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VOTING, STANDSTILL, NON-COMPETITION AND NON-SOLICITATION AGREEMENT

NonSolicitation Agreement

VOTING, STANDSTILL, NON-COMPETITION AND NON-SOLICITATION AGREEMENT | Document Parties: DIRECTV GROUP INC | DTVG TWO, INC | Engelwood, CO | Greenlady Corporation | Greenlady II, LLC | Liberty Entertainment, Inc | Liberty Media Corporation | Liberty, Splitco, Holdings, DTVG ONE, INC You are currently viewing:
This NonSolicitation Agreement involves

DIRECTV GROUP INC | DTVG TWO, INC | Engelwood, CO | Greenlady Corporation | Greenlady II, LLC | Liberty Entertainment, Inc | Liberty Media Corporation | Liberty, Splitco, Holdings, DTVG ONE, INC

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Title: VOTING, STANDSTILL, NON-COMPETITION AND NON-SOLICITATION AGREEMENT
Governing Law: Delaware     Date: 5/4/2009
Industry: Broadcasting and Cable TV     Law Firm: Simpson Thacher;Weil Gotshal;Baker Botts     Sector: Services

VOTING, STANDSTILL, NON-COMPETITION AND NON-SOLICITATION AGREEMENT, Parties: directv group inc , dtvg two  inc , engelwood  co , greenlady corporation , greenlady ii  llc , liberty entertainment  inc , liberty media corporation , liberty  splitco  holdings  dtvg one  inc
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Exhibit 10.2

 

VOTING, STANDSTILL, NON-COMPETITION AND NON-SOLICITATION AGREEMENT

 

May 3, 2009

This Voting, Standstill, Non-Competition and Non-Solicitation Agreement, dated as of May 3, 2009 (this “ Agreement ”), is by and among Liberty Media Corporation, a Delaware corporation (“ Liberty ”), DIRECTV, a Delaware corporation formed as a direct, wholly-owned Subsidiary of The DIRECTV Group, Inc. (“ Holdings ”), The DIRECTV Group, Inc., a Delaware corporation (“ DIRECTV ”), Liberty Entertainment, Inc., a Delaware corporation and an indirect wholly-owned subsidiary of Liberty (“ Splitco ”), Greenlady Corporation, a Delaware corporation (“ Greenlady Corp. ”), and Greenlady II, LLC, a Delaware limited liability company (“ Greenlady II ”, together with Greenlady Corp., the “ Greenlady Entities ” and each, a “ Greenlady Entity ”).

For purposes of this Agreement, capitalized terms used and not defined herein shall have the respective meanings ascribed to them in the Agreement and Plan of Merger, dated as of May 3, 2009 (as amended from time to time, the “ Merger Agreement ”), by and among Liberty, Splitco, Holdings, DTVG ONE, INC., a Delaware corporation and a direct, wholly-owned Subsidiary of Holdings (“ Merger Sub One ”), DTVG TWO, INC., a Delaware corporation and a direct, wholly-owned Subsidiary of Holdings (“ Merger Sub Two ”), and DIRECTV.

WHEREAS, subject to the receipt of the Liberty Stockholder Approval, prior to the Effective Time, Liberty will (i) pursuant to the Reorganization Agreement, complete the Restructuring (as defined in the Reorganization Agreement) and (ii) redeem, in accordance with the terms of the Reorganization Agreement and on a pro rata basis, ninety percent (90%) of the outstanding shares of Liberty Entertainment Common Stock in exchange for all of the outstanding Splitco Common Stock (the “ Split-Off );

WHEREAS, Liberty acknowledges the highly competitive nature of the businesses of DIRECTV and the Splitco Business and further acknowledges that it has been provided with access to sensitive, proprietary and confidential information of DIRECTV and the Splitco Business and has been provided with the opportunity to develop relationships with customers, vendors, prospective customers, prospective vendors, employees and other agents of DIRECTV and its Affiliates and the Splitco Business, which, in each case, Liberty and Splitco acknowledges and agrees constitute valuable assets thereof;

WHEREAS, as further set forth in this Agreement, Liberty and Splitco desire to cause each of the Greenlady Entities to vote all of their Liberty DIRECTV Shares in favor of the DIRECTV Merger at the DIRECTV Stockholders Meeting;

WHEREAS, in connection with the Transactions, each of Holdings and DIRECTV has provided or given Liberty and Splitco access to certain confidential information regarding their respective businesses; and

WHEREAS, as a condition to their willingness to enter into the Merger Agreement, Holdings and DIRECTV have required that Liberty and Splitco enter into this Agreement and, in

 

 

 


order to induce Holdings and DIRECTV to enter into the Merger Agreement, Liberty and Splitco are willing to enter into this Agreement.

NOW, THEREFORE, in consideration of the foregoing and the covenants and agreements contained herein, and for other good and valuable consideration, the receipt of which are hereby acknowledged, each of the parties hereby agree as follows:

1.

Certain Definitions.

As used in this Agreement and the schedules hereto, the following terms have the respective meanings set forth below.

Affiliate ” means, as to any Person, any other Person that, directly or indirectly, controls, or is controlled by, or is under common control with, such Person. For this purpose, “ control ” (including, with its correlative meanings, “ controlled by ” and “ under common control with ”) means the possession, directly or indirectly, of the power to direct or cause the direction of management or policies of a Person, whether through the ownership of securities or partnership or other ownership interests, by contract or otherwise and with respect to a natural Person, such Person’s immediate family members and any trust, partnership, limited liability company or similar vehicle established and maintained for the benefit of such Person. For purposes of this Agreement, (i) none of Liberty, Splitco, DIRECTV or Holdings shall be considered an Affiliate of John C. Malone, Liberty Global, Inc., Ascent Media Corporation or Discovery Communication, Inc., (ii) DIRECTV and its Subsidiaries shall not be deemed to be an Affiliate of Liberty or any of its Subsidiaries or (after giving effect to the Restructuring and Split-Off but prior to the Merger Effective Time) Splitco or any of its Subsidiaries and (iii) neither IAC/InteractiveCorp nor Expedia, Inc., nor any of their respective Affiliates, will be treated as Affiliates of Liberty or Splitco for any purpose.

Beneficial Owner ” and “ Beneficial Ownership ” and words of similar import have the meaning assigned to such terms in Rule 13d-3 and Rule 13d-5 promulgated under the Exchange Act and a Person’s Beneficial Ownership of securities shall be calculated in accordance with the provisions of such rules; provided that a Person shall be deemed to have Beneficial Ownership of all securities that such Person has a right to acquire without regard to the 60 day limitation in such rule.

Covered Areas ” means (i) the Rocky Mountain area consisting of Colorado, Utah, Wyoming, Montana, southern Idaho, western Nebraska, western Kansas and northeastern Nevada, (ii) the Northwest area consisting of Washington, Oregon, Idaho, Montana, Alaska, Wyoming and northern Nevada and (iii) the Pittsburgh area consisting of Pennsylvania, West Virginia, Ohio and western Maryland.

Current Market Price ” of any security on any day means (i) the last reported sale price (or, if no sale is reported, the average of the high and low bid prices) on The Nasdaq Stock Market on such day, or (ii) if the primary trading market for such security is not The Nasdaq Stock Market, then the closing sale price regular way on such day (or, in

 

 

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case no such sale takes place on such day, the reported closing bid price regular way on such day) in each case on the New York Stock Exchange, or, if such security is not listed or admitted to trading on such exchange, then on the principal exchange on which such security is traded, or (iii) if the Current Market Price of such security on such day is not available pursuant to one of the methods specified above, then the average of the bid and asked prices for such security on such day as furnished by any New York Stock Exchange member firm selected from time to time by the Board of Directors for that purpose.

EchoStar ” means EchoStar Corp.

Equity Security ” means (i) any common stock, preferred stock or other capital stock, (ii) any securities convertible into or exchangeable for common stock, preferred stock or other capital stock or (iii) any subscriptions, options, rights, warrants, calls, convertible or exchangeable securities (or any similar securities) or agreement of any character to acquire common stock, preferred stock or other capital stock.

Liberty Standstill and Voting Agreement ” means that certain standstill and voting agreement dated, May 6, 2008, by and among Liberty, the Greenlady Entities and DIRECTV (as the same may be assumed by Splitco pursuant to the Merger Agreement).

Per Share Value ”, as to (i) Holdings Class B Common Stock on any relevant day, means the average of the Current Market Prices of Holdings Class A Common Stock into which the shares of Holdings Class B Common Stock are convertible under certain circumstances described in the Certificate of Incorporation of Holdings for the period of 30 consecutive trading days ending on the last trading day prior to the date the parties enter into a definitive agreement in respect of a transaction to acquire the Persons referred to in Section 5(A) of this Agreement and (ii) as to Holdings Class A Common Stock on any relevant day, means the average of the Current Market Prices of Holdings Class A Common Stock for the period of 30 consecutive trading days ending on the last trading day prior to the date the parties enter into a definitive agreement in respect of a transaction to acquire such Person, in the case of clauses (i) and (ii), appropriately adjusted to take into account any stock dividends on the Holdings Class A Common Stock, or any stock splits, reclassifications or combinations of Holdings Class A Common Stock during the period following the first of such 30 trading days and ending on the last full trading day immediately preceding the date the parties enter into a definitive agreement.

Primarily Engaged in a Restricted Business ” means, with respect to any Person, that more than 10% of such Person’s business, as measured by the average of such Person’s consolidated revenues for the last one completed fiscal year, is comprised of a Restricted Business.

Proprietary Information ” shall mean all non-public, proprietary or confidential information obtained by Liberty, Splitco (prior to the Merger Effective Time), their respective Affiliates or their respective Representatives (collectively, the “ Liberty  

 

 

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Group ”) in connection with the Transactions or as a result of being the owner of the businesses comprising the Splitco Business and a principal stockholder, director or officer of DIRECTV, including trade secrets, know-how, research and development, software, databases, inventions, processes, formulae, technology, designs and other intellectual property, information concerning finances, investments, profits, pricing, costs, products, services, vendors, customers, joint venture partners, personnel, recruiting, advertising, sales, marketing, promotions, government and regulatory activities and approvals, concerning the past, current or future business, activities and operations of Holdings or any of its Affiliates, including Splitco and the Splitco Business (after the Merger Effective Time) and DIRECTV and all analyses, compilations, data, studies, translations, memoranda or other documents prepared by the Liberty Group containing or based in whole or in part on any such information. Proprietary Information does not include, however, information which (i) is or becomes generally available to the public, other than as a result of a disclosure by a member of the Liberty Group, (ii) was or becomes available to the Liberty Group from a Person other than Holdings, its Affiliates or its or their Representatives who is not known nor believed by Liberty, in good faith, to be bound by a confidentiality agreement with Holdings, its Affiliates or any of its or their Representatives, or is otherwise not known by Liberty nor believed, in good faith, to be under an obligation to Holdings, its Affiliates or any of its or their Representatives not to disclose the information, or (iii) Liberty can establish was or is independently developed by a member of the Liberty Group or its Representatives without reliance upon any Proprietary Information.

 

 

 

 

 

 

 

 

 

 

 

 

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2.

Agreement to Vote Liberty DIRECTV Shares and Related Matters.

(a)        Voting . From the date hereof until any termination of this Agreement in accordance with its terms, at any meeting of the stockholders of DIRECTV however called (or any action by written consent in lieu of a meeting) or any adjournment or postponement thereof, during the period from and after the date of this Agreement to the Split-Off Effective Time Liberty shall cause, and from and after the Split-Off Effective Time Splitco shall cause, each Greenlady Entity to, and each Greenlady Entity agrees that it shall, subject to the limitations set forth in the Liberty Standstill and Voting Agreement, appear at such meeting of stockholders or otherwise cause the Liberty DIRECTV Shares to be counted as present thereat for the purpose of establishing a quorum, and vote all of the Liberty DIRECTV Shares (or cause them to be voted) or (as appropriate) execute written consents in respect thereof, (i) in favor of the adoption of the Merger Agreement, (ii) against any action or agreement (including any amendment of any agreement) that would result in a breach of any representation, warranty, covenant, agreement or other obligation of Liberty or Splitco in the Merger Agreement, (iii) against any DIRECTV Takeover Proposal and (iv) against any agreement (including any amendment of any agreement), amendment of the Certificate of Incorporation or By Laws of DIRECTV or other action that would reasonably be expected to prevent, prohibit, or materially delay the consummation of the DIRECTV Merger. Any such vote shall be cast (or consent shall be given) by the Greenlady Entities in accordance with such procedures relating thereto so as to ensure that it is duly counted, including for purposes of determining that a quorum is present and for purposes of recording the results of such vote (or consent).

 

(b)

Proxy .

(i)        In furtherance of the agreements in Section 2(a) above, but subject to the following sentence, each Greenlady Entity hereby irrevocably constitutes and appoints DIRECTV and any officer(s) or directors of DIRECTV designated as proxy or proxies by DIRECTV as its attorney-in-fact and proxy in accordance with the DGCL, (with full power of substitution and re-substitution), for and in the name, place and stead of such Greenlady Entity, to vote, subject to the limitations set forth in the Liberty Standstill and Voting Agreement, all its Liberty DIRECTV Shares (at any meeting of stockholders of DIRECTV however called or any adjournment or postponement thereof), or to execute one or more written consents in respect of such Liberty DIRECTV Shares, (A) in favor of the adoption of the Merger Agreement, (B) against any action or agreement (including any amendment of any agreement) that would result in a breach of any representation, warranty, covenant, agreement or other obligation of Liberty or Splitco in the Merger Agreement, (C) against any DIRECTV Takeover Proposal and (D) against any agreement (including any amendment of any agreement), amendment of the Certificate of Incorporation or By Laws of DIRECTV or other action that would reasonably be expected to prevent, prohibit or materially delay the consummation of the DIRECTV Merger.

(ii)       Such proxy shall (A) be valid and irrevocable until the termination of this Agreement in accordance with Section 9 hereof and (B) automatically terminate upon the termination of this Agreement in accordance with Section 9 hereof. Liberty and Splitco represent that any and all other proxies heretofore given in respect of the Liberty DIRECTV Shares are revocable, that such other proxies either have been revoked or are hereby revoked.

 

 

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Liberty and Splitco affirm that the foregoing proxy is: (x) given (I) in connection with the execution and adoption of the Merger Agreement and (II) to secure the performance of the duties of Liberty, Splitco and the Greenlady Entities under this Agreement, (y) coupled with an interest and may not be revoked except as otherwise provided in this Agreement and (z) intended to be irrevocable prior to termination of this Agreement in accordance with the provisions of Section 212(e) of the DGCL. If for any reason the proxy granted herein is not irrevocable or is for any reason unenforceable, then Liberty, Splitco and the Greenlady Entities irrevocably agree to vote or to direct the voting or the execution of written consents in respect of their Liberty DIRECTV Shares in accordance with Section 2(a).

(c)        Proxies; Non-Interference; etc . From the date hereof until any termination of this Agreement in accordance with its terms or except as expressly provided by this Agreement (including Section 2(b)(ii)), none of Liberty, Splitco or any Greenlady Entity shall directly or indirectly (i) deposit any Liberty DIRECTV Shares into a voting trust or grant any proxies or enter into a voting agreement, power of attorney or voting trust with respect to any Liberty DIRECTV Shares, (ii) take any action that would make any representation or warranty of Liberty, Splitco or the Greenlady Entities set forth in this Agreement untrue or incorrect or have the effect of preventing, disabling or materially delaying Liberty, Splitco and the Greenlady Entities from performing any of their respective obligations under this Agreement or (iii) agree (whether or not in writing) to take any of the actions referred to in the foregoing clauses (i) or (ii) of this Section 2(c). DIRECTV shall cause all certificates representing Liberty DIRECTV Shares to bear a prominent legend stating that such shares are subject to the voting and other restrictions described in this Agreement, and Liberty and the Greenlady Entities hereby consent thereto; provided , however , that such legend shall be removed immediately in the event of the termination of this Agreement or the Merger Agreement.

(d)        Additional Shares . Until any termination of this Agreement in accordance with its terms, Liberty, Splitco and the Greenlady Entities shall promptly notify Holdings and DIRECTV of the number of shares of DIRECTV Common Stock, if any, as to which Liberty, Splitco or any Greenlady Entity acquires record or Beneficial Ownership after the date hereof (including pursuant to the exercise of any stock option or stock appreciation right and excluding any such shares received as a result of any dividend or other distribution made or similar action taken by DIRECTV or any of its Affiliates), provided , however , that Liberty and Splitco have covenanted under the Merger Agreement to not acquire Beneficial Ownership of DIRECTV Common Stock. Any shares of DIRECTV Common Stock as to which Liberty, Splitco or the Greenlady Entities acquire record or Beneficial Ownership after the date hereof and prior to termination of this Agreement shall be Liberty DIRECTV Shares for purposes of this Agreement. Without limiting the foregoing, in the event of any stock split, stock dividend or other change in the capital structure of DIRECTV affecting DIRECTV Common Stock, the number of shares of DIRECTV Common Stock constituting Liberty DIRECTV Shares shall be adjusted appropriately and this Agreement and the obligations hereunder shall attach to any additional shares of DIRECTV Common Stock or other voting securities of DIRECTV issued to Liberty, Splitco or the Greenlady Entities in connection therewith. For the avoidance of doubt, nothing herein shall void, modify, limit, qualify or amend Liberty’s obligations pursuant to Sections 6.26 and 6.27 of the Merger Agreement.

 

 

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3.          Non-Solicitation . Liberty acknowledges that Holdings’ and its Subsidiaries’ employees from and after the Closing Date will be key components to the success of Holdings and its Subsidiaries, including Splitco, the Splitco Business and DIRECTV, and that the preservation of Holdings’ and its Subsidiaries’ respective employee bases from and after the Closing Date is critical to, among other things, Holdings’ and its Subsidiaries’ prospects. Consequently, Liberty agrees that, for a period of two years from and after the Closing Date, without the prior written consent of Holdings, Liberty will not, and will cause its Affiliates not to, directly or indirectly, (a) solicit any individual who is an executive officer or other member of senior management of Holdings or its Subsidiaries from and after the Closing Date to leave his or her employment with Holdings or its Subsidiaries or interfere with the employment relationship between Holdings or its Subsidiaries, on the one hand, and any individual who is an executive officer or other member of senior management of Holdings or its Subsidiaries, on the other hand, from and after the Closing Date, or (b) hire any individual who is an executive officer or other member of senior management of DIRECTV, the Splitco Business or any of their Subsidiaries during the twelve month period preceding the Closing Date; provided that the foregoing restrictions shall not prohibit Liberty or its Affiliates from (A) soliciting or hiring any individuals through the placement of general advertisements of employment opportunities which are not specifically directed at employees of Holdings or its Subsidiaries or (B) hiring any such individuals who become aware of employment opportunities other than by a solicitation prohibited by this Section 3 and approach Liberty


 
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