Exhibit 10.2


 


INSIGHT COMMUNICATIONS COMPANY, INC.

2005 STOCK INCENTIVE PLAN


 


Article I

Purpose


 


Insight Communications Company, Inc.
has established this stock incentive plan to foster and promote its long-term
financial success and materially increase stockholder value by (a) motivating
superior performance, (b) encouraging and providing for the acquisition of
an ownership interest in the Company by Employees and (c) enabling the
Company and its Subsidiaries to attract and retain the services of an outstanding
management team upon whose judgment, interest and special effort the successful
conduct of its and their operations is largely dependent.  Capitalized terms have the meaning given in Article XI.


 


Article II

Eligibility and Participation


 


Participants in the Plan shall be
those Employees and Eligible Directors selected by the Board or Committee to
participate in the Plan, as provided herein.


 


Article III

Powers of the Board


 


Section 3.1             Power to Grant and Establish
Terms of Awards.  The Board and, as provided
in Section 6.1, the Committee shall have the discretionary authority,
subject to the terms of the Plan, to determine the Employees to whom Awards
shall be granted (which may include members of the Board), and the terms and
conditions of any and all Awards.


 


Section 3.2             Administration.  The Board shall be responsible for the
administration of the Plan.  The Board
may prescribe, amend and rescind rules and regulations relating to the
administration of the Plan, provide for conditions and assurances it deems
necessary or advisable to protect the interests of the Company and make all
other determinations necessary or advisable for the administration and
interpretation of the Plan.  Any
authority exercised by the Board under the Plan shall be exercised by the Board
in its sole discretion.  Determinations,
interpretations or other actions made or taken by the Board under the Plan
shall be final, binding and conclusive for all purposes and upon all persons.


 





















 


Section 3.3             Delegation by the Board.  All of the powers, duties and
responsibilities of the Board specified in this Plan may be exercised and
performed by the Board or any duly constituted committee thereof to the extent
authorized by the Board to exercise and perform such powers, duties and
responsibilities, and any determination, interpretation or other action taken
by such committee shall have the same effect hereunder as if made or taken by
the Board.


 


Article IV

Shares Subject to the Plan


 


Section 4.1             Number.  The maximum number of shares of Series E
Shares that may be issued under the Plan or be subject to Awards may not exceed
3,666,887 shares.  The maximum number of Series F
Shares that may be issued under the Plan or be subject to Awards may not exceed
100,000 shares.  The Common Shares to be
delivered under the Plan may consist, in whole or in part, of shares held in
treasury or authorized but unissued Common Shares that are not reserved for any
other purpose.


 


Section 4.2             Canceled, Terminated or
Forfeited Awards.  If any Award of Series E
Shares or any portion thereof is for any reason forfeited, canceled or
otherwise terminated, the Series E Shares subject to such Award or portion
thereof shall not be available for grant under the Plan.  If any Award of Series F Shares or any
portion thereof is for any reason forfeited, canceled or otherwise terminated
or is repurchased by the Company as provided in Section 8.3, the Series F
Shares subject to such Award or portion thereof shall again be available for
grant under the Plan.


 


Section 4.3             Adjustment in Capitalization.  The number and kind of Common Shares
available for issuance under the Plan and the number, class, Participation
Level or other terms of any outstanding Award may be adjusted by the Board if
it shall deem such an adjustment necessary or appropriate to reflect any Common
Share dividend, stock split or share combination or any recapitalization,
merger, consolidation, exchange of shares, liquidation or dissolution of the
Company or other similar transaction affecting the Common Shares.  To the extent deemed equitable and
appropriate by the Board, in its good faith judgment, and subject to any
required action by stockholders, in any merger, consolidation, reorganization,
liquidation, dissolution or other similar transaction, any Award granted under
the Plan shall pertain to the securities or other property to which a holder of
the number of Common Shares covered by the Award would have been entitled to
receive in connection with such event. 
Notwithstanding the foregoing, in the event of a Final Reclassification
(as defined in the


 


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Securityholders Agreement), the Common Shares shall be adjusted as
provided in the Securityholders Agreement; provided, that such
adjustment shall not alter the vesting schedule provided in this Plan or
the Subscription Agreement evidencing the grant of such Common Shares.


 


Article V

Terms of Series E Shares


 


Section 5.1             Grant of Series E Shares.  The Board shall grant Series E Shares to
each Eligible Series E Participant at such time or times within 45
Business Days after the Effective Time as it shall determine.  Each Series E Share granted to a
Participant shall be evidenced by a Subscription Agreement that shall specify
the number of Series E Shares that are being granted to the Participant,
the vesting schedule of such Series E Shares, Participation Levels
with respect to such Series E Shares, which shall initially be not less
than $11.75 per share, the rights and responsibilities of Participant with
respect to such Series E Shares, and such other terms as the Board shall
determine.


 


Section 5.2             Vesting of Series E Shares.  Series E Shares shall vest in accordance
with such vesting schedule as shall be specified by the Board on or before
the Grant Date and as specified in the Subscription Agreement.


 


Article VI

Terms of Series F Shares


 


Section 6.1             Grant of Series F Shares.  The Board or Committee may grant or offer for
sale Series F Shares to Participants at such time or times and on such
terms as it shall determine; provided, however, that a grant or
offer for sale of Series F Shares may only be made if Management
recommends such grant or offer to the Committee and the Committee approves such
grant or offer; and provided, further, that, if immediately prior
to a Sale of the Company or a Qualified IPO any Series F Shares available
for issuance under the Plan remain available for grant hereunder and Management
and the Committee cannot agree on the grant of Awards with respect thereto,
such remaining Series F Shares shall not be awarded and the outstanding Series F
Shares granted under this Plan shall be entitled to the treatment set forth in
the Charter and the Securityholders Agreement. 
Each Series F Share granted to or purchased by a Participant shall
be evidenced by a Subscription Agreement that shall specify the number of Series F
Shares that are being granted to Participant, the vesting schedule of such
Series F Shares, the


 


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rights and responsibilities of Participant with respect to such Series F
Shares, and such other terms as the Board shall determine.


 


Section 6.2             Purchase Price and Payment.  The purchase price for any Series F
Shares to be offered and sold pursuant to Section 6.1 shall be the Fair
Market Value on the Grant Date or such other price as the Board shall
determine.  The purchase price with
respect to any Series F Shares offered and sold pursuant to Section 6.1
shall be paid in cash or other readily available funds simultaneously with the
closing of the purchase of such Series F Shares or in such other manner as
the Board shall determine.  Series F
Shares granted under this Plan shall not require a purchase price.


 


Section 6.3             Vesting of Series F Shares.  Series F Shares issued pursuant to Section 6.1
shall vest in accordance with the vesting schedule, or upon the attainment of
such performance criteria, as shall be specified by the Board on or before the
Grant Date and as specified in the Subscription Agreement.  Unless otherwise determined by the Board on
or before the Grant Date and specified in Participant’s Subscription Agreement,
one fifth of the Series F Shares issued pursuant to Section 6.1 shall
vest and become exercisable on each of the first, second, third, fourth and
fifth anniversaries of the Grant Date.


 


Article VII

Terms of the Common Shares


 


Section 7.1             Subscription Agreements, Etc.  No Common Shares shall be issued to a
Participant pursuant to an Award granted hereunder unless (i) the
Participant shall enter into a Subscription Agreement that shall include, among
other things, provisions providing that the Common Shares shall be subject to the
terms and provisions of the Securityholders Agreement and such other terms and
provisions as are determined by the Board, (ii) the Participant shall be a party to the Securityholders
Agreement, (iii) the Participant shall have delivered a duly executed
undated instrument of transfer or assignment in blank, having attached thereto
or to such Common Share certificate all requisite stock or other applicable or
documentary tax stamps, all in form and substance satisfactory to the Company,
relating to the Common Shares covered by such grant, and (iv) the Board
shall require that the certificates evidencing such Common Shares be held by
the Secretary of the Company until the Common Shares have vested.


 


Section 7.2             Voting Rights.  Participants shall have no voting rights
except as set forth in the Charter or as may be required under the General
Corporation Law of the State of Delaware.


 


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Section 7.3             Other Rights and Obligations.
The Participant shall be entitled to the rights and subject to the obligations
created under this Plan, the Subscription Agreement and the Securityholders
Agreement, each to the extent set forth herein or therein.


 


Section 7.4             Dividends and Other
Distributions.  Unless otherwise
determined by the Board at the time of grant and subject to the Subscription
Agreement and any other agreement to which the Common Shares are subject,
Participants’ outstanding Common Shares shall be entitled to receive all
dividends and other distributions paid with respect to those shares at the same
time (and within the same calendar year) as all other holders of the same class
of securities; provided that, if any such dividends or distributions are
paid in Common Shares or other securities or property, such shares, securities
and property shall be subject to the same vesting provisions, forfeiture
restrictions and restrictions on transferability as apply to the Common Shares
with respect to which they were paid.


 


Section 7.5             Board Discretion.  Notwithstanding anything else contained in
this Plan to the contrary, the Board may accelerate the vesting of any Common
Shares, all Common Shares or any class or series of Common Shares for any
reason on such terms and subject to such conditions, as the Board shall
determine, at any time and from time to time.


 


Article VIII

Termination of Employment


 


Section 8.1             Termination due to Death or
Disability.  Upon Participant’s termination
of employment due to death or Disability, all of Participant’s unvested Common
Shares shall vest.


 


Section 8.2             Termination for Any Other Reason.  Unless otherwise determined by the Board and
set forth in the Subscription Agreement, if a Participant’s employment with the
Company or any of its Subsidiaries is terminated for any reason other than
death or Disability, all vested Common Shares then held by Participant shall
remain outstanding and shall remain subject to the terms and conditions of the
Plan, the Subscription Agreement and the Securityholders Agreement and all of
Participant’s unvested Common Shares shall be immediately forfeited and
canceled without payment therefor, except in the case of an Employee who
purchased the Common Shares pursuant to Section 6.1, in which case the
Employee shall be entitled to payment equal to the lower of the


 


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purchase price of the Common Shares or their Fair Market Value at the time
of termination.


 


Section 8.3             Certain Rights upon Termination
of Employment Prior to a Qualified IPO. 
Unless otherwise determined by the Board at the time of grant, each
Subscription Agreement shall provide that the Company shall have the right
prior to a Qualified IPO to purchase all or any portion of a Participant’s
Common Shares during the 180-day period following any termination of
employment, at a purchase price per share equal to the Fair Market Value as of
the effective date of such termination of employment.  Any determination to purchase all or any
portion of a Participant’s Common Shares under this Section 8.3 shall be
subject to the approval of a majority of the directors designated by the
holders of Series B Preferred Stock and Sidney Knafel or in the event of
his death or incapacity such that he is unable to act, the Chief Executive
Officer of the Company at such time. The Company may assign its repurchase
rights under this Section 8.3, provided that the assignment is
approved by Management and the Committee.


 


Article IX

Sale of the Company


 


Accelerated Vesting and Payment.  Except as
otherwise provided in the Subscription Agreement, all unvested Common Shares
shall vest upon a Sale of the Company.


 


Article X

Amendment, Modification, and Termination of the Plan


 


The Board may terminate or suspend
the Plan at any time, and may amend or modify the Plan from time to time; provided
that, prior to a Sale of the Company or Qualified IPO, any such termination,
suspension, amendment or modification shall require the approval of (i) Sidney
Knafel prior to his death or incapacity such that he is unable to act, (ii) the
Chief Executive Officer of the Company at such time and (iii) a majority
of the directors designated by the holders of Series B Preferred
Stock.  No amendment, modification,
termination or suspension of the Plan shall in any manner adversely affect any
Award theretofore granted under the Plan without the consent of the Participant
holding such Award or the consent of a majority of Participants holding similar
Awards (such majority to be determined based on the number of shares covered by
such Awards).  Shareholder approval of
any such amendment, modification, termination or


 


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suspension shall be obtained to the extent mandated by applicable law, or
if otherwise deemed appropriate by the Board.


 


Article XI

Definitions


 


Section 11.1           Definitions.  Whenever used herein, the following terms
shall have the respective meanings set forth below:


 


“Award” shall mean a grant of Common Shares,
or an offer and sale of Common Shares in each case granted pursuant to the
terms of the Plan.


 


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


 


“Business Day” shall have the meaning set
forth in the Securityholders Agreement.


 


 “Charter”
means the Amended and Restated Certificate of Incorporation of the Company as
on file with the Secretary of State of Delaware, as the same may be amended
from time to time.


 


“Code” means the United States Internal
Revenue Code of 1986, as amended, and any successor thereto.


 


“Committee” the Compensation Committee of the
Board or, if there shall not be any committee then serving, the Board.


 


“Common Shares” means the Series E
Shares and the Series F Shares.


 


“Company” means Insight Communications
Company, Inc., a Delaware corporation, and any successor thereto.


 


“Disability” means the inability of
Participant 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 can be expected to last continuously through the final
vesting date of the applicable Common Shares.


 


“Effective Date” has the meaning given in Section 12.8.


 


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“Effective Time” shall have the meaning set
forth in the Agreement and Plan of Merger dated as of July 28, 2005,
between Insight Acquisition Corp. and the Company.


 


“Eligible Director” means a director of the
Company who is not also an Employee.


 


“Eligible Series E Participant” means an
Employee who is employed by the Company or any of its Subsidiaries immediately
prior to the Effective Time, including each employee who is not actively at
work on account of illness, disability, vacation or leave of absence, who held
any option to purchase shares of common stock of the Company immediately prior
to the Effective Time.


 


“Employee” means any executive, officer or
other employee of the Company or any Subsidiary.


 


“Fair Market Value” means, as of any date of
determination prior to a Qualified IPO, the per share fair market value on such
date of a share of Common Shares as determined in good faith by the Board.  In making a determination of Fair Market
Value, the Board shall give due consideration to such factors as it deems
appropriate, including, but not limited to, the earnings and other financial
and operating information of the Company in recent periods, the potential value
of the Company as a whole, the future prospects of the Company and the
industries in which it competes, the history and management of the Company, the
general condition of the securities markets, the fair market value of
securities of companies engaged in businesses similar to those of the Company,
and any recent valuation of the Common Shares that shall have been performed by
an independent valuation firm (although nothing herein shall obligate the Board
to obtain any such independent valuation). 
Unless otherwise determined by the Board or provided in a Subscription
Agreement, any determination of Fair Market Value as of the end of any fiscal
year shall continue to apply throughout the next succeeding fiscal year.  The determination of Fair Market Value will
not give effect to any restrictions on transfer of the Common Shares or take
into account any control premium, but shall be determined taking into account
the fact that such shares would represent a minority interest in the Company
and are illiquid.  Following a Qualified
IPO, Fair Market Value shall mean the average of the high and low trading
prices for a share of Common Stock on the primary national exchange (including
NASDAQ) on which Common Shares are then traded on the


 


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trading day immediately preceding the date as of
which such Fair Market Value is determined.


 


“Grant Date” means, with respect to any
Award, the date as of which such Award is granted pursuant to the Plan.


 


“Independent Director” shall have the meaning
set forth in the Securityholders Agreement.


 


“Management” shall mean the Management
Representatives (as defined in the Securityholders Agreement).


 


“Participant” means any Employee or Eligible Director who is granted
an Award.


 


“Participation Level” shall have the meaning
set forth in the Charter.


 


“Person” means any natural person, firm,
partnership, limited liability company, association, corporation, company,
trust, business trust, governmental authority or other entity.


 


“Plan” means this Insight Communications
Company, Inc. 2005 Stock Incentive Plan.


 


“Qualified IPO” shall have the meaning set
forth in the Securityholders Agreement, as amended from time to time.


 


“Sale of the Company” shall mean a “Sale” as
defined in the Securityholders Agreement, as amended from time to time.


 


“Securityholders Agreement” means the
Securityholders Agreement, dated as of December 16, 2005, among the
Company and its stockholders, as the same may be amended from time to time.


 


“Series E Shares” means the Series E
non-voting common shares of the Company, par value $0.01 per share.


 


“Series F Shares” means the Series F
non-voting common shares of the Company, par value $0.01 per share.


 


“Subscription Agreement” means a subscription
or grant agreement between the Company and a Participant embodying the terms of
any stock


 


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purchase or issuance made pursuant
to the Plan and in the form approved by the Board from time to time for such
purpose.


 


“Subsidiary” means any corporation, limited
liability company or other entity, a majority of whose outstanding voting
securities is owned, directly or indirectly, by the Company.


 


“Transfer” means sell, transfer, pledge,
encumber or otherwise dispose of, whether directly or indirectly (by merger or
sale of equity in any direct or indirect holding company or otherwise), and
whether voluntarily or by operation of law.


 


Section 11.2           Gender and Number.  Except when otherwise indicated by the
context, words in the masculine gender used in the Plan shall include the
feminine gender, the singular shall include the plural, and the plural shall
include the singular.


 


Article XII

Miscellaneous Provisions


 


Section 12.1           Nontransferability of Awards.  Subject in all cases to the Securityholders
Agreement, except as otherwise provided herein, or as the Board may permit on
such terms as it shall determine or, following vesting, as provided in the
Securityholders Agreement, the Participant shall not Transfer any Common Shares
to any Person other than the Company or by will or by the laws of descent and
distribution.  All rights with respect to
Awards granted to a Participant under the Plan shall be exercisable during the
Participant’s life-time by such Participant only (or, in the event of the
Participant’s Disability, such Participant’s legal representative).  Following a Participant’s death, all rights
with respect to Awards that were outstanding at the time of such Participant’s
death and have not terminated shall be exercised by his designated beneficiary
or by his estate in the absence of a designated beneficiary.


 


Section 12.2           Tax Withholding.  The Company or the Subsidiary employing a
Participant shall have the power to withhold, or to require such Participant to
remit to the Company or such Subsidiary, an amount (in cash, from other
compensation payable to the Participant, or in Common Shares granted under the Plan,
upon their vesting) sufficient to satisfy all U.S. federal, state, local and
any non-U.S. withholding tax or other governmental tax, charge or fee
requirements in respect of any Award granted under the Plan.


 


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Section 12.3           No Guarantee of Employment or
Participation.  Nothing in the Plan
or in any agreement granted hereunder shall interfere with or limit in any way
the right of the Company or any Subsidiary to terminate any Participant’s
employment or retention at any time, or confer upon any Participant any right
to continue in the employ or retention of the Company or any Subsidiary.  No Employee or Eligible Director shall have a
right to be selected as a Participant or, having been so selected, to receive
any Awards.


 


Section 12.4           No Limitation on Compensation; No
Impact on Benefits.  Nothing in the
Plan shall be construed to limit the right of the Company or any Subsidiary to
establish other plans or to pay compensation to its Employees or Eligible Directors,
in cash or property, in a manner that is not expressly authorized under the
Plan.  Except as may otherwise be
specifically and unequivocally stated under any employee benefit plan, policy
or program, no amount payable in respect of any Award shall be treated as
compensation for purposes of calculating a Participant’s rights under any such
plan, policy or program.  The selection
of an Employee as a Participant shall neither entitle such Employee to, nor
disqualify such Employee from, participation in any other award or incentive
plan.


 


Section 12.5           Requirements of Law.  The granting of Awards and the issuance of
shares of Common Shares pursuant to the Plan shall be subject to all applicable
laws, rules and regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be required.  No Awards shall be granted under the Plan,
and no Common Shares shall be issued under the Plan, if such grant or issuance
would result in a violation of applicable law, including U.S. federal
securities laws and any applicable state or non-U.S. securities laws.


 


Section 12.6           Freedom of Action.  Nothing in the Plan or any Subscription
Agreement shall be construed as limiting or preventing the Company or any
Subsidiary from taking any action that it deems appropriate or in its best
interest (as determined in its sole and absolute discretion) and no Participant
(or person claiming by or through a Participant) shall have any right relating
to the diminishment in the value of any Award as a result of any such action.


 


Section 12.7                           Unfunded
Plan; Plan Not Subject to ERISA.  The
plan is an unfunded plan and Participants shall have the status of unsecured
creditors of the Company.  The Plan is
not intended to be subject to the Employee Retirement Income and Security Act
of 1974, as amended.


 


Section 12.8           Term of Plan.  The Plan shall be effective as of December 16,
2005 (the “Effective Date”) and shall continue in effect, unless sooner
terminated


 


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pursuant to Article X, until the tenth anniversary of such date.  The provisions of the Plan shall continue
thereafter to govern all outstanding Awards.


 


Section 12.9           Governing Law.  THIS PLAN, AND ALL AGREEMENTS HEREUNDER,
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE STATE OF
NEW YORK, WITHOUT REGARD TO THE APPLICATION OF RULES OF CONFLICTS OF LAW THAT
WOULD APPLY THE LAWS OF ANY OTHER JURISDICTION, EXCEPT TO THE EXTENT THAT THE
CORPORATE LAW OF THE STATE OF DELAWARE SPECIFICALLY AND MANDATORILY APPLIES.


 


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