Exhibit 10.23


 


Description of the 2010-2012 Long-Term Incentive
Plan


 


On January 7, 2010, the compensation committee (the “Committee”)
of the Board of Directors of Virgin Media Inc. (the “Company”) approved the
Company’s 2010-2012 long-term incentive plan (the “2010 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 2010 LTIP is designed to incentivize senior managers to meet
stringent business performance targets, which are aligned with driving
long-term stockholder value, over a three-year period.  The 2010 LTIP consists of awards of stock
options and performance-based restricted stock units under the Company’s Stock
Incentive Plan.


 


Overall Structure


 


The 2010 LTIP is comprised of (1) option grants that vest based
solely on time in approximately twenty percent increments, beginning January 1,
2011, 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 (January 1, 2010 to December 31, 2012), in each
case, subject to continued employment with the Company to the vesting
date.  Options with a face value of 100%
of the recipient’s base annual salary were granted to all eligible employees,
subject to the conditions above.  Of this
total, options with a face value of £30,000 per eligible employee were granted
under the CSOP.  These options, to the
extent granted to US nationals, are also intended to qualify as Incentive Stock
Options under applicable US tax legislation. 
For senior executives, restricted stock units with a face value of up to
150% of the recipient’s annual base salary were granted, subject to the
conditions above.  For other eligible
employees, restricted stock units with a face value of up to 75% of the
recipient’s annual base salary were granted, subject to the conditions above.


 


The options will have a ten-year term. 
The vesting of the options will accelerate in the event that there is a
change in control of the Company and the individual is terminated for good
reason or without cause within 12 months of the change of control event. If
CSOP option vesting is accelerated, those options to which accelerated vesting
is applied may in certain circumstances cease to qualify for the favorable tax
treatment otherwise applicable (unless accelerated vesting is for certain
specific good leaver reasons) to CSOP options and the tax treatment will be
that applicable to options granted otherwise under the 2010 LTIP.


 


Grant Date


 


The options were granted on January 7, 2010 with the exception of
the CSOP options, which were granted on January 8, 2010 following HMRC’s
approval of the CSOP.  The restricted
stock units were granted on January 7, 2010.


 

















 


Value of the Awards


 


The grant date face value of the options awarded under the 2010 LTIP is
determined using the average of the high and low stock prices of the Company’s
common stock on the grant date, 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 grant date face value of the
restricted stock units awarded under the 2010 LTIP is determined using the
average of the high and low stock prices of the Company’s common stock on the
grant date.


 


Performance Criteria for the Restricted Stock Units


 


The performance criteria for the restricted stock units is as follows: (i) 50%
based on achievement of a cumulative simple cash flow (“SCF”) target in respect
of the period from January 1, 2010 through December 31, 2012, being
operating income before depreciation, amortization, goodwill and other
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 the Asset Retirement and
Environmental Obligations Topic of the FASB Accounting Standards Codification)
and (ii) 50% based on total shareholder value (“TSV”) performance in
respect of the period from January 1, 2010 through December 31, 2012
relative to a pre-determined performance comparator group.  For senior executives, vesting of any
SCF-based award with grant date face value of greater than 50% of the recipient’s
annual base salary also requires top quartile TSV performance.  Further, if TSV growth is negative, the
number of restricted stock units vesting based on TSV performance (except in
respect of the SCF-based award) will be reduced by half from the percentage
otherwise applicable.


 


The performance criteria include minimum and maximum performance
levels. Each restricted stock unit agreement will establish a minimum level for
each performance condition below which no restricted stock units will vest and
a maximum level of performance at which all of the restricted stock units will
vest.  If the performance is below the
minimum level, the restricted stock units subject to such performance condition
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, 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.


 


2010 LTIP Grants


 


Options to purchase an aggregate of approximately 1.7 million shares of
common stock and an aggregate of approximately 1.7 million restricted stock
units (based on the maximum target level being achieved) were awarded to 122
award recipients.  The exercise price of
the options granted on January 7, 2010 is $17.16 per share and the
exercise price of the CSOP options granted on January 8, 2010 is $17.12
per share, in each case being the average of the high and low stock prices on
the relevant grant date.  Additional
awards under the 2010 LTIP may be made during the 2010 fiscal year.