Exhibit 10.2
EXECUTION COPY
FORM OF RETENTION
AGREEMENT
This RETENTION AGREEMENT
(this “ Agreement ”) is made on and as of
December 4, 2005, by and among [
] (“ Executive ”), PROVIDE COMMERCE, INC., a
Delaware corporation, and LIBERTY MEDIA CORPORATION, a Delaware
corporation (“ Parent ”).
RECITALS
A. Concurrently with the execution
and delivery of this Agreement, Parent and Company are entering
into the Merger Agreement. This Agreement is an inducement to
Parent to enter into the Merger Agreement, and it is a condition
precedent to Parent’s obligations to effect the Merger
thereunder that this Agreement shall have been entered into and be
in full force and effect.
B. Executive currently holds Company
Stock Options, as defined in the Merger Agreement, to purchase
approximately [
] shares of Company common stock.
C. Section 2.3(b) of the Merger
Agreement provides that each Company Stock Option outstanding at
the Effective Time (whether or not then exercisable) shall be
converted immediately following the Effective Time into the right
to receive an amount (the “ Option Consideration
”) equal to the product of (i) the number of shares
subject to such Company Stock Option, multiplied by (ii) the
positive amount (if any) obtained by subtracting the exercise price
per share of such Company Stock Option from the Merger
Consideration (as defined in the Merger Agreement), payable in
cash. The aggregate Option Consideration to which Executive would
be entitled to receive pursuant to Section 2.3(b) of the
Merger Agreement, in respect of all Company Stock Options held by
Executive at the Effective Time, is referred to herein as the
“ Aggregate Option Consideration ”.
D. Executive is currently an
Employee of the Company and is its [
]. At or before the Effective Time, Company and Executive shall
enter into a new employment agreement, or an amendment to
Executive’s current employment agreement with Company (such
new or amended employment agreement, the “ Employment
Agreement ”), which Employment Agreement shall provide,
among other things, for Executive to receive Appreciation Units
under the Value Plan, effective as of the Effective
Time.
NOW, THEREFORE,
in consideration of the foregoing,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
1. Definitions . As used in
this Agreement, the following terms have the corresponding
meanings:
“ Acceleration Event
” is defined in Section 3(d)
“ Affiliate ” of
a Person means any other Person that, directly or indirectly,
through one or more intermediaries, Controls, is Controlled by or
is under common Control with such Person. “ Control
” (including as used in other forms of that term), means
possession
of the power to direct or cause the
direction of the management and policies of another Person, whether
through the ownership of voting securities, by contract or
otherwise.
“ Aggregate Option
Consideration ” is defined in Recital C.
“ Business Day ”
means a day on which banks are not required or authorized to close
in the City of New York or the State of California.
“ Cause ” has the
meaning given to such term in the Employment Agreement.
“ Change in Control
” means (i) the merger, consolidation or reorganization
of the Company with any other company (or the issuance by the
Company of its voting securities as consideration in a merger,
consolidation or reorganization of a Subsidiary with any other
company), other than any merger, consolidation or
reorganization immediately following the effectiveness of which any
combination of Liberty Media, its Affiliates and Designated Persons
(as defined below) shall be the beneficial owners (as determined
pursuant to Rule 13d-3 and Rule 13d-5 under the Exchange Act and
any successor regulation) of, in the aggregate, at least 50% of the
combined voting power of the outstanding voting securities of the
Company or other entity surviving such merger, consolidation or
reorganization; (ii) the approval by the shareholders of the
Company of a plan of complete liquidation of the Company or the
sale or disposition by the Company of all or substantially all of
the Company’s assets, other than any such sale or disposition
to an entity at least 50% of the combined voting power of the
voting securities of which is, in the aggregate, beneficially owned
immediately after the sale or disposition by any combination of
Liberty Media, its Affiliates and Designated Persons; or
(iii) any sale, transfer or issuance of voting securities of
the Company (including any series of related transactions) as a
result of which Liberty Media, its Affiliates and Designated
Persons shall cease to be the beneficial owners of, in the
aggregate, at least 50% of the voting power of the voting
securities of the Company. For purposes of this definition, “
Designated Persons ” means (A) the Chairman of
the Board of Liberty Media on the Effective Date, (B) the
Chief Executive Officer of Liberty Media on the Effective Date,
(C) each of the members of the board of directors of Liberty
Media on the Effective Date, and (D) the respective spouses,
descendants, descendants of spouses and spouses of descendants,
estates and heirs of any of the Designated Persons referred to in
clauses (A), (B) and (C) above and any trust or other
investment vehicle for the benefit of any Designated Person. For
the avoidance of doubt, in the case of any event described in
Section 19, the provisions of Section 19 shall be applied
first before determining whether such event or any subsequent event
constitutes a Change in Control within the meaning of this
definition.
“ Company ” means
Provide Commerce, Inc., a Delaware corporation, or another entity
as provided in Section 19(a).
“ Company Successor
” is defined in Section 19(a).
“ Company Successor
Parent ” is defined in Section 19(a).
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“ Disability ”
and “ Disabled ” means a condition under which
Executive (i) is unable to engage in any substantial gainful
activity by reason of any medically determined physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than 12
months, or (ii) is, by reason of any medically determinable
physical or mental impairment that can be expected to result in
death or can be expected to last for a continuous period of not
less than 12 months, receiving income replacement benefits for a
period of not less than 3 months under an accident and health
policy covering employees of Company, or such other definition as
may be prescribed by Section 409A.
“ Effective Time
” means the effective time of the Merger, as provided in the
Merger Agreement.
“ Employment Agreement
” is defined in Recital D.
“ Escrow Agent ”
means the party named as Escrow Agent in the Escrow Agreement,
which shall be a trust company or other financial institution
selected by Parent.
“ Escrow Agreement
” means an Escrow Agreement by and among Parent, Executive,
the Escrow Agent named therein, and the other party thereto,
substantially in the form attached hereto as Exhibit A, subject to
such changes thereto as the Escrow Agent shall require.
“ Executive ” is
defined in the Preamble.
“ Forfeiture Event
” means the occurrence of either (i) a Separation From
Service for Cause, or (ii) a Separation From Service initiated
by Executive without Good Reason.
[FOR STRAUSS: “GOOD
REASON” MEANS A TERMINATION INITIATED BY EXECUTIVE UNDER
CIRCUMSTANCES WHICH QUALIFY AS A “TERMINATION WITHOUT
CAUSE” PURSUANT TO THE LAST TWO SENTENCES OF SECTION 5(C) OF
THE EMPLOYMENT AGREEMENT.]
[FOR WIJNPERLE: “GOOD
REASON” HAS THE MEANING GIVEN TO SUCH TERM IN THE EMPLOYMENT
AGREEMENT.]
“ Liberty Media ”
means Liberty Media Corporation, a Delaware corporation, or another
entity as provided in Section 19(b).
“ Liberty Successor
” is defined in Section 19(b)(i).
“ Liberty Successor
Parent ” is defined in Section 19(b)(i).
“ Merger ” means
the merger of Merger Sub with and into Company, with Company as the
surviving corporation, pursuant to the Merger Agreement.
“ Merger Agreement
” means the Agreement and Plan of Merger dated as of the date
hereof, among Company, Parent and Merger Sub, as such agreement may
be amended or supplemented from time to time prior to the Effective
Time.
“ Merger Sub ”
means Barefoot Acquisition, Inc., a Delaware corporation and
indirect wholly owned subsidiary of Parent.
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“ Parent ” is
defined in the Preamble.
“ Person ” means
an individual, corporation, limited liability company, partnership,
trust, incorporated or unincorporated association, joint venture or
other entity.
“ Restriction ”
is defined in Section 3(a).
“ Retention Amount
” means $[
] in cash, as such amount may be adjusted from time to time
pursuant to Section 2(c).
“ Section 409A ”
means Section 409A of the Internal Revenue Code of 1986, as it
may be amended from time to time, and the Treasury regulations and
other guidance issued thereunder.
“ Separation From
Service ” (and variations on the form of such term) means
any separation from service of Executive with Liberty Media or
Company (as applicable) within the meaning of
Section 409A.
“ spin-off entity
” is defined in Section 19(b)(ii).
“ Subsidiary ” of
any Person means any corporation, limited liability company,
partnership or other entity a majority of the voting power of which
is owned, directly or indirectly, by such Person.
“ Unvested Retention
Amount ” is defined in Section 3(a).
“ Vested Retention
Amount ” is defined in Section 3(a).
“ Value Plan ”
means the Provide Commerce, Inc., Value Plan, as the same may
hereafter be amended from time to time.
2. Payment of Retention Amount
into Escrow .
(a) Executive hereby agrees that his
right to receive the Aggregate Option Consideration shall be
subject to the restrictions imposed by this Agreement and the
Escrow Agreement, and agrees that, notwithstanding anything in the
Merger Agreement to the contrary, (i) the Aggregate Option
Consideration shall be reduced by an amount equal to the Retention
Amount and (ii) Parent shall pay the Retention Amount to the
Escrow Agent for deposit in the Escrow Fund (as such term is
defined in the Escrow Agreement). Executive acknowledges and agrees
that his rights and interests in the Escrow Fund shall be
non-transferable and subject to a risk of forfeiture as provided in
this Agreement and the Escrow Agreement.
(b) Immediately following the
Effective Time, subject to and in accordance with the terms and
conditions of the Merger Agreement, Parent shall pay the Retention
Amount to the Escrow Agent, and shall have no obligation under the
Merger Agreement or otherwise to pay the Retention Amount to
Executive (or to cause such amount to be so paid).
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(c) The Retention Amount paid to the
Escrow Agent pursuant to this Agreement shall be adjusted from time
to time for any gains, interest, other income, losses and expenses
attributable to such Retention Amount during the period such
Retention Amount (or portion thereof) is held in escrow by the
Escrow Agent in accordance with the Escrow Agreement.
3. Forfeiture and Vesting of
Retention Amount .
(a) All rights and interests of
Executive in and to the Retention Amount shall be subject to
forfeiture by Executive in the event of any Forfeiture Event, as
provided in this Section 3. The risk of forfeiture imposed
upon such rights and interests under this Agreement, together with
the restrictions on transferabilit
