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Exhibit 10.2  


 
 

LIBERTY MEDIA INTERNATIONAL, INC.
  2004 NONEMPLOYEE DIRECTOR INCENTIVE PLAN    
    


ARTICLE I 


PURPOSE
OF PLAN 


        1.1    Purpose.    The purpose of the Plan is to provide a method whereby eligible Nonemployee Directors of the
Company may be awarded additional remuneration for services rendered and encouraged to invest in capital stock of the Company, thereby increasing their proprietary interest in the Company's businesses
and increasing their personal interest in the continued success and progress of the Company. The Plan is also intended to aid in attracting Persons of exceptional ability to become Nonemployee
Directors of the Company. 


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 the Company means any corporation, partnership or other business association that, directly or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with the Company. 


        "Agreement"
means a stock option agreement, stock appreciation rights agreement, restricted shares agreement, 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 shares of Common Stock 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 common stockholders of the Company immediately prior to such transaction have the same proportionate ownership of the Common
Stock 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 who are common stockholders 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 the 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 the 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 a


 
vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period. 


        "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. 


        "Common
Stock" means each or any (as the context may require) series of the Company's common stock. 


        "Company"
means Liberty Media International, Inc., a Delaware corporation. 



        "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), corporation or other entity (other than the Company, any Subsidiary of the Company or any employee benefit plan sponsored by the Company or any Subsidiary of the Company) shall purchase any
Common Stock of the Company (or securities convertible into Common Stock of the Company) for cash, securities or any other consideration pursuant to a tender offer or exchange offer, without the prior
consent of the Board, or (ii) any person (as such term is so defined), corporation or other entity (other than the Company, any Subsidiary of the Company, any employee benefit plan sponsored by
the Company or any Subsidiary of the Company or any Exempt 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 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 related transactions) approved by the Board. For purposes of this definition, "Exempt Person" means each of (a) the
Chairman of the Board, the President and each of the directors of the Company as of the Distribution Date, and (b) the respective family members, estates, and heirs of each of the Persons
referred to in clause (a) above and any trust or other investment vehicle for the primary benefit of any of such Persons or their 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. 


        "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 12 months. 


        "Distribution
Date" means the date on which the Company ceases to be a wholly owned subsidiary of Liberty Media Corporation, a Delaware corporation. 



        "Dividend
Equivalents" means, with respect to Restricted Shares to be issued at the end of the Restriction Period, to the extent specified by the Board only, an amount equal to all
dividends and
other distributions (or the economic equivalent thereof) which are payable to stockholders of record during the Restriction Period on a like number and kind of shares of Common Stock. 


        "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. 


        "Effective
Date" means May 11, 2004. 


        "Equity
Security" shall have the meaning ascribed to such term in Section 3(a)(11) of the Exchange Act, and an equity security of an issuer shall have the meaning ascribed thereto
in Rule 16a-1 promulgated under the Exchange Act, or any successor Rule.

 


        "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. 


        "Fair
Market Value" of a share of any series of Common Stock 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 share of such series of Common Stock on such day (or, if such day is not a trading day, on the next preceding trading day) as reported on the consolidated transaction reporting system
for the principal national securities exchange on which shares of such series of Common Stock are listed on such day or if such shares are not then listed on a national securities exchange, then as
reported on Nasdaq. If for any day the Fair Market Value of a share of the applicable series of Common Stock is not determinable by any of the foregoing means, then the Fair Market Value for such day
shall be determined in good faith by the Board on the basis of such quotations and other considerations as the Board deems appropriate. 


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


        "Holder"
means a Person who has received an Award under the Plan. 


        "Nasdaq"
means The Nasdaq Stock Market. 


        "Nonemployee
Director" means an individual who is a member of the Board and who is not an employee of the Company or any Subsidiary. 



        "Nonqualified
Stock Option" means a stock option granted under Article VI. 


        "Option"
means a Nonqualified Stock Option. 


        "Person"
means an individual, corporation, limited liability company, partnership, trust, incorporated or unincorporated association, joint venture or other entity of any kind. 


        "Plan"
means this Liberty Media International, Inc. 2004 Nonemployee Director Incentive Plan. 



        "Restricted
Shares" means shares of any series of Common Stock or the right to receive shares of any specified series of Common Stock, 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. 


        "SARs"
means stock appreciation rights, awarded pursuant to Article VII, with respect to shares of any specified series of Common Stock. 


        "Stock
Unit Awards" has the meaning ascribed thereto in Section 9.1. 


        "Subsidiary"
of a Person means any present or future subsidiary (as defined in Section 424(f) of the Code) of such Person or any business entity in which such Person owns,
directly or indirectly, 50% or more of the voting, capital or profits interests. An entity shall be deemed a subsidiary of a Person 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. 



ARTICLE III 


ADMINISTRATION



        3.1    Administration.    The Plan shall be administered by the Board, provided that it may delegate to employees of
the Company certain administrative or ministerial duties in carrying out the purposes of the Plan. 


        3.2    Powers.    The Board shall have full power and authority to grant to eligible Persons Options under
Article VI of the Plan, 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
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. The Board 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 Board 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 Board may take into account such factors as the Board in its
discretion deems relevant. 


        3.3    Interpretation.    The Board 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 Board, including any interpretation or construction of the Plan, shall be final and conclusive for all
purposes and upon all Persons. No member of the Board shall be liable for any action or determination made or taken by him or the Board 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 shares of
Common Stock with respect to which Awards may be granted during the term of the Plan shall be 5 million shares. Shares of Common Stock 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 shares of Common Stock subject to (a) 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), (b) any Award of any SARs granted
under the Plan that shall be exercised for cash, and (c) 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. 


        4.2    Adjustments.    If the Company subdivides its outstanding shares of any series of Common Stock into a greater
number of shares of such series of Common Stock (by stock dividend, stock split, reclassification, or otherwise) or combines its outstanding shares of any series of Common Stock into a smaller number
of shares of such series of Common Stock (by reverse stock split, reclassification, or otherwise) or if the Board 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 such series of Common Stock or other similar
corporate event

 
(including mergers or consolidations other than those which constitute Approved Transactions, adjustments with respect to which shall be governed by Section 10.1(b)) affects any series of
Common Stock so that an adjustment is required to preserve the benefits or potential benefits intended to be made available under the Plan, then the Board, in its sole discretion and in such manner as
the Board may deem equitable and appropriate, may make such adjustments to any or all of (a) the number and kind of shares of stock which thereafter may be awarded, optioned, or otherwise made
subject to the benefits contemplated by the Plan, (b) the number and kind of shares of stock subject to outstanding Awards, and (c) 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 shares of any series of Common Stock are redeemed, then each outstanding Award shall be adjusted to substitute for the shares of such series of Common
Stock subject thereto the kind and amount of cash, securities or other assets issued or paid in the redemption of the equivalent number of shares of such series of Common Stock and otherwise the terms
of such Award, including, in the case of Options or similar rights, the aggregate exercise price, and, in the case of Free Standing SARs, the aggregate base price, shall remain constant before and
after the substitution (unless otherwise determined by the Board and provided in the applicable Agreement). The Board may, if deemed appropriate, provide for a cash payment to any Holder of an Award
in connection with any adjustment made pursuant to this Section 4.2. 


ARTICLE V 


ELIGIBILITY



        5.1    General.    The Persons who shall be eligible to participate in the Plan and to receive Awards under the Plan
shall, subject to Section 5.2, be such Persons who are Nonemployee Directors as the Board shall select. Awards may be made to Nonemployee Directors who hold or have held Awards under the Plan
or any similar or other awards under any other plan of the Company or any of its Affiliates. 


        5.2    Ineligibility.    No Person who is not a Nonemployee Director shall be eligible to receive an Award. 


ARTICLE VI 


STOCK
OPTIONS 


        6.1    Grant of Options.    Subject to the limitations of the Plan, the Board 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 series and number of shares of Common Stock subject to such Option, and, subject to
Section 6.2, the purchase price of the shares of Common Stock subject to such Option. 


        6.2    Option Price.    The price at which shares may be purchased upon exercise of an Option shall be fixed by the
Board and may be more than, less than or equal to the Fair Market Value of the shares of the applicable series of Common Stock subject to the Option as of the date the Option is granted. 


        6.3    Term of Options.    Subject to the provisions of the Plan with respect to death, retirement and termination of
service, the term of each Option shall be for such period as the Board shall determine as set forth in the applicable Agreement. 


        6.4    Exercise of Options.    An 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 the Plan and, unless the Agreement otherwise provides, may be exercised to the extent exercisable, in whole or in part, at any time
and from time to time during such term; provided, however, that subsequent to the grant of an Option, the Board, 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). 


        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 Board 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 10.9 shall be determined by the Board and may consist of (i) cash, (ii) check,
(iii) whole shares of any series of Common Stock, (iv) the withholding of shares of the applicable series of Common Stock issuable upon such exercise of the Option, (v) the
delivery, together with a properly
executed exercise notice, of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds required to pay the purchase price, or (vi) any
combination of the foregoing methods of payment, or such other consideration and method of payment as may be permitted for the issuance of shares under the Delaware General Corporation 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 as
the Board deems appropriate. 


        (b)   Value of Shares. Unless otherwise determined by the Board and provided in the applicable Agreement, shares of any series
of Common Stock delivered in payment of all or any part of the amounts payable in connection with the exercise of an Option, and shares of any series of Common Stock withheld for such payment, shall
be valued for such purpose at their Fair Market Value as of the exercise date. 


        (c)   Issuance of Shares. The Company shall effect the transfer of the shares of Common Stock 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 10.9, and within a reasonable time thereafter, such
transfer shall be evidenced on the books of the Company. Unless otherwise determined by the Board 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 shares of Common Stock 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 Board 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, SARs may be granted by the Board to such eligible
Persons in such numbers, with respect to any specified series of Common Stock, and at such times during the term of the Plan as the Board shall determine. A SAR may be granted to a Holder of an Option
(hereinafter called a "related Option") with respect to all or a portion of the shares of Common Stock subject to the related Option (a "Tandem SAR") or may be granted separately to an eligible
Nonemployee Director (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 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 the exercise or termination of the related Option, the Tandem SARs with respect thereto shall be canceled automatically to the extent of the number of shares of Common Stock with respect
to which the related 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 Board and provided in the
applicable Agreement, (a) the Holder thereof shall be entitled to receive from the Company, for each share of the applicable series of Common Stock 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 share of the applicable series of Common Stock with
respect to which the Tandem SAR was granted on the date of exercise over the related Option purchase price per share, and (b) the related Option with respect thereto shall be canceled
automatically to the extent of the number of shares of Common Stock 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 may be more than, less than or equal to the Fair Market Value of the applicable series of Common Stock with
respect to which the Free Standing SAR was granted as of the date the Free Standing SAR is granted. Subject to the limitations of the Plan, upon the exercise of a Free Standing SAR and unless
otherwise determined by the Board and provided in the applicable Agreement, the Holder thereof shall be entitled to receive from the Company, for each share of the applicable series of Common Stock
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
share of the applicable series of Common Stock with respect to which the Free Standing SAR was granted 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 a SAR by the Holder shall be paid in
cash, shares of the applicable series of Common Stock with respect to which the SAR was granted (valued at Fair Market Value on the date of exercise of such SAR), a combination of cash and such shares
of the applicable series of Common Stock or such other consideration, in each case, as provided in the Agreement. No fractional shares of Common Stock shall be issuable upon exercise of a SAR, and
unless otherwise provided in the applicable Agreement, the Holder will receive cash in lieu of fractional shares. Unless the Board shall otherwise determine, to the extent a Free Standing SAR is
exercisable, it will be exercised automatically for cash 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 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, including a condition that the SAR may be
exercised only in accordance with rules and regulations adopted from time to time, as the Board may determine. 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 a 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 Board and provided in the applicable Agreement). 


        7.7    Nontransferability.    Unless otherwise determined by the Board and provided in the applicable Agreement,
(a) SARs shall not be transferable other than by will or the laws of descent and

 
distribution or pursuant to a Domestic Relations Order, and (b) 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). 


ARTICLE VIII 


RESTRICTED
SHARES 


        8.1    Grant.    Subject to the limitations of the Plan, the Board shall designate those eligible Persons to be
granted Awards of Restricted Shares, shall determine the time when each such Award shall be granted, shall determine whether shares of Common Stock 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 shares of the applicable series of Common Stock
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 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 be deemed fully paid and nonassessable. All determinations made by 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 shares of the applicable series of
Common Stock 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 or its designee, and the Holder shall deposit with the custodian 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 shares of the applicable series of Common Stock for all corporate purposes. The Holder will have the right to vote such Restricted Shares, to receive and retain such dividends and
distributions, as the Board may designate, paid or distributed on such Restricted Shares, and to exercise all other rights, powers and privileges of a Holder of shares of the applicable series of
Common Stock with respect to such Restricted Shares; except, that, unless otherwise determined by the Board 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 or its designee 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 Board may designate, the Company or its designee 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 established by 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 shares of the applicable series of Common Stock, and the Holder shall not have any of the rights of a stockholder with respect to the shares of
Common Stock 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 Restriction Period. If and to the extent that
shares of Common Stock are to be issued at the end of the Restriction Period, the Holder shall be entitled to receive Dividend Equivalents with respect to the shares of Common Stock covered thereby
either (a) during the Restriction Period or (b) in accordance with the rules applicable to Retained Distributions, as the Board may specify in the Agreement. 


        8.5    Cash Payments.    In connection with any Award of Restricted Shares, an Agreement 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. Such cash amounts shall be payable in accordance with such additional
restrictions, terms and conditions as shall be prescribed by the Board in the Agreement and shall be in addition to any 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 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 amount 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 Board may, in its discretion,
provide that the delivery of any Restricted Shares, Retained Distributions and unpaid Dividend Equivalents that shall have become vested, and payment of any cash amounts 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 Board in accordance
with such rules and regulations, including any deadline for the making of such an election, as the Board may provide. 


ARTICLE IX 


STOCK
UNITS 


        9.1    Grant.    In addition to granting Awards of Options, SARs and Restricted Shares, the Board shall, subject to
the limitations of the Plan, have authority to grant to eligible Persons Awards of Stock Units which may be in the form of shares of any specified series of Common Stock or units, the value of which
is based, in whole or in part, on the Fair Market Value of the shares of any specified series of Common Stock. Subject to the provisions of the Plan, including any 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 Board may determine in its discretion, which need not
be identical for each Award. The determinations made by the Board pursuant to this Section 9.1 shall be specified in the applicable Agreement.

 


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



        (a)   Any
shares of Common Stock which 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 Board 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 any shares of Common Stock to be
issued in connection therewith, if applicable, shall be delivered without the payment of cash consideration; provided, however, that the issuance of any
shares of Common Stock 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. 


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


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


        (e)   In
such circumstances as the Board may deem advisable, the Board 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 Awards.    



        (a)   Death or Disability. If a Holder's service 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 any unpaid Dividend Equivalents shall become vested and any related 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:
(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 related 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 immediately prior to consummation of the Approved Transaction. Notwithstanding the foregoing, unless otherwise provided in the
applicable Agreement, the Board 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 in connection with an Approved Transaction if effective provision has been made for the taking of such action which, in the opinion of the Board, is equitable and appropriate to
substitute a new Award for such Award or to assume such Award and to make such new or assumed Award, as nearly as may be practicable, equivalent to the old Award (before giving effect to any
acceleration of the vesting or exercisability thereof), taking into account, to the extent applicable, the kind and amount of securities, cash or other assets into or for which the applicable series
of Common Stock may be changed, converted or exchanged in connection with the Approved Transaction. 




        10.2    Termination of Service.    



        (a)   General. If a Holder's service shall terminate prior to an Option or SAR becoming exercisable or being exercised (or
deemed exercised, as provided in Section 7.2) in full, 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 or SAR shall thereafter become or be exercisable, such Stock Units to the extent vested shall thereafter be exercisable, and the Holder's rights to any unvested Restricted Shares,
Retained Distributions, unpaid Dividend Equivalents and related 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 Board 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 service terminates 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 of the Holder's service for cause will be treated in accordance with the
provisions of Section 10.2(b). 


        (b)   Termination for Cause. If a Holder's service on the Board shall be terminated by the Company for "cause" during the
Restriction Period with respect to any Restricted Shares, or prior to any Option or SAR becoming exercisable or being exercised in full or prior to the vesting or complete exercise of any Stock Unit
(for these purposes, "cause" shall include dishonesty, incompetence, moral turpitude, other misconduct of any kind and the refusal to perform his duties and responsibilities for any reason other than
illness or incapacity; provided, however, that if such termination occurs within 12 months after an Approved Transaction or Control Purchase or
Board Change, termination for "cause" shall mean only a felony conviction for fraud, misappropriation or embezzlement), then, unless otherwise determined by the Board and provided in the applicable
Agreement, (i) all Options and SARs and all unvested or unexercised Stock Units held by such Holder shall immediately terminate, and (ii) such Holder's rights to all Restricted Shares,
Retained Distributions, any unpaid Dividend Equivalents and any related cash amounts shall be forfeited immediately. 




        10.3    Nonalienation of Benefits.    Except as set forth herein, 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. 


        10.4    Written Agreement.    Each Award of Options shall be evidenced by a stock option agreement; each Award of SARs
shall be evidenced by a stock appreciation rights agreement; each Award of Restricted Shares shall be evidenced by a restricted shares agreement; and 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 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. Any such
Agreement may be supplemented or amended from time to time as approved by the Board as contemplated by Section 10.6(b). 



        10.5    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 Board 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. 


        10.6    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 Plan may be terminated at any time prior to the tenth anniversary of the Effective Date and may, from time to time, be suspended or
discontinued or modified or amended if such action is deemed advisable by the Board. 


        (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 10.6(a)), the Board may amend outstanding Agreements with any Holder, including any amendment which 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 Board may, but solely with the Holder's consent unless otherwise
provided in the Agreement, agree to cancel any Award under the Plan and grant 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 10.6(b) shall be construed to prevent the Board 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 Board may, subject to the express provisions of the Plan, adopt from time to
time or impair the enforceability of any such provision. 




        10.7    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 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 Common Stock may be listed or quoted. For so long as any series of Common Stock are registered under
the Exchange Act, the Company shall use its reasonable efforts to comply with any legal requirements (a) to maintain a registration statement in effect under the Securities Act of 1933 with
respect to all shares of the applicable series of Common Stock that may be issued to Holders under the Plan and (b) to file in a timely manner all reports required to be filed by it under the
Exchange Act. 


        10.8    Withholding.    The Company's obligation to deliver shares of Common Stock or pay cash in respect of any Award
under the Plan shall be subject to applicable federal, state and local tax withholding requirements. 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, be paid in shares of the
applicable series of Common Stock already owned by the Holder or through the withholding of shares otherwise issuable to such Holder, upon such terms and conditions (including the conditions

 
referenced in Section 6.5) as the Board shall determine. If the Holder shall fail to pay, or make arrangements satisfactory to the Board 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. 


        10.9    Nonexclusivity of the Plan.    The adoption of the Plan by the Board shall not be construed as creating any
limitations on the power of the Board to adopt such other incentive arrangements as it may deem desirable, including 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. 



        10.10    Exclusion from Other Plans.    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 compensation or bonus in determining the
amount of any payment under any pension, retirement or other benefit plan, program or policy of the Company or any Subsidiary of the Company. 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 which is payable to such beneficiary under
any life insurance plan of the Company or any Subsidiary of the Company. 



        10.11    Unfunded Plan.    Neither the Company nor any Subsidiary of the Company shall be required to segregate any
cash or any shares of Common Stock 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 Holder shall have voting or other rights with respect to the shares of Common Stock covered by an Award
prior to the delivery of such shares. Neither the Company nor any Subsidiary of the Company shall, by any provisions of the Plan, be deemed to be a trustee of any shares of Common Stock or any other
property, and the liabilities of the Company to any Holder 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 Holder under the Plan shall be limited to those of a general creditor of the Company. 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. 


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


        10.13    Accounts.    The delivery of any shares of Common Stock and the payment of any amount in respect of an Award
shall be for the account of the Company or the applicable Subsidiary of the Company, as the case may be, and any such 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 10.8. 


        10.14    Legends.    Each certificate evidencing shares of Common Stock subject to an Award shall bear such legends as
the Board deems necessary or appropriate to reflect or refer to any terms, conditions or restrictions of the Award applicable to such shares, including 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. 


        10.15    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. 



        10.16    Interpretation.    The words "include," "includes," "included" and "including" to the extent used in the Plan
shall be deemed in each case to be followed by the words "without limitation." 











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LIBERTY MEDIA INTERNATIONAL, INC. 2004 NONEMPLOYEE DIRECTOR INCENTIVE PLAN