Exhibit 10.18


 


Description of the 2009-2011 Long-Term Incentive
Plan


 


On June 10, 2009, the compensation committee (the “Committee”) of
the Board of Directors of Virgin Media Inc. (the “Company”) approved the
2009-2011 long-term incentive plan (the “2009 LTIP”), which includes the grant
of stock options and restricted stock units to its executive officers
(excluding the Chairman and the Chief Executive Officer) and other key
employees of the Company and its subsidiaries.  
The 2009 LTIP is comprised of (1) option grants that vest based
solely on time in five equal annual installments beginning January 1,
2010, and (2) restricted stock unit grants with cliff-vesting after three
years that are linked to the achievement of performance criteria over the
three-year period. On June 12, 2009 (the “Grant Date”), the Company
granted the stock options and restricted stock units under the 2009 LTIP to the
eligible participants.


 


Fair Value of the Awards


 


The grant date fair value of the options awarded under the 2009 LTIP
was determined using the Black-Scholes pricing model, and the exercise price is
equal to the average of the high and low stock prices of the Company’s common
stock on the Grant Date.  The options
will have a ten-year term and will vest, subject to continued employment, in
twenty percent increments on each of January 1, 2010, 2011, 2012, 2013 and
2014, subject to accelerated vesting in the event of a change in control of the
Company.


 


The grant date fair value of the restricted stock units awarded under the
2009 LTIP was based on the average of the high and low stock prices of the
Company’s common stock on the Grant Date. The restricted stock units will vest
if (1) the Company meets certain performance goals based on its long-term
model for cumulative group simple cash flow in respect of the period from January 1,
2009 through December 31, 2011 and (2) the award recipient remains
continuously employed by the Company or any of its subsidiaries through the
payment date, which will be not later than April 30, 2012.


 


Performance Criteria for the Restricted Stock Units


 


The performance criteria for the restricted stock units is based on a
cumulative group simple cash flow in respect of the period from January 1,
2009 through December 31, 2011, being operating income before
depreciation, amortization, goodwill and intangible asset impairments and
restructuring and other charges, less fixed asset additions on an accrual basis
(excluding additions in respect of Electronic Equipment Waste Obligations
accrued under FASB Staff Position FAS 143-1). 
The performance criteria include minimum and on-target performance
levels. Each restricted stock unit agreement will establish a minimum level of
performance below which no restricted stock units will vest and an on-target
level of performance at which all of the restricted stock units (with a grant
date fair value of 50% of base salary (based on the value of the restricted
stock units on the Grant Date)) will vest. 
Between these levels, vesting will be extrapolated on a linear basis. If
the performance is below the minimum level, the restricted stock units will
lapse.


 

















 


Equivalent payments may be made in cash rather than common stock at the
Committee’s discretion. If the award recipient’s employment terminates prior to
the payment date or if the recipient has not entered into new terms and
conditions of employment with the Company or any of its subsidiaries on terms
satisfactory to the Company on or before July 31, 2009 (unless otherwise
agreed by the Company), the restricted stock units will be forfeited.  The vesting of the restricted stock units
will not accelerate in the event of a change in control of the Company.


 


2009 LTIP Grants


 


Options to purchase an aggregate of approximately 4.0 million shares of
common stock and an aggregate of approximately 1.6 million restricted stock
units (based on the on-target level of 100% being achieved) were awarded to 117
award recipients.  The exercise price of
the option is $8.73 per share, being the average of the high and low stock prices,
on the Grant Date.  The options may not
be exercised by a recipient unless such person has entered into new terms and
conditions of employment with the Company or any of its subsidiaries on terms
satisfactory to the Company on or before July 31, 2009.   If the exercise condition is not satisfied,
the options will terminate in full on August 1, 2009 unless otherwise
agreed by the Company.


 


Additional awards under the 2009 LTIP may be made during the 2009
fiscal year.