STOCK OPTIONS AGREEMENT
Exhibit 4.5
THIS STOCK OPTIONS AGREEMENT (the “Agreement”) is entered into as of March 30, 2009,
by and between Ascent Media Corporation, a Delaware corporation (the “Corporation”), and
the individual whose name, address and social security number appear on the signature page hereto
(the “Holder”).
RECITALS
WHEREAS, prior to the spin-off (the “DHC Spin-Off”) of Discovery Holding Company
(“DHC”) from Liberty Media Corporation (“LMC”) on July 21, 2005, the Holder held
options (the “LMC Options”) to purchase shares of common stock of LMC pursuant to three
separate Stock Appreciation Rights Agreements, dated February 28, 2001, July 31, 2003 and August
6, 2004, between LMC and the Holder (collectively, the “Existing Award Agreements”);
WHEREAS, in connection with the DHC Spin-Off, each LMC Option was adjusted so that, after the
completion of the DHC Spin-Off, the Holder held, in addition to an option to purchase shares of LMC
common stock, an option to purchase shares of the same series of DHC common stock as the series of
LMC common stock for which the LMC Option was exercisable (the number of shares of DHC common stock
subject to, and the exercise price for, each such DHC option immediately prior to the closing of
the Transactions (as defined below) are set forth on Schedule 1 attached hereto and
referred to herein as the “Adjusted DHC Options”);
WHEREAS, the Adjusted DHC Options were made pursuant to the Discovery Holding Company
Transitional Stock Adjustment Plan (as amended and restated, the “Stock Adjustment Plan”);
WHEREAS, on May 16, 2007, pursuant to the Discovery Holding Company 2005 Incentive Plan (as
amended and restated, the “Incentive Plan” and, together with the Stock Adjustment Plan,
the “Plans”), the Compensation Committee of the Board of Directors of DHC awarded to the
Holder an option to purchase 10,000 shares of Class A common stock, par value $0.01 per share, of
DHC at an exercise price of $22.90 (such option, the “2007 Option” and, together with the
Adjusted DHC Options, the “Existing Awards”);
WHEREAS, on September 17, 2008, DHC completed a series of transactions (collectively, the
“Transactions”) contemplated by (i) the Transaction Agreement, dated as of June 4, 2008
(as amended, “Transaction Agreement”), by and among DHC, Discovery Communications, Inc.
(“DCI”), DHC Merger Sub, Inc., Advance/Xxxxxxxx Programming Partnership, and for limited
purposes stated therein, Advance Publications, Inc. and Xxxxxxxx Broadcasting Corporation and (ii)
the Reorganization Agreement, dated as of June 4, 2008 (as amended, the “Reorganization
Agreement”), by and among DHC, DCI, the Corporation, Ascent Media Group LLC and Ascent Media
Creative Sound Services, Inc.; and
WHEREAS, pursuant to Section 2.03(d) of the Transaction Agreement each Existing Award that was
exercisable for shares of DHC Series A common stock was converted into (i) an option to purchase
shares of Series A common stock, par value $0.01, (“Series A
Common Stock”), of the Corporation, (ii) an option to purchase shares of DCI Series A
common stock and (iii) an option to purchase shares of DCI Series C common stock, and each Existing
Award that was exercisable for shares of DHC Series B common stock was converted into (x) an option
to purchase shares of Series B common stock, par value $0.01, (“Series B Common Stock” and,
together with the Series A Common Stock, the “Common Stock”), of the Corporation, (y) an
option to purchase shares of DCI Series B common stock and (z) an option to purchase shares of DCI
Series C common stock.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Corporation and Holder hereby agree as follows:
1. Converted Options. Pursuant to the Transaction Agreement and Reorganization
Agreement, subject to the terms contained herein, the Corporation and the Holder agree that the
Holder is the owner (collectively, the “Converted Options”) of (i) an option to purchase
from the Corporation 5,582 shares of Series A Common Stock at an exercise price of $16.70 per share
(as converted from the Adjusted DHC Option subject to the Existing Award Agreement dated July 31,
2003); (ii) an option to purchase from the Corporation 5,582 shares of Series A Common Stock at an
exercise price of $15.21 per share (as converted from the Adjusted DHC Option subject to the
Existing Award Agreement dated August 6, 2004); (iii) an option to purchase from the Corporation
558 shares of Series A Common Stock at an exercise price of $29.42 per share (as converted from
2007 Option); and (iv) an option to purchase from the Corporation 76,210 shares of Series B Common
Stock at an exercise price of $25.29 per share, or, at the election of the Holder, 93,115 shares of
Series A Common Stock at an exercise price of $22.53 per share (as converted from the Adjusted DHC
Option subject to the Existing Award Agreement dated February 28, 2001, the “B/A Converted
Option”).
2. Exercise of B/A Converted Option. As a result of the adjustments to the B/A
Converted Option described above, the number of shares of Series B Common Stock subject to such
option is different than the number of shares of Series A Common Stock subject to such option if
the Holder elects, as provided in the Existing Award Agreement, to convert such B/A Converted
Option into an option to acquire shares of Series A Common Stock. The Holder and the Corporation
hereby agree that, notwithstanding anything to the contrary in any Existing Award Agreement, the
first exercise of the B/A Converted Option by the Holder shall determine whether the B/A Converted
Option is exercisable for shares of Series B Common Stock or Series A Common Stock, and, upon such
first exercise of the B/A Converted Option, the B/A Converted Option shall thereafter only be
exercisable for the series of Common Stock so elected by the Holder in the first exercise and such
election shall be deemed to be an irrevocable election by the Holder as to the applicable series
for which such B/A Converted Option shall be exercisable.
3. Terms and Conditions of Converted Options. Except as provided herein, (i) each
Converted Option that was converted from an Adjusted DHC Option will remain subject to all of the
terms, conditions and provisions (including the termination, vesting and exercise provisions) of
the Stock Adjustment Plan and Existing Award Agreement and (ii) the Converted Option that was
converted from the 2007 Option will remain subject to all of the terms, conditions and provisions
(including the termination, vesting and exercise provisions) of the Incentive Plan and
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Non-Qualified Stock Option Agreement, dated as of May 16, 2007, between DHC and the Holder.
Notwithstanding anything herein or in any Plan or Existing Award Agreement to the contrary, to the
extent any Converted Option would otherwise expire prior to its scheduled expiration date as a
result of the Holder ceasing to be employed by DHC, DCI or the Corporation, such Converted Option
shall remain exercisable through its scheduled expiration date irrespective of whether the Holder
is at any time, following the closing of the Transactions, employed by LMC, DHC, DCI or the
Corporation.
4. Representations of the Holder. The Holder hereby represents and warrants to the
Corporation that the Holder understands and acknowledges: (a) that each Converted Option, and any
shares of Common Stock that may be issued upon exercise of all or any portion of a Converted
Option, have not been registered under the Securities Act of 1933, as amended, and/or qualified
under any applicable state securities laws; (b) that any shares of Common Stock that may be issued
upon exercise of all or any portion of a Converted Option may not subsequently be transferred
unless so registered and qualified, or unless exemptions from such registration and qualification
requirements are available; and (c) that the certificates representing any such shares delivered
upon exercise of a Converted Option will bear a legend to that effect. The Holder has been advised
that exemptions under such federal and state securities laws may not be available or may not permit
the Holder to transfer any such shares in the amounts or at the times desired by the Holder.
Notwithstanding anything to the contrary contained herein, if the Holder is engaged as a consultant
of the Corporation during the term of any Converted Option, the Corporation shall take reasonable
efforts to cause such Converted Option to be covered by an effective Form S-8 Registration
Statement, and, to the extent the Holder exercises any such Converted Option while (i) he is a
consultant of the Corporation and (ii) such Form S-8 is effective, the shares acquired upon such
exercise shall not be subject to the restrictions set forth in clause (b) or (c) of this Section 4.
5. Notice. Unless the Corporation notifies the Holder in writing of a different
procedure, any notice or other communication with respect to this Agreement will be in writing and
will be delivered personally or sent by United States first class mail, postage prepaid and
addressed as follows:
Ascent Media Corporation
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
00000 Xxxxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attn: Xxxxxxx X. Xxxxxxxxxx
Any notice or other communication to the Holder with respect to this Agreement will be in writing
and will be delivered personally, or will be sent by United States first class mail, postage
prepaid, to the Holder’s address as listed on the signature page hereto, unless the Company has
received written notification from the Holder of a change of address.
6. Entire Agreement. Except as otherwise set forth herein, this Agreement (including
the schedules hereto) constitutes the entire agreement among the parties hereto pertaining to the
subject matter hereof and supersede all prior agreements and understandings of the parties in
connection herewith.
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7. Governing Law. This Agreement will be governed by, and construed in accordance
with, the internal laws of the State of Colorado. Each party irrevocably submits to the general
jurisdiction of the state and federal courts located in the State of Colorado in any action to
interpret or enforce this Agreement and irrevocably waives any objection to jurisdiction that such
party may have based on inconvenience of forum.
8. Severability. Each provision of this Agreement will be considered separable and if
for any reason any provision of this Agreement, or the application thereof, becomes or is declared
by a court of competent jurisdiction to be illegal, void or unenforceable, the remainder of this
Agreement will continue in full force and effect and the application of such provision to other
Persons or circumstances will be interpreted so as reasonably to effect the intent of the parties
hereto. The parties hereto further agree to replace such void or unenforceable provision of this
Agreement with a valid and enforceable provision that will achieve, to the extent possible, the
economic, business and other purposes of such illegal, void or unenforceable provision.
9. Successors and Assigns. This Agreement shall be binding upon and shall inure to the
benefit of the parties hereto and their respective successors and assigns.
10. Interpretations. References in this Agreement to “this Agreement” and the words
“herein,” “hereof,” “hereunder” and similar terms include all Schedules appended hereto. The word
“include” and all variations thereof are used in an illustrative sense and not in a limiting sense.
Except as provided herein, all of the terms and provisions of the Plan under which the Existing
Award was granted and the related Existing Award Agreement shall remain in full force and effect.
The headings of the sections of this Agreement have been included for convenience of reference
only, are not to be considered a part hereof and will in no way modify or restrict any of the terms
or provisions hereof.
11. Counterparts. This Agreement may be executed in one or more counterparts, all of
which will be considered one and the same instrument and will become effective when one or more
counterparts have been signed by each of the parties hereto and delivered to the other parties
hereto, it being understood that all parties hereto need not sign the same counterpart.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the
date first above written.
| CORPORATION: ASCENT MEDIA CORPORATION |
||||
| By: | /s/ Xxxxxxx X. Xxxxx | |||
| Name: | Xxxxxxx X. Xxxxx | |||
| Title: | Executive Vice President, General Counsel and Secretary | |||
| HOLDER: |
||||
| /s/ Xxxxxx X. Xxxxxxx | ||||
| Xxxxxx X. Xxxxxxx | ||||
| Address: 00000 Xxxxxxx Xxxx Xxxxxx, XX 00000 | ||||
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Schedule 1
Adjusted DHC Options
| Existing Award Agreement Date | Shares of DHC Common | Exercise Price per share of | |||||
| Stock Subject to Adjusted DHC Option |
Adjusted DHC Option |
||||||
1.
|
February 28, 2001 | 1,667,985 (Series B)1 | $19.06 | ||||
2.
|
July 31, 2003 | 100,000 (Series A) | $13.00 | ||||
3.
|
August 6, 2004 | 100,000 (Series A) | $11.84 | ||||
| 1 | The option is also exercisable at the election of the Holder for the same number of shares of DHC Series A common stock at an exercise price of $17.54 per share. |
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