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EXHIBIT 4a
21ST CENTURY CABLE TV, INC.
STOCK OPTION PLAN
1. Preamble.
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21st Century Cable TV, Inc., an Illinois corporation (the "Company"),
establishes the 21st Century Cable TV, Inc. Stock Option Plan (the "Plan"),
effective January 30, 1997, as a means whereby the Company may, through awards
of non-qualified stock Options:
(a) provide employees of the Company and any of its Subsidiaries with
additional incentive to promote the success of the Company's and its
Subsidiaries' businesses;
(b) enable such employees to acquire proprietary interests in the
Company; and
(c) encourage such employees to remain in the employ of the Company
and its Subsidiaries.
2. Definitions.
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2.01 "Board" or "Board of Directors" means the board of directors of
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the Company.
2.02 "Cause" means, (a) with respect to a Participant who has an
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employment agreement with the Company, "Cause" as such term is defined in such
employment agreement, and (b) with respect to a Participant who does not have an
employment agreement with the Company, the Participant's (i) unsatisfactory job
performance as measured by management of the Company against the Participant's
job description, (ii) theft or embezzlement of any material property of the
Company or any Subsidiary; (iii) gross, willful or wanton negligence in
performing his/her duties as an employee of the Company or any Subsidiary; (iv)
unauthorized use of the Company's or any Subsidiary's trade secrets or
confidential information; and/or (v) commission of a felony which adversely
affects the Company's or any Subsidiary's business, reputation or business
relations.
2.03 "Change in Control" means, the occurrence of any one of the
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following events:
(a) any consolidation or merger of the Company in which the Company
is not the continuing or surviving corporation or which contemplates that
all or substantially all of the business and/ or assets of the Company
shall be controlled by another corporation or a recapitalization in which
the shareholders of the Company on January 30, 1997 do not continue to
beneficially own more than 50% of the combined voting power of the
Company's securities, having the right to vote (whether presently or upon
exercise, conversion or exchange of any such securities) in the election of
directors;
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(b) any sale, lease, exchange or transfer (in one transaction or
series of related transactions) of all or substantially all of the assets
of the Company and/or its Subsidiaries;
(c) the day of implementation of any plan or proposal for the
liquidation or dissolution of the Company which has been approved by the
shareholders of the Company;
(d) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Exchange Act), other than the shareholders of the Company on January
30, 1997, shall become the beneficial owner of securities of the Company
representing more than 50% of the combined voting power of the Company's
securities having the right to vote (whether presently or upon exercise,
conversion or exchange of any such securities) in the election of
directors; or
(e) a "Qualified Public Offering," as such term is defined in the
Stock Purchase Agreement by and among the Company and the parties thereto
dated January 30, 1997;
provided, however, that notwithstanding paragraphs (a) through (d) hereof, a
Change in Control shall not be deemed to occur unless the shareholders of the
Company on January 30, 1997, receive cash or stock or other equivalent
consideration for their shares.
2.04 "Code" means the Internal Revenue Code of 1986, as it exists now and
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as it may be amended from time to time.
2.05 "Committee" means the Compensation Committee of the Board.
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2.06 "Common Stock" means the common stock of the Company, no par value,
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or, if the various series of common stock are eliminated by amendment to, or
restatement of, the Company's Articles of Incorporation, the resulting class of
equity securities ordinarily (and apart from rights accruing under special
circumstances) having the right to vote for the election of directors.
2.07 "Company" means 21st Century Cable TV, Inc., an Illinois corporation,
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and any successor thereto.
2.08 "Exchange Act" means the Securities Exchange Act of 1934, as it exists
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now or from time to time may hereafter be amended.
2.09 "Fair Market Value" means for the relevant day;
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(a) If shares of Common Stock are listed or admitted to unlisted
trading privileges on any national or regional
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securities exchange, the last reported sale price, regular way, on the
composite tape of that exchange on the day Fair Market Value is to be
determined;
(b) If the Common Stock is not listed or admitted to unlisted trading
privileges as provided in paragraph (a), and if sales prices for
shares of Common Stock are reported by the National Association of
Securities Dealers, Inc. Automated Quotations, Inc. National Market
System ("NASDAQ System"), then the last sale price for Common Stock
reported as of the close of business on the day Fair Market Value is
to be determined, or if no such sale takes place on that day, the
average of the high bid and low asked prices so reported; if Common
Stock is not traded on that day, the next preceding day on which such
stock was traded; or
(c) If trading of the Common Stock is not reported by the NASDAQ
System or on a stock exchange, Fair Market Value will be determined by
the Committee based upon the best available data, which determination
shall be conclusive for all purposes.
2.10 "Option" means the right of a Participant to purchase a specified
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number of shares of Common Stock, subject to the terms and conditions of the
Plan and the agreement between the Company and the Participant evidencing such
right. All Options granted under this Plan are not intended to qualify under
Section 422 of the Code.
2.11 "Option Date" means the date upon which an Option is awarded to a
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Participant under the Plan.
2.12 "Option Price" means the price per share at which an Option may be
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exercised.
2.13 "Participant" means an individual to whom an Option has been granted
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under the Plan.
2.14 "Plan" means the 21st Century Cable TV, Inc. Stock Option Plan, as set
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forth herein and as from time to time amended.
2.15 "Securities Act" means the Securities Act of 1933, as it exists now or
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from time to time may hereinafter be amended.
2.16 "Subsidiary" means any corporation or other entity of which the
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majority voting power or equity interest is owned directly or indirectly by the
Company.
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2.17 Rules of Construction.
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(a) Governing Law. The construction and operation of this Plan are
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governed by the internal laws of the State of Illinois, notwithstanding
any choice of law provision.
(b) Undefined Terms. Unless the context requires another meaning, any
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term not specifically defined in this Plan has the meaning given to it by
the Code.
(c) Headings. All headings in this Plan are for reference only and
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are not to be utilized in construing the Plan.
(d) Gender. Unless clearly appropriate, all nouns of whatever gender
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refer indifferently to persons of any gender.
(e) Singular and Plural. Unless clearly inappropriate, singular terms
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refers also to the plural and vice versa.
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(f) Severability. If any provision of this Plan is determined to be
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illegal or invalid for any reason, the remaining provisions shall continue
in full force and effect and shall be construed and enforced as if the
illegal or invalid provision did not exist, unless the continuance of the
Plan in such circumstances is not consistent with its purposes.
3. Stock Subject to the Plan.
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Except as otherwise provided in Section 10, the aggregate number of shares
of Common Stock that may be issued under Options under this Plan may not exceed
728.6677 shares. Reserved shares may be either authorized but unissued shares
or treasury shares, in the Board's discretion. If any awards hereunder shall
terminate or expire, as to any number of shares, new Options may thereafter be
awarded with respect to such shares.
4. Administration.
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The Plan shall be administered by the Committee. In addition to any other
powers set forth in this Plan, the Committee has the exclusive authority:
(a) to construe and interpret the Plan, and to remedy any ambiguities
or inconsistencies therein;
(b) to establish, amend and rescind appropriate rules and regulations
relating to the Plan;
(c) subject to the express provisions of the Plan, to determine the
individuals who will receive awards of Options;
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the times when they will receive them, the number of shares to be subject
to each award and the Option Price, payment terms, payment method, and
expiration date applicable to each award;
(d) to contest on behalf of the Company or Participants, at the
expense of the Company, any ruling or decision on any matter relating to
the Plan or to any awards of Options;
(e) generally, to administer the Plan, and to take all such steps and
make all such determinations in connection with the Plan and the awards of
Options granted thereunder as it may deem necessary or advisable; and
(f) to determine the form in which tax withholding under Section 13
of this Plan will be made.
5. Eligible Employees.
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Subject to the provisions of the Plan, the Committee shall determine from
time to time those employees of the Company or a Subsidiary who shall be
designated as Participants and the number, if any, of Options to be awarded to
each such Participant; provided, however, that no Options shall be awarded under
the Plan after the expiration of the period of ten years from the date this Plan
is adopted by the Board.
6. Terms and Conditions of Option.
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The Committee may, in its discretion, grant Options to any Participant
under the Plan. Each Option shall be evidenced by an agreement between the
Company and the Participant. Each Option agreement, in such form as is approved
by the Committee, shall be subject to the following express terms and conditions
and to such other terms and conditions, not inconsistent with the Plan as the
Committee may deem appropriate:
(a) Option Period. Each Participant's Option will expire as of the
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earliest of:
(i) the date on which it is forfeited under the provisions of
Section 8;
(ii) 10 years from the Option Date; or
(iii) the date on which it expires pursuant to the relevant
Option agreement.
(b) Option Price. At the time when the Option is granted, the
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Committee will fix the Option Price. The Option Price may be greater than,
less than or equal to the Fair
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Market Value on the Option Date, as determined in the sole discretion of
the Committee.
(c) Other Option Provisions. The form of Option agreement authorized
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by the Plan may contain such other provisions as the Committee may from
time to time determine.
7. Manner of Exercise of Options.
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To exercise an Option in whole or in part, a Participant (or, after the
Participant's death, the Participant's executor or administrator) must give
written notice to the Committee, stating the number of shares with respect to
which he intends to exercise the Option. The Company will issue the shares with
respect to which the Option is exercised upon payment in full of the amount (the
"Option Amount") determined by multiplying the number of shares with respect to
which the Option is being exercised by the Option Price. The Option Amount may
be paid in (i) cash, (ii) shares of Common Stock having an aggregate Fair Market
Value, as determined on the date of delivery, equal to the Option Amount, (iii)
by delivery of irrevocable instructions to a broker to promptly deliver to the
Company the amount of sale or loan proceeds necessary to pay for all Common
Stock acquired through such exercise and any tax withholding obligations
resulting from such exercise, or (iv) in the discretion of the Committee by cash
for the par value of the Common Stock plus a promissory note for the balance of
the Option Amount, which note shall contain such terms and conditions as the
Committee may determine, including without limitation the right to repay the
note partially or wholly with Common Stock. The Option Amount may be paid in
shares of Common Stock which were received by the Participant upon the exercise
of one or more Options.
8. Vesting.
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A Participant may not exercise an Option until it has become vested. The
portion of an Option that is vested depends upon the period that has elapsed
since the Option Date. Options shall vest in accordance with the provisions of
this Section 8 and the Participant's Option Agreement.
(a) Unless the Committee establishes a different vesting schedule in
a Participant's Option Agreement at the time when an Option is granted, no
Option granted under this Plan shall vest during the first year of a
Participant's employment; provided, however, that if the Participant is
still employed by the Company on the first anniversary of his or her
employment date, such Option shall have vested for 1/4th of the shares of
Common Stock covered by such Option, and thereafter, shall vest 1/48/th/
each month of the next three succeeding years.
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(b) Except as provided below, in a Participant's Option Agreement or
in Section 9, if a Participant's employment with the Company or its
Subsidiaries is terminated for reasons other than (i) Cause, or (ii) by the
Participant with Notice (as provided in the Participant's employment
agreement) such Participant and/or his executor, personal representative
(s) or legatee(s), as the case may be, shall continue vesting in any
Options that are not vested at the time of such termination and the
Participant will have until the later of (A) a Qualified Public Offering or
(B) one year from the date on which the final installment of the
Participant's Options have vested in accordance herewith to exercise such
Options. A transfer from the Company to a Subsidiary or affiliate, or vice
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versa is not a termination of employment for purposes of this Plan.
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(c) Unless the Committee in its sole discretion specifically waives
the application of this paragraph, then notwithstanding the vesting
schedule contained herein or in the Participant's agreement, if the
Participant's employment is terminated for Cause, other than in accordance
with subparagraph 9(c)(ii) of the Participant's employment agreement with
the Company, all Options granted to the Participant will be immediately
cancelled and forfeited by the Participant upon delivery to him of notice
of such termination.
(d) If the Participant's employment is terminated (i) for Cause in
accordance with subparagraph 9(c)(ii) of the Participant's employment
agreement with the Company, or (ii) with Notice by the Participant, then
such Participant shall continue vesting in any Options that are not vested
at the time of such termination through the last day of the calendar month
in which such termination occurred, and thereafter, all the unvested
Options granted to the Participant will be immediately cancelled and
forfeited by the Participant. The Participant shall be entitled to exercise
all previously vested Options in accordance with the terms of the Plan and
his Option Agreement.
9. Change in Control.
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Notwithstanding the provisions of Section 8 or anything contained in a
Participant's Option agreement to the contrary, immediately prior to a Change in
Control all Options shall become 100% vested and immediately exercisable.
Notwithstanding the foregoing, no Options granted under the Plan shall be
exercisable if such exercise will result in the imposition of any excise tax
under Section 280G of the Code.
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10. Adjustments to Reflect Changes in Capital Structure.
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The Committee shall make any adjustments it deems necessary to prevent
accretion, or to protect against dilution, in the number and kind of shares
authorized by the Plan and with respect to outstanding Options, in the number
and kind of shares covered thereby and in the applicable price in the event of a
stock split or stock dividend.
11. Non-Transferability of Options.
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Except as provided in the Option agreement, the Options awarded under the
Plan are not transferable, voluntarily or involuntarily, other than by will or
the laws of descent and distribution, or pursuant to a qualified domestic
relations order as defined in Section 414 (p) of the Code; provided, however,
that Options may be transferred to (i) a trust which has as its exclusive
beneficiaries such Participant, or members of the immediate family of such
Participant, and (ii) any members of the immediate family of any direct or
indirect holder of such Participant. For purposes of this Section, "immediate
family" means children, stepchildren and grandchildren, including relationships
arising from legal adoption of a Participant.
12. Rights as Shareholder.
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No Common Stock may be delivered upon the exercise of any Option until full
payment of the particular Option Amount has been made. A Participant has no
rights whatsoever as a shareholder with respect to any shares covered by an
Option until the date of the issuance of a stock certificate for the shares.
13. Withholding Tax
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The Company shall have the right to withhold in cash or shares of Common
Stock with respect to any payments made to Participants under the Plan any taxes
required by law to be withheld because of such payments.
14. No Right To Employment.
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Participation in the Plan will not give any Participant a right to be
retained as an employee of the Company or any Subsidiary, or any right or claim
to any benefit under the Plan, unless the right or claim has specifically
accrued under the Plan.
15. Amendment of the Plan.
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The Committee may from time to time amend or revise the terms of this Plan
in whole or in part and may without limitation, adopt any amendment deemed
necessary; provided, however, that no change in any award previously granted to
a Participant may be made that
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would impair the rights of the Participant without the Participant's consent.
16. Conditions Upon Issuance of Shares.
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An Option shall not be exercisable and a share of Common Stock shall not be
issued pursuant to the exercise of an Option and unless the exercise of such
Option and the issuance and delivery of such share pursuant thereto shall comply
with all relevant provisions of law, including, without limitation, the
Securities Act, the Exchange Act, the rules and regulations promulgated
thereunder, and the requirements of any stock exchange upon which the shares of
Common Stock may then be listed, and shall be further subject to the approval of
counsel for the Company with respect to such compliance. As a condition to the
exercise of an Option, the Company may require the person exercising such Option
to represent and warrant at the time of any such exercise that the Common Stock
is being purchased only for investment and without any present intention to sell
or distribute such shares if, in the opinion of counsel for the Company, such a
representation is required by any of the aforementioned relevant provisions of
law. Additionally, as a condition to the exercise of an Option, if the
Shareholders Agreement dated as of January 30, 1997 by and between the Company
and its Shareholders (as such term is defined therein) (the "Shareholders
Agreement") is still in effect, the Participant shall be required to execute a
counterpart to the Shareholders Agreement.
17. Participation Rights.
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In the event of a sale of equity securities by or on behalf of one or more
of the Company's shareholders (in one transaction or series of transactions)
resulting in a Change in Control, Participants shall be given timely notice
thereof and shall have the right to surrender Options in such sale and receive,
on a pro rata basis, the amount as to which the Options could be converted if
such Option was exercised immediately prior to such transaction, less the Option
Price.
18. Effective Date and Termination of Plan.
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18.1 Effective Date. This Plan is effective as of January 30, 1997.
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18.2 Termination of the Plan. The Committee may terminate the Plan at any
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time with respect to any shares that are not then subject to Options.
Termination of the Plan will not affect the rights and obligations of any
Participant with respect to Options granted and which remain outstanding
immediately prior to termination.
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