1
EXHIBIT 10.62
AMENDED AND RESTATED STOCK APPRECIATION RIGHT
THIS AMENDED AND RESTATED STOCK APPRECIATION RIGHT AGREEMENT ("AGREEMENT")
is made as of this 8TH DAY OF MARCH, 1999, by and among TCI INTERNET SERVICES,
INC., a Colorado corporation (the "INTERNET SERVICES"), TELE-COMMUNICATIONS,
INC., a Delaware corporation (the "COMPANY"), and ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ("GRANTEE").
Capitalized terms used herein and not otherwise defined are defined in paragraph
18 below.
WHEREAS, Internet Services, the Company and Grantee have previously entered
into a Stock Appreciation Rights Agreement, dated as of December 1, 1996, as
amended (the "PRIOR SAR AGREEMENT");
WHEREAS, as a result of certain corporate restructurings and other
transactions which are occurring in connection with the consummation of the
merger of a wholly owned subsidiary of AT&T Corp. ("AT&T") with and into the
Company (the "MERGER"), TCI Internet Holdings Inc. ("HOLDINGS"), a Subsidiary of
Internet Services, will become a member of the Company Group (as defined in the
Company's certificate of incorporation);
WHEREAS, Grantee has previously exercised stock appreciation rights granted
to him under the Prior SAR Agreement with respect to six (6) of the ten (10)
shares of Internet Services common stock to which he was entitled;
WHEREAS, Grantee is entering into a Consulting Agreement, dated as of March
8, 1999, with the Company (the "CONSULTING AGREEMENT") pursuant to which Grantee
will become a consultant to the Company; and
WHEREAS, the parties desire to amend the Prior SAR Agreement to adjust for
Grantee's prior exercises of stock appreciation rights thereunder, substitute
for the remaining stock appreciation rights with respect to the common stock of
Internet Services a stock appreciation right with respect to the securities and
other assets held by Internet Services immediately prior to the Merger, provide
for other appropriate adjustments reflecting certain changed circumstances
resulting from the Merger (including, but not limited to, Grantee's becoming a
consultant to the Company pursuant to the Consulting Agreement), and to restate
the Prior SAR Agreement in its entirety in order to reflect such adjustments,
amendments and other changes.
NOW THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements contained herein, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
2
1. GRANT OF STOCK APPRECIATION RIGHTS; TERM; RELEASE. (a) The Company
hereby grants to Grantee stock appreciation rights ("SARS") with respect four
(4) Share Units on the terms and subject to the conditions set forth herein.
Subject to paragraph 2 and 3(b), the SARs shall be exercisable in whole at any
time and in part from time to time during the period commencing on the date
hereof and expiring at 5:00 p.m., Denver, Colorado time ("CLOSE OF BUSINESS") on
the tenth anniversary of the Determination Date, or such earlier date as the
SARs may be terminated pursuant to paragraph 6 or paragraph 9(a) (the "TERM").
(b) The grant of SARs hereunder shall be deemed to be in substitution
for and replacement of the stock appreciation rights with respect to the shares
of common stock of Internet Services which were previously granted by Internet
Services to Grantee, and the parties acknowledge and agree that such prior stock
appreciation rights grant is hereby terminated and shall cease to be of any
further force and effect. Grantee hereby irrevocably releases Internet Services
and the Company from any and all obligations under the Prior SAR Agreement.
2. CONDITIONS OF EXERCISE; VESTING. (a) Except as otherwise provided in
paragraph 2(b) or in paragraph 9(a), (i) the SARs shall not be exercisable
immediately, (ii) two (2) SARs will vest and become exercisable on February 1,
2000 and (iii) all unexercised SARs will vest and become exercisable on February
1, 2001.
(b) Notwithstanding the foregoing, all then unexercised SARs (the
"REMAINING SARS") shall become immediately exercisable if during the Term (i)
Grantee's employment with the Company Group shall terminate by reason of (x)
termination by the Company Group without Cause, (y) termination by Grantee for
Good Reason or (z) Disability, (ii) Grantee's employment shall terminate
pursuant to provisions of a written agreement, if any, between Grantee and the
applicable member(s) of the Company Group which expressly permits Grantee to
terminate such employment upon the occurrence of specified events (other than
the giving of notice and passage of time) or (iii) Grantee dies while employed
by the Company Group; provided, however, that the parties acknowledge and agree
that (x) termination of Grantee's consulting services other than pursuant to
Section 1(b)(i) of the Consulting Agreement shall be deemed to be a termination
of employment by the Company without Cause for purposes of this Agreement and
(y) this Agreement shall not create any additional or further rights in the
Company with respect to the termination of Grantee's consulting services, other
than the rights specified in the Consulting Agreement. A change of employment is
not a termination of employment within the meaning of this paragraph 2(b),
provided that, after giving effect to such change, Grantee is an employee of, or
becomes or continues to be a consultant to, any member of the Company Group.
3. EXERCISE OF SARS. (a) SARs granted hereunder may be exercised by
delivery to the Company of a written notice (the "EXERCISE NOTICE") specifying
the whole number of SARs being exercised. The date upon which such notice is
validly delivered to the Company shall be deemed to be the date of exercise of
the SARs specified therein (the "EXERCISE DATE"). Upon the valid exercise of
SARs, Grantee shall be entitled to receive from the Company, with respect to
each SAR then being exercised, the excess of (x) the Per Share Unit Value as of
the Exercise Date over (y) the Strike Price (such excess, the "CASH VALUE").
Upon a valid exercise of a SAR and payment in full by the
2
3
Company of the Cash Value in respect thereof, such SAR shall be deemed canceled
and will cease to be outstanding.
(b) The minimum number of SARs which may be exercised at any time will
be one (1).
(c) If on the Exercise Date @Home is not a Public Company and the value
of the @Home Common Stock is not otherwise established pursuant to Schedule 1,
then, Grantee shall have the right to rescind an exercise of SARs prior to the
Close of Business on the fifteenth (15th) day following the Exercise Date in the
event that (i) Grantee has elected to determine the Per Share Unit Value through
negotiation with the Company, (ii) Grantee and the Company have not agreed upon
a Per Share Unit Value by such date and (iii) Grantee has not made a subsequent
election to require that the Per Share Unit Value be determined by appraisal
pursuant to paragraph 10(c) hereof. In addition, an exercise of SARs shall be
deemed rescinded under the circumstances set forth in paragraph 10(b) hereof. In
the event of any rescission of an exercise of SARs pursuant to this paragraph
3(c), Grantee shall not be permitted to again exercise SARs for a period of
thirty (30) days following the date of such rescission.
(d) In the event the Grantee elects to rescind his exercise of SARs in
accordance herewith, such exercise shall be deemed rescinded ab initio and the
future exercisability and vesting of those SARs whose exercise has been
rescinded shall not be affected by such exercise and subsequent rescission,
except as provided in the last sentence of paragraph 3(c) above.
4. WITHHOLDING FOR TAXES. It shall be a condition precedent to any exercise
of a SAR that Grantee make provision acceptable to the Company for the payment
or withholding of any and all federal, state and local taxes required to be
withheld by the Company to satisfy the tax liability associated with such
exercise, as determined by the Company Board.
5. DELIVERY BY THE COMPANY. (a) Subject to the withholding referred to in
paragraph 4, the Company shall deliver or cause to be delivered to Grantee the
Cash Value of the SARs then being exercised, with such amount being paid, at the
Company's election, in (i) cash, (ii)(x) provided that the Company is then a
Public Company and that the Company's common stock is then listed or traded on
NASDAQ or a national securities exchange and is actively traded, shares of the
Company's common stock (and if more than one series of such common stock is
created with different voting rights, the series with the lower voting rights),
or (y) shares of AT&T Class A Liberty Media Group Common Stock, $1.00 par value
per share, or any successor class or series of AT&T's common stock which is
intended to reflect the business and assets of the Company and which is listed
or traded on NASDAQ or a national securities exchange and is actively traded
("COMPANY COMMON STOCK"), (iii) shares of any class or series of capital stock
of any other Person, provided that shares of the same class and series of
securities being so delivered are then listed or traded on NASDAQ or a national
securities exchange and are actively traded ("OTHER STOCK"), or (iv) any
combination of cash, Company Common Stock and Other Stock, as the Company may
elect. It shall be a condition to the Company's right to deliver shares of
Company Common Stock or Other Stock in satisfaction of its obligations hereunder
that (i) (x) the issuance of such shares to Grantee shall have been
3
4
registered under the Securities Act of 1933, as amended (the "SECURITIES ACT"),
on Form S-8 (or other appropriate form) and (y) such shares may be immediately
sold in the market by Grantee (either pursuant to Rule 144 or a resale
prospectus ) or (ii) such shares may be sold to Grantee without registration
under the Securities Act and Grantee's immediate resale of such shares is not
prohibited or otherwise restricted by the registration requirements of the
Securities Act. If the Company elects to pay all or any portion of the Cash
Value in shares of Company Common Stock or Other Stock, said shares shall be
valued for such purpose at the most recent Closing Price thereof as of the date
of delivery of such shares to Grantee. The payment of the Cash Value (in cash or
by delivery of Company Common Stock or Other Stock) shall be made (i) if each of
the Subject Companies is a Public Company, on the 10th day following the
Exercise Date and (ii) if each of the Subject Companies is not a Public Company,
on the 10th day following either (x) the date Grantee and the Company mutually
agree as to the Agreed Per Share Unit Value or (y) the receipt by Grantee and
the Company of notice pursuant to paragraph 10(c) of the final determination of
the Appraised Per Share Unit Value (or on such other date as the parties may
agree).
6. EARLY TERMINATION OF SARS. Subject to the provisions of Section 2(b)
hereof, unless otherwise determined by the Company Board in its sole discretion,
the SARs shall terminate prior to the expiration of the ten-year period provided
for in paragraph 1, as follows:
(a) If Grantee's employment with the Company Group terminates other than
(i) by Grantee with Good Reason, (ii) by reason of Grantee's death or
Disability, (iii) with the written consent of the applicable member(s) of
the Company Group, (iv) without such consent if such termination is
pursuant to provisions of a written employment agreement, if any, between
Grantee and the applicable member(s) of the Company Group which expressly
permits Grantee to terminate such employment upon the occurrence of
specified events (other than the giving of notice and passage of time), or
(v) by the Company Group with or without Cause, then the SARs shall
terminate at the Close of Business on the first business day following the
expiration of the 90-day period beginning on the date of termination of
Grantee's employment;
(b) If Grantee dies (i) while employed by the Company Group or (ii)
prior to the expiration of a relevant period of time following termination
of employment during which the SARs remain exercisable as provided in this
paragraph 6, the SARs shall terminate at the Close of Business on the first
business day following the expiration of the one-year period beginning on
the date of death;
(c) If Grantee's employment with the Company Group terminates by reason
of Disability, then the SARs shall terminate at the Close of Business on
the first business day following the expiration of the one-year period
beginning on the date of termination of Grantee's employment;
(d) If Grantee's employment with the Company Group is terminated by the
Company Group for Cause, then the SARs shall terminate immediately upon
such termination of Grantee's employment; and
4
5
(e) If Grantee terminates his employment with the Company Group (i) with
Good Reason, (ii) with the written consent of the applicable member(s) of
the Company Group or (iii) pursuant to provisions of a written employment
agreement, if any, between Grantee and the applicable member(s) of the
Company Group which expressly permits Grantee to terminate such employment
upon the occurrence of specified events (other than the giving of notice
and passage of time), or if the Company Group terminates Grantee's
employment with the Company Group without Cause, then the Term shall not
terminate prior to the end of the ten-year period provided for in paragraph
1, except as otherwise provided for in paragraph 6(b) or 9(a).
In any event in which the SARs remain exercisable for a period of time
following the date of termination of Grantee's employment as provided above,
such SARs may be exercised during such period of time only to the extent they
were exercisable as provided in paragraph 2 or paragraph 9(a) on such date of
termination of Grantee's employment (after giving effect to any acceleration
provided for in paragraph 2(b)). A change of employment is not a termination of
employment within the meaning of this paragraph 6, provided that, after giving
effect to such change, Grantee is an employee of, or becomes or continues to be
a consultant to, any member of the Company Group. Anything contained herein to
the contrary notwithstanding, the SARs shall in any event terminate upon the
expiration of the ten-year period provided for in paragraph 1, if not
theretofore terminated.
7. NONTRANSFERABILITY OF SARS. During Grantee's lifetime, the SARs are not
and shall not be transferable (voluntarily or involuntarily) other than pursuant
to a Domestic Relations Order and, except as otherwise required pursuant to a
Domestic Relations Order, the SARs shall be exercisable only by Grantee or
Grantee's court appointed legal representative. Grantee may designate a
beneficiary or beneficiaries to whom the 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 Company on the form annexed
hereto as Exhibit A or such other form as may be prescribed by the Company
Board, 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 Grantee's death, the SARs shall pass by
will or the laws of descent and distribution. Following Grantee's death, the
SARs, if otherwise exercisable, may be exercised by the person to whom the SARs
pass according to the foregoing, and such person shall be deemed to be Grantee
for purposes of any applicable provisions of this Agreement.
8. NO SHAREHOLDER RIGHTS; NO GUARANTEE OF EMPLOYMENT; UNSECURED OBLIGATION.
(a) Grantee shall not be deemed for any purpose to be, or to have any of the
rights of, a stockholder of the Company by virtue of the SARs. The existence of
this Agreement and Grantee's rights hereunder shall not affect in any way the
right or power of the Company or its stockholders to accomplish any corporate
act.
(b) Nothing contained in this Agreement, and no action by the Company or
the Company Board with respect hereto, shall confer or be construed to confer on
Grantee any right to continue in the employ of the Company Group or any member
thereof or interfere in any way with the right of the Company or any employing
member of the Company Group to terminate Grantee's
5
6
employment at any time, with or without Cause, except as otherwise expressly
provided in any written agreement between the applicable member(s) of the
Company Group and Grantee.
(c) The amount of cash payable at any time by the Company upon the valid
exercise of SARs granted hereunder shall not in any way be reserved or held in
trust by the Company. Grantee shall not have any rights against the Company in
respect of payments of such amount of cash other than as the rights of an
unsecured general creditor of the Company. The amount of cash payable upon the
valid exercise of SARs hereunder shall not be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or
charge, and shall not in any manner be liable or subject to the debts,
contracts, liabilities, engagements or torts of Grantee or of any designated
beneficiary or personal representative.
9. ACCELERATION; AUTOMATIC EXERCISE. (a) The Company Board may at any time
in its sole discretion determine that the SARs shall become exercisable in full,
without regard to paragraph 2, whether immediately, upon the occurrence of
specified events, or otherwise. Without limiting the generality of the
foregoing, in the event of any Board Change, Control Purchase or Approved
Transaction that occurs with respect to the Company following the date hereof,
the SARs shall become exercisable in full, without regard to paragraph 2,
effective upon the Board Change or Control Purchase or immediately prior to
consummation of the Approved Transaction, as applicable (or at such earlier time
as the Company Board in its sole discretion may determine); provided, however,
that to the extent not theretofore exercised the SARs shall terminate upon the
first to occur of the consummation of the Approved Transaction or the expiration
or early termination of the Term. Notwithstanding the foregoing, the Company
Board may, in its discretion, determine that the 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 Company 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 Company Board is equitable and appropriate
to substitute new stock appreciation rights for the SARs evidenced by this
Agreement (provided that no change in the Subject Companies or Subject
Securities, as in effect immediately prior to such event, is made in connection
with such substitution), or to assume this Agreement and the SARs evidenced
hereby and in order to make such new or assumed stock appreciation rights, as
nearly as may be practicable, equivalent to the SARs evidenced by this Agreement
as then in effect (but before giving effect to any acceleration of the
exercisability hereof unless otherwise determined by the Company Board).
(b) Immediately prior to the termination of the SARs as provided in
paragraph 6 above (other than pursuant to paragraph 6(d)), this paragraph 9, or
the expiration of the Term, all Remaining SARs shall be deemed to have been
exercised by Grantee and Grantee shall be deemed to have taken all actions
required by paragraph 3(a) for a valid exercise of SARs.
10. RESTRICTIONS IMPOSED BY LAW; AGREED PER SHARE UNIT VALUE; APPRAISAL
PROCEDURES. (a) Grantee acknowledges that neither the SARs nor the interests
evidenced thereby have been registered under the Securities Act and that neither
the SARs nor such interests may be transferred in the absence of such
registration or the availability of an exemption therefrom under the
6
7
Securities Act or the rules and regulations of the Securities and Exchange
Commission promulgated thereunder. Neither the Company nor any other person
shall have any obligation to register the SARs or the interests represented
thereby, or any transfer of the SARs or the interests represented thereby, under
the Securities Act, the Exchange Act or any other state or federal securities
law.
(b) Except as otherwise provided in Schedule 1 hereto, in the event that
the Subject Securities of one or more of the Subject Companies are not Publicly
Traded as of the Exercise Date (each such Subject Company whose Subject
Securities are not Publicly Traded, a "PRIVATE ISSUER"), Grantee shall have the
right to elect that portion of the Per Share Unit Value attributable to the
securities of a Private Issuer (the "PRIVATE SHARES") be determined by appraisal
as provided herein or to seek to negotiate a mutually acceptable Private Share
Value in respect thereof with the Company; provided, that in the event Grantee
and the Company are unable to agree upon all Private Share Values prior to the
Close of Business on the fifteenth (15th) day following the Exercise Date, then
Grantee shall have the further right (subject to the last sentence of paragraph
10(c) below), exercisable by written notice to the Company, to require that any
Private Share Value as to which Grantee and the Company have not agreed be
determined by appraisal as provided herein. In the event that @Home is a Private
Issuer and Grantee and the Company have not agreed upon the Private Share Value
of the @Home securities included in a Share Unit as of the Close of Business on
such fifteenth (15th) day and the Grantee has not delivered notice requiring
appraisal, the Grantee shall be deemed to have rescinded the exercise of SARs
pursuant to paragraph 3 hereof. In the event that either or both of Sportsline
or iVillage is a Private Issuer, Grantee shall have no right to rescind the
exercise of the SARs, and instead shall be deemed to have delivered at the Close
of Business on such fifteenth (15th) day notice requiring appraisal of such
Private Shares. In the event that Grantee elects to seek to negotiate the
Private Share Value with the Company, each party agrees to negotiate in good
faith and use its commercially reasonable efforts to agree upon the Agreed
Private Share Value. The parties acknowledge and agree that in connection with
such negotiations the parties shall give due consideration to the determination
of the Fair Market Value of each Private Issuer (as set forth in the definition
thereof) and the number of shares of Private Issuer Common Stock outstanding
(based upon the principles set forth in paragraph 10(c) hereof).
(c) In the event Grantee elects to require that any Private Share Value
be determined by appraisal, Grantee shall specify in the Exercise Notice or the
subsequent written notice to the Company electing appraisal (or in a written
notice to the Company following a deemed request for appraisal the identity of
the Appraiser selected by Grantee to make the determination of the Fair Market
Value of each Private Issuer (the "FIRST APPRAISER"). Within three (3) business
days following receipt of such notice, the Company shall notify Grantee in
writing as to the identity of the Appraiser selected by the Company (the "SECOND
APPRAISER"). The Appraisers selected pursuant to this paragraph 10(c) shall make
separate determinations of the Fair Market Value of each Private Issuer in
accordance with the provisions of this paragraph 10(c), and Grantee and the
Company shall each be entitled to a single Appraiser in respect of any exercise
of SARs hereunder. The First Appraiser and the Second Appraiser shall each
submit its determination of the Fair Market Value of each Private Issuer to
Grantee and the Company within thirty (30) days of the date of selection of the
Second Appraiser. If the respective determinations of the Fair Market Value of a
Private Issuer by
7
8
such Appraisers vary by less than 10% of the higher determination, then the Fair
Market Value of such Private Issuer shall be the average of the two
determinations. If such determinations vary by 10% or more of the higher
determination, the two Appraisers shall promptly designate a third Appraiser
(the "THIRD APPRAISER"). Neither Grantee nor the Company shall provide, and the
First Appraiser and Second Appraiser shall be instructed not to provide, any
information to the Third Appraiser as to the determination of the First
Appraiser and Second Appraiser or otherwise influence such Third Appraiser's
determination. The Third Appraiser shall submit its determination of the Fair
Market Value of such Private Issuer to Grantee and the Company within fifteen
(15) days of the date of its selection. The Fair Market Value of such Private
Issuer shall be equal to the average of the two closest of the three
determinations, provided, that, if the difference between the highest and middle
determinations is no more than 105% and no less than 95% of the difference
between the middle and lowest determinations, the Fair Market Value of such
Private Issuer shall be equal to the middle determination. Following the
determination of the Fair Market Value of each such Private Issuer, the
Appraisers whose determinations were used in the calculation of the Fair Market
Value of such Private Issuer shall determine the number of shares of Private
Issuer Common Stock outstanding together with any further appropriate
adjustments to the Fair Market Value of such Private Issuer resulting from such
determination. The number of shares of Private Issuer Common Stock outstanding
with respect to such Private Issuer shall mean a number, as determined by such
Appraisers as of the applicable date, equal to the sum of the number of shares
of Private Issuer Common Stock outstanding with respect to such Private Issuer
and the number of shares of Private Issuer Common Stock issuable by such Private
Issuer upon the conversion, exercise or exchange of those Convertible Securities
the holders of which would derive an economic benefit from the conversion,
exercise of exchange of such Convertible Securities which exceeds the economic
benefits of not converting, exercising or exchanging such Convertible
Securities; provided, however, that shares of @Home Common Stock issuable upon
the exercise of warrants to purchase @Home Common Stock issued by @Home to cable
television operators, which warrants become exercisable only to the extent that
such operator has upgraded its cable system or is distributing the @Home high
speed internet access service over its cable plant and equipment, such warrants
shall be deemed exercised only to the extent that such warrants are exercisable
in accordance with their terms as of the applicable Exercise Date. The
Appraisers shall then calculate the value per share of Private Issuer Common
Stock (the "APPRAISED PRIVATE SHARE VALUE") with respect to each Private Issuer
for which appraisal was required, which shall be the quotient obtained by
dividing the Fair Market Value of such Private Issuer by the number of shares of
Private Issuer Common Stock of such Private Issuer outstanding or deemed
outstanding; provided, that if such Appraisers do not agree on the number of
shares of Private Issuer Common Stock outstanding, each Appraiser whose
determination of the Fair Market Value of such Private Issuer is being used in
the calculation of such Appraised Private Share Value shall determine the
Appraised Private Share Value based upon its determination of the Fair Market
Value of such Private Issuer and the number of shares of Private Issuer Common
Stock of such Private Issuer outstanding, and the Appraised Private Share Value
shall be the average of the quotients so obtained on the basis of the respective
determinations of such firms. The Appraisers shall jointly notify the Company
and Grantee in writing of their final determination of the Appraised Private
Share Value as to each Private Issuer within five (5) days after the
determination of the Fair Market Value of the last of the Private Issuers with
respect to which appraisal is required. Grantee and the Company shall each pay
the fees and expenses of his or its own Appraiser and one-half of the
8
9
fees and expenses of the Third Appraiser, if any. Grantee acknowledges and
agrees that he shall not be entitled to require an appraisal pursuant to this
Agreement more than once in any 12 month period. In connection with any
appraisal pursuant to this paragraph 10, the Company agrees that it shall use
its commercially reasonable efforts to obtain and (subject to the recipient
agreeing to customary confidentiality restrictions) make available to Grantee
and any Appraiser, such financial and business information concerning such
Private Issuer as is reasonably necessary to assist Grantee or such Appraisers
in determining the Fair Market Value of such Private Issuer.
11. NOTICE. Unless the Company notifies Grantee in writing of a change of
address, any notice or other communication to the Company with respect to this
Agreement shall be in writing and shall be delivered personally or sent by first
class mail, postage prepaid and addressed as follows:
If to the Company:
Tele-Communications, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
Any notice or other communication by the Company to 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 date hereof, unless the Company has received
written notification from Grantee of a change of address. Except as otherwise
specifically provided herein, all notices and other communications hereunder,
including without limitation any Exercise Notice, shall be effective when
actually received.
12. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the internal laws of the State of Colorado.
13. CONSTRUCTION. References in this Agreement to "this Agreement" and the
words "herein," "hereof," "hereunder" and similar terms refer to this Agreement,
including all Exhibits and Schedules, as a whole, unless the context otherwise
requires. 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 not modify or restrict any of the terms or provisions hereof. All
decisions of the Company Board upon questions regarding this Agreement shall be
conclusive, so long as such decisions are otherwise made in accordance with this
Agreement.
14. DUPLICATE ORIGINALS. The Company and 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.
15. ENTIRE AGREEMENT. This Agreement is in satisfaction of and in lieu of
all prior discussions and agreements, oral or written, between or among the
Company and Grantee, or any of them, with respect to the subject matter hereof.
Each of the Company and Grantee hereby declares
9
10
and represents that no promise or agreement not herein expressed has been made
and that this Agreement contains the entire agreement between and among the
parties hereto with respect to the SARs and supersedes and makes null and void
any prior agreements between or among the Company and Grantee, or any of them,
regarding the SARs.
16. AMENDMENT. This Agreement may be amended, modified or supplemented by
the Company, without the consent of the Grantee, (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 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,
without limitation, any applicable federal or state securities laws]. Except as
provided above, this Agreement may be amended, modified or supplemented only by
written agreement of the parties hereto.
17. DEFINITIONS. As used in this Agreement, the following terms have the
corresponding meanings:
"AFFILIATE" means, with respect to any Person, any other Person that
directly or indirectly through one or more intermediaries Controls, is
Controlled by, or is under common Control with such first Person.
"AGREED PRIVATE SHARE VALUE" means the Fair Market Value of a share of
Private Issuer Common Stock as of the Exercise Date, as agreed by the Company
and Grantee pursuant to paragraph 10(b) hereof; provided, however, that to the
extent the provisions of Schedule 1 are applicable to the valuation of Private
Issuer Common Stock, the parties will be deemed to have mutually agreed upon the
value established in accordance with Schedule 1 as of the Exercise Date.
"APPRAISER" means, as of any date of selection, an investment banking
firm of national reputation that is not affiliated with the Company or Grantee.
"APPROVED TRANSACTION", when used with respect to the Company means any
transaction in which the Company Board (or, if approval of the Company Board is
not required as a matter of law, the stockholders of the Company) shall approve
(i) any consolidation or merger of the Company, or binding share exchange,
pursuant to which shares of common stock of the Company would be changed or
converted into or exchanged for cash, securities or other property, other than
any such transaction in which the common stockholders of the Company immediately
prior to such transaction have the same proportionate ownership of the common
stock of, and voting power with respect to, the surviving corporation
immediately after such transaction, (ii) any merger, consolidation or binding
share exchange to which the Company is a party as a result of which the persons
who are common stockholders of the Company immediately prior thereto have less
than a majority of the combined voting power of the outstanding capital stock of
the Company ordinarily (and apart from the rights accruing under special
circumstances) having the right to vote in the election of directors immediately
following such merger, consolidation or binding share exchange, (iii) the
adoption of any plan or proposal for the liquidation or dissolution of the
Company, or (iv) any sale, lease, exchange
10
11
or other transfer (in one transaction or a series of related transactions) of
all, or substantially all, of the assets of the Company.
"@HOME" means At Home Corporation, a Delaware corporation, and shall
include any successor thereto by merger, consolidation, sale of assets or
similar transaction.
"@HOME COMMON STOCK" means, collectively, the @Home Series A Common
Stock, the @Home Series B Common Stock and the @Home Series K Common Stock.
"@HOME SERIES A COMMON STOCK" means the Series A Common Stock, par
value $.01 per share, of @Home.
"@HOME SERIES B COMMON STOCK" means the Series B Common Stock, par
value $.01 per share, of @Home.
"@HOME SERIES K COMMON STOCK" means the Series K Common Stock, par
value $.01 per share, of @Home.
"BOARD CHANGE" means individuals who at the Effective Time constituted
the entire Company Board cease for any reason to constitute a majority thereof
unless the election, or the nomination for election, of each new director was
approved by a vote of at least two-thirds of the directors then still in office
who were directors at the beginning of the period.
"CAUSE" has the meaning ascribed thereto in any employment or
consulting agreement between Grantee and the applicable member of the Company
Group, and in the absence of any such employment or consulting agreement shall
include but not be limited to, insubordination, dishonesty, incompetence, moral
turpitude, other misconduct of any kind or the refusal to perform one's duties
and responsibilities for any reason other than illness or incapacity, or
negligence in the performance of any of one's material duties or
responsibilities that continues after written notice from the Company, as
determined in good faith by the Company Board; provided, however, that if such
termination occurs within twelve (12) months after an Approved Transaction,
Control Purchase or Board Change occurs with respect to the Company following
the date hereof, then "CAUSE" shall mean only a felony conviction for fraud,
misappropriation or embezzlement.
"CLOSING PRICE" of a share of any class or series of capital stock on
any day means the last sale price (or, if no last sale price is reported, the
average of the high bid and low asked prices) for a share of such class or
series of capital stock on such day (or, if such day is not a trading day, on
the next preceding trading day) as reported on NASDAQ or, if not reported on
NASDAQ, as quoted by the National Quotation Bureau Incorporated, or if such
class or series of capital stock is listed on an exchange, on the principal
exchange on which the shares are listed. If for any day the Closing Price of a
share of such class or series of capital stock is not determinable by any of the
foregoing means, then the Closing Price for such day shall be determined in good
faith by the Company's Board of Directors on the basis of such quotations and
other considerations as such Board deems appropriate
11
12
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, or any successor statute or statutes thereto. Reference to any specific
Code section shall include any successor section.
"COMPANY BOARD" means the Board of Directors of the Company.
"COMPANY GROUP" means the Company and its Subsidiaries, collectively,
or the applicable of the Company or a Subsidiary of the Company, as the context
may require.
"CONTROL" (including its correlative meanings "CONTROLLED BY" and
"UNDER COMMON CONTROL WITH") means the possession, direct or indirect, of the
power to direct or cause the direction of the management and policies of a
Person, whether through the ownership of voting securities, by contract,
management agreement or otherwise.
"CONTROL PURCHASE" means any transaction (or series of related
transactions) in which (i) any person (as such term is defined in Sections
13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other
than the Company, any Subsidiary of the Company or any employee benefit plan
sponsored by the Company or any Subsidiary of the Company) shall purchase any
common stock of the Company (or securities convertible into common stock of the
Company) for cash, securities or any other consideration pursuant to a tender
offer or exchange offer, without the prior consent of the Company Board, or (ii)
any person (as such term is so defined), corporation or other entity (other than
the Company, any Subsidiary of the Company, any employee benefit plan sponsored
by the Company or any Subsidiary of the Company, or any Controlling Person (as
defined below)) shall become the "beneficial owner" (as such term is defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the then
outstanding securities of the Company ordinarily (and apart from the rights
accruing under special circumstances) having the right to vote in the election
of directors (calculated as provided in Rule 13d-3(d) under the Exchange Act in
the case of rights to acquire the Company's securities), other than in a
transaction (or series of related transactions) approved by the Company Board.
For purposes of this definition, "Controlling Person" means each of (a) the
Chairman of the Board, the President and each of the directors of the Company as
of December 31, 1996, (b) the respective family members, estates and heirs of
(i) ▇▇▇ ▇▇▇▇▇▇▇ and (ii) each of the persons referred to in clause (a) above,
and any trust or other investment vehicle for the primary benefit of any of such
persons or their respective family members or heirs and (c) ▇▇▇▇▇▇-Tribune
Corporation, a Delaware corporation. As used with respect to any person, the
term "family member" means the spouse, siblings and lineal descendants of such
person.
"CONTROLLED AFFILIATE" of any Person shall be any other Person which is
Controlled by such Person.
"CONVERTIBLE SECURITIES" means any or all options, warrants, securities
or rights which are convertible into or exercisable or exchangeable for Private
Issuer Common Stock or which otherwise entitle the holder thereof to subscribe
for, purchase or otherwise acquire Private Issuer
12
13
Common Stock; provided, that any Private Issuer Common Stock which is
convertible at the option of the holder into another class or series of common
stock of such Private Issuer which is different from such Private Issuer Common
Stock only in that the holder of such other class or series of common stock is
entitled to a lesser number of votes (and other differences related thereto)
shall not be deemed a Convertible Security.
"DETERMINATION DATE" means February 1, 1996.
"DISABILITY" means the inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that (a) can be expected to result in death or (b) has lasted or can be expected
to last for a continuous period of not less than 12 months.
"DOMESTIC RELATIONS ORDER" means a domestic relations order as defined
by the Code or Title I of the Employee Retirement Income Security Act of 1974,
as amended, or the rules thereunder.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute or statutes thereto, and the rules
and regulations promulgated by the Securities and Exchange Commission
thereunder. References to any specific section of the Exchange Act or rule
thereunder shall include any successor section or rule.
"FAIR MARKET VALUE" means, as of the Exercise Date, the fair market
value of a Private Issuer on a going concern (whether as a sale of stock or
assets) or liquidation basis (whichever method would yield the highest
valuation). The Fair Market Value of a Private Issuer on a going concern basis
shall take into account such considerations (including, but not limited to, tax
considerations which are specific to a sale of assets versus a sale of stock) as
would customarily affect the price at which a willing seller would sell and a
willing buyer would buy a comparable business as a going concern in an arm's
length transaction. The Fair Market Value of a Private Issuer on a liquidation
basis shall take into account tax liabilities that would be incurred on
liquidation assuming the most tax efficient and practical plan of liquidation
reasonably available. In determining the Fair Market Value of a Private Issuer,
the parties or the Appraisers shall not assume any premium with respect to the
ownership of a controlling interest or any discount with respect to the
ownership of a minority interest.
"GOOD REASON" means the occurrence of any of the following prior to any
termination of employment by Grantee:
(i) any reduction in Grantee's annual rate of salary (other than a
reduction to which Grantee consents);
(ii) a failure by the Company to continue in effect any employee
benefit plan in which Grantee was participating, or 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
13
14
any action adversely affects the senior members of the corporate management
of the Company (as applicable) generally;
(iii) the assignment to Grantee of duties and responsibilities that are
materially more oppressive or onerous than those attendant to Grantee's
position on 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.
"iVILLAGE" means iVillage, Inc.
"iVILLAGE COMMON STOCK" means the common stock of iVillage.
"NASDAQ" means the Nasdaq Stock Market.
"OTHER SARS" means the stock appreciation rights relating to the Share
Units granted pursuant to certain Stock Appreciation Right Agreements dated as
of the date hereof among Internet Services, the Company and the grantee named
therein, respectively.
"PER SHARE UNIT VALUE" means the sum of (i) as to each Subject Security
which is Publicly Traded as of the Exercise Date, (x) the Closing Price of each
such Subject Security as of the Exercise Date multiplied by the number of issued
and outstanding shares of such Subject Security included in a Share Unit, plus
(y) as to each Subject Security which is a Convertible Security, an amount equal
to the difference between the Closing Price of the Subject Security into which
such Convertible Security is convertible, exercisable or exchangeable and the
strike price, option exercise price or other consideration payable upon the
conversion, exercise or exchange of such Convertible Security, multiplied by the
number of Subject Securities issuable upon the conversion, exercise or exchange
of such Convertible Security, and (ii) as to each Subject Company which is a
Private Issuer as of the Exercise Date, an amount equal to the Private Share
Value of each applicable Subject Security multiplied by the number shares of
such Subject Security included in a Share Unit.
"PERSON" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof, or other entity, whether acting in an individual, fiduciary or other
capacity.
14
15
"PRIVATE ISSUER COMMON STOCK" means the Subject Securities of any
Subject Company which is a Private Issuer.
"PRIVATE SHARE VALUE" means the Agreed Private Share Value or the
Appraised Private Share Value.
"PUBLIC COMPANY" means a person the common equity securities of which
are registered under Section 12(b) or 12(g) of the Exchange Act and which common
equity securities are listed for trading on the New York Stock Exchange or the
NASDAQ National Market.
"PUBLICLY TRADED" means, with respect to any Subject Security, that the
class or series of shares which include the Subject Securities (or any
Convertible Securities which are convertible into or exercisable or exchangeable
for such Subject Securities) are listed or traded on The NASDAQ Stock Market or
other national securities exchange and are actively traded.
"SHARE UNIT" means a unit initially consisting of shares of the Subject
Companies, as specified in Schedule 1 hereto, as such Subject Securities may
hereafter be adjusted in accordance with the provisions of Schedule 1.
"SPORTSLINE" means Sportsline, Inc.
"SPORTSLINE COMMON STOCK" means the common stock of Sportsline.
"STRIKE PRICE" means $29,170 per SAR, plus an interest factor of 6% per
annum on such amount from the Determination Date hereof to the date of exercise
(calculated on the basis of a 365- day year and actual days elapsed).
"SUBJECT COMPANIES" means, collectively, @Home, iVillage and
Sportsline, unless and until such Subject Companies are changed in accordance
with Schedule 1.
"SUBJECT SECURITIES" means, collectively, the @Home Series A Common
Stock, the iVillage Common Stock and the Sportsline Common Stock, unless and
until such Subject Securities are changed in accordance with Schedule 1 hereto.
"SUBSIDIARY", when used with respect to the Company means any present
or future subsidiary (as defined in Section 424(f) of the Code) of the Company
or any business entity in which the Company owns, directly or indirectly, 50% or
more of the voting, capital or profits interests. An entity shall be deemed a
Subsidiary of the Company for purposes of this definition only for such periods
as the requisite ownership or control relationship is maintained.
18 RULES BY COMPANY BOARD. The rights of Grantee and obligations of the
Company hereunder shall be subject to such reasonable rules and regulations as
the Company Board may adopt from time to time hereafter.
15
16
IN WITNESS WHEREOF, the Company, Internet Services and Grantee have
caused this Agreement to be duly executed and delivered as of the date first
written above.
ATTEST: TELE-COMMUNICATIONS, INC.
By:
----------------------------- ---------------------------------------
Assistant Secretary Name:
Title:
TCI INTERNET SERVICES, INC.
By:
---------------------------------------
Name:
Title:
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
16
17
Exhibit A to Agreement
dated as of March 8, 1999
TELE-COMMUNICATIONS, INC
STOCK APPRECIATION RIGHT
DESIGNATION OF BENEFICIARY
I, ___________________________________________ (the "GRANTEE"), hereby
declare that upon my death __________________________________________ (the
"BENEFICIARY") of Name
______________________________________________________________________, who is
Street Address City State Zip Code
my _________________________________________________, shall be entitled to the
Relationship to Grantee
stock appreciation rights and all other rights accorded 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 Grantee's death. If any such condition is not
satisfied, such rights shall devolve according to Grantee's will or the laws of
descent and distribution.
All prior designations of beneficiary under the Prior SAR Agreement and
this Agreement are hereby revoked. This Designation of Beneficiary may only be
revoked in writing, signed by Grantee, and filed with Tele-Communications, Inc.
prior to Grantee's death.
------------------------------- ------------------------------------
Date Grantee
17
18
SCHEDULE 1
I. Each Share Unit will initially consist of the following securities:
Subject Security No. of Shares
---------------- -------------
(i) @Home Series A Common Stock 46,460
(ii) Sportsline Common Stock 533.333
(iii) iVillage Common Stock 715.256
II. If after the date hereof any Subject Company pays a dividend or makes a
distribution on its Subject Securities consisting of capital stock or
other securities of such Subject Company or capital stock or other
securities of any other Person ("OTHER SECURITIES"), then each
outstanding Share Unit shall be adjusted to include therein the amount
of Other Securities which a holder of such number of shares of Subject
Securities immediately prior to the record date for such dividend or
distribution would have received as a result of such dividend or
distribution, and such Other Securities shall thereafter become Subject
Securities for purposes of this Agreement and the issuer of such Other
Securities (if not already a Subject Company), shall thereafter be and
become a Subject Company for purposes of this Agreement.
III. The number of shares of each Subject Security in each Share Unit shall
be appropriately adjusted to reflect the effects of any stock split,
reverse split, stock dividend, reclassification or other event
affecting outstanding shares of such Subject Security; provided, that
the number of shares of iVillage Common Stock listed above assumes a 3
for 1 reverse split which is anticipated to occur prior to iVillage's
initial public offering, and such number of shares shall not be further
adjusted in connection with such reverse split, and shall be
appropriately re-adjusted in the event such reverse split does not
occur.
IV. In the event of any dividend or distribution by a Subject Company to
all holders of Subject Securities of any rights, warrants or other
securities, the amount and type of Subject Securities included in a
Share Unit shall be adjusted to include any such rights, warrants or
other securities which a holder of such number of shares of Subject
Securities on the record or effective date for such dividend or
distribution would have been entitled to receive as a result of such
dividend or distribution, and the Subject Securities included in such
Share Unit shall, upon expiration or termination of such rights,
warrants or other securities, be re-adjusted to reflect such subsequent
expiration or termination of such rights, warrants or other securities.
V. In the event any dividend or other distribution is paid or made in cash
or other property (other than securities) on or in respect of a Subject
Security, the amount of such cash or other
18
19
property receivable in respect of such Subject Security shall be
included in and become part of such Share Unit.
VI. In the event of any merger, consolidation, binding share exchange, sale
of all or substantially all assets or other fundamental corporate
transaction affecting any Subject Company, the applicable Subject
Company and the Subject Securities included in each outstanding Share
Unit will be adjusted following such occurrence by substituting for the
affected Subject Company the successor by merger (or purchaser of
assets) to such Subject Company, and thereafter such Share Unit will
include therein as the Subject Securities of such successor Subject
Company, the securities, cash or other property which a holder of such
number of shares of Subject Securities immediately prior to the
effectiveness of such merger or other transaction would have received
as a result of such merger or other transaction. In the event that
@Home ceases to be a Public Company as a result of any such merger or
other business combination in which the holders of @Home Common Stock
receive securities which are not Publicly Traded, the @Home Common
Stock included in the Share Units shall be deemed to have been sold for
an amount in cash equal to the Closing Price of the @Home Common Stock
immediately prior to the effectiveness of such merger or other
transaction, multiplied by the number of shares of @Home Common Stock
included in such Share Unit, and the securities so received in respect
thereof shall not become Subject Securities; to the extent that a
holder of @Home Common Stock receives cash, Publicly Traded securities
and/or securities which are not Publicly Traded, each share of @Home
Common Stock will be deemed to have been sold for cash at such Closing
Price, and the consideration received appropriately allocated among
such components, with the securities which are not publicly traded
being deemed sold for the cash component attributable thereto, and such
securities shall not become Subject Securities.
In the event that Liberty Media Corporation ("Liberty") sells
(other than in a merger or other transaction affecting all stockholders
of such Subject Company) (a "Liberty Sale") all or a portion of (i) the
2,861 shares of iVillage Common Stock held by it on the date hereof (as
adjusted for the anticipated stock split) or (ii) the 2,133 shares of
Sportsline Common Stock held by it on the date hereof (in each case, as
such amount may be adjusted for stock splits, stock dividends and the
like occurring after the date hereof (other than the iVillage Common
Stock stock split referred to above), then if the proceeds of such sale
consist of: (x) cash, then such cash shall be included in the Share
Unit in respect of the Subject Securities sold; (y) securities which
are Publicly Traded, such securities shall become Subject Securities in
substitution for the Subject Securities so disposed of; and (z)
securities which are not Publicly Traded, then the Subject Securities
so disposed of shall be valued at the Closing Price thereof on the date
immediately prior to such Liberty Sale, and such Subject Securities
shall be deemed to have been sold for an amount of cash equal to the
number of shares sold multiplied by such Closing Price, and the
securities received in such Liberty Sale shall not become Subject
Securities.
19
20
Any sale of @Home Common Stock by TCI, AT&T or their
respective affiliates (other than Liberty), after the date hereof shall
not result in any adjustment to the Subject Securities.
Any cash, substitute securities or other consideration
received in respect of the Subject Securities shall be allocated pro
rata among the remaining Share Units.
VII. Any cash or other property received (or deemed to be received) in
respect of a Subject Security (whether in connection with a merger or
other fundamental corporate transaction affecting such Subject Company,
upon the sale of iVillage Common Stock or Sportsline Common Stock by
Liberty, as a dividend, interest payment or other distribution on such
Subject Security, or otherwise), shall be and become a part of the
Share Unit. Any cash so received shall accrue interest thereon at the
rate of 6% per annum from the date of payment until the date of payment
of the Cash Value in respect of such Share Unit.
VIII. The adjustments contemplated by this Schedule 1 shall be made (i)
successively whenever any event listed above shall occur and (ii)
without duplication. For a dividend or distribution, the adjustment
shall become effective immediately after the record date for the
dividend or distribution. For a subdivision or combination, the
adjustment shall become effective immediately after the effective date
of the subdivision or combination.
20