EX-10.1



 










December 1, 2004



Mr. Tim Evard

c/o OpenTV Corp.

275 Sacramento Street

San Francisco, California 94111




Dear Tim:




     This letter confirms our offer to you of the position of Senior Vice
President and General Manager of Marketing and Applications Products, reporting
directly to me in my capacity as Chief Executive Officer. You shall have the
rights, powers, duties and obligations relating to such office as are
customarily associated with such office and such other rights, powers, duties
and obligations as we may agree upon from time to time. Your principal place
of work, subject to reasonable and customary travel, shall be at the OpenTV
offices located in San Francisco, California, and you will be expected to
relocate to the San Francisco Bay area within a reasonable period of time after
you have accepted this offer. Your employment will be deemed to have commenced
on November 22, 2004, provided, however, that your grant of options will not be
made until approved by the Compensation Committee as described in more detail
below.



     During the course of your employment with OpenTV you shall devote your
full business time and efforts to OpenTV; provided, that, nothing herein shall
prevent you from (i) participating in industry, trade, professional, charitable
and community activities, (ii) serving on corporate, civic or charitable boards
or committees, and (iii) managing your personal investments and affairs, in
each case so long as such activities do not conflict with OpenTV’s interests or
interfere with the performance of your responsibilities to OpenTV.



Base Salary and Annual Bonus



     Your annual base salary will be $375,000, which shall be paid to you in
regular intervals in accordance with OpenTV’s customary payroll schedules for
salaried employees, but in no event less frequently than twice each month. For
each of the calendar years in which you are employed by OpenTV, you shall be
eligible for annual discretionary bonus awards (the target amount of which
shall be established by the Chief Executive Officer of the Company, subject to
approval by the Compensation Committee (the “Committee”) of the Board of
Directors of OpenTV (the “Board”) prior to the commencement of any calendar
year to which it relates), based on financial and strategic objectives agreed
to annually by the Committee and me. Your discretionary bonus, if any, will be
paid to you, at the option of the Committee, in a cash payment, in shares of
capital stock of OpenTV, or in a combination of cash and capital stock of
OpenTV. Your



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target bonus for 2005 is 35% of your annual base salary, which may change
in subsequent years, as described above, within the discretion of the
Committee, but such targeted bonus percentage shall not be materially less than
the target bonus percentages of other senior executives of OpenTV at the same
level. Such annual discretionary bonus awards shall be payable or issuable, as
applicable, as soon as practicable after the Committee and I can determine
whether, and the degree to which, such financial and strategic objectives have
been reached, but in no event later than any discretionary performance bonuses
are paid to other senior executives of OpenTV.



Stock Options



     Subject to approval by the Committee, the Company will grant to you stock
options under the OpenTV Corp. 2003 Incentive Plan (the “Plan”) to purchase
Two Hundred Thousand (200,000) Class A Ordinary Shares (the “Option”), with an
exercise price equal to the fair market value of the Class A Ordinary Shares on
the date of grant (the “Grant Date”). The Option shall vest in equal annual
installments on each of the second, third, fourth and fifth anniversaries of
the Grant Date and shall be evidenced by a standard stock option agreement
approved by the Committee for the grant of other stock options under the Plan,
a copy of which is attached hereto as Exhibit A and by this reference
incorporated herein, provided, that to the extent there are any inconsistencies
between the terms of this Agreement and the terms of such form of stock option
agreement, the terms of this Agreement shall govern, and, to the extent
necessary, the form of option agreement entered into by you and the Company
will be revised to make it consistent herewith. The grant date for your Option
will be deemed to be the date of this letter.



Termination



     If either: (i) OpenTV terminates your employment without Cause, as defined
below, or (ii) you resign your employment due to a material reduction of your
duties and/or responsibilities (which caused a significant amount of your duties to be
inconsistent with the duties and responsibilities normally assigned to a person
serving in the capacity of Senior Vice President and General Manager of
Marketing and Applications Products) or a material reduction in your annual
base salary, then, in each such case, you will be entitled to the following:





	 	•	 	a lump sum payment in an amount equal to the sum of (a) your annual
base salary through the date of termination, (b) vacation time not used
as of the date of termination to the extent that such vacation time has
been accrued during the calendar year of termination, calculated based
upon your base salary at the date of termination, and (c) business
expenses reimbursable under this letter, in each case to the extent not
theretofore paid;
	 
	 	•	 	continuation of your base salary then in effect, payable in accordance
with the normal payroll practices of OpenTV in effect on the date of
termination, for a period of six (6) months after the date of
termination, unless the date of such termination is within 12 months
following the date of any “Approved




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	 	 	 	Transaction”, “Board Change” or “Control Purchase” (as such terms are
defined in the Plan, and collectively referred to herein as “Change in
Control”), in which case the amount due to you pursuant to this
sub-paragraph shall be equal to 12 months of your then base salary,
payable in accordance with the normal payroll practices of OpenTV in
effect on the date of termination;







	 	•	 	continued vesting of all options granted to you under the Plan through
six (6) month anniversary of the date of your termination; provided,
however, that if a termination to which this paragraph applies occurs
within 12 months after a Change in Control (and the vesting of such
options have not otherwise been accelerated pursuant to the terms of the
Plan), then, in such event, vesting of all options granted to you under
the Plan shall continue until the 12 month anniversary of the date of
your termination; and
	 
	 	•	 	all vested stock options held by you following the termination of your
employment with OpenTV pursuant to the first sentence of this paragraph
(including any stock options that vest following the date of termination
pursuant to the immediately preceding sub-paragraph above) shall remain
exercisable for a period of 90 days following the date on which the last
options vest in accordance with the continued vesting provisions of the
immediately preceding sub-paragraph above (but not later than the
scheduled expiration of such stock option).





     If you intend to resign your employment as a result of a material
reduction of your duties or your annual base salary, you must notify OpenTV in
writing. If OpenTV fails to cure or remedy your reason for resignation within
thirty (30) days of its receipt of your notification your resignation shall be
effective on the earlier of (i) the date OpenTV notifies you in writing of its
determination not to cure or remedy your reason for resignation or (ii) the
thirtieth (30th) day following OpenTV’s receipt of your notification.



     OpenTV may terminate your employment for Cause at any time upon written
notice of such termination to you setting forth in reasonable detail the nature
of such Cause. If OpenTV terminates your employment for Cause, or you resign
for a reason other than those stated in the first paragraph under “Termination”
above, then you will be entitled to a lump sum in an amount equal to the sum of
(i) your annual base salary through the date of termination, (ii) vacation time
not used as of the date of termination to the extent that such vacation time
has been accrued during the calendar year of termination, calculated based upon
your base salary at the date of termination, and (iii) business expenses
reimbursable under this letter, in each case to the extent not theretofore
paid. In addition, upon termination of your employment by OpenTV for Cause,
all stock options granted to you, notwithstanding any prior vesting, shall
immediately terminate.



     Solely for purposes of this letter, “Cause” shall be deemed to have
occurred upon the happening of any of the following: (A) the breach by you of
any material provision of the Employee Proprietary Information and Inventions
Agreement, dated as of the date of your acceptance of this letter (the
“Employee Inventions Agreement”), a copy of which is attached hereto as Exhibit
B, (B) any breach by you of any of the provisions set



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forth under the heading “Noncompetition” below, (C) your having been
charged with a felony under the laws of the United States or any state thereof
(other than a traffic violation), (D) your act of fraud, theft, embezzlement,
other material act of dishonesty or any material breach of fiduciary duty owed
to OpenTV, (E) your willful failure to perform, or gross neglect in the
performance of, your duties and responsibilities to OpenTV (other than as a
result of illness or incapacity), and (F) your agreement to settle any charges
brought against you by the Securities and Exchange Commission with respect to
any act or omission by you, which charges involve an allegation of fraud or, in
the good faith opinion of the Board, would reasonably likely to have resulted
in a conviction had the matter proceeded.



Benefits; Vacation; Expenses; Relocation



     You will have the right to participate in and to receive benefits from all
present and future life, accident, disability, medical, pension and savings
plans and all similar benefits made available generally to executives of
OpenTV. The amount and extent of benefits to which you are entitled shall be
governed by the specific benefit plan, as it may be amended from time to time.



     You will be entitled to four weeks of paid vacation per year or such
longer period as may be provided by OpenTV. Such vacation shall be taken at
such times and intervals as shall be determined by you, subject to the
reasonable business needs of OpenTV. You shall not be permitted to accrue more
than 1.75 times your annual vacation entitlement.



     OpenTV shall pay or reimburse you promptly for all reasonable expenses and
other disbursements incurred or paid by you in the performance of your duties
and responsibilities to OpenTV, including those incurred or paid in connection
with business related travel, telecommunications and entertainment, subject to
reasonable substantiation by you in accordance with OpenTV’s policies.



     As an additional benefit, OpenTV will reimburse you for reasonable moving
expenses related to your relocation from your current residence to the San
Francisco Bay Area in accordance with the terms of the separate Relocation
Acknowledgement that you are required to sign. Reimbursable moving expenses
will include normal costs of moving household and personal items, as well as
other pre-approved relocation expenses which you may incur, and may, subject to
prior approval, include temporary housing expenses for a limited period not to
exceed two months and brokerage commissions payable in respect of a rental
apartment, but shall not, in any event, include brokerage commissions payable
in connection with the sale or purchase of a home, closing costs for the sale
or purchase of a house, loan fees or similar types of expenses. Reimbursement
is subject to your presentation to OpenTV of satisfactory receipts or other
evidence of expenses incurred.



Noncompetition



     Covenant Not to Compete. During the period of your employment with OpenTV
and ending upon the first anniversary of the date of termination of your
employment with



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OpenTV (the “Restricted Period”), you agree that you will not, directly or
indirectly, engage in, participate in, or acquire an equity interest in any
person, firm, corporation or other entity (a “Person”), which engages or
participates in any business that operates any line of business, business
activity or operations that are competitive with any line of business, business
activity or operations conducted by OpenTV during the Restricted Period (the
“Restricted Business”).



     Exceptions to Covenant Not to Compete. Notwithstanding the foregoing, the
restrictions set forth in the immediately preceding paragraph shall not be
applicable to:





	 	•	 	any acquisition of an interest in a Person, which is engaged in a
Restricted Business so long as (x) you do not control (whether through
the ownership of voting securities, by contract or otherwise) such other
Person and (y) the Restricted Business conducted by such other Person
does not constitute ten percent (10%) or more of its business (as
measured by its assets or revenues);
	 
	 	•	 	the acquisition of beneficial ownership (as defined in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended) by you
or any member of your Immediate Family (as defined below) of an equity
interest in any Person engaged in a Restricted Business, so long as (i)
such equity interest (A) is listed or traded on a national securities
exchange or the NASDAQ Stock Market and (B) constitutes less than five
percent (5%) of the outstanding equity interests of such Person and (ii)
you are not actively involved in the management of the business of such
Person; the term “Immediate Family” shall mean your spouse, parents,
children, siblings, mothers and fathers-in-law, sons and
daughters-in-law, and brothers and sisters-in-law;
	 
	 	•	 	your engaging in or participating in the Restricted Business in
connection with your employment with OpenTV at the direction of the Board
or the Chairman of the Board;
	 
	 	•	 	situations where a termination of employment with OpenTV is (i)
terminated by you pursuant to clause (ii) of the first sentence under the
paragraph captioned “Termination,” or (ii) effected by OpenTV without
Cause or for reasons unrelated to performance, such as a result of a
reduction in workforce; or
	 
	 	•	 	you being employed by or otherwise rendering services to Liberty Media
Corporation, any of its subsidiaries or controlled affiliates of any
other person or entity to which Liberty Media Corporation may consent.





     Territory for Covenant Not to Compete. You hereby acknowledge and agree
that the Restricted Businesses engaged in by OpenTV and its subsidiaries
extends throughout the United States and in other jurisdictions in which OpenTV
conducts significant business activities (the “Restricted Territory”) and that
OpenTV and its subsidiaries may be harmed by competitive conduct anywhere in
the Restricted Territory. You therefore agree that the covenants contained in
the provisions under the heading “Noncompetition” shall be applicable in and
throughout the Restricted Territory, as well as throughout other



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areas of the world in which OpenTV and its subsidiaries may be (or have
prepared written plans to be) doing business from time to time. You further
warrant and represent that, because of your varied skill and abilities, you do
not need to compete with OpenTV and its subsidiaries in any Restricted
Business, and that this letter will therefore not prevent you from earning a
livelihood. You acknowledge that the restrictions contained in the provisions
under the heading “Noncompetition” constitute reasonable protections for OpenTV
and its subsidiaries in light of the foregoing and in light of the
consideration and promises to you contained in the letter.



Arbitration of Claims



     You hereby acknowledge and agree that, except as provided below, all
disputes concerning your employment with OpenTV, the termination thereof, the
breach by either party of the terms of this letter or any other matters
relating to or arising from your employment with OpenTV shall be resolved in
binding arbitration in a proceeding in San Francisco, California, administered
by and under the rules and regulations of the American Arbitration Association.
Both parties and the arbitrator will treat the arbitration process and the
activities that occur in the proceedings as confidential. Nothing contained in
this paragraph shall limit OpenTV’s right to seek equitable relief in any court
of competent jurisdiction in respect of the matters set forth in the
“Noncompetition” provisions above.



Employment At Will



     By signing this letter, you understand and agree that your employment with
OpenTV is at-will. Therefore, your employment can terminate, with or without
Cause, and with or without notice, at any time, at your option or OpenTV’s
option, and OpenTV can terminate or change all other terms and conditions of
your employment, with or without Cause, and with or without notice, at any
time, in all cases subject to the other terms and conditions of this letter.
This at-will relationship will remain in effect throughout your employment with
OpenTV Corp. or any of its subsidiaries or affiliates. This letter, including
the documents contained in Exhibit A, and any stock option agreement between
you and OpenTV, constitute the entire agreement, arrangement and understanding
between you and OpenTV on the nature and terms of your employment with OpenTV.
This letter supersedes any prior or contemporaneous agreement, arrangement or
understanding on this subject matter, except, subject to the third succeeding
sentence, for any stock option agreement between you and OpenTV. By executing
this letter as provided below, you expressly acknowledge the termination of any
such prior agreement, arrangement or understanding. Also, by your execution of
this letter, you affirm that no one has made any written or verbal statement
that contradicts the provisions of this letter. In the event of any
inconsistency between the terms contained in this letter and the terms
contained in any stock option agreement between you and OpenTV, the terms
contained in this letter shall control, such that the provisions regarding
vesting or termination contained in your stock option agreements shall be
superseded by the provisions of this letter to the extent of any conflict and
the non-competition covenant contained in this letter shall also be supersede
the provisions of any other similar covenant contained in your stock option
agreement to the extent of any



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conflict. The at-will nature of your employment, as set forth in this
paragraph, can be modified only by a written agreement signed by both OpenTV’s
Chief Executive Officer and you which expressly alters it. This at-will
relationship may not be modified by any oral or implied agreement, or by any
policies of OpenTV, practices or patterns of conduct.



     We are enthusiastic about your potential employment with us and the
contributions you can make to our executive management team and OpenTV. Please
retain the original offer letter for your records and return the signed copy
and required documents to me.


	 	 	 	 	 
	 	Sincerely,





OPENTV, INC.

 	 
	 	By:  	/s/ Jim Chiddix
 	 
	 	Name:  	Jim Chiddix 	 	 
	 	Title:  	Chairman and Chief Executive
Officer 	 	 
	 





Signature of Acceptance:



/s/ Tim Evard




Tim Evard




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Exhibit A



OPENTV CORP.




2003 INCENTIVE PLAN




ARTICLE I




PURPOSE AND EFFECTIVENESS




     1.1 Purpose. The purpose of the Plan is to promote the success of the
Company by providing a method whereby (i) eligible employees (including
employees who are directors) of the Company and its Affiliates, (ii)
independent directors of the Company and (iii) independent contractors
providing services to the Company or its Subsidiaries may be awarded additional
remuneration for services rendered and encouraged to invest in stock of the
Company, thereby increasing their proprietary interest in the Company’s
businesses, encouraging them to remain in the employ of, or continue to provide
service to, the Company or its Subsidiaries, and increasing their personal
interest in the continued success and progress of the Company or its
Subsidiaries. The Plan is also intended to aid in (i) attracting persons of
exceptional ability to become directors, officers and employees of the Company
and its Subsidiaries and (ii) inducing independent contractors to agree to
provide services to the Company.



     1.2 Effective Date. The Plan was adopted by the Compensation Committee of
the Board by unanimous written consent as of May 6, 2003, but shall be subject
to approval by the affirmative vote of the holders of at least a majority of
the voting power of the outstanding shares of stock of the Company represented
in person or by proxy and entitled to vote at the 2003 annual meeting of
stockholders of the Company. Any Awards under the Plan made prior to such
stockholder approval shall be conditioned upon such approval and shall be null
and void if such approval is not obtained.



ARTICLE II




DEFINITIONS




     2.1 Certain Defined Terms. Capitalized terms not defined elsewhere in the
Plan shall have the following meanings (whether used in the singular or
plural):




     “Affiliate” of a person or an Entity means any other person or
Entity that, directly or indirectly, through one or more intermediaries,
controls, is controlled by, or is under common control with such person
or Entity.




     “Agreement” means a stock option agreement, stock appreciation
rights agreement, restricted shares agreement or stock units agreement,
or an agreement evidencing more than one type of Award, specified in
Section 10.5, as any such Agreement may be supplemented or amended from
time to time.




     “Approved Transaction” means any transaction in which the Board (or,
if approval of the 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
Ordinary Shares 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 holders of Ordinary Shares of the Company
immediately prior to such transaction have the same proportionate
ownership of the Ordinary Shares 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 or Entities who are holders of
Ordinary Shares 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 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 or other
transfer (in one transaction or a series of related transactions) of all,
or substantially all, of the assets of the Company.



 









 






     “Award” means a grant of Options, SARs, Restricted Shares, Stock
Units and/or cash under this Plan.




     “Board” means the Board of Directors of the Company.




     “Board Change” means, during any period of two consecutive years,
individuals who at the beginning of such period constituted the entire
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 (i) Liberty or (ii) the vote of a majority of the directors
then still in office who were directors at the beginning of the period
(or whose nomination for election was so approved).




     “Class A Ordinary Shares” means the Class A Ordinary Shares, no par
value, of the Company (or any securities the Class A Ordinary Shares may
be exchanged for or converted into in connection with a Domestication
Transaction).




     “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.




     “Committee” means the committee of the Board appointed pursuant to
Section 3.1 to administer the Plan, or if no such committee shall have
been appointed, the Board.




     “Company” means OpenTV Corp., a company organized under the laws of
the British Virgin Islands.




     “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), or other person or
Entity (other than the Company, any Subsidiary, any employee benefit plan
sponsored by the Company or any Subsidiary, or any Liberty Entity) shall
purchase any Ordinary Shares of the Company (or securities convertible
into Ordinary Shares of the Company) pursuant to a tender offer or
exchange offer (other than any such purchase that, alone and together
with any other purchase of Ordinary Shares (or securities convertible
into Ordinary Shares of the Company) by such “person” or Entity, or any
of its respective affiliates, represents less than five percent (5%) 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), without the prior
consent of the Board, or (ii) any person (as such term is so defined), or
other person or Entity (other than the Company, any Subsidiary, any
employee benefit plan sponsored by the Company or any Subsidiary, any
Liberty Entity, or any Enumerated 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 twenty percent (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 transactions) (A)
to which any Liberty Entity is a party or (B) that is approved by the
Board. Anything contained herein to the contrary notwithstanding, no
such purchase or transaction shall constitute a “Control Purchase” so
long as after consummation of any such purchase or transaction the
Liberty Entities beneficially own securities of the Company representing
more than fifty percent (50%) 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). For purposes of this definition, “Enumerated Person” means
each of the Chairman of the Board and the President of Liberty as of the
Effective Date of this Plan and their respective family members, estates
and heirs and any trust or other investment vehicle for the primary
benefit of any of such Entities or persons or such persons’ respective
family members or heirs. As used with respect to any person, the term
“family member” means the spouse, siblings and lineal descendants of such
person.



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     “Disability” means the inability to engage in any substantial
gainful activity by reason of any medically determinable physical or
mental impairment which can be expected to result in death or which has
lasted or can be expected to last for a continuous period of not less
than twelve (12) months.




     “Dividend Equivalents” means, with respect to Restricted Shares to
be issued at the end of the Restriction Period, to the extent specified
by the Committee only, an amount equal to all dividends and other
distributions (or the economic equivalent thereof) that are payable to
stockholders of record during the Restriction Period on a like number and
kind of Class A Ordinary Shares.




     “Domestic relations order” means a domestic relations order as
defined by the Code or Title I of the Employee Retirement Income Security
Act, or the rules thereunder.




     “Domestication Transaction” means a transaction pursuant to which
the Company or any successor thereto is incorporated under the laws of a
jurisdiction outside the British Virgin Islands in the manner provided
under those laws.




     “Effective Date” means the date on which the Plan originally became
effective.




     “Entity” means any partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture or other entity of any nature.




     “Exchange Act” means the Securities Exchange Act of 1934, as amended
from time to time, or any successor statute or statutes thereto.
Reference to any specific Exchange Act section shall include any
successor section.




     “Exercise Price” has the meaning ascribed thereto in Section 6.2.




     “Fair Market Value” of a Class A Ordinary Share 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 Class A Ordinary Share 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 Class A Ordinary Shares
are listed on an exchange, on the principal exchange on which the Class A
Ordinary Shares are listed. If for any day the Fair Market Value of a
Class A Ordinary Share is not determinable by any of the foregoing means
(or if the Committee determines for any purpose that the Fair Market
Value of a Class A Ordinary Share should be determined on an intra-day
basis), then the Fair Market Value for such day (or at a given time on
such day) shall be determined in good faith by the Committee on the basis
of such quotations and other considerations as the Committee deems
appropriate.




     “Free Standing SAR” has the meaning ascribed thereto in Section 7.1.




     “Holder” means an employee (including any employee who is a
director) of the Company or any of its Affiliates, an Independent
Director or an independent contractor who has received an Award under
this Plan.




     “Incentive Stock Option” means a stock option granted under Article
VI with respect to Class A Ordinary Shares that is intended to be an
incentive stock option within the meaning of Section 422 of the Code.




     “Independent Director” means a director of the Company who is not an
employee of (i) the Company or any Subsidiary of the Company, or (ii) any
Entity controlling, or under common control with, the Company.




     “Liberty” means Liberty Media Corporation and any direct or indirect
successor by merger, consolidation, binding share exchange, transfer or
otherwise to all or substantially all of the assets of Liberty Media
Corporation.



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     “Liberty Entity” means (i) Liberty, (ii) any Affiliate of Liberty,
or (iii) any employee benefit plan sponsored by Liberty or any Affiliate
of Liberty.




     “Nasdaq” means The Nasdaq Stock Market.




     “Nonqualified Stock Option” means a stock option granted under
Article VI with respect to Class A Ordinary Shares that is designated a
nonqualified stock option.




     “Option” means any Incentive Stock Option or Nonqualified Stock
Option.




     “Ordinary Shares” means the Class A Ordinary Shares and the Class B
Ordinary Shares, no par value, of the Company (or any securities the
Class B Ordinary Shares may be exchanged for or converted into in
connection with a Domestication Transaction).




     “Plan” means the Company’s 2003 Incentive Plan, as set forth in this
document.




     “Restricted Shares” means Class A Ordinary Shares or the right to
receive Class A Ordinary Shares, as the case may be, awarded pursuant to
Article VIII.




     “Restriction Period” means a period of time beginning on the date of
each Award of Restricted Shares and ending on the Vesting Date with
respect to such Award.




     “Retained Distribution” has the meaning ascribed thereto in Section
8.3.




     “Rule 16b-3” means Rule 16b-3 promulgated under the Exchange Act, or
any successor Rule. References to paragraphs of Rule 16b-3 shall include
the comparable provisions of any successor Rule.




     “SARs” means stock appreciation rights, awarded pursuant to Article
VII, with respect to Class A Ordinary Shares.




     “Section 162(m)” means Section 162(m) of the Code and all Treasury
Regulations promulgated thereunder, including without limitation Treasury
Regulation § 1.162-27(e)(2)(i) and any successor Treasury Regulation.




     “Stock Unit Award” has the meaning ascribed thereto in Section 9.1.




     “Subsidiary” of the Company means any present or future subsidiary
(as defined in Section 424(f) of the Code) of the Company or any Entity
in which the Company owns directly or indirectly, fifty percent (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.




     “Tandem SARs” has the meaning ascribed thereto in Section 7.1.




     “Vesting Date” with respect to any Restricted Shares awarded
hereunder means the date on which such Restricted Shares cease to be
subject to a risk of forfeiture, as designated in or determined in
accordance with the Agreement with respect to such Award of Restricted
Shares pursuant to Article VIII. If more than one Vesting Date is
designated for an Award of Restricted Shares, reference in the Plan to a
Vesting Date in respect of such Award shall be deemed to refer to each
part of such Award and the Vesting Date for such part.



4









 





ARTICLE III




ADMINISTRATION




     3.1 Committee. The Plan shall be administered by the Compensation
Committee of the Board unless a different committee is appointed by the Board.
The Committee shall be comprised of not less than two persons. The Board may
from time to time appoint members of the Committee in substitution for or in
addition to members previously appointed, may fill vacancies in the Committee
and may remove members of the Committee. With respect to Awards granted to a
person subject to Rule 16b-3, unless otherwise determined by the Board, the
Committee granting such Award (a) shall be the entire Board or (b) shall be
comprised solely of two or more “non-employee directors” as defined by Rule
16b-3. With respect to Awards granted to a “covered employee” under Section
162(m), unless otherwise determined by the Board, the Committee granting such
Award shall be comprised solely of two or more “outside directors” as defined
by Section 162(m). With respect to Awards granted to a person subject to both
Rule 16b-3 and Section 162(m), unless otherwise determined by the Board, all
grants will be made in a manner that complies with both Rule 16b-3 and Section
162(m). The Committee may select one of its members as its chairman and shall
hold its meetings at such times and places as it shall deem advisable. A
majority of its members shall constitute a quorum and all determinations shall
be made by a majority of such quorum. Any determination reduced to writing and
signed by all of the members shall be fully as effective as if it had been made
by a majority vote at a meeting duly called and held.



     3.2 Powers. The Committee shall have full power and authority to grant to
eligible persons Options under Article VI of the Plan and, subject to the last
sentence of this Section 3.2 shall have full power and authority to grant to
eligible persons SARs under Article VII of the Plan, Restricted Shares under
Article VIII of the Plan, and/or Stock Units under Article IX of the Plan, to
determine (subject to the express provisions of the Plan) the terms and
conditions (which need not be identical) of all Awards so granted, to interpret
the provisions of the Plan and any Agreements relating to Awards granted under
the Plan, and to supervise the administration of the Plan. If provided in the
applicable form of Agreement, the Committee in making an Award may provide for
the granting or issuance of additional, replacement or alternative Awards upon
the occurrence of specified events, including the exercise of the original
Award. The Committee shall have sole authority in the selection of persons to
whom Awards may be granted under the Plan and in the determination of the
timing, pricing and amount of any such Award, subject only to the express
provisions of the Plan. In making determinations hereunder, the Committee may
take into account the nature of the services rendered by the respective
employees, Independent Directors and independent contractors, their present and
potential contributions to the success of the Company and its Subsidiaries and
such other factors as the Committee in its discretion deems relevant. Anything
contained herein to the contrary notwithstanding, the Committee shall not grant
any Awards in the form of Tandem SARs, Free Standing SARs, Restricted Shares
and/or Stock Units in any calendar year unless the Board (taking into account
tax and accounting consequences and other relevant circumstances) shall first
have determined that Awards in such form may be granted in such calendar year
and shall have approved a form of Agreement applicable to such Award, and any
and all such Awards shall be subject to such terms and conditions as the Board
shall adopt at or before such determination and approval.



     3.3 Interpretation. The Committee is authorized, subject to the
provisions of the Plan, to establish, amend and rescind such rules and
regulations as it deems necessary or advisable for the proper administration of
the Plan and to take such other action in connection with or in relation to the
Plan as it deems necessary or advisable. Each action and determination made or
taken pursuant to the Plan by the Committee, including any interpretation or
construction of the Plan, shall be final and conclusive for all purposes and
upon all persons. No member of the Committee shall be liable for any action or
determination made or taken by him or the Committee in good faith with respect
to the Plan.



ARTICLE IV




SHARES SUBJECT TO THE PLAN




     4.1 Number of Shares. Subject to the provisions of this Article IV, the
maximum number of Class A Ordinary Shares with respect to which Awards may be
granted during the term of the Plan (whether as Options,



5









 







SARs, Restricted Shares or Stock Units) shall be 5,000,000 shares. Class
A Ordinary Shares will be made available from the authorized but unissued
shares of the Company or from shares reacquired by the Company, including
shares purchased in the open market. The Class A Ordinary Shares subject to
(i) any Award granted under the Plan that shall expire, terminate or be
annulled for any reason without having been exercised (or considered to have
been exercised as provided in Section 7.2), (ii) any Award of any SARs granted
under the Plan that shall be exercised for cash and (iii) any Award of
Restricted Shares or Stock Units that shall be forfeited prior to becoming
vested (provided that the Holder received no benefits of ownership of such
Restricted Shares or Stock Units other than voting rights and the accumulation
of Retained Distributions and unpaid Dividend Equivalents that are likewise
forfeited), shall again be available for purposes of the Plan. Without
limiting the provisions of Section 10.1(b), no person may be granted in any
calendar year Awards covering more than 400,000 Class A Ordinary Shares as such
number may be adjusted hereafter as provided in Section 4.2.



     4.2 Adjustments. If the Company subdivides its outstanding Class A
Ordinary Shares into a greater number of Class A Ordinary Shares (by stock
dividend, stock split, reclassification or otherwise) or combines its
outstanding Class A Ordinary Shares into a smaller number of Class A Ordinary
Shares (by reverse stock split, reclassification or otherwise), or if the
Committee determines that any stock dividend, extraordinary cash dividend,
reclassification, recapitalization, reorganization, split-up, spin-off,
combination, exchange of shares, warrants or rights offering to purchase Class
A Ordinary Shares, or other similar corporate event (including mergers or
consolidations other than those that constitute Approved Transactions,
adjustments with respect to which shall be governed by Section 10.1(b)) affects
the Class A Ordinary Shares such that an adjustment is required in order to
preserve the benefits or potential benefits intended to be made available under
this Plan, then the Committee, in its sole discretion and in such manner as the
Committee may deem equitable and appropriate, may make such adjustments to any
or all of (i) the number and kind of shares which thereafter may be awarded,
optioned, or otherwise made subject to the benefits contemplated by the Plan,
(ii) the number and kind of shares subject to outstanding Awards, and (iii) the
purchase or exercise price and the relevant appreciation base with respect to
any of the foregoing, provided, however, that the number of shares subject to
any Award shall always be a whole number. Notwithstanding the foregoing, if
all Class A Ordinary Shares are redeemed, then each outstanding Award shall be
adjusted to substitute for the Class A Ordinary Shares subject thereto the kind
and amount of cash, securities or other assets issued or paid in the redemption
of the equivalent number of Class A Ordinary Shares and otherwise the terms of
such Award, including, in the case of Options or similar rights, the total
exercise price, and, in the case of SARs, the base price, shall remain constant
before and after the substitution (unless otherwise determined by the Committee
and provided in the applicable Agreement). The Committee may, if deemed
appropriate, provide for a cash payment to any Holder of an Award in connection
with or in lieu of any adjustment made pursuant to this Section 4.2.



ARTICLE V




ELIGIBILITY




     The persons who shall be eligible to participate in the Plan and to
receive Awards under the Plan shall be such employees (including employees who
are directors) of the Company and its Affiliates, Independent Directors, and
independent contractors of the Company and its Subsidiaries as the Committee
shall select. Awards may be made to any such employee, Independent Director or
independent contractor whether or not he or she holds or has held Awards under
this Plan or any similar or other Awards under any other plan of the Company or
any of its Affiliates.



ARTICLE VI




STOCK OPTIONS




     6.1 Grant of Options. Subject to the limitations of the Plan, the
Committee shall designate from time to time those eligible persons to be
granted Options, the time when each Option shall be granted to such eligible
persons, the number of Class A Ordinary Shares subject to such Option, whether
such Option is an Incentive Stock Option or a Nonqualified Stock Option and,
subject to Section 6.2, the purchase price of the Class A Ordinary Shares
subject to such Option. Subject to the other provisions of the Plan, the same
person may receive Incentive



6









 







Stock Options and Nonqualified Stock Options at the same time and pursuant
to the same Agreement, provided that Incentive Stock Options and Nonqualified
Stock Options are clearly designated as such.



     6.2 Option Price. The price at which shares may be purchased upon
exercise of an Option (“Exercise Price”) shall be fixed by the Committee and
may be more than, less than or equal to the Fair Market Value per Class A
Ordinary Share as of the date the Option is granted; provided, however, that
the per share Exercise Price of an Option shall not be less than the Fair
Market Value per Class A Ordinary Share on the date the Option is granted (or,
if the Committee determines to measure Fair Market Value for this purpose on an
intra-day basis, at the time the Option is granted) without the prior approval
of the Board.



     6.3 Term of Options. Subject to the provisions of the Plan and the
applicable Agreement with respect to death, retirement and termination of
employment, the term of each Option shall be for such period as the Committee
shall determine as set forth in the applicable Agreement, but shall in no event
be longer than ten (10) years from the date of grant unless otherwise
determined by the Committee and provided in the applicable Agreement.



     6.4 Exercise of Options. Each Option granted under the Plan shall become
(and remain) exercisable during the term of the Option to the extent provided
in the applicable Agreement and this Plan; provided, however, that no Option
shall be exercisable prior to the second anniversary of the date of grant, or
become exercisable as to more than twenty-five percent (25%) of the shares
subject thereto (on a cumulative basis) on each of the second, third, fourth
and fifth anniversaries of the date of grant, without the prior approval of the
Board. Unless the Agreement otherwise provides, each Option granted under this
Plan may be exercised to the extent exercisable, in whole or in part, at any
time and from time to time during the term of such Option; provided, however,
that subsequent to the grant of an Option, the Board (or, if the Board
expressly provides, the Committee), at any time before complete termination of
such Option, may accelerate the time or times at which such Option may be
exercised in whole or in part (without reducing the term of such Option except
as otherwise provided herein).



     6.5 Manner of Exercise.




     (a) Form of Payment. An Option shall be exercised by written notice
to the Company upon such terms and conditions as the Agreement may
provide and in accordance with such other procedures for the exercise of
Options as the Committee may establish from time to time. The method or
methods of payment of the purchase price for the shares to be purchased
upon exercise of an Option and of any amounts required by Section 10.10
shall be as set forth in the applicable Agreement and may consist of the
following:




     (i) cash,




     (ii) check,




     (iii) whole Class A Ordinary Shares owned by such
Holder immediately prior to the exercise of such Option,




     (iv) the withholding of Class A Ordinary Shares
issuable upon such exercise of the Option,




     (v) delivery, together with such other documentation
as the Company in its sole and absolute discretion shall
require, of irrevocable instructions by Holder to an approved
broker to (A) sell the shares issuable upon exercise of the
Option and (B) deliver to the Company the amount of sale
proceeds required to pay the Exercise Price; provided, that:
(x) the delivery by the Company to the approved broker of shares sold pursuant to the Holder’s instructions, (y) the
broker’s delivery of the Exercise Price to the Company, and
(z) the broker’s delivery of the net proceeds of the sale to
the Holder, take place on the same date (the “Settlement
Date”) and; provided, further, that the Settlement Date is no
later than three (3) days following the date the Holder
provides the approved broker with instructions to sell the
shares issuable upon the exercise of the Option,



7









 






     (vi) any combination of the foregoing methods of
payment, or




     (vii) such other consideration and method of payment
as may be permitted for the issuance of shares under
applicable law.



     The permitted method or methods of payment of the amounts payable upon
exercise of an Option, if other than in cash, shall be set forth in the
applicable Agreement and may be subject to such conditions and/or limitations
as the Committee (or, if applicable, the Board) deems appropriate. Without
limiting the generality of the foregoing, if a Holder is permitted to elect to
have Class A Ordinary Shares issuable upon exercise of an Option withheld to
pay all or any part of the amounts payable in connection with such exercise,
then the Committee or the Board may each reserve the discretion to approve or
disapprove such election.




     (b) Value of Shares. Unless otherwise determined by the Committee
and provided in the applicable Agreement, Class A Ordinary Shares
delivered in payment of all or any part of the amounts payable in
connection with the exercise of an Option, and Class A Ordinary Shares
withheld for such payment, if permitted, shall be valued for such purpose
at their Fair Market Value as of the exercise date (or, if the Committee
determines to measure Fair Market Value for this purpose on an intra-day
basis, at the time of exercise).




     (c) Issuance of Shares. The Company shall effect the transfer of
the Class A Ordinary Shares purchased under the Option as soon as
practicable after the exercise thereof and payment in full of the
purchase price therefor and of any amounts required by Section 10.10, and
within a reasonable time thereafter such transfer shall be evidenced on
the books of the Company. Unless otherwise determined by the Committee
and provided in the applicable Agreement, (i) no Holder or other person
exercising an Option shall have any of the rights of a stockholder of the
Company with respect to Class A Ordinary Shares subject to an Option
granted under the Plan until due exercise and full payment has been made;
and (ii) no adjustment shall be made for cash dividends or other rights
for which the record date is prior to the date of such due exercise and
full payment.



     6.6 Nontransferability. Unless otherwise determined by the Committee and
provided in the applicable Agreement, Options shall not be transferable other
than by will or the laws of descent and distribution or pursuant to a domestic
relations order and, except as otherwise required pursuant to a domestic
relations order, Options may be exercised during the lifetime of the Holder
thereof only by such Holder (or his or her court appointed legal
representative).



ARTICLE VII




SARS




     7.1 Grant of SARs. Subject to the limitations of the Plan, including the
last sentence of Section 3.2 and any terms and conditions imposed by the Board
in connection with any Board action authorizing SAR Awards pursuant thereto,
SARs may be granted by the Committee to such eligible persons in such numbers,
and at such times during the term of the Plan as the Committee shall determine.
An SAR may be granted to a Holder of an Option (hereinafter called a “related
Option”) with respect to all or a portion of the Class A Ordinary Shares
subject to the related Option (a “Tandem SAR”) or may be granted separately to
an eligible person (a “Free Standing SAR”). Subject to the limitations of the
Plan, SARs shall be exercisable in whole or in part upon notice to the Company
upon such terms and conditions as are provided in the Agreement.



     7.2 Tandem SARs. A Tandem SAR may be granted either concurrently with the
grant of the related Option or (if the related Option is a Nonqualified Option)
at any time thereafter prior to the complete exercise, termination, expiration
or cancellation of such related Option. Tandem SARs shall be exercisable only
at the time and to the extent that the related Option is exercisable (and may
be subject to such additional limitations on exercisability as the Agreement
may provide), and in no event after the complete termination or full exercise
of the related Option. Upon any exercise or termination of the related Option,
the Tandem SARs with respect thereto shall be canceled automatically to the
extent of the number of Class A Ordinary Shares with respect to which the
related



8









 







Option was so exercised or terminated. Subject to the limitations of the
Plan, upon the exercise of a Tandem SAR, and unless otherwise determined by the
Committee and provided in the applicable Agreement, (i) the Holder thereof
shall be entitled to receive from the Company, for each Class A Ordinary Share
with respect to which the Tandem SAR is being exercised, consideration (in the
form determined as provided in Section 7.4) equal in value to the excess of the
Fair Market Value of a Class A Ordinary Share on the date of exercise over the
related Option purchase price per share (or, if the Committee determines to
measure Fair Market Value for this purpose on an intra-day basis, at the time
of exercise), provided, however, that the Committee may, in any Agreement
granting Tandem SARs, provide that the appreciation realizable upon exercise
thereof shall be measured from a base higher than the related Option purchase
price, and (ii) the related Option with respect thereto shall be cancelled
automatically to the extent of the number Class A Ordinary Shares with respect
to which the Tandem SAR was so exercised.



     7.3 Free Standing SARs. Free Standing SARs shall be exercisable at the
time, to the extent and upon the terms and conditions set forth in the
applicable Agreement. The base price of a Free Standing SAR shall be not less
than 100% of the Fair Market Value of a Class A Ordinary Share on the date of
grant of the Free Standing SAR. Subject to the limitations of the Plan, upon
the exercise of a Free Standing SAR and unless otherwise determined by the
Committee and provided in the applicable Agreement, the Holder thereof shall be
entitled to receive from the Company, for each Class A Ordinary Share with
respect to which the Free Standing SAR is being exercised, consideration (in
the form determined as provided in Section 7.4) equal in value to the excess of
the Fair Market Value of a Class A Ordinary Share on the date of exercise over
the base price per share of such Free Standing SAR.



     7.4 Consideration. The consideration to be received upon the exercise of
an SAR by the Holder shall be paid in cash, Class A Ordinary Shares (valued at
Fair Market Value on the date of exercise of such SAR, or at any time on such
date as determined by the Committee) or a combination of cash and Class A
Ordinary Shares or such other consideration, in each case, as specified in the
Agreement, or, if so provided in the Agreement, either as determined by the
Committee in its sole discretion or as elected by the Holder, provided that the
Committee (and/or the Board, if it so provides in connection with any action
pursuant to the last sentence of Section 3.2 hereof) shall have the power to
approve or disapprove the election by a Holder to receive cash in full or
partial settlement of an SAR, which approval or disapproval may be given at any
time. The Company’s obligation arising upon the exercise of an SAR may be paid
currently or on a deferred basis with such interest or earnings equivalent as
the Committee may determine. No fractional Class A Ordinary Shares shall be
issuable upon exercise of an SAR and, unless otherwise provided in the
applicable Agreement, the Holder will receive cash in lieu of fractional
shares. Unless the Committee (or the Board) shall otherwise determine, to the
extent an SAR is exercisable, it will be exercised automatically for stock on
its expiration date.



     7.5 Limitations. The applicable Agreement may provide for a limit on the
amount payable to a Holder upon exercise of SARs at any time or in the
aggregate, for a limit on the number or aggregate value of SARs that may be
exercised by the Holder in whole or in part for cash during any specified
period, for a limit on the time periods during which a Holder may exercise SARs
and for such other limits on the rights of the Holder and such other terms and
conditions of the SAR as the Committee (or the Board) may determine, including,
without limitation, a condition that the SAR may be exercised only in
accordance with rules and regulations adopted by the Committee or the Board
from time to time. Unless otherwise so provided in the applicable Agreement,
any such limit relating to a Tandem SAR shall not restrict the exercisability
of the related Option. Such rules and regulations may govern the right to
exercise SARs granted prior to the adoption or amendment of such rules and
regulations as well as SARs granted thereafter.



     7.6 Exercise. For purposes of this Article VII, the date of exercise of
an SAR shall mean the date on which the Company shall have received notice from
the Holder of the SAR of the exercise of such SAR (unless otherwise determined
by the Committee and provided in the applicable Agreement).



     7.7 Nontransferability. Unless otherwise determined by the Committee and
provided in the applicable Agreement, (i) SARs shall not be transferable other
than by will or the laws of descent and distribution or pursuant to a domestic
relations order, and (ii) except as otherwise required pursuant to a domestic
relations order, SARs may be exercised during the lifetime of the Holder
thereof only by such Holder (or his or her court appointed legal
representative).



9









 





ARTICLE VIII




RESTRICTED SHARES




     8.1 Grant. Subject to the limitations of the Plan, including the last
sentence of Section 3.2 and any terms and conditions imposed by the Board in
connection with any Board action authorizing Restricted Share Awards pursuant
thereto, the Committee shall designate those eligible persons to be granted
Awards of Restricted Shares, shall determine the time when each such Award
shall be granted, whether Class A Ordinary Shares covered by Awards of
Restricted Shares will be issued at the beginning or the end of the Restriction
Period and whether Dividend Equivalents will be paid during the Restriction
Period in the event Class A Ordinary Shares are to be issued at the end of the
Restriction Period, and shall designate (or set forth the basis for
determining) the Vesting Date or Vesting Dates for each Award of Restricted
Shares and may prescribe other restrictions, terms and conditions applicable to
the vesting of such Restricted Shares in addition to those provided in the
Plan. The Committee (or the Board) shall determine the price, if any, to be
paid by the Holder for the Restricted Shares; provided, however, that the
issuance of Restricted Shares shall be made for at least the minimum
consideration necessary to permit such Restricted Shares to constitute fully
paid and nonassessable shares. All determinations made by the Committee and/or
the Board pursuant to this Section 8.1 shall be specified in the Agreement.



     8.2 Issuance of Restricted Shares at Beginning of the Restriction Period.
If Class A Ordinary Shares are issued at the beginning of the Restriction
Period, the stock certificate or certificates representing such Restricted
Shares shall be registered in the name of the Holder to whom such Restricted
Shares shall have been awarded. During the Restriction Period, certificates
representing the Restricted Shares and any securities constituting Retained
Distributions shall bear a restrictive legend to the effect that ownership of
the Restricted Shares (and such Retained Distributions), and the enjoyment of
all rights appurtenant thereto, are subject to the restrictions, terms and
conditions provided in the Plan and the applicable Agreement. Such
certificates shall remain in the custody of the Company and the Holder shall
deposit with the Company stock powers or other instruments of assignment, each
endorsed in blank, so as to permit retransfer to the Company of all or any
portion of the Restricted Shares and any securities constituting Retained
Distributions that shall be forfeited or otherwise not become vested in
accordance with the Plan and the applicable Agreement.



     8.3 Restrictions. Restricted Shares issued at the beginning of the
Restriction Period shall constitute issued and outstanding Class A Ordinary
Shares for all corporate purposes. The Holder will have the right to vote such
Restricted Shares, to receive and retain such dividends and distributions paid
or distributed on such Restricted Shares as the Committee (or the Board) may
designate, and to exercise all other rights, powers and privileges of a Holder
of Class A Ordinary Shares with respect to such Restricted Shares; except, that
unless otherwise determined by the Committee and provided in the applicable
Agreement, (a) the Holder will not be entitled to delivery of the stock
certificate or certificates representing such Restricted Shares until the
Restriction Period shall have expired and unless all other vesting requirements
with respect thereto shall have been fulfilled or waived; (b) the Company will
retain custody of the stock certificate or certificates representing the
Restricted Shares during the Restriction Period as provided in Section 8.2; (c)
other than such dividends and distributions as the Committee or the Board may
designate, the Company will retain custody of all distributions (“Retained
Distributions”) made or declared with respect to the Restricted Shares (and
such Retained Distributions will be subject to the same restrictions, terms and
vesting and other conditions as are applicable to the Restricted Shares) until
such time, if ever, as the Restricted Shares with respect to which such
Retained Distributions shall have been made, paid or declared shall have become
vested, and such Retained Distributions shall not bear interest or be
segregated in a separate account; (d) the Holder may not sell, assign,
transfer, pledge, exchange, encumber or dispose of the Restricted Shares or any
Retained Distributions or his interest in any of them during the Restriction
Period; and (e) a breach of any restrictions, terms or conditions provided in
the Plan or applicable Agreement or established by the Committee (or the Board)
with respect to any Restricted Shares or Retained Distributions will cause a
forfeiture of such Restricted Shares and any Retained Distributions with
respect thereto.



     8.4 Issuance of Stock at End of the Restriction Period. Restricted Shares
issued at the end of the Restriction Period shall not constitute issued and
outstanding Class A Ordinary Shares and the Holder shall not have any of the
rights of a stockholder with respect to the Class A Ordinary Shares covered by
such an Award of Restricted Shares, in each case until such shares shall have
been transferred to the Holder at the end of the



10









 







Restriction Period. If and to the extent that Class A Ordinary Shares are
to be issued at the end of the Restriction Period, the Holder shall be entitled
to receive Dividend Equivalents with respect to the Class A Ordinary Shares
covered thereby (if at all) to such extent, at such time and in such manner as
the Committee or the Board may specify in the Agreement.



     8.5 Cash Awards. The Agreement in connection with an Award of Restricted
Shares may provide for the payment of a cash amount to the Holder of such
Restricted Shares at any time after such Restricted Shares shall have become
vested. Any such cash Awards shall be payable in accordance with such
additional restrictions, terms and conditions as shall be prescribed by the
Committee or the Board in the Agreement and shall be in addition to any other
salary, incentive, bonus or other compensation payments which such Holder shall
be otherwise entitled or eligible to receive from the Company.



     8.6 Completion of Restriction Period. On the Vesting Date with respect to
each Award of Restricted Shares, and the satisfaction of any other applicable
restrictions, terms and conditions (a) all or the applicable portion of such
Restricted Shares shall become vested, (b) any Retained Distributions and (to
the extent specified in the Agreement) any unpaid Dividend Equivalents with
respect to such Restricted Shares shall become vested to the extent that the
Restricted Shares related thereto shall have become vested and (c) any cash
Award to be received by the Holder with respect to such Restricted Shares shall
become payable, all in accordance with the terms of the applicable Agreement.
Any such Restricted Shares, Retained Distributions and any unpaid Dividend
Equivalents that shall not become vested shall be forfeited to the Company, and
the Holder shall not thereafter have any rights (including dividend and voting
rights) with respect to such Restricted Shares, Retained Distributions and any
unpaid Dividend Equivalents that shall have been so forfeited. The Committee
or the Board may provide that the delivery of any Restricted Shares, Retained
Distributions and unpaid Dividend Equivalents that shall have become vested,
and payment of any cash Awards that shall have become payable, shall be
deferred until such date or dates as the recipient may elect. Any election of
a recipient pursuant to the preceding sentence shall be filed in writing with
the Committee in accordance with such rules and regulations, including any
deadline for the making of such an election, as the Committee may provide.



ARTICLE IX




STOCK UNITS




     9.1 Grant. Subject to the limitations of the Plan, including the last
sentence of Section 3.2 and any terms and conditions imposed by the Board in
connection with any Board action authorizing Stock Unit Awards pursuant
thereto, the Committee shall have authority to grant to eligible persons Awards
of Stock Units (each such Award, a “Stock Unit Award”), which may be in the
form of Class A Ordinary Shares or units, the value of which is based, in whole
or in part, on the Fair Market Value of Class A Ordinary Shares. Subject to
the provisions of the Plan, including rules established pursuant to Section
9.2, Awards of Stock Units shall be subject to such terms, restrictions,
conditions, vesting requirements and payment rules as the Committee (or Board)
may determine in its sole discretion, which need not be identical for each
Award. The determinations made by the Committee (and/or Board) pursuant to
this Section 9.1 shall be specified in the applicable Agreement.



     9.2 Rules. The Committee may, in its sole discretion, establish any or
all of the following rules for application to an Award of Stock Units:




     (a) Any Class A Ordinary Shares that are part of an Award of Stock
Units may not be assigned, sold, transferred, pledged or otherwise
encumbered prior to the date on which the shares are issued, or if later,
the date provided by the Committee at the time of the Award.




     (b) Such Awards may provide for the payment of cash consideration by
the person to whom such Award is granted or provide that the Award, and
Class A Ordinary Shares to be issued in connection therewith, if
applicable, shall be delivered without the payment of cash consideration;
provided, however, that the issuance of any Class A Ordinary Shares in
connection with an Award of Stock Units shall be for at least the minimum
consideration necessary to permit such shares to be deemed fully paid and
nonassessable.



11









 






     (c) Awards of Stock Units may relate in whole or in part to
performance or other criteria established by the Committee at the time of
grant.




     (d) Awards of Stock Units may provide for deferred payment
schedules, vesting over a specified period of employment, the payment (on
a current or deferred basis) of dividend equivalent amounts with respect
to the number of Class A Ordinary Shares covered by the Award, and
elections by the person to defer payment of the Award or the lifting of
restrictions on the Award, if any.




     (e) If the Board action required by the last sentence of Section 3.2
of this Plan expressly authorizes, in such circumstances as the Committee
may deem advisable, the Committee may waive or otherwise remove, in whole
or in part, any restrictions or limitations to which a Stock Unit Award
was made subject at the time of grant.



ARTICLE X




GENERAL PROVISIONS




10.1 Acceleration of Options, SARs, Restricted Shares and Stock Units.



     (a) Death or Disability. If a Holder’s employment (or in the case
of an Independent Director, service as a director of the Company) shall
terminate by reason of death or Disability, notwithstanding any contrary
waiting period, installment period, vesting schedule or Restriction
Period in any Agreement or in the Plan, unless the applicable Agreement
provides otherwise: (i) in the case of an Option or SAR, each outstanding
Option or SAR granted under the Plan shall immediately become exercisable
in full in respect of the aggregate number of shares covered thereby;
(ii) in the case of Restricted Shares, the Restriction Period applicable
to each such Award of Restricted Shares shall be deemed to have expired
and all such Restricted Shares, any related Retained Distributions and
(to the extent provided in the applicable Agreement) any unpaid Dividend
Equivalents shall become vested and any cash amounts payable pursuant to
the applicable Agreement shall be adjusted in such manner as may be
provided in the Agreement, and (iii) in the case of Stock Units, each
such Award of Stock Units shall become vested in full.



     (b) Approved Transactions; Board Change; Control Purchase. In the
event of any Approved Transaction, Board Change or Control Purchase,
notwithstanding any contrary waiting period, installment period, vesting
schedule or Restriction Period in any Agreement or in the Plan, unless
the applicable Agreement provides otherwise, but subject in any event to
the last sentence of this Section 10.1(b): (i) in the case of an Option
or SAR, each such outstanding Option or SAR granted under the Plan shall
become exercisable in full in respect of the aggregate number of shares
covered thereby; (ii) in the case of Restricted Shares, the Restriction
Period applicable to each such Award of Restricted Shares shall be deemed
to have expired and all such Restricted Shares, any related Retained
Distributions and any unpaid Dividend Equivalents shall become vested and
any cash amounts payable pursuant to the applicable Agreement shall be
adjusted in such manner as may be provided in the Agreement; and (iii) in
the case of Stock Units, each such Award of Stock Units shall become
vested in full, in each case effective upon the Board Change or Control
Purchase or two (2) business days prior to consummation of the Approved
Transaction; provided, however, that any Options, SARs or, if applicable,
Stock Units not theretofore exercised shall terminate upon consummation
of the Approved Transaction. Notwithstanding the foregoing, unless
otherwise provided in the applicable Agreement, the Board (or, if the
Board expressly provides, the Committee) may, in its discretion,
determine that any or all outstanding Awards of any or all types granted
pursuant to the Plan will not vest or become exercisable on an
accelerated basis, and/or that any or all outstanding Awards of any or
all types will not terminate if not exercised prior to consummation of
the Approved Transaction, if the Board or the surviving or acquiring
corporation, as the case may be, shall have taken, or made effective
provision for the taking of, such action as in the opinion of the Board
(or, if the Board expressly provides, the Committee) is equitable and
appropriate to substitute a new Award for such Award or to assume such
Award and in order to make such new or assumed Award, as nearly as may be
practicable, equivalent to the old Award (without giving effect to any
acceleration of the vesting or



12









 







exercisability thereof), taking into account, to the extent
applicable, the kind and amount of securities, cash or other assets into
or for which the Class A Ordinary Shares may be changed, converted or
exchanged in connection with the Approved Transaction.



10.2 Termination of Employment.



     (a) General. If a Holder’s employment shall terminate (or in the
case of an Independent Director, such director shall cease to serve as a
director) prior to the complete exercise of an Option or SAR (or deemed
exercise thereof, as provided in Section 7.2) or during the Restriction
Period with respect to any Restricted Shares or prior to the vesting or
complete exercise of any Stock Units, then such Option, SAR, or Stock
Unit shall thereafter be exercisable, and the Holder’s rights to any
unvested Restricted Shares, Retained Distributions, unpaid Dividend
Equivalents and cash amounts and any such unvested Stock Units shall
thereafter vest, in each case solely to the extent provided in the
applicable Agreement; provided, however, that, unless otherwise
determined by the Committee and provided in the applicable Agreement, (i)
no Option or SAR may be exercised after the scheduled expiration date
thereof; (ii) if the Holder’s employment terminates (or in the case of an
Independent Director, such director ceases to serve as a director) by
reason of death or Disability, the Option or SAR shall remain exercisable
for a period of at least one year following such termination (but not
later than the scheduled expiration of such Option or SAR); and (iii) any
termination by the Company for cause will be treated in accordance with
the provisions of Section 10.2(b).





	 	(b)	 	Termination for Cause.
	 
	 	(i)	 	Termination of Employee by Company for Cause. If
a Holder’s employment with the Company or a Subsidiary shall
be terminated by the Company or such Subsidiary during the
Restriction Period with respect to any Restricted Shares, or
prior to the exercise of any Option or SAR, or prior to the
vesting or complete exercise of any Stock Unit, for cause (for
these purposes, cause shall have the meaning ascribed thereto
in any employment agreement to which such Holder is a party
or, in the absence thereof, shall include but not be limited
to, insubordination, dishonesty, incompetence, moral
turpitude, other misconduct of any kind and the refusal to
perform his or her duties and responsibilities for any reason
other than illness or incapacity; provided, however, that,
unless the Agreement (or such an employment agreement)
otherwise provides, if such termination occurs within twelve
(12) months after an Approved Transaction, a Control Purchase
or a Board Change, termination for cause shall mean only the
commission of a fraud, misappropriation, embezzlement or other
material act of dishonesty or bad faith, as determined by the
Board in good faith and confirmed by the final judgment of any
civil or criminal court of proper jurisdiction, which
confirmation may be obtained after the effective date of any
such termination), then, unless otherwise determined by the
Committee and provided in the applicable Agreement, (x) all
Options and SARs, notwithstanding any prior vesting, and all
unvested or unexercised Stock Units held by such Holder shall
immediately terminate and (y) such Holder’s rights to all
Restricted Shares, Retained Distributions, any unpaid Dividend
Equivalents and any cash Awards shall be forfeited
immediately. If a Holder whose employment is terminated with
the Company or any Subsidiary for cause is also a director of
the Company or Subsidiary, then all Awards held by such Holder
shall terminate and all unvested Awards shall be forfeited as
provided in this Section 10.2(b)(i) regardless of whether such
Award was granted to such Holder for service as an employee or
as a director of the Company or any Subsidiary.
	 
	 	(ii)	 	Removal of Director by Company for Cause. If a
Holder who is an Independent Director is removed as a director
during the Restriction Period with respect to any Restricted
Shares, or prior to the exercise of any Option or SAR, or
prior to the vesting or complete exercise of any Stock Unit,
for cause (for these purposes, cause shall mean, in addition
to any meaning ascribed thereto in the Company’s Articles of
Association (if any), any of




13









 







	 	 	 	the following: (x) engagement by such Holder in illegal or
other wrongful conduct substantially detrimental to the
business or reputation of the Company or any of its
Affiliates, (y) such Holder being charged with or convicted
of a felony, or (z) engagement by such Holder in any fraud,
embezzlement, misappropriation, material act of dishonesty or
similar conduct against the Company or any of its
Affiliates), then, unless otherwise determined by the
Committee and provided in the applicable Agreement, (A) all
Options and SARs, notwithstanding any prior vesting, and all
unvested or unexercised Stock Units held by such Holder shall
immediately terminate and (B) such Holder’s rights to all
Restricted Shares, Retained Distributions, any unpaid
Dividend Equivalents and any cash Awards shall be forfeited
immediately.






     (c) Miscellaneous. The Committee may determine whether any given
leave of absence constitutes a termination of employment; provided,
however, that for purposes of the Plan (i) a leave of absence, duly
authorized in writing by the Company for military service or sickness, or
for any other purpose approved by the Company if the period of such leave
does not exceed ninety (90) days, and (ii) a leave of absence in excess
of ninety (90) days, duly authorized in writing by the Company, if the
employee’s right to reemployment following such leave is guaranteed
either by statute or contract, shall not be deemed a termination of
employment. Unless otherwise determined by the Committee and provided in
the applicable Agreement, Awards made under the Plan shall not be
affected by any change of employment so long as the Holder continues to
be an employee of the Company or any Subsidiary.



     10.3 No Right to Employment or Directorship. Nothing contained in the
Plan or in any Award, and no action of the Company, the Board or the Committee
with respect thereto, shall (a) confer or be construed to confer on any Holder
any right to continue in the employ of the Company or any of its Subsidiaries
or interfere in any way with the right of the Company or a Subsidiary to
terminate the employment of the Holder at any time, with or without cause;
subject, however, to the provisions of any employment agreement between the
Holder and the Company or any Subsidiary or (b) impose upon the Company, the
Board or any directors of the Company any obligation to nominate any Holder for
election as a director, or interfere in any way with the right of the
stockholders of the Company to remove any person as a director of the Company
at any time, with or without cause.



     10.4 Nonalienation of Benefits. No right or benefit under the Plan shall
be subject to anticipation, alienation, sale, assignment, hypothecation,
pledge, exchange, transfer, encumbrance or charge, and any attempt to
anticipate, alienate, sell, assign, hypothecate, pledge, exchange, transfer,
encumber or charge the same shall be void. No right or benefit hereunder shall
in any manner be liable for or subject to the debts, contracts, liabilities or
torts of the person entitled to such benefits.



     10.5 Written Agreement. Each grant of an Option under the Plan shall be
evidenced by a stock option agreement which shall designate the Options granted
thereunder as Incentive Stock Options or Nonqualified Stock Options; each SAR
shall be evidenced by a stock appreciation rights agreement; each Award of
Restricted Shares shall be evidenced by a restricted shares agreement; each
Award of Stock Units shall be evidenced by a stock units agreement, each in
such form and containing such terms and provisions not inconsistent with the
provisions of the Plan as the Board (or, if the Board expressly provides, the
Committee) from time to time shall approve; provided, however, that if more
than one type of Award is made to the same Holder, such Awards may be evidenced
by a single agreement with such Holder. Each grantee of an Option, SAR,
Restricted Shares or Stock Units shall be notified promptly of such grant and a
written Agreement shall be promptly executed and delivered by the Company and
the grantee, provided that, in the discretion of the Committee, such grant of
Options, SARs, Restricted Shares or Stock Units shall terminate if such written
Agreement is not signed by such grantee (or his attorney) and delivered to the
Company within sixty (60) days after the date the Committee approved such
grant. Any such written Agreement may contain (but shall not be required to
contain) such provisions as the Committee deems appropriate (i) to insure that
the penalty provisions of Section 4999 of the Code will not apply to any stock
or cash received by the Holder from the Company or (ii) if the Board expressly
so authorizes, to provide cash payments to the Holder to mitigate the impact of
such penalty provisions upon the Holder. Any such Agreement may be
supplemented or amended from time to time as approved by the Committee as
contemplated by Section 10.8(b).



14









 





     10.6 Designation of Beneficiaries. Each person who shall be granted an
Award under the Plan may designate a beneficiary or beneficiaries and may
change such designation from time to time by filing a written designation of
beneficiary or beneficiaries with the Committee on a form to be prescribed by
it, provided that no such designation shall be effective unless so filed prior
to the death of such person.



     10.7 Right of First Refusal. The Agreements may contain such provisions
as the Committee shall determine to the effect that if a Holder elects to sell
all or any Class A Ordinary Shares that such Holder acquired upon the exercise
of an Option or SAR or upon the vesting of Restricted Shares or Stock Units
awarded under the Plan, then such Holder shall not sell such shares unless such
Holder shall have first offered in writing to sell such shares to the Company
at Fair Market Value on a date specified in such offer (which date shall be at
least three business days and not more than ten business days following the
date of such offer). In any such event, certificates representing shares
issued upon exercise of Options or SARs and the vesting of Restricted Shares or
Stock Units shall bear a restrictive legend to the effect that transferability
of such shares are subject to the restrictions contained in the Plan and the
applicable Agreement and the Company may cause the transfer agent for the Class
A Ordinary Shares to place a stop transfer order with respect to such shares.



     10.8 Termination and Amendment.




     (a) General. Unless the Plan shall theretofore have been terminated
as hereinafter provided, no Awards may be made under the Plan on or after
the tenth anniversary of the Effective Date. The Board may at any time
prior to the tenth anniversary of the Effective Date terminate the Plan,
and may, from time to time, suspend or discontinue the Plan or modify or
amend the Plan in such respects as it shall deem advisable; except that
no such modification or amendment shall be effective prior to approval by
the Company’s stockholders to the extent such approval is then required
by any applicable legal requirements.




     (b) Modification. No termination, modification or amendment of the
Plan may, without the consent of the person to whom any Award shall
theretofore have been granted, adversely affect the rights of such person
with respect to such Award. No modification, extension, renewal or other
change in any Award granted under the Plan shall be made after the grant
of such Award, unless the same is consistent with the provisions of the
Plan. With the consent of the Holder and subject to the terms and
conditions of the Plan (including Section 10.8(a), the last sentence of
Section 3.2, and any terms and conditions imposed by the Board in
connection with any Board action pursuant to Section 3.2), the Committee
may amend outstanding Agreements with any Holder, including, without
limitation, any amendment that would (i) accelerate the time or times at
which the Award may be exercised and/or (ii) extend the scheduled
expiration date of the Award. Without limiting the generality of the
foregoing, the Committee may, but solely with the Holder’s consent unless
otherwise provided in the Agreement, agree to cancel any Award under the
Plan and issue a new Award in substitution therefor, provided that the
Award so substituted shall satisfy all of the requirements of the Plan as
of the date such new Award is made. Nothing contained in the foregoing
provisions of this Section 10.8(b) shall be construed to prevent the
Committee from providing in any Agreement that the rights of the Holder
with respect to the Award evidenced thereby shall be subject to such
rules and regulations as the Committee (or the Board) may, subject to the
express provisions of the Plan, adopt from time to time, or impair the
enforceability of any such provision.



     10.9 Government and Other Regulations. The obligation of the Company with
respect to Awards shall be subject to all applicable laws, rules and
regulations and such approvals by any governmental agencies as may be required,
including, without limitation, the effectiveness of any registration statement
required under the Securities Act of 1933, and the rules and regulations of any
securities exchange or association on which the Class A Ordinary Shares may be
listed or quoted. For so long as any of the Class A Ordinary Shares are
registered under the Exchange Act, the Company shall use its reasonable efforts
to comply with any legal requirements (i) to maintain a registration statement
in effect under the Securities Act of 1933 with respect to all Class A Ordinary
Shares that may be issued to Holders under the Plan, and (ii) to file in a
timely manner all reports required to be filed by it under the Exchange Act.



     10.10 Withholding. The Company’s obligation to deliver Class A Ordinary
Shares or pay cash in respect of any Award under the Plan shall be subject to
applicable federal, state and local tax withholding requirements.



15









 







Federal, state and local withholding tax due at the time of an Award, upon
the exercise of any Option or SAR or upon the vesting of, or expiration of
restrictions with respect to, Restricted Shares or Stock Units, as appropriate,
may, in the discretion of the Board (or, if the Board expressly provides, the
Committee), be paid in Class A Ordinary Shares already owned by the Holder or
through the withholding of shares otherwise issuable to such Holder, upon such
terms and conditions (including, without limitation, the conditions referenced
in Section 6.5) as the Board (or the Committee) shall determine. If the Holder
shall fail to pay, or make arrangements satisfactory to the Board and the
Committee for the payment to the Company of all such federal, state and local
taxes required to be withheld by the Company, then the Company shall, to the
extent permitted by law, have the right to deduct from any payment of any kind
otherwise due to such Holder an amount equal to any federal, state or local
taxes of any kind required to be withheld by the Company with respect to such
Award, as determined by the Committee on such basis as the Committee shall deem
appropriate.



     10.11 Separability. It is the intent of the Company that Awards under
this Plan comply with certain exemptive provisions of Rule 16b-3 with respect
to persons subject to Section 16 of the Exchange Act and with certain exemptive
provisions of Section 162(m) of the Code with respect to persons covered
thereby, unless otherwise provided herein or in an Award Agreement, that any
ambiguities or inconsistencies in the construction of this Plan be interpreted
to give effect to such intentions, and that if any provision of this Plan is
found not to be consistent with the availability of either of such exemptive
provisions or with any other requirement of law, such provision shall be null
and void to the extent required to comply with such exemptive provisions and/or
applicable law.



     10.12 Non-Exclusivity of the Plan. Neither the adoption of the Plan by
the Board nor the submission of the Plan to the stockholders of the Company for
approval shall be construed as creating any limitations on the power of the
Board to adopt such other incentive arrangements as it may deem desirable,
including, without limitation, the granting of stock options and the awarding
of stock and cash otherwise than under the Plan, and such arrangements may be
either generally applicable or applicable only in specific cases.



     10.13 Exclusion from Pension and Profit-Sharing Computation. By
acceptance of an Award, unless otherwise provided in the applicable Agreement,
each Holder shall be deemed to have agreed that such Award is special incentive
compensation that will not be taken into account, in any manner, as salary,
compensation or bonus in determining the amount of any payment under any
pension, retirement or other employee benefit plan, program or policy of the
Company or any Subsidiary. In addition, each beneficiary of a deceased Holder
shall be deemed to have agreed that such Award will not affect the amount of
any life insurance coverage, if any, provided by the Company on the life of the
Holder that is payable to such beneficiary under any life insurance plan
covering employees of the Company or any Subsidiary.



     10.14 Unfunded Plan. Neither the Company nor any Subsidiary shall be
required to segregate any cash or any Class A Ordinary Shares which may at any
time be represented by Awards and the Plan shall constitute an “unfunded” plan
of the Company. Except as provided in Article VIII with respect to Awards of
Restricted Shares and except as expressly set forth in an Agreement, no person
shall have voting or other rights with respect to the Class A Ordinary Shares
covered by an Award prior to the delivery of such shares. Neither the Company
nor any Subsidiary shall, by any provisions of the Plan, be deemed to be a
trustee of any Class A Ordinary Shares or any other property, and the
liabilities of the Company and any Subsidiary to any person pursuant to the
Plan shall be those of a debtor pursuant to such contract obligations as are
created by or pursuant to the Plan, and the rights of any employee, former
employee or beneficiary under the Plan shall be limited to those of a general
creditor of the Company or the applicable Subsidiary, as the case may be. In
its sole discretion, the Board may authorize the creation of trusts or other
arrangements to meet the obligations of the Company under the Plan, provided,
however, that the existence of such trusts or other arrangements is consistent
with the unfunded status of the Plan.



     10.15 Governing Law. The Plan shall be governed by, and construed in
accordance with, the laws of the State of Delaware.



     10.16 Accounts. The delivery of any Class A Ordinary Shares and the
payment of any amount in respect of an Award shall be for the account of the
Company or the applicable Subsidiary, as the case may be, and any such



16









 







delivery or payment shall not be made until the recipient shall have paid
or made satisfactory arrangements for the payment of any applicable withholding
taxes as provided in Section 10.10.



     10.17 Legends. In addition to any legend contemplated by Section 10.7,
each certificate evidencing Class A Ordinary Shares subject to an Award shall
bear such legends as the Committee deems necessary or appropriate to reflect or
refer to any terms, conditions or restrictions of the Award applicable to such
shares, including, without limitation, any to the effect that the shares
represented thereby may not be disposed of unless the Company has received an
opinion of counsel, acceptable to the Company, that such disposition will not
violate any federal or state securities laws.



     10.18 Company’s Rights. The grant of Awards pursuant to the Plan shall
not affect in any way the right or power of the Company to make
reclassifications, reorganizations or other changes of or to its capital or
business structure or to merge, consolidate, liquidate, sell or otherwise
dispose of all or any part of its business or assets.




17










 





Exhibit B



EMPLOYEE PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT




     In consideration of my employment or continued employment by OpenTV, Inc.
and its affiliates and related entities (collectively referred to as the
“Company”), and the compensation now and hereafter paid to me, I hereby agree
as follows:



     1. EMPLOYMENT AT WILL. I agree and understand that nothing in this
Agreement shall confer any right with respect to continuation of employment by
the Company, nor shall it interfere in any way with my right or the Company’s
right to terminate my employment at any time, with or without cause or notice.



     2. DEFINITIONS.



          2.1. Proprietary Information. The term “Proprietary Information” shall
mean any and all trade secrets, confidential and/or proprietary knowledge, data
or information of or concerning the Company. By way of illustration but not
limitation, “Proprietary Information” includes information concerning the
organization, business, corporate structure or finances of the Company such as
(a) trade secrets, inventions, mask works, ideas, processes, formulas, source
and object codes, data, programs, other works of authorship, know-how,
improvements, discoveries, developments, designs and techniques; (b)
information regarding plans for research, development, new products, marketing
and selling, business plans, budgets and unpublished financial statements,
licenses, prices and costs, suppliers and customers; and (c) information
regarding personnel matters such as the skills, performance, compensation and
employment status of other employees of the Company. Notwithstanding the
foregoing, it is understood that, “Proprietary Information” does not include
information that is generally known in the trade or industry, which is not
gained as result of a breach of this Agreement.



          2.2. Third Party Information. The term “Third Party Information” means
confidential or proprietary information that the Company has received and in
the future will receive from third parties. The Company has a duty to maintain
the confidentiality of such information and to use it only for certain limited
purposes.



          2.3. Proprietary Rights. The term “Proprietary Rights” shall mean all
trade secret, patent, copyright (including any renewal or extensions thereof),
mask work and other intellectual property rights throughout the world.



          2.4. Inventions.



          2.4.1. Inventions. “Inventions” shall mean any new or useful art,
discovery, improvement or invention whether or not patentable, and all related
know-how, designs, mask works, trademarks, formulae, processes, manufacturing
techniques, trade secrets, ideas, art work or software, and all patents,
copyrights, trade secrets and other Proprietary Rights therein.



          2.4.2. Employer Inventions. “Employer Inventions” shall mean all
Inventions that are solely or jointly conceived, made, reduced to practice,
fixed in a tangible medium, and that are a) learned by me in the course of any
work performed for the Company, b) developed on the



 









 







Company’s time or with the Company’s equipment, or c) assigned to the
Company or to a third party at the direction of the Company pursuant to the
terms of this Agreement.



          2.4.3. Prior Inventions. “Prior Inventions” shall include all Inventions
that I have a) alone or jointly with others, conceived, developed or reduced to
practice prior to the commencement of my employment with the Company, or b)
caused to be conceived, developed or reduced to practice prior to the
commencement of my employment with the Company, and that I consider to be my
property or the property of third parties and that I wish to have excluded from
the scope of this Agreement. Prior Inventions shall not be affected by this
Agreement. As described below (see Section 4.1), I agree to disclose promptly
in writing to the Company all Inventions that are Prior Inventions.



     3. NONDISCLOSURE; PROHIBITED ACTIONS



          3.1. Nondisclosure of Proprietary Information and Inventions. At all
times during my employment and at all times thereafter, I will hold in
strictest confidence and will not disclose, use, lecture upon or publish any
Proprietary Information of the Company or any Invention (including Employer
Inventions) assigned or assignable to the Company pursuant to this Agreement
except as such disclosure, use or publication may be required in connection
with my work for the Company, or unless an officer of the Company expressly
authorizes such disclosure or use in writing (see Section 3.4 below).



          3.2. Nondisclosure of Third Party Information. In addition, at all times
during my employment and at all times thereafter I will hold Third Party
Information in the strictest confidence and will not disclose to anyone (other
than Company personnel who need to know such information in connection with
their work for the Company), Third Party Information unless expressly
authorized by an officer of the Company in writing (see Section 3.4 below).



          3.3. No Improper Use of Information of Prior Employers and Others. During
my employment by the Company I will not improperly use or disclose any
confidential information or trade secrets, if any, of any former employer or
any other person to whom I have an obligation of confidentiality, and I will
not bring onto the premises of the Company any unpublished documents or any
property belonging to any former employer or any other person to whom I have an
obligation of confidentiality unless consented to in writing by that former
employer or person. I will use in the performance of my duties only
information which is generally known and used by persons with training and
experience comparable to my own, which is common knowledge in the industry or
otherwise legally in the public domain, or which is otherwise provided or
developed by the Company.



          3.4. Written Approval for Disclosure/Use. I understand that only an
authorized officer of the Company may give written approval for disclosure or
use of any Proprietary Information, any Invention (including Employer
Inventions) assigned or assignable to the Company pursuant to this Agreement or
any Third Party Information not expressly permitted by this Agreement. In
addition, I will obtain written approval from an authorized officer of the
Company before publishing or submitting for publication any material (written,
verbal, or otherwise) that relates to my work at Company and/or incorporates or
refers to any such Proprietary Information, Invention (including Employer
Inventions), or Third Party Information.



 









 





     4. ASSIGNMENT OF INVENTIONS.



          4.1. Prior Inventions. Inventions, if any, patented or unpatented, which I
made prior to the commencement of my employment with the Company are excluded
from the scope of this Agreement. To preclude any possible uncertainty, I have
set forth in Exhibit A (Prior Inventions) attached hereto, a complete list of
all Prior Inventions. If disclosure of any such Prior Invention would cause me
to violate any prior confidentiality agreement, I understand that I am not to
list such Prior Inventions in Exhibit A but am only to disclose a cursory name
for each such invention, a listing of the party(ies) to whom it belongs and the
fact that full disclosure as to such inventions has not been made for that
reason. A space is provided on Exhibit A for such purpose. If no such
disclosure is attached, I represent that there are no Prior Inventions. If, in
the course of my employment with the Company, I incorporate a Prior Invention
into a Company product, process or machine, the Company is hereby granted and
shall have a nonexclusive, royalty-free, irrevocable, perpetual, worldwide
license (with rights to sublicense through multiple tiers of sublicenses) to
make, have made, modify, use and sell such Prior Invention. Notwithstanding
the foregoing, I agree that I will not incorporate, or permit to be
incorporated, Prior Inventions in any Invention (including any Employer
Invention) assigned or assignable to the Company pursuant to this Agreement
without the Company’s prior written consent.



          4.2. Assignment of Inventions. Subject to Sections 4.3, and 4.5, I hereby
assign and agree to assign in the future (when any such Inventions (including
Employer Inventions) or Proprietary Rights are first reduced to practice or
first fixed in a tangible medium, as applicable) to the Company all my right,
title and interest in and to any and all Inventions (including Employer
Inventions) assigned or assignable to the Company pursuant to this Agreement
(and all Proprietary Rights with respect thereto) whether or not patentable or
registrable under copyright or similar statutes, made or conceived or reduced
to practice or learned by me, either alone or jointly with others, during the
period of my employment with the Company, except as provided in Section 4.7.



          4.3. Obligation to Keep Company Informed. During the period of my
employment and for six (6) months after termination of my employment with the
Company, I will promptly disclose to the Company fully and in writing all
Inventions that relate to or arise out of work that I performed for the
Company. In addition, I will promptly disclose to the Company all patent
applications related to inventions or developments that relate to or arise out
of work that I performed for the Company filed by me or on my behalf within a
year after termination of employment.



          4.4. Government or Third Party. I also agree to assign all my right,
title and interest in and to any particular Invention (including Employer
Inventions) assigned or assignable to the Company pursuant to this Agreement to
a third party, including without limitation the United States, as directed by
the Company.



          4.5. Works for Hire. I acknowledge that all original works of authorship
which are made by me (solely or jointly with others) within the scope of my
employment and which are protectable by copyright are “works made for hire”,
pursuant to United States Copyright Act (17 U.S.C., Section 101). Further, I
acknowledge that such “works for hire” are and will be prepared wholly within
the scope of my employment and such work has been and will be specially



 









 







ordered or commissioned by the Company. As between myself and the
Company, the Company shall exclusively and perpetually own all now known or
hereafter existing rights of every kind throughout the universe in and to such
results and proceeds. The Company shall have the right, but not the
obligation, to use, adapt, change, or revise any work or product of myself or
any part thereof and to combine the same with other material or works and I
expressly waive any so-called “moral rights” of authors in the work.
Furthermore, to the extent I may have or acquire any right, title, or interest
in the result of any work which I perform or work product which I create during
my employment with the Company, I hereby assign to the Company any and all such
right, title, and interest. The Company shall also have the exclusive right,
throughout the universe and in perpetuity, to use and reproduce and license
others to use and reproduce, my name and likeness in connection with my
services hereunder. I expressly agree to take any and all actions necessary to
establish and preserve the Company’s rights under this Section.



          4.6. Enforcement of Proprietary Rights. I will assist the Company in
every proper way to obtain, and from time to time enforce, United States and
foreign Proprietary Rights relating to any and all Inventions (including
Employer Inventions) assigned or assignable to the Company pursuant to this
Agreement in any and all countries. To that end, I will execute, verify and
deliver such documents and perform such other acts (including appearances as a
witness) as the Company may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such Proprietary
Rights and the assignment thereof. In addition, I will execute, verify and
deliver assignments of such Proprietary Rights to the Company or its designee.
My obligation to assist the Company with respect to Proprietary Rights relating
to such Inventions (including Employer Inventions) in any and all countries
shall continue beyond the termination of my employment, but the Company shall
compensate me at a reasonable rate after my termination for the time actually
spent by me at the Company’s request on such assistance.



     In the event the Company is unable for any reason, after reasonable
effort, to secure my signature on any document needed in connection with the
actions specified in the preceding paragraphs, I hereby irrevocably designate
and appoint the Company and its duly authorized officers and agents as my agent
and attorney in fact, which appointment is coupled with an interest, to act for
and in my behalf to execute, verify and file any such documents and to do all
other lawfully permitted acts to further the purposes of the preceding
paragraph with the same legal force and effect as if executed by me. I hereby
waive and quitclaim to the Company any and all claims, of any nature
whatsoever, which I now or may hereafter have for infringement of any
Proprietary Rights assigned hereunder to the Company.



          4.7. Exception to Assignments. I understand that the provisions of this
Agreement requiring assignment of Inventions (including Employer Inventions) to
the Company do not apply to any Invention that qualifies fully under the
provisions of California Labor Code Section 2870 (attached hereto as Exhibit B)
or similar local law. I will advise the Company promptly in writing of any
Inventions that I believe meet the criteria in this Section and not otherwise
disclosed on Exhibit A.



     5. RECORDS. I agree to keep and maintain adequate and current records (in
the form of notes, sketches, drawings and in any other form that may be
required by the Company) of all Proprietary Information developed by me and all
Inventions (including Employer Inventions)



 









 







made by me during the period of my employment at the Company, which
records shall be available to and remain the sole property of the Company at
all times.



     6. CONFLICTING EMPLOYMENT.



          6.1. During Employment with the Company. I agree that during the period
of my employment by the Company I will not, without the Company’s express
written consent, engage in any employment or business activity which is
competitive with, or would otherwise conflict with, my employment by the
Company.



          6.2. After Employment with the Company Ends. I acknowledge and agree that
solicitation of employees, clients or customers of the Company on behalf of
another employer whose business competes with the Company where such other
employer is located either a) in the nine-county San Francisco Bay Area, or b)
if I am employed outside the San Francisco Bay Area then within 50 miles of my
place of employment with the Company, would require me to use Proprietary
Information gained through my employment with the Company. I acknowledge and
agree that the covenants in this section are essential to adequately protect
the Proprietary Information of the Company. I hereby agree that I shall not,
in any manner (other than as authorized in writing by the Company, which
authorization may be granted or withheld in the Company’s sole discretion),
during the twelve (12) months after my employment with the Company ends,
directly or indirectly, on my own behalf or in the service of or on behalf of
any other individual or entity, either as a proprietor, employee, agent,
independent contractor, consultant, director, officer, member, partner or
stockholder:



          6.2.1. divert, solicit, attempt to solicit or accept business from any (a)
current or former client of the Company or (b) prospective client of the
Company that was actively sought as a client of the Company while I was an
employee of the Company, for the purposes of providing products or services
that are competitive with the Company’s;



          6.2.2. solicit for employment, directly or indirectly, any person who is
or was employed by the Company while I was an employee of the Company; or



          6.2.3. interfere with, disrupt or attempt to disrupt the past, present or
prospective relationship, contractual or otherwise, between the Company and any
third party with whom I had material contact while I was an employee of the
Company. The term “prospective relationship” is defined as any relationship in
which I had actually sought an individual or entity as a prospective client,
supplier, consultant or vendor to the Company.



     7. NO CONFLICTING OBLIGATION. I represent that my performance of all the
terms of this Agreement and as an employee of the Company does not and will not
breach any agreement to keep in confidence information acquired by me in
confidence or in trust prior to my employment by the Company. I have not
entered into, and I agree I will not enter into, any agreement either written
or oral in conflict herewith.



     8. RETURN OF COMPANY DOCUMENTS. When I leave the employ of the Company, I
will deliver to the Company any and all drawings, notes, memoranda,
specifications, devices, formulas, and documents, together with all copies
thereof, and any other material containing or disclosing any Inventions
(including Employer Inventions) assigned or assignable to the



 









 







Company pursuant to this Agreement, Third Party Information or Proprietary
Information of the Company. I further agree that any property situated on the
Company’s premises and owned by the Company, including disks and other storage
media, filing cabinets or other work areas, is subject to inspection by Company
personnel at any time with or without notice. Prior to leaving, I will
cooperate with the Company in completing and signing the form attached as
Exhibit C.



     9. NOTIFICATION TO NEW EMPLOYER. In the event that I leave the employ of
the Company, I hereby consent to the notification to my new employer of my
rights and obligations under this Agreement.



     10. GENERAL PROVISIONS.



          10.1. Legal and Equitable Remedies. Because my services are personal and
unique and because I may have access to and become acquainted with the
Proprietary Information of the Company, the Company shall have the right to
enforce this Agreement and any of its provisions by injunction, specific
performance or other equitable relief, without bond and without prejudice to
any other rights and remedies that the Company may have for a breach of this
Agreement.



          10.2. Governing Law; Consent to Personal Jurisdiction. This Agreement
will be governed by and construed according to the laws of the State of
California. I hereby expressly consent to the personal jurisdiction of the
state and federal courts located in San Francisco County, California for any
lawsuit filed there against me by Company arising from or related to this
Agreement.



          10.3. Severability. In case any one or more of the provisions contained
in this Agreement shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect the other provisions of this Agreement, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein. To the extent permitted by law, if any one or
more of the provisions contained in this Agreement shall for any reason be held
to be excessively broad as to duration, geographical scope, activity or
subject, it shall be construed by limiting and reducing it, so as to be
enforceable to the extent compatible with the applicable law as it shall then
appear.



          10.4. Successors and Assigns. This Agreement cannot be assigned by me and
shall be binding upon my heirs, executors, administrators and other legal
representatives. The Company shall have the right to assign this Agreement to
its successors and assigns, and all covenants hereunder shall inure to the
benefit of and be enforceable by said successors and assigns.



          10.5. Survival. The provisions of this Agreement shall survive the
termination of my employment and the assignment of this Agreement by the
Company to any successor in interest or other assignee.



          10.6. Waiver. No waiver by the Company of any breach of this Agreement
shall be a waiver of any preceding or succeeding breach. No waiver by the
Company of any right under this Agreement shall be construed as a waiver of any
other right. The Company shall



 









 







not be required to give notice to enforce strict adherence to all terms of
this Agreement.



          10.7. Notices. Any notices required or permitted hereunder shall be given
to the appropriate party at the address specified below or at such other
address as the party shall specify in writing. Such notice shall be deemed
given upon personal delivery to the appropriate address or if sent by certified
or registered mail, three (3) days after the date of mailing.



          10.8. Entire Agreement. Except as expressly provided herein, the
obligations set forth in this Agreement shall apply to any time during which I
was previously employed, or am in the future employed, by the Company as a
consultant if no other agreement governs nondisclosure and assignment of
inventions during such period. This Agreement is the final, complete and
exclusive agreement of the parties with respect to the subject matter hereof
and supersedes and merges all prior discussions between us. No modification of
or amendment to this Agreement, nor any waiver of any rights under this
Agreement, will be effective unless in writing and signed by the party to be
charged. Any subsequent change or changes in my duties, salary or compensation
will not affect the validity or scope of this Agreement.



     This Agreement shall be effective as of the first day of my employment
with the Company, namely:                                       ,           .



     I HAVE READ THIS AGREEMENT CAREFULLY AND UNDERSTAND ITS TERMS. I HAVE
COMPLETELY FILLED OUT EXHIBIT A TO THIS AGREEMENT.


Dated:                                       

















(Signature)









(Printed Name)













 









 





EXHIBIT A




TO:      OpenTV, Inc.



FROM:




DATE:




SUBJECT:      Previous Inventions




     1. Except as listed in Section 2 below, the following is a complete list
of all inventions or improvements relevant to the subject matter of my
employment by OpenTV, Inc. (the “Company”) that have been made or conceived or
first reduced to practice by me alone or jointly with others prior to my
engagement by the Company:



          o No inventions or improvements.



          o See below:


o Additional sheet attached.




     2. Due to a prior confidentiality agreement, I cannot complete the
disclosure under Section 1 above with respect to inventions or improvements
generally listed below, the proprietary rights and duty of confidentiality with
respect to which I owe to the following party(ies):



                    Invention or Improvement                                         Party(ies)      
                                   Relationship



     1.



     2.



     3.


o Additional sheets attached.




 









 





EXHIBIT B




CALIFORNIA LABOR CODE SECTION 2870




Employment Agreements; Assignment Of Rights




     . . .



     (a) Any provisions in an employment agreement which provides that an
employee shall assign, or offer to assign, any of his or her rights in an
invention to his or her employer shall not apply to an invention that the
employee developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those
inventions that either:



          (1) Relate at the time of conception or reduction to practice of the
invention to the employer’s business, or actual or demonstrably anticipated
research or development of the employer.



          (2) Result from any work performed by the employee for the employer.



               (b) To the extent a provision in an employment agreement purports to
require an employee to assign an invention otherwise excluded from being
required to be assigned under subdivision (a), the provision is against the
public policy of this state and is unenforceable.



     . . .



 









 





EXHIBIT C




TERMINATION CERTIFICATION




     My signature certifies that I do not have in my possession, nor have I
failed to return, any devices, records, data, notes, reports, proposals, lists,
correspondence, materials, equipment, other documents or property, or
reproductions of any such items belonging to OpenTV, Inc. or any of its
affiliates and related entities.



     My signature further certifies that I will preserve as confidential all
trade secrets, confidential knowledge, or other proprietary information
relating to products, processes, know-how, designs, formulas, developmental or
experimental work, computer programs, data bases, other original works of
authorship, customer lists, business plans, financial information or other
subject matter pertaining to any business of OpenTV, Inc. or any of its
employees, clients, consultants or licensees.



     My signature I further certifies that I have complied with all the terms
of OpenTV, Inc.’s Employee Proprietary Information Agreement signed by me,
including the reporting of any inventions and original works of authorship (as
defined in the Agreement), conceived or made by me (alone or jointly with
others) and covered by that Agreement.



     Date:                                       



     Employee Signature:                                                          



     Employee Name: