y) termination by Grantee for good reason (as defined herein) or (z)
Disability, (ii) shall terminate pursuant to provisions of a written
employment agreement, if any, between the Grantee and the Company
which expressly permit the Grantee to terminate such
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employment upon the occurrence of specified events (other than the
giving of notice and passage of time), or (iii) if 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 TCOMA
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 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.
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 delivered in
payment of the 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.
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Notwithstanding the foregoing, if in order to meet the
exemptive requirements of Rule 16b-3, the Grantee exercises TCOMA Tandem SARs
during a quarterly window period determined in accordance with paragraph (e)(3)
of such Rule (including by designating in a written notice of exercise
delivered prior thereto that such exercise is to be effective during such
window period), then the date of exercise of such TCOMA Tandem SARs shall be
deemed for purposes of this paragraph 5 and for purposes of the Fair Market
Value determinations to be made pursuant to paragraph 2 hereof, to be the day
during such window period on which the highest reported last sale price of a
share of TCOMA as reported on NASDAQ occurred and the Fair Market Value of such
share shall be deemed to be such highest reported last sale price.
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 TCOMA Option Shares
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 TCOMA Option Term,
at the time specified below:
(a) If Grantee's employment with the Company and its
Subsidiaries terminates (i) other than (x) by the Company for "cause"
(as defined in Section 10.2(b) of the Plan), (y) by the Grantee with
"good reason" (as defined herein) or (z) by the Company without cause,
and (ii) other than (x) by reason of death or Disability, (y) with the
written consent of the Company or the applicable Subsidiary or (z)
without such consent if such termination is pursuant to provisions of
a written employment agreement, if any, between the Grantee and the
Company which expressly permit the Grantee to terminate such
employment upon the occurrence of specified events (other than the
giving of notice and passage of time), then the TCOMA Option and all
TCOMA Tandem SARs shall terminate at the Close of Business on
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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;
(c) If Grantee's employment with the Company 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 10.2(b) of the Plan), then the TCOMA Option and all TCOMA
Tandem SARs shall terminate immediately upon such termination of
Grantee's employment; or
(e) If Grantee's employment (i) is terminated by Grantee
(x) with "good reason" (as defined herein), (y) with the written
consent of the Company or the applicable Subsidiary or (z) pursuant to
provisions of a written employment agreement, if any, between the
Grantee and the Company which expressly permit the Grantee to
terminate such employment upon the occurrence of specified events
(other than the giving of notice and passage of time), or (ii) by the
Company without "cause" (as defined in Section 10.2(b) of the Plan),
then the TCOMA Option Term shall terminate early only as provided for
in paragraph 8(b) above or 12(b) below.
In any event in which the TCOMA Option and TCOMA Tandem SARs
remain exercisable for a period of time following the Grantee's voluntary
termination of his status as a member of the Board, 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 status. 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.
"Good reason" for purposes of the Agreement shall be deemed to
have occurred upon the happening of any of the following:
(i) any reduction in Grantee's annual rate of salary;
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(ii) either (x) a failure of the Company to continue in
effect any employee benefit plan in which Grantee was participating or
(y) the taking of any action by the Company that would adversely
affect Grantee's participation in, or materially reduce Grantee's
benefits under, any such employee benefit plan, unless such failure or
such taking of any action, adversely affects the senior members of the
corporate management of the Company generally;
(iii) the assignment to Grantee of duties and
responsibilities that are materially more oppressive or onerous than
those attendant to Grantee's position immediately after the date
hereof,
(iv) the relocation of the office location as assigned to
Grantee by the Company to a location more than 20 miles from Grantee's
current location without Grantee's consent; or
(v) the failure of the Company to obtain, prior to the
time of any reorganization, merger, consolidation, disposition of all
or substantially all of the assets of the Company or similar
transaction effective after the date hereof, in which the Company is
not the surviving person, the unconditional assumption in writing or
by operation of law of the Company's obligations to Grantee under this
Agreement by each direct successor to the Company in any such
transaction.
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 qualified
domestic relations order and, except as otherwise required pursuant to a
qualified 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 10.18 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 10.9 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 securities
exchange or association upon
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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.
P.0. 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 10.8(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
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of, any law or governmental rule or regulation, including any
applicable federal or state securities laws; and
(b) subject to Section 10.8(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 Colorado.
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. 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
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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.
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.
ATTEST: TELE-COMMUNICATIONS, INC.
By:
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Assistant Secretary Name:
Title:
ACCEPTED:
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Schedule 1 to Non-Qualified Stock
Option and Stock Appreciation Rights
Agreement dated as of December 13, 1995
TELE-COMMUNICATIONS, INC.1996 STOCK INCENTIVE PLAN
Grantee:
Grant Date: December 13, 1995
Option Price: $17.00 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 December 13, 1995
TELE-COMMUNICATIONS, INC. 1996 STOCK 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____________________________________________________________________,
Relationship to Grantee
be entitled 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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