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:
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
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
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.
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Agreement to Vote Liberty DIRECTV Shares and
Related Matters.
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(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).
(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.
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.
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