Document:

exv10w1

 

EXHIBIT 10.1

EXECUTION VERSION

 

LIBERTY GLOBAL, INC.,

UNITEDGLOBALCOM, INC.

AND

THE BANK OF NEW YORK

as Trustee

 

THIRD SUPPLEMENTAL INDENTURE

Dated as of August 26, 2005

to

INDENTURE

Dated as of April 6, 2004

1 3/4% Convertible Senior Notes Due April 15, 2024

 

 

 

THIRD SUPPLEMENTAL INDENTURE, dated as of August 26, 2005 (this “Third Supplemental Indenture”),
among LIBERTY GLOBAL, INC., a Delaware corporation (herein called “Liberty Global”), having its
principal office at 4643 South Ulster Street, Suite 1300, Denver, Colorado 80237, UNITEDGLOBALCOM,
INC., a Delaware corporation (herein called the “Company”), having its principal office at 4643
South Ulster Street, Suite 1300, Denver, Colorado 80237, and THE BANK OF NEW YORK, a New York
banking corporation, as Trustee (herein called the “Trustee”).

WITNESSETH:

WHEREAS, the Company has executed and delivered to the Trustee that certain Indenture, dated as of
April 6, 2004 (the “Original Indenture”), pursuant to which the Company’s 13/4% Convertible Senior
Notes due April 15, 2024 in the original principal amount of €500,000,000 were issued;

WHEREAS, the Original Indenture has been amended and supplemented by means of (i) the First
Supplemental Indenture, dated as of May 24, 2005, between the Company and the Trustee, and (ii) the
Second Supplemental Indenture, dated as of June 15, 2005, among the Company, Liberty Global and the
Trustee (the Original Indenture, as so amended and supplemented, is herein referred to as the
“Amended Indenture”);

WHEREAS, the Amended Indenture provides that, without the consent of any Holders, the Company, when
authorized by a Board Resolution of the Company, and the Trustee, at any time and from time to
time, may enter into one or more indentures supplemental to the Amended Indenture for the purpose
of, among other things, adding to the covenants of the Company for the benefit of the Holders,
making any change that does not materially and adversely affect the rights of any Holder or to cure
any ambiguity, defect or inconsistency;

WHEREAS, on August 4, 2005, the board of directors of Liberty Global declared a stock dividend (the
“Series C Stock Dividend”) of one share of Series C Common Stock (as hereinafter defined) for (i)
each share of Series A Common Stock and (ii) each share of Liberty Global’s Series B common stock,
par value $.01 per share, in each case to holders of record of those shares at 5:00 p.m., New York
City time, on August 26, 2005 (as such time and date may be changed by the board of directors of
Liberty Global, the “Series C Stock Dividend Record Date”);

WHEREAS, pursuant to Section 12.6(b) of the Amended Indenture, no adjustment need be made to the
Conversion Rate of the Securities if Holders are to participate in the Series C Stock Dividend upon
conversion of their Securities, on a basis and with notice that the Board of Directors of the
Company determines to be fair and appropriate in light of the basis and notice on which holders of
the Series A Common Stock participate in the Series C Stock Dividend;

WHEREAS, it is anticipated that the Closing Sale Price of the Series A Common Stock will be
affected by the issuance of the shares of Series C Common Stock in the Series C Stock Dividend;

WHEREAS, Section 12.1(a) of the Amended Indenture sets forth the circumstances in which Holders of
Securities are entitled to convert their Securities, and certain of those circumstances are based,
in whole or in part, on the Closing Sale Price of the Series A Common Stock;

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WHEREAS, Section 12.5 of the Amended Indenture provides for the adjustments to be made to the
Conversion Price if Liberty Global takes certain actions with respect to or which affect the Series
A Common Stock and Section 12.12 of the Amended Indenture addresses the consequences of a
reclassification or change of the outstanding shares of Series A Common Stock, a consolidation,
merger or binding share exchange to which Liberty Global is a party or a sale or conveyance of all
or substantially all of the assets of Liberty Global as a result of which the Series A Common Stock
is converted to cash, securities or other property;

WHEREAS, the Company, Liberty Global and the Trustee are entering into this Third Supplemental
Indenture, in compliance with Sections 9.1 and 12.6 of the Amended Indenture, for the purpose of,
among other things, (i) providing for the right of Holders to participate in the Series C Stock
Dividend upon conversion of their Securities, (ii) adding to the circumstances in which Holders of
Securities are entitled to convert their Securities in light of the Series C Stock Dividend, (iii)
providing for adjustments to be made to the Series C Dividend Shares Amount (as hereinafter
defined) in the event Liberty Global takes the types of actions specified in Section 12.5 of the
Amended Indenture with respect to the Series C Common Stock or effects a transaction of the type
specified in Section 12.12 of the Amended Indenture which affects the Series C Common Stock, and
(iv) clarifying the meaning of the term “Current Market Price”, for purposes of Section 12.5, in
the Amended Indenture; and

WHEREAS, the Board of Directors of the Company has determined that the basis on which the Holders
of Securities will participate in the Series C Stock Dividend, as set forth in this Third
Supplemental Indenture, is fair and appropriate in light of the basis on which holders of the
Series A Common Stock will participate in the Series C Stock Dividend.

NOW, THEREFORE, each party agrees as follows for the benefit of each of the other parties to this
Third Supplemental Indenture and for the equal and ratable benefit of the Holders of the
Securities:

ARTICLE I

DEFINED TERMS

     All capitalized terms that are defined in this Third Supplemental Indenture have the meanings
assigned to them herein. All capitalized terms used in this Third Supplemental Indenture that are
not otherwise defined in this Third Supplemental Indenture have the meanings assigned to them in
the Amended Indenture.

ARTICLE II

AMENDMENTS

Section 2.1 Terms and Conditions.

     (a) For all purposes of the Indenture, this Third Supplemental Indenture and the Securities,
the definitions of the following terms in Section 1.1 of the Amended Indenture are amended and
restated to read in full as follows:

         “Conversion Price” has the meaning specified in the Securities, as adjusted from time to time
in accordance with this Indenture. As of the date of the Third

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Supplemental Indenture, the Conversion Price specified in the Securities has been adjusted to
€45.2719 per share of Series A Common Stock in accordance with Section 12.12 and shall remain
€45.2719 per share of Series A Common Stock until further adjusted in accordance with this
Indenture.

         “Current Market Price,” for purposes of Section 12.5, means the average of the Closing Sale
Prices for the 10 consecutive Trading Days ending immediately preceding the day before the Event
Record Date (or, if earlier, the Ex-Dividend Date) with respect to any dividend, distribution,
issuance or other transaction or event requiring such computation.

     (b) For all purposes of the Indenture and the Securities, Section 1.1 of the Amended Indenture
is amended by adding the following defined terms:

         “Adjusted Conversion Value” of a Security means, on any date of determination, the sum of (i)
the product of (a) the Closing Sale Price on such date multiplied by the Currency Rate on such date
and (b) the number of shares of Series A Common Stock issuable upon conversion of €1,000 in
principal amount of the Securities on such date (which will equal €1,000 divided by the then
applicable Conversion Price) plus (ii) the product of (a) the Series C Closing Sale Price on such
date multiplied by the Currency Rate on such date and (b) the Series C Dividend Shares Amount
deliverable upon conversion of €1,000 in principal amount of the Securities on such date.

         “Adjusted Trading Price” of the Securities means, on any date of determination, the average of
the secondary market bid quotations per €1,000 principal amount of Securities obtained by the
Conversion Agent at the request of the Company for €5,000,000 principal amount of Securities at
approximately 3:30 p.m., New York City time, on such determination date from three independent
nationally recognized securities dealers the Company selects; provided, that if at least three such
bids cannot reasonably be obtained by the Conversion Agent, but two such bids can reasonably be
obtained, then the average of these two bids shall be used; provided, further, that if at least two
such bids cannot reasonably be obtained, but one such bid can reasonably be obtained, this one bid
shall be used. If the Conversion Agent cannot reasonably obtain at least one bid for €5,000,000
principal amount of the Securities from a nationally recognized securities dealer or, in the
Company’s reasonable judgment, the bid quotations are not indicative of the secondary market value
of the Securities, then the Adjusted Trading Price of the Securities will equal the sum of (a) the
product of (x) the number of shares of Series A Common Stock into which €1,000 principal amount of
the Securities is convertible on such date of determination, and (y) the average Closing Sale Price
for the five Combined Trading Days ending on such determination date multiplied by the Currency
Rate on such determination date, plus (b) the product of (x) the Series C Dividend Shares Amount
deliverable upon conversion of €1,000 principal amount of the Securities on such date of
determination, and (y) the average Series C Closing Sale Price for the five Combined Trading Days
ending on such determination date multiplied by the Currency Rate on such determination date.

         “Combined Closing Sale Price” means, on any date of determination, the sum of (i) the Closing
Sale Price on such date and (ii) the Series C Closing Sale Price on such date.

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         “Combined Trading Day” means a day which is both a Trading Day and a Series C Trading Day.

         “Series C Common Stock” means the Series C common stock, par value $.01 per share, of Liberty
Global, as it exists on the Series C Stock Dividend Record Date.

         “Series C Closing Sale Price” means, on any date of determination, the closing per share sale
price (or if no closing sale price is reported, the average of the bid and ask prices or, if more
than one in either case, the average of the average bid and the average ask prices) of the Series C
Common Stock on such date on the Nasdaq National Market as reported by the Nasdaq National Market,
or if the shares are not then quoted on the Nasdaq National Market, on the principal United States
securities exchange on which the Series C Common Stock is listed, as reported in composite
transactions, or, if the Series C Common Stock is not listed on a United States securities
exchange, as reported by the National Quotation Bureau Incorporated or similar organization. In
absence of such a quotation, the Company’s determination in good faith of the sale price for the
Series C Common Stock on any basis it considers appropriate shall be the “Series C Closing Sale
Price.”

         “Series C Dividend Shares Amount,” when used with respect to a principal amount of Securities,
means the number of whole shares of Series C Common Stock which a Holder would have received as a
result of the Series C Stock Dividend had such Holder converted such principal amount into shares
of Series A Common Stock immediately prior to the Series C Stock Dividend Record Date (and such
Holder continued to own such shares of Series A Common Stock received upon conversion as of the
Ex-Dividend Date for the Series C Stock Dividend), as such number of shares may be adjusted from
time to time pursuant to the Indenture.

         “Series C Dividend Shares Amount Ceiling” has the meaning specified in Section 12.5(h).

         “Series C Stock Dividend” has the meaning specified in the fourth recital of the Third
Supplemental Indenture.

         “Series C Stock Dividend Record Date” has the meaning specified in the fourth recital of the
Third Supplemental Indenture.

         “Series C Trading Day” means a day during which trading in securities generally occurs on the
Nasdaq National Market (or, if the Series C Common Stock is not quoted on the Nasdaq National
Market, on the principal other market on which the Series C Common Stock is then traded), other
than a day on which a material suspension of or limitation on trading is imposed that affects
either the Nasdaq National Market (or, if applicable, such other market) in its entirety or only
the shares of Series C Common Stock (by reason of movements in price exceeding limits permitted by
the relevant market on which the shares are traded or otherwise) or on which the Nasdaq National
Market (or, if applicable, such other market) cannot clear the transfer of shares of Series C
Common Stock due to an event beyond Liberty Global’s control.

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Section 2.2 Concerning Conversion.

     For all purposes of the Indenture and the Securities, Article Twelve of the Amended Indenture
is amended as follows:

     (a) Section 12.1(a) is amended by inserting the words “received by the Company’s stockholders
for their Series A Common Stock” immediately after the word “rights)” in the fifth line of
paragraph (5), deleting the period at the end of paragraph (5) and substituting therefore a
semi-colon and the word “or”, and inserting the following new paragraphs (6) and (7):

     (6) during any Quarter commencing after the Series C Stock Dividend Record Date, if (i)
the product of (x) the Combined Closing Sale Price for at least 20 Combined Trading Days in
the period of 30 consecutive Combined Trading Days ending on the last Combined Trading Day
of the Quarter preceding the Quarter in which the conversion occurs and (y) the Currency
Rate on each such day exceeds (ii) 130% of the Conversion Price on that thirtieth Combined
Trading Day and (B) the Holder has surrendered the Holder’s Securities for conversion during
the following Quarter; or

     (7) during the five consecutive Combined Trading Day period immediately following any
ten consecutive Combined Trading Day period in which the Adjusted Trading Price of the
Securities (as determined in accordance with the procedures set forth in Section 12.1(b)(6))
for each Combined Trading Day of such period was less than 100% of the Adjusted Conversion
Value of the Securities on the same Combined Trading Day and (B) the Holder has surrendered
the Holder’s Securities for conversion during such five consecutive Combined Trading Day
period prior to the close of business on that fifth Combined Trading Day.

     (b) Section 12.1(b) is amended by inserting the words “with the cooperation of the Company
and” after the words “the Conversion Agent shall,” in paragraph (1) thereof and inserting after
paragraph (4) the following new paragraphs (5) and (6):

     (5) In connection with Section 12.1(a)(6), at the end of each Quarter the Conversion
Agent shall, with the cooperation of the Company and on the Company’s behalf, determine
whether the Securities are convertible in the subsequent Quarter pursuant to Section
12.1(a)(6), and promptly notify the Holders in the manner provided for in Section 1.5 if the
Securities are convertible.

     (6) In connection with Section 12.1(a)(7), the Conversion Agent shall, on the Company’s
behalf and on Company Request, determine the Adjusted Trading Price of the Securities and
whether the Securities are convertible pursuant to Section 12.1(a)(7), and promptly notify
the Holders in the manner provided in Section 1.5 if the Securities are convertible. The
Company shall have no obligation to make such Company Request to the Conversion Agent,
unless one or more Holders of Securities shall have provided the Company with reasonable
evidence that the Adjusted Trading Price of the Securities is less than 100% of the Adjusted
Conversion Value of the Securities; at which time the Company shall instruct the Conversion
Agent to determine

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the Adjusted Trading Price of the Securities beginning on the Combined Trading Day
immediately following the Combined Trading Day on which the Company shall have been provided
such evidence and on each successive Combined Trading Day until the Adjusted Trading Price
of the Securities is equal to or greater than 100% of the Adjusted Conversion Value of the
Securities.

     (c) Section 12.2(a) is amended by inserting the following paragraph at the end thereof:

     The Series C Dividend Shares Amount shall be based on the total principal amount of
Securities surrendered for conversion by a Holder for such Conversion Date, and the name(s)
in which the certificate(s) for shares of Series C Common Stock are issued, and the
address(es) to which such certificate(s) are delivered, shall be the same as those stated in
the Conversion Notice for the shares of Series A Common Stock that may be issued upon such
conversion.

     (d) Section 12.3(a) is amended by inserting the following paragraph at the end thereof:

     Subject to the provisions of Article 12 (including, without limitation, the provisions
of Section 12.1) and paragraph 8 of the Securities, a Holder, upon conversion of its
Securities, shall be entitled to receive from the Company the Series C Dividend Shares
Amount attributable to the principal amount of such Securities so converted, in addition to
the shares of Series A Common Stock, cash, or combination of cash and shares of Series A
Common Stock delivered by the Company to such Holder upon such conversion in satisfaction of
the Company’s Conversion Obligation.

     (e) Section 12.3(b) is amended by inserting the following sentence at the end thereof:

     The Series C Dividend Shares Amount deliverable to a Holder upon conversion of its
Securities shall be delivered at the same time as the Company effects delivery under the
Settlement Method elected by the Company.

     (f) Section 12.3 is amended by inserting the following clause (g) at the end thereof:

     (g) The provisions of Sections 12.3(c), (d) and (f), insofar as they apply to shares of
Series A Common Stock that may be delivered to a Holder upon its conversion of Securities,
shall apply, mutatis mutandi, to the shares of Series C Common Stock included in the Series
C Dividend Shares Amount deliverable to such Holder.

     (g) Section 12.4 is amended by inserting the following paragraph at the end thereof:

     Liberty Global will not issue, and the Company will not deliver, fractional shares of
Series C Common Stock upon conversion of Securities. If, as a result of an adjustment to
the Series C Dividend Shares Amount pursuant to Section 12.5(h), a

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Holder would otherwise be entitled to a fractional share interest, the Company shall
pay cash in lieu of such fractional share interest. The amount of cash in lieu to be paid,
if any, shall be determined by multiplying (a) the product of the Series C Closing Sale
Price on the Series C Trading Day immediately prior to the Conversion Date and the Currency
Rate on such Series C Trading Day by (b) such fractional share interest, and rounding the
product to the nearest whole Euro cent, with one-half cent being rounded upward.

     (h) Section 12.5(d)(1) is amended by restating the third sentence thereof to read in its
entirety as follows:

If the Board of Directors of the Company determines the fair market value of any
distribution for purposes of this Section 12.5(d) by reference to the actual or when issued
trading market for any securities, it must in doing so consider the prices in such market
over the same period used in computing the Current Market Price; provided, that if the
Distributed Securities are a new issue of securities and will not have been traded for at
least 10 consecutive Trading Days immediately preceding the day before the Event Record Date
(or, if earlier, the Ex-Dividend Date) for such distribution, then the Board of Directors
may determine the fair market value of such distribution by reference to the actual or when
issued trading market for such securities over such period of time as the Board of
Directors deems appropriate under the circumstances.

     (i) Section 12.5(g) is amended by inserting the words “or Series C Dividend Shares Amount, as
applicable,” after the words “Conversion Price” each place the latter words appear in Section
12.5(g)(3) and inserting after paragraph (5) thereof the following new paragraphs (6) and (7):

     (6) Subject to compliance with applicable stockholder approval rules set forth in Rule
4350 of the Nasdaq Market Place Rules, if applicable, and to the extent permitted by
applicable law, the Company may make such increases in the Series C Dividend Shares Amount,
in addition to any adjustments required by this Section 12.5, as the Board of Directors of
the Company considers to be advisable to avoid or diminish any income tax to holders of
Series C Common Stock or rights to purchase Series C Common Stock in connection with any
dividend or distribution of stock or from any event treated as such for income tax purposes.

     (7) For purposes of this Section 12.5, the number of shares of Series C Common Stock at
any time outstanding shall not include shares held in the treasury of Liberty Global but
shall include shares issuable in respect of scrip certificates issued in lieu of fractions
of shares of Series C Common Stock so long as the Company does not pay any dividend or make
any distribution on shares of Series C Common Stock held in the treasury of Liberty Global.

     (j) Section 12.5 is amended by inserting the following paragraph (h) at the end thereof:

     (h) If Liberty Global shall, at any time or from to time, while any of the Securities
are Outstanding, take any action of the type described in Section 12.5(a),

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(b), (c), (d) or (f) with respect to the Series C Common Stock which if taken with respect
to the Series A Common Stock would have required an adjustment to the Conversion Price, then
the Company shall effect an adjustment to the Series C Dividend Shares Amount so as to
approximate, in the reasonable judgment of the Board of Directors, the adjustment
contemplated by Section 12.5(a), (b), (c), (d) or (f), in each case taking into account the
difference between a share adjustment and a price adjustment. An adjustment to the Series C
Dividend Shares Amount made pursuant to the preceding sentence shall become effective on the
date that such adjustment would have become effective had it been made to the Conversion
Price (and, if the Conversion Price would have been readjusted as contemplated by Section
12.5(a), (b), (c), (d) or (f), then the Series C Dividend Shares Amount shall be readjusted
so as to approximate, in the reasonable judgment of the Board of Directors, the readjustment
of the Conversion Price contemplated by Section 12.5(a), (b), (c), (d) or (f), in each case
taking into account the difference between a share adjustment and a price adjustment). In
addition, in case Liberty Global declares a dividend or distribution to all holders of
Series C Common Stock of cash, then the Company shall effect an adjustment to the Series C
Dividend Shares Amount so as to approximate, in the reasonable judgment of the Board of
Directors, the adjustment of the Conversion Price contemplated by Section 12.5(e), taking
into account the difference between a share adjustment and a price adjustment; provided,
that an adjustment to the Series C Dividend Shares Amount shall be made pursuant to this
Section 12.5(h) in respect of such dividend or distribution only to the extent that, after
giving effect to such adjustment, the Series C Dividend Shares Amount per €1,000 principal
amount shall not exceed the product of (x) the initial Series C Dividend Shares Amount per
€1,000 principal amount and (y) a fraction, the numerator of which shall be the initial
Conversion Price and the denominator of which shall be the Conversion Floor (the “Series C
Dividend Shares Amount Ceiling”, which Series C Dividend Shares Amount Ceiling shall be
adjusted only upon the occurrence of the events and in the manner described in Sections
12.5(a) and 12.5(b), in each case, as such sections apply to the Series C Common Stock
pursuant to Section 12.5(h)). An adjustment to the Series C Dividend Shares Amount made
pursuant to the preceding sentence shall become effective on the date that such adjustment
would have become effective had it been made to the Conversion Price. If such dividend or
distribution of cash is not so paid or made, the Series C Dividend Shares Amount shall again
be adjusted to the Series C Dividend Shares Amount that would then be in effect if such
dividend or distribution had not been declared. In any case in which an adjustment to the
Series C Dividend Shares Amount pursuant to this Section 12.5(h) is to become effective
immediately after the record date for an event, the Company may defer until the occurrence
of such event (A) delivering to the Holder of any Securities converted after such record
date and before the occurrence of such event the additional shares of Series C Common Stock
deliverable upon such conversion by reason of the adjustment required by such event to the
Series C Dividend Shares Amount over and above the shares of Series C Common Stock
deliverable upon such conversion before giving effect to such adjustment and (B) paying to
such Holder any amount in cash in lieu of any fraction of a share of Series C Common Stock
pursuant to Section 12.4.

     (k) Section 12.6 is amended by inserting “(a)” prior to the words “Notwithstanding anything”
in the first sentence of such section, renumbering clauses (a), (b), (c)

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and (d) of such section as (i), (ii), (iii) and (iv), respectively, deleting clause (e)
thereof in its entirety and inserting the following Sections 12.6(b) and 12.6(c):

     (b) Notwithstanding anything to the contrary herein, no adjustments to the Series C
Dividend Shares Amount shall be made in the following circumstances.

     (i) No adjustment to the Series C Dividend Shares Amount shall be required
unless the adjustment would require an increase or decrease of at least one percent
in the Series C Dividend Shares Amount as last adjusted; provided, however, that any
adjustments which by reason of this Section 12.6(b) are not required to be made
shall be carried forward and taken into account in any subsequent adjustment. All
calculations under this Article shall be made to the nearest one-ten thousandth of a
share.

     (ii) No adjustment need be made to the Series C Dividend Shares Amount for a
transaction referred to in Section 12.5, if Holders are to participate in the
transaction on a basis and with notice that the Board of Directors of the Company
determines to be fair and appropriate in light of the basis and notice on which
holders of Series C Common Stock participate in the transaction. Such participation
by Holders may include participation upon conversion; provided, that an adjustment
shall be made at such time as the Holders are no longer entitled to participate.

     (iii) No adjustment need be made to the Series C Dividend Shares Amount for
rights to purchase Series C Common Stock or issuances of Series C Common Stock
pursuant to a Company plan for reinvestment of dividends or interest.

     (iv) No adjustment need be made to the Series C Dividend Shares Amount for a
change in the par value, a change from par value to no par value or a change from no
par value to par value of the Series C Common Stock.

     (c) Notwithstanding anything to the contrary herein, to the extent that the Securities
become convertible into cash, no adjustment need be made thereafter as to the cash.
Interest will not accrue on the cash.

     (l) Section 12.7 is amended by inserting the words “or Series C Common Stock” immediately
after the words “Series A Common Stock” each place the latter words appear in Section 12.7.

     (m) Section 12.8 is amended by inserting after paragraph (c) the following new paragraphs (d),
(e) and (f):

     (d) Liberty Global shall, prior to the Ex-Dividend Date for the Series C Stock
Dividend, and from time to time as may be necessary, reserve, out of its authorized but
unissued Series C Common Stock, a sufficient number of shares of Series C Common Stock to
satisfy the Company’s obligation to deliver the Series C Dividend Shares Amount upon the
conversion of all outstanding Securities.

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     (e) All shares of Series C Common Stock delivered as part of the Series C Dividend
Shares Amount upon conversion of the Securities shall be newly issued shares or treasury
            shares, shall be duly authorized, validly issued, fully paid and nonassessable and shall be
free from preemptive rights and free of any lien or adverse claim.

     (f) Liberty Global will endeavor promptly to comply with all federal and state
securities laws regulating the offer and delivery of shares of Series C Common Stock upon
conversion of Securities and will cause such shares to be quoted on the Nasdaq National
Market or other over-the-counter market or such other market on which the Series C Common
Stock is then listed or quoted, if any; provided, however, that if rules of such automated
quotation system or exchange permit Liberty Global to defer the listing of such Series C
Common Stock until the first conversion of the Securities in accordance with the provisions
of this Indenture, Liberty Global covenants to list such Series C Common Stock issuable upon
conversion of the Securities in accordance with the requirements of such automated quotation
system or exchange, if any, at such time.

     (n) Section 12.10 is amended and restated to read in full as follows:

     After the Trustee or the Paying Agent holds cash or shares of Series A Common Stock or
both sufficient to satisfy the Conversion Obligation and shares of Series C Common Stock
sufficient to effect delivery of the Series C Dividend Shares Amount in respect of all the
Securities validly tendered for conversion on the Conversion Date (or, if the Company is
acting as its own Paying Agent, unless the Company shall default in the payment of the cash
portion of such Conversion Obligation), then immediately after the Conversion Date, the
Securities tendered for conversion shall cease to be Outstanding, interest (and Liquidated
Damages, if any) on the Securities tendered for conversion shall cease to accrue and all
rights of the Holders thereof shall cease, except for the right of Holders to receive the
cash or shares of Series A Common Stock or such combination thereof that is to be received
in respect of the satisfaction of such Conversion Obligation and the shares of Series C
Common Stock that are to be received in satisfaction of the obligation to deliver the Series
C Dividend Shares Amount.

     (o) Section 12.12 is amended by inserting the following new paragraph at the end thereof:

     If Liberty Global effects a transaction of the type described in this Section 12.12
that affects the Series C Common Stock, the Company shall take such action with respect to
the Series C Dividend Shares Amount as, in the reasonable judgment of the Board of
Directors, is necessary or appropriate to approximate the results contemplated under the
foregoing provisions of this Section 12.12 with respect to the Series A Common Stock.

     (p) Section 12.14 is amended by deleting the last sentence of such section in its entirely and
replacing it with the following:

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Notwithstanding anything to the contrary in the preceding sentence, any determination that
the Company must make pursuant to Section 12.1(b)(2) or Section 12.1(b)(6) or in respect of
the Trading Price or Adjusted Trading Price, as applicable, of the Securities shall be
conclusive if made in good faith and in accordance with the provisions of Section 12.1(b)(2)
or Section 12.1(b)(6), as applicable, absent manifest error, and if made by at least one of
the officers of the Company who is permitted to sign any Company Request pursuant to this
Indenture.

     (q) Section 13.1(c)(5) is amended by deleting the words “into Series A Common Stock”
immediately after the words “be converted” in the second line of such section.

     (r) Section 13.2(c)(1) is amended and restated to read in full as follows:

     (1) the Closing Sale Price of Series A Common Stock plus the Series C Closing Sale
Price (in each case, converted to Euro by multiplying such price by the Currency Rate on the
applicable Combined Trading Days) for any five Combined Trading Days during the ten Combined
Trading Days immediately preceding the Change of Control is at least equal to 105% of the
Adjusted Conversion Price in effect on such day; or

     (s) Section 13.2(e)(9) is amended by deleting the words “into Series A Common Stock”
immediately after the words “be converted” in the second line of such section.

Section 2.3 Concerning Form of Securities.

     (a) The first sentence of paragraph 4 of the Form of Securities attached as Exhibit A to the
Amended Indenture (the “Form of Securities”) is amended and restated to read in full as follows:

The Company issued the Securities under an Indenture, dated as of
April 6, 2004, between the Company and the Trustee (such Indenture
as it may from time to time be supplemented or amended, including
without limitation pursuant to the First Supplemental Indenture, the
Second Supplemental Indenture and the Third Supplemental Indenture,
the “Indenture”).

     (b) The Company agrees that the Trustee is permitted (i) to place a notation about this Third
Supplemental Indenture on the Securities in accordance with the provisions of Section 9.6 of the
Indenture and (ii) to modify new Securities to conform to this Third Supplemental Indenture, which
shall be authenticated and delivered by the Trustee in exchange for outstanding Securities.

ARTICLE III

CONCERNING THE TRUSTEE

Section 3.1 Terms and Conditions.

12

 

     The Trustee accepts this Third Supplemental Indenture and agrees to perform the duties of the
Trustee upon the terms and conditions set forth herein and in the Amended Indenture, as modified by
this Third Supplemental Indenture.

Section 3.2 No Responsibility.

     The Trustee makes no undertaking or representations in respect of, and shall not be
responsible in any manner whatsoever for and in respect of, the validity or sufficiency of this
Third Supplemental Indenture or the proper authorization or the due execution hereof by Liberty
Global or the Company or for in respect of the recitals and statements contained herein, all of
which recitals and statements are made solely by the Company.

Section 3.3 Officer’s Certificate and Opinion of Counsel

     Concurrently with the execution and delivery of this Third Supplemental Indenture, the Company
has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel as required by
Section 9.3 of the Amended Indenture.

ARTICLE IV

EFFECT OF EXECUTION AND DELIVERY

     Notwithstanding the execution and delivery of this Third Supplemental Indenture on the date
hereof, the amendments to the Amended Indenture set forth in Article II of this Third Supplemental
Indenture shall not become effective until the Series C Stock Dividend Record Date. From and after
the Series C Stock Dividend Record Date and without any further notice or action on the part of
Liberty Global, the Company, the Trustee, any Holder or any other Person, (i) the Amended Indenture
shall be deemed to be modified in accordance with the amendments set forth in Article II of this
Third Supplemental Indenture, (ii) this Third Supplemental Indenture shall form a part of the
Indenture for all purposes, (iii) except as expressly modified by this Third Supplemental
Indenture, the Amended Indenture shall continue in full force and effect, (iv) the Securities shall
continue to be governed by the Amended Indenture, as modified by this Third Supplemental Indenture
and (v) every Holder of Securities heretofore or hereafter authenticated and delivered shall be
bound by the Amended Indenture, as modified by this Third Supplemental Indenture. Without limiting
the generality of the foregoing, each outstanding Security shall be deemed modified and amended as
set forth in the Amended Indenture, as modified by this Third Supplemental Indenture.
Notwithstanding the foregoing, this Third Supplemental Indenture shall have no force or effect, and
shall be deemed terminated, if the board of directors of Liberty Global rescinds its declaration of
the Series C Stock Dividend. The Company may defer until the occurrence of the Ex-Dividend Date
for the Series C Stock Dividend (A) issuing to the Holder of any Securities converted after the
Series C Stock Dividend Record Date and before the occurrence of such Ex-Dividend Date the Series C
Dividend Shares Amount issuable upon such conversion and (B) paying to such Holder any amount in
cash in lieu of any fraction of a share of Series C Common Stock pursuant to Section 12.4;
provided, however, that the Company shall not be required to deliver such Series C Dividend Shares
Amount or cash if the board of directors of Liberty Global rescinds its declaration of the Series C
Stock Dividend before the Ex-Dividend Date for the Series C Stock Dividend.

13

 

ARTICLE V

OBLIGATIONS UNDER THE INDENTURE

     Notwithstanding anything to the contrary in the Indenture, this Third Supplemental Indenture
or the Amended Indenture, as modified by this Third Supplemental Indenture, (i) all obligations for
payment of principal of, or premium, if any, interest, Liquidated Damages, if any, Change of
Control Purchase Price, Conversion Obligation, Put Price or Redemption Price due to be paid on, the
Securities shall remain solely the obligations of the Company and (ii) any requirement to provide
notices, make announcements or file documents with the Trustee in Article Twelve or Thirteen of the
Amended Indenture, as modified by this Third Supplemental Indenture, shall remain the
responsibility of the Company, and Liberty Global shall not be responsible for such notices,
announcements or filings. Liberty Global has executed this Third Supplemental Indenture only for
the purpose of confirming its obligation to issue Series C Common Stock upon the conversion of
Securities as set forth herein, and Liberty Global neither has nor assumes any obligations for
payment of principal of, or premium, if any, interest, Liquidated Damages, if any, Change of
Control Purchase Price, Conversion Obligation, Put Price or Redemption Price due to be paid on, the
Securities or any other obligations under the Indenture, this Third Supplemental Indenture or the
Amended Indenture, as modified by this Third Supplemental Indenture.

ARTICLE VI

MISCELLANEOUS PROVISIONS

Section 6.1 Headings Descriptive.

     The Article and Section headings in this Third Supplemental Indenture are for convenience only
and shall not affect the construction of this Third Supplemental Indenture.

Section 6.2 Rights and Obligations of the Trustee.

     All of the provisions of the Amended Indenture with respect to the rights, privileges,
immunities, powers and duties of the Trustee shall be applicable in respect of this Third
Supplemental Indenture as fully and with the same effect as if set forth herein in full.

Section 6.3 Successors and Assigns. 

     All covenants and agreements in this Third Supplemental Indenture by the Company or Liberty
Global shall bind its respective successors and assigns, whether so expressed or not.

Section 6.4 Separability Clause.

     In case any provision in this Third Supplemental Indenture shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby.

Section 6.5 Counterparts.

14

 

     This Third Supplemental Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one and the same
instrument.

Section 6.6 Governing Law.

     THIS THIRD SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAW OF THE STATE OF NEW YORK, INCLUDING, WITHOUT LIMITATION, SECTIONS 5-1401 AND 5-1402 OF THE NEW
YORK GENERAL OBLIGATIONS LAW AND NEW YORK CIVIL PRACTICE LAWS AND RULES 327(B), AS APPLIED TO
CONTRACTS MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS OF LAW
PRINCIPLES.

Section 6.7 Conflict with Trust Indenture Act.

     If any provision of this Third Supplemental Indenture limits, qualifies or conflicts with any
provision which is required or deemed to be included in this Third Supplemental Indenture by any of
the provisions of the Trust Indenture Act, such provision or requirement of the Trust Indenture Act
shall control. If any provision of this Third Supplemental Indenture modifies or excludes any
provision of the Trust Indenture Act that may be so modified or excluded, the latter provision
shall be deemed to apply to this Third Supplemental Indenture as so modified or excluded, as the
case may be.

15

 

     IN WITNESS WHEREOF, the parties hereto have caused this Third Supplemental Indenture to be
duly executed all as of this day and year first above written.

	 	 	 	 	 
	 	LIBERTY GLOBAL, INC.

 	 
	 	By:  	/s/ Bernard G. Dvorak
 	 
	 	 	Bernard G. Dvorak 	 
	 	 	Senior Vice President and Co-Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	UNITEDGLOBALCOM, INC.

 	 
	 	By:  	/s/ Bernard G. Dvorak
 	 
	 	 	Bernard G. Dvorak 	 
	 	 	Senior Vice President and Co-Chief Financial Officer 	 
	 

	 	 	 	 	 
	 	THE BANK OF NEW YORK

 	 
	 	By:  	/s/ Michael Pitfick
 	 
	 	 	Michael Pitfick 	 
	 	 	Vice President 	 
	 

16exv4w1

 

EXHIBIT 4.1

INFINITY, INC.

2005 EQUITY INCENTIVE PLAN

475,000 SHARES

     This Equity Incentive Plan was adopted this 17th day of April 2005, by Infinity, Inc., a
Colorado corporation, upon the following terms and conditions:

     1. Definitions. Except as otherwise expressly provided in this Plan, the
following capitalized terms shall have the respective meanings hereafter ascribed to them:

          (a) “Board” shall mean the Board of Directors of the Company;

          (b) “Code” shall mean the Internal Revenue Code of 1986, as amended;

          (c) “Consultant” shall mean a person who provides services to the Company
as an independent contractor;

          (d) “Company” means Infinity, Inc. and each and all of any present and
future subsidiaries;

          (e) “Date of Grant” shall mean, for each participant in the Plan, the
date on which the Board approves the specific grant to that participant under the plan,;

          (f) “Employee” shall be an employee of the Company or any subsidiary of
the Company;

          (g) “Grantee” shall mean the recipient of an Incentive Stock Option, a
Non-statutory Option or a Restricted Share Award under the Plan;

          (h) “Incentive Stock Option” shall refer to a stock option which
qualifies under Section 422 of the Code;

          (i) “Non-statutory Option” shall mean an option which is not an Incentive
Stock Option;

          (j) “Restricted Share Award” shall mean a right any right to acquire
restricted shares under the Plan;

          (k) “Shares” shall mean the Company’s common stock, $.0001 par value;

          (l) “Shareholders” shall mean owners of record of any Shares.

     2. Purpose. The purpose of this Equity Incentive Plan (the “Plan”) is
two-fold. First, the Plan will further the interests of the Company and its shareholders by
providing incentives in the form of stock options or restricted shares (each a “Share Award”) to
employees who contribute materially to the success and profitability of the Company. Share Awards
will be granted to recognize and reward outstanding individual performances and contributions and
will give selected employees an interest in the

 

 

Company parallel to that of the shareholders, thus enhancing their proprietary interest in the
Company’s continued success and progress. This program also will enable the Company to attract and
retain experienced employees. Second, the Plan will provide the Company flexibility and the means
to reward directors and consultants who render valuable contributions to the Company.

     3. Administration. This Plan will be administered by the Board. The Board
has the exclusive power to select the participants in this Plan, fix the awards to each
participant, and make all other determinations necessary or advisable under the Plan, to determine
whether the performance of an eligible employee warrants an award under this Plan, and to determine
the amount and duration of the award. The Board has full and exclusive power to construe and
interpret this Plan, to prescribe, amend and rescind rules and regulations relating to this Plan,
and to take all actions necessary or advisable for this Plan’s administration. The Board shall
have full power and authority to determine, and at the time such option is granted shall clearly
set forth, whether the option shall be an Incentive Stock Option or a Non-statutory Option. Any
such determination made by the Board will be final and binding on all persons. A member of the
Board will not be liable for performing any act or making any determination required by or pursuant
to the Plan, if such act or determination is made in good faith. The Board has the authority to
set up a committee of directors to administer the Plan and to delegate whichever of the above
powers it determines.

     4. Participants. Any employee, officer, director or consultant that the
Board, in its sole discretion, designates is eligible to participate in this Plan. However, only
employees of the Company shall be eligible to receive grants of Incentive Stock Options. The
Board’s designation of a person as a participant in any year does not require the Board to
designate that person to receive an award under this Plan in any other year or, if so designated,
to receive the same award as any other participant in any year. The Board may consider such
factors as it deems pertinent in selecting participants and in determining the amount of their
respective awards, including, but without being limited to: (a) the financial condition of the
Company; (b) expected profits for the current or future years; (c) the contributions of a
prospective participant to the profitability and success of the Company; and (d) the adequacy of
the prospective participant’s other compensation. The Board, in its discretion, may grant benefits
to a participant under this Plan, even though stock, stock options, stock appreciation rights or
other benefits previously were granted to him under this or another plan of the Company, whether or
not the previously granted benefits have been exercised, but the participant may hold such options
only on the terms and subject to the restrictions hereafter set forth. Subject to the foregoing
limitation, a person who has participated in another benefit plan of the Company may also
participate in this Plan.

     5. Option Awards. Awards of options to acquire Shares under this Plan, if
any, will be granted described below.

          (a) Limitations. Upon the exercise of an option, the Company shall deliver to
the participant certificates representing authorized but unissued Shares. The cumulative total
number of shares which may be subject to options issued and outstanding pursuant to this Plan is
limited to 475,000 shares. This amount will be automatically adjusted in accordance with
Section 17 of this Plan. If an option is terminated, in whole or in part, for any reason other
than its exercise, the Board may reallocate the shares subject to that option (or to the part
thereof so terminated) to one or more other options to be granted under this Plan.

          (b) Expiration. Any Incentive Stock Option granted under this Plan shall
automatically expire ten years after the Date of Grant or at such earlier time as may be
described in Section 6 or directed by the Board in the grant of the option. Notwithstanding the
preceding sentence,

2

 

no Incentive Stock Option granted to a Shareholder who owns, as of the Date of Grant, stock
possessing more than ten percent of the total combined voting power of all classes of stock of
the Company shall, in any event, be exercisable after the expiration of five years from the Date
of Grant. For the purpose of determining under any provision of this Plan whether a shareholder
owns stock possessing more than ten percent of the total combined voting power of all classes of
stock of the Company, such shareholder shall be considered as owning the stock owned, directly
or indirectly, by or for his brothers and sisters (whether by the whole or half blood), spouse,
ancestors and lineal descendants, and stock owned, directly or indirectly, by or for a
corporation, partnership, estate or trust shall be considered as being owned proportionately by
or for its shareholders, partners or beneficiaries.

          (c) Option Exercise Price. Each option shall state the option price, which shall be
not less than 100% of the fair market value of the Shares on the Date of Grant or the par value
thereof whichever is greater. Notwithstanding the preceding sentence, in the case of a grant of
an Incentive Stock Option to an employee who, as of the Date of Grant, owns stock possessing
more than ten percent of the total combined voting power of all classes of stock of the Company
or its Parent or Subsidiaries, the option price shall not be less than 110% of the fair market
value of the Shares on the Date of Grant or the par value thereof, whichever is greater.

               During such time as the Shares are not traded in any securities market, the fair market
value per share shall be determined by a good faith effort of the Board, using its best efforts
and judgment. During such time as the Shares are traded in a securities market but not listed
upon an established stock exchange, the fair market value per share shall be the highest closing
bid price in the securities market in which it is traded on the Date of Grant, as reported by
the National Association of Securities Dealers, Inc. If the Shares are listed upon an
established stock exchange or exchanges such fair market value shall be deemed to be the highest
closing price on such stock exchange or exchanges on the Date of Grant, or if no sale of any
Shares shall have been made on any stock exchange on that day, on the next preceding day on
which there was such a sale. Subject to the foregoing, the Board shall have full authority and
discretion in fixing the option price and shall be fully protected in doing so.

          (d) Maximum Option Exercise. The aggregate fair market value (determined as of the
Date of Grant) of the stock with respect to which Incentive Stock Options are exercisable for
the first time by a grantee during any calendar year (under all such plans of the Company and
its parent or subsidiary, if any) shall not exceed $100,000. For purposes of this Section 5,
the value of stock acquired through the exercise of Non-statutory Options shall not be included
in the computation of the aggregate fair market value.

     6. Exercise of Options.

          (a) No stock option granted under this Plan may be exercised before the Grantee’s
completion of such period of services as may be specified by the Board on the Date of Grant.
Furthermore, the timing of the exercise of any option granted under this Plan may be subject to
a vesting schedule based upon years of service or an expiration schedule as may be specified by
the Board on the Date of Grant. Thereafter, or if no such period is specified subject to the
provisions of

3

 

subsections (c), (d), (e), (f) and (g) of this Section 6, the Grantee may exercise the
option in full or in part at any time until expiration of the option.

     A Grantee cannot exercise an Incentive Stock Option granted under this Plan unless, at
the time of exercise, he has been continuously employed by the Company since the date the option
was granted. The Board may decide in each case to what extent bona fide leaves of absence for
illness, temporary disability, government or military service, or other reasons will not be
deemed to interrupt continuous employment.

          (b) Unless an Option specifically provides to the contrary, all options granted under this
Plan shall immediately become exercisable in full in the event of the consummation of any of the
following transactions:

          (i) A merger or acquisition in which the Company is not the surviving entity;

          (ii) The sale, transfer or other disposition of all or substantially all of the
assets of the Company; or

          (iii) Any merger in which the Company is the surviving entity but in which
fifty percent (50%) or more of the Company’s outstanding voting stock is issued to holders
different from those who held the stock immediately prior to such merger.

          (c) Except as provided in subsections (d), (e) and (f) of this Section 6, a
Grantee cannot exercise an Incentive Stock Option after he ceases to be an employee of the
Company, unless the Board, in its sole discretion, grants the recipient an extension of time to
exercise the Incentive Stock Option after cessation of employment. The extension of time of
exercise that may be granted by the Board under this subsection (c) shall not exceed three
months after the date on which the Grantee ceases to be an employee and in no case shall extend
beyond the stated expiration date of the option.

          (d) If the employment of a Grantee is terminated by the Company for a cause as
defined in subsection (i) of this Section 6, all rights to any stock option granted under this
Plan shall terminate, including but not limited to the ability to exercise such stock options.

          (e) If a Grantee ceases to be an employee as a result of retirement, he may
exercise the Incentive Stock Option within three months after the date on which he ceases to be
an employee (but no later than the stated expiration date of the option) to the extent that the
Incentive Stock Option was exercisable when he ceased to be an employee. An employee shall be
regarded as retired if he terminates employment after his sixty-fifth birthday.

          (f) If a Grantee ceases to be an employee because of disability (within the
meaning of Section 105(d)(4) of the Code), or if a Grantee dies, and if at the time of the
Grantee’s disability or death he was entitled to exercise an Incentive Stock Option granted
under this Plan, the Incentive Stock Option can be exercised within 12 months after his death or
termination of employment on account of disability (but no later than the stated expiration date
of the option), by the Grantee in the case of disability or, in case of death, by his personal
representative, estate or the person who acquired by gift, bequest or inheritance his right to
exercise the Incentive Stock Option. Such options

4

 

can be exercised only as to the number of shares for which they could have been exercised
at the time the Grantee died or became disabled.

          (g) With respect to Non-statutory Options granted to Board members, the Board may
provide on the Date of the Grant that such options will expire a specified number of days after
such Board member ceases to be a member of the Board. In the absence of any such provision, the
option will expire on the stated expiration date of the option.

          (h) Any stock option granted under the Plan will terminate, as a whole or in
part, to the extent that, in accordance with this Section 6, it no longer can be exercised.

          (i) For purposes of this Section 6, “cause” shall mean the following:

          (i) Fraud or criminal misconduct;

          (ii) Gross negligence;

          (iii) Willful or continuing disregard for the safety or soundness of the Company;

          (iv) Willful or continuing violation of the published rules of the Company.

          (j) Notice. Options may be exercised only by delivery to the Company of a
written stock option exercise agreement (the “Exercise Agreement”) in a form approved by the
Board (which need not be the same for each Grantee), stating the number of shares being
purchased, the restrictions imposed on the shares, if any, and such representations and
agreements regarding Grantee’s investment intent and access to information, if any, as may be
required by the Company to comply with applicable securities laws, together with payment in full
of the exercise price for the number of Shares being purchased.

          (k) Payment. Payment for the shares may be made in cash (by check) or, where
approved by the Board in its sole discretion and where permitted by law: (a) by cancellation of
indebtedness of the Company to the Grantee; (b) by surrender of shares of common stock of the
Company having a Fair Market Value equal to the applicable exercise price of the Option that
have been owned by Grantee for more than six months (and which have been paid for within the
meaning of the Securities and Exchange Commission (“SEC”) Rule 144 and, if such shares were
purchased from the Company by use of a promissory note, such note has been fully paid with
respect to such shares), or were obtained by Grantee in the open public market; (c) by waiver of
compensation due or accrued to Grantee for services rendered; (d) provided that a public market
for the Company’s stock exists, through a “same day sale” commitment from Grantee and a
broker-dealer that is a member of the National Association of Securities Dealers (an “NASD
Dealer”) whereby Grantee irrevocably elects to exercise the
Option and to sell a portion of the shares so purchased to pay for the exercise price and whereby the NASD Dealer irrevocably
commits upon receipt of such shares to forward the exercise price directly to the Company; (e)
provided that a public market for the Company’s stock exists, through a “margin” commitment from
Grantee and an NASD Dealer whereby Grantee irrevocably elects to exercise the Option and to
pledge the shares so purchased to the NASD Dealer in a margin account as security for a loan
from the NASD Dealer in the amount of the exercise price, and whereby the NASD Dealer
irrevocably commits upon receipt of such shares to forward the exercise price directly to the
Company; or (f) by any combination of the foregoing.

5

 

          (l) Taxes; Compliance with Law; Approval of Regulatory Bodies. The Company, if
necessary or desirable, may pay or withhold the amount of any tax attributable to any amount
payable or shares deliverable under this Plan and the Company may defer making payment on
delivery until it is indemnified to its satisfaction for that tax. Stock options are
exercisable, and shares can be delivered under this Plan, only in compliance with all applicable
federal and sate laws and regulations, including, without limitation, state and federal
securities laws, and the rules of all stock exchanges on which the Company’s shares are listed
at any time. Any certificate issued pursuant to options granted under this Plan shall bear such
legends and statements as the Board deems advisable to assure compliance with federal and state
laws and regulations. No option may be exercised, and shares may not be issued under this Plan,
until the Company has obtained the consent or approval of every regulatory body, federal or
state, having jurisdiction over such matters as the Board deems advisable.

     Specifically, in the event that the Company deems it necessary or desirable to file a
registration statement with the Securities and Exchange Commission or any State Securities
Commission, no option granted under the Plan may be exercised, and shares may not be issued,
until the Company has obtained the consent or approval of such Commission.

     In the case of the exercise of an option by a person or estate acquiring by bequest or
inheritance the right to exercise such option, the Board may require reasonable evidence as to
the ownership of the option and may require such consents and releases of taxing authorities as
the Board deems advisable.

     7. Restricted Share Awards. Each restricted share award agreement shall be in
such form and shall contain such restrictions, terms and conditions, if any, as the Board shall
deem appropriate and shall be subject to the terms and conditions of this Plan. The terms and
conditions of restricted share award agreements may change from time to time, and the terms and
conditions of separate restricted share award agreements need not be identical, but each restricted
share award agreement shall include (through incorporation of provisions hereof by reference in the
agreement or otherwise) the substance of each of the following provisions:

          (a) Consideration. A restricted share award may be awarded in consideration for
past services actually rendered, or for future services to be rendered, to the Company or an
affiliate of the Company for its benefit.

          (b) Vesting. Common Stock awarded under the restricted share award agreement may
(A) be subject to a vesting schedule to be determined by the Board, or (B) be fully vested at
the time of grant.

          (c) Termination of Grantee’s Service. Unless otherwise provided in the
restricted share award agreement, in the event a Grantee’s service terminates prior to a vesting
date set forth in the restricted share award agreement, any unvested restricted share award
shall be forfeited and automatically transferred to and reacquired by the Company at no cost to
the Company, and neither the Grantee nor his or her heirs, executors, administrators or
successors shall have any right or interest in the restricted share award. Notwithstanding the
foregoing, unless otherwise provided in the restricted share award agreement, in the event a
Grantee’s service terminates as a result of (A) being terminated by the Company for reasons
other than for cause, (B) death, (C) Disability,

6

 

(D) Retirement, or (E) a Change of Control (subject to the provisions of Section 11(c)
hereof), then any unvested restricted share award shall vest immediately upon such date.

          (d) Transferability. Rights to acquire Common Stock under the restricted share
award agreement shall be transferable by the Grantee only upon such terms and conditions as are
set forth in the restricted share award agreement, as the Board shall determine in its
discretion, so long as Ordinary Shares awarded under the restricted share award agreement remain
subject to the terms of the restricted share award agreement.

     8. Assignability. No Share Award granted under this Plan is transferable
other than by will or the laws of descent and distribution. Each Share Award is exercisable during
the life of the Grantee only by him.

     9. Tenure. A participant’s right, if any, to continue to serve the Company
as an officer, employee or otherwise, will not be enlarged or otherwise affected by his designation
as a participant under this Plan, and such designation will not in any way restrict the right of
the Company to terminate at any time the employment or affiliation of any participant for cause or
otherwise.

     10. Amendment and Termination of Plan. The Board may alter, amend or
terminate this Plan from time to time without approval of the shareholders. However, without the
approval of the shareholders, no amendment will be effective that:

          (a) materially increases the benefits accruing to participants under the Plan;

          (b) increases the cumulative number of shares that may be delivered upon the
exercise of options granted under the Plan or the aggregate fair market value of options which a
participant may exercise in any calendar year;

          (c) materially modifies the eligibility requirements for participation in the
Plan; or

          (d) amends the requirements of paragraphs (a)-(c) of this Section 10.

     Any amendment, whether with or without the approval of shareholders, that alters the
terms or provisions of an option granted before the amendment will be effective only with the
consent of the participant to whom the option was granted or the holder currently entitled to
exercise it, except for adjustments expressly authorized by this Plan.

     11. Expenses of Plan. The expenses of the Plan will be borne by the Company.

     12. Duration of Plan. Share Awards may only be granted under this Plan during
the ten years immediately following the earlier of the adoption of the Plan or its approval by the
Shareholders. Share Awards granted during that ten year period will remain valid thereafter in
accordance with their terms and the provisions of this Plan.

     13. Other Provisions. The award agreements authorized under the Plan shall
contain such other provisions including, without limitation, restrictions upon the exercise of the
option, as the Board shall deem advisable. Any such option agreements, which are intended to be
“Incentive Stock Options”

7

 

shall contain such limitations and restrictions upon the exercise of the option as shall be
necessary in order that such option will be an “Incentive Stock Option” as defined in Section 422
of the Code.

     14. Indemnification of the Board. In addition to such other rights of
indemnification as they may have as directors, the members of the Board shall be indemnified by the
Company against the reasonable expenses, including attorneys’ fees actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or in connection with
any appeal therein, to which they or any of them may be a party by reason of any action taken or
failure to act under or in connection with the Plan or any option granted thereunder, and against
all amounts paid by them in settlement thereof (provided such settlement is approved by independent
legal counsel selected by the Company) or paid by them in satisfaction of a judgment in any such
action, suit or proceeding, except in relation to matters as to which it shall be adjudged in such
action, suit or proceeding that such director is liable for negligence or misconduct in the
performance of his duties.

     15. Application of Funds. The proceeds received by the Company from the
sale of stock pursuant to options granted under this Plan will be used for general corporate
purposes.

     16. No Obligation to Exercise Option. The granting of an option shall
impose no obligation upon the Grantee to exercise such option.

     17. Adjustment Upon Change of Shares. If a reorganization, merger,
consolidation, reclassification, recapitalization, combination or exchange of shares, stock split,
stock dividend, rights offering, or other event affecting shares of the Company occurs, then the
number and class of shares to which options are authorized to be granted under this Plan, the
number and class of shares then subject to options previously granted under this Plan, and the
price per share payable upon exercise of each option outstanding under this Plan shall be equitably
adjusted by the Board to reflect such changes.

     18. Number and Gender. Unless otherwise clearly indicated in this Plan,
words in the singular or plural shall include the plural and singular, respectively, where they
would so apply, and words in the masculine or neuter gender shall include the feminine, masculine
or neuter gender where applicable.

     19. Applicable Law. The validity, interpretation and enforcement of this
Plan are governed in all respects by the laws of Colorado.

     20. Effective Date of Plan. This Plan shall not take effect until adopted
by the Board. This Plan shall terminate if it is not approved by the shareholders of the capital
stock of the Company, which approval must occur within the period beginning twelve months before
and ending twelve months after the Plan is adopted by the Board.

8

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00090-of-00352.parquet"}]]