PERFORMANCE-VESTING NONQUALIFIED STOCK OPTION AGREEMENT

(d) Forfeiture Resignation.  If, following the CEO Effective Date, Optionee Voluntarily (as defined in the Employment Agreement) resigns without Good Reason and assumes the role of chairman, chief executive officer, president or other substantially similar role at Comcast, Time Warner Cable, Cablevision, Cox or any of their respective affiliates (or a company that is, at such time, a top-four (4) multi-system operator peer of the Company, and any affiliate of any such company) (each such company, a “Restricted Company”) at any time before the 18-month anniversary of the CEO Effective Date (such resignation, a “Forfeiture Resignation”, and such 18-month anniversary, the “Release Date”), Optionee shall forfeit any and all rights to the Option, and the Option shall immediately be canceled (the “Forfeiture Provision”).   In order to implement the foregoing, notwithstanding anything to the contrary set forth in this Agreement, the Employment Agreement or the Plan, any Options which otherwise would have vested pursuant to Section 4(a) prior the Release Date shall become vested on the Release Date (and only if there has not been a Forfeiture Termination); provided that if the Optionee’s employment is terminated in accordance with Section 4(b)(ii) prior to the Release Date, any Options which would have vested prior to such termination but for this Section 4(d), as well as any Options which vest in accordance with Section 4(b)(ii), will become vested on the Termination Date.  The Forfeiture Provision shall expire upon a Change in Control that occurs prior to the Release Date, and any Options which otherwise would have vested pursuant to Section 4(a) through the date of such Change in Control shall become vested on such date.

(i) Termination Example.  Optionee is terminated by the Company without Cause or resigns for Good Reason on August 13, 2013 (the Release Date).  Assume that the average of the per-share closing price of a Share as reported on the principal exchange on which the Shares are listed for trading for the sixty (60) consecutive trading days ending on February 13, 2013 (the first anniversary of the CEO Effective Date) was $85.  But for Section 4(d), Optionee would have already vested in 25% of the Tranche I Performance Options and Tranche II Performance Options (i.e., as to 37,500 Options) on February 13, 2013 (because the Tranche I Measurement Standard and Tranche II Measurement Standard were satisfied and such Options were Eligible Options), and those Options will vest on the Date of Termination.  Additionally, the unvested Options shall remain eligible to vest in accordance with Section 4(a) until the applicable Exercise Expiration Date as to (i) Options that are Eligible Options at the time of termination, which is 25% of each of the Tranche III, IV and V Performance Options (a total of 74,200 Options), and (ii) fifty percent (50%) of each of Tranche I, II, III, IV and V Performance Options which were scheduled to become Eligible Options on February 13, 2014 (i.e., 55,850 Options in the aggregate).  The remaining unvested Options, consisting of 62.5% of each of the Tranches I, II, III, IV and V Performance Options, shall be forfeited and cancelled.

(ii) Change in Control Example.  In the event a Change in Control is completed on June 30, 2012 where the Per-Share Consideration is equal to $127.50, each of the then-unvested Tranche I Performance Options, Tranche II Performance Options, Tranche III Performance Options and Tranche IV Performance Options vests and becomes exercisable because the Per-Share Consideration was greater than the Tranche I Measurement Standard, Tranche II Measurement Standard, Tranche III Measurement Standard and Tranche IV Measurement Standard, but the Tranche V Performance Options will be canceled and forfeited.

(iii) Forfeiture Resignation Example.  Optionee Voluntarily resigns on February 14, 2013.  Assume that the average of the per-share closing price of a Share as reported on the principal exchange on which the Shares are listed for trading for the sixty (60) consecutive trading days ending on February 13, 2013 (the first anniversary of the CEO Effective Date) was $85.  But for Section 4(d), Optionee would have already vested in 25% of the Tranche I Performance Options and Tranche II Performance Options (i.e., as to 37,500 Options) on February 13, 2013 (because the Tranche I Measurement Standard and Tranche II Measurement Standard were satisfied and such Options were Eligible Options).  However, because that vesting date is prior to the Release Date, such Options did not vest on that date.  On May 25, 2013, Optionee is hired as the chief executive officer of a Restricted Company and all of the Options are immediately cancelled due to the Forfeiture Provision.  (If, however, a Change in Control occurred on May 24, 2013, the Forfeiture Provision would have expired and 25% of the Tranche I Performance Options and Tranche II Performance Options would become fully exercisable on May 24, 2013.)

(f) Committee Discretion to Accelerate Vesting.  Notwithstanding the foregoing, the Committee may, in its sole discretion, provide for accelerated vesting of all or any portion the Option at any time and for any reason.

5.1 Subject to the terms and conditions of this Agreement and the Plan, the vested portion of the Option may be exercised by delivery of written notice in person, electronically or by mail to the Plan Administrator (or his or her designee).  Such notice shall state that the Optionee is electing to exercise the Option and the number of Shares in respect of which the Option is being exercised and shall be signed by the person or persons exercising the Option.  If requested by the Committee, such person or persons shall (i) deliver this Agreement to the Plan Administrator (or his or her designee) who shall endorse thereon a notation of such exercise and (ii) provide satisfactory proof as to the right of such person or persons to exercise the Option.

5.2 The notice of exercise described in Section 5.1 hereof shall be accompanied by (a) the full purchase price for the Shares in respect of which the Option is being exercised, in cash, by check, by transferring Shares to the Company having a Fair Market Value on the date of exercise equal to the cash amount for which such Shares are substituted, or in such other manner as may be permitted by the Committee in its discretion, and (b) payment of the Withholding Taxes as provided by Section 11 of this Agreement, and in the manner as may be permitted by the Committee its discretion pursuant to Section 11 of this Agreement.

5.3 Upon receipt of notice of exercise and full payment for the Shares in respect of which the Option is being exercised, the Company shall, subject to the terms of the Plan, take such action as may be necessary to effect the transfer to the Optionee of the number of Shares as to which such exercise was effective.

5.4 Except as otherwise provided in Section 9, the Optionee shall not be deemed to be the holder of, or to have any of the rights of a holder with respect to any Shares subject to the Option until (i) the Option shall have been exercised pursuant to the terms of this

If, following the CEO Effective Date, the employment of the Optionee is terminated for any reason other than for Cause (including, without limitation, the Optionee’s ceasing to be employed by a Subsidiary or Division as a result of the sale of such Subsidiary or Division or an interest in such Subsidiary or Division or a termination of employment by the Optionee with or without Good Reason), the vested portion of the Option shall (subject to Section 4(d)) continue to be exercisable in whole or in part at any time, but in no event after the Exercise Expiration Date, for six (6) months after the Date of Termination, and the portion of the Option, if any, that vests after the Date of Termination pursuant to the terms and conditions of Section 4(a) and 4(b) shall (subject to Section 4(d)) be exercisable in whole or in part at any time after such vesting but in no event after the Exercise Expiration Date, for six (6) months after the applicable vesting date.  If the employment of the Optionee is terminated for Cause, the entire Option (whether or not vested) shall terminate effective immediately prior to the Optionee’s termination of employment.

The Option shall not be transferable other than by will or by the laws of descent and distribution.  During the lifetime of the Optionee, the Option shall be exercisable only by the Optionee.

Nothing in this Agreement or the Plan shall be interpreted or construed to confer upon the Optionee any right with respect to continuance of employment by the Company, or any Subsidiary or Affiliate of the Company, nor shall this Agreement or the Plan interfere in any way with the right of the Company to terminate the Optionee’s employment or service at any time.

9.1 Change in Capitalization.  In the event of a Change in Capitalization, the Committee shall make appropriate adjustments to (i) the number and class of Shares or other stock or securities subject to the Option, or (ii) the purchase price for such Shares or other stock or securities.  The Committee’s adjustment shall be made in accordance with the provisions of the Plan and shall be effective and final, binding and conclusive for all purposes of the Plan and this Agreement.

9.2 Dividends and Other Distributions.  If the Company (i) makes extraordinary distributions (by dividend or otherwise), (ii) grants rights to purchase securities to existing shareholders as a group, or (iii) issues securities to existing shareholders as a group (other than pursuant to (a) any equity awards granted under the Company’s equity incentive

 

 

Subject to the terms of the Plan and this Agreement, in the event of (a)  a liquidation or dissolution of the Company or (b) a merger or consolidation of the Company (a “Transaction”) that does not constitute a Change in Control, the Options shall continue in effect in accordance with their respective terms, except that the Committee may, in its discretion, do one or more of the following: (i) shorten the period during which the Options are exercisable (provided they remain exercisable for at least thirty (30) calendar days after the date on which notice of such shortening is given to the Optionee); (ii) accelerate the vesting schedule with respect to the Options, (iii) arrange to have the surviving or successor entity assume the Options or grant replacement Options with appropriate adjustments in the exercise prices, and adjustments in the number and kind of securities or other property issuable upon exercise or adjustments so that the Options or their replacements represent the right to purchase or receive the stock, securities or other property (including cash) as may be issuable or payable as a result of such Transaction with respect to or in exchange for the number of Shares purchasable and receivable upon the exercise of the Options had such exercise occurred in full prior to the Transaction, or (iv) cancel the Options upon the payment to the Optionee in cash of an amount that is equal to the amount, if any, by which Fair Market Value of the Shares subject to the Option or portion thereof exceed the aggregate exercise price for such Shares under the Option or portion thereof surrendered at the effective time of the Transaction.  The treatment of any Option as provided in this Section 10 shall be conclusively presumed to be appropriate for purposes of Section 10 of the Plan.