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Exhibit 7(a)
AMENDED AND RESTATED STOCK OPTION FULFILLMENT
AGREEMENT (this "Agreement") dated as of June
10, 2000, between Liberty Media Corporation
("Liberty") and Liberty Livewire Corporation
("Livewire")
Recitals
A. Liberty and Livewire are parties to the Agreement and Plan of Merger
dated as of December 10, 1999, as amended (the "Merger Agreement") among AT&T
Corp. ("Parent"), B-Group Merger Corp. ("Merger Sub"), Liberty and Livewire
(then known as "The Xxxx-XX Corporation"). On June 9, 2000, pursuant to the
Merger Agreement, Merger Sub merged (the "Merger") with and into Livewire, which
was the surviving corporation in the Merger.
B. Upon consummation of the Merger, all outstanding stock options of
Livewire's predecessor became options (the "Carryover Options") to purchase, for
each share of common stock for which such option was exercisable prior to the
Merger, (i) 0.5 of a share of LMGA (as defined below) and (ii) 0.4 of a share of
the Class A Common Stock, par value $0.01 per share, of Livewire. The Merger
Agreement provides that the Carryover Options are obligations of Livewire.
C. On June 10, 2000, Liberty and Livewire entered into a Stock Option
Fulfillment Agreement (the "Original Fulfillment Agreement"), which provided a
mechanism for Livewire to fulfill its obligations under the Carryover Options as
they pertain to shares of LMGA. However, that mechanism was not utilized by the
parties.
D. On December 10, 2000, all Carryover Options not previously exercised by
the holders thereof were automatically terminated in accordance with their
terms. Livewire has performed its obligations under all Carryover Options
exercised for shares of LMGA prior to such date.
E. Liberty and Livewire desire to amend and restate the Original
Fulfillment Agreement in its entirety to read as provided herein, with the same
effect as if this Agreement, and not the Original Fulfillment Agreement, had
been entered into on the date first written above.
NOW THEREFORE, in consideration of the premises, the mutual covenants and
agreements herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
covenant and agree as follows:
1. Certain Definitions. As used herein, the following terms have the
corresponding meanings:
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1.1. "Average Closing Price" means, on any date, the average of the
high and low price per share of the LMGA during normal trading hours on such
date, as reported on the New York Stock Exchange composite transaction tape.
1.2. "Liabilities" means any and all liabilities, obligations, losses,
costs, damages, expenses, claims, actions and causes of action whatsoever,
whether known or unknown, matured or unmatured, fixed or contingent.
1.3. "LMGA" means the Class A Liberty Media Group Common Stock, par
value $1.00 per share, of Parent.
1.4. "Net Amount" means, with respect to any Carryover Option, the
amount by which (A) the Average Closing Price on the date such Carryover Option
was exercised exceeds (B) the exercise price per share of LMGA under such
Carryover Option, as stated in the applicable Notice of Exercise.
2. Carryover Options.
2.1. Obligations of Livewire. The Carryover Options shall be the
obligations of Livewire and Livewire shall be solely responsible for the
fulfillment thereof and all payroll, withholding and other taxes relating
thereto. Livewire shall indemnify and defend Liberty for any and all Liabilities
arising from or in connection with the Carryover Options or any modification or
termination thereof, other than Liberty's express obligations under this
Agreement. Nothing in this Agreement shall confer upon any holder of a Carryover
Option any rights against Liberty whatsoever.
2.2. Notice of Exercise. From and after the Merger, upon any exercise
by the holder thereof of any Carryover Option, Livewire shall provide written
notice of such exercise to Liberty (a "Notice of Exercise"), stating (i) the
date of such exercise, (ii) the number of shares of LMGA issuable upon such
exercise in accordance with the terms of the Carryover Option and (iii) the
exercise price per share of LMGA payable by such holder in accordance with the
terms of the Carryover Option.
2.3. Remittance. Upon receipt of any Notice of Exercise pursuant to
Section 2.2, Liberty shall promptly remit to Livewire funds in an amount equal
to the product of (i) the number of shares of LMGA subject to the Carryover
Option described in such Notice of Exercise, to the extent exercised, times (ii)
the Net Amount with respect to such Carryover Option.
2.4. Issuance of LWIRB. Livewire shall issue to Liberty, for each
Carryover Option funded pursuant to Section 2.3, a number of shares of
Livewire's Class B Common Stock, par value $0.01 per share ("LWIRB"), equal to
the product of (i) the number of shares of LMGA subject to such Carryover
Option, to the extent exercised, times (ii) the Net Amount with respect to such
Carryover Option, divided by (iii) the Average Closing Price on the date such
Carryover Option was exercised, times (iv) 1.2.
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2.5. No Fractional Shares. No fractional shares of LWIRB shall be issued
pursuant to Section 2.4. If a fractional share would otherwise be issuable
hereunder, then the aggregate number of shares of LWIRB issuable hereunder shall
be rounded to the nearest whole number.
2.6. Amounts Received. Livewire shall be entitled to retain any and all
exercise prices and/or other amounts paid upon the exercise of any Carryover
Option.
3. Representations and Warranties of Liberty. Liberty hereby represents
and warrants to Livewire as follows:
(a) Requisite Power. Liberty has all requisite corporate power
and authority to enter into this Agreement and perform its obligations
hereunder.
(b) Due Authorization. The execution and delivery of this
Agreement by Liberty and the performance by Liberty of its obligations
hereunder have been duly authorized by all requisite corporate action of
Liberty.
(c) Execution and Enforceability. This Agreement has been duly
executed and delivered by Liberty and, assuming due authorization,
execution and delivery by Livewire, is a valid, binding and enforceable
obligation of Liberty, except to the extent that enforceability may be
limited by bankruptcy, insolvency and other laws affecting the rights of
creditors generally.
(d) Investment Purpose. The shares of LWIRB that Liberty
acquires pursuant to this Agreement shall be acquired for Liberty's own
account, for investment purposes, and not with a view to, or for, any
resale or distribution, in whole or in part. Liberty acknowledges that,
at the time issued, such shares shall not be registered under the
Securities Act of 1933, as amended (the "Securities Act"), and
applicable state securities laws and may not be resold unless
subsequently registered under the Securities Act or an exemption from
such registration is available. Liberty acknowledges that certificates
representing the shares of LWIRB acquired by Liberty hereunder will bear
an appropriate restrictive legend in customary form for securities
issued without registration under the Securities Act.
4. Representations and Warranties of Livewire. Livewire hereby represents
and warrants to Liberty as follows:
(a) Requisite Power. Livewire has all requisite corporate power
and authority to enter into this Agreement and perform its obligations
hereunder.
(b) Due Authorization. The execution and delivery of this
Agreement by Livewire and the performance by Livewire of its obligations
hereunder have been duly authorized by all requisite corporate action of
Livewire.
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(c) Execution and Enforceability. This Agreement has been duly
executed and delivered by Livewire and, assuming due authorization,
execution and delivery by Liberty, is a valid, binding and enforceable
obligation of Livewire, except to the extent that enforceability may be
limited by bankruptcy, insolvency and other laws affecting the rights of
creditors generally.
(d) LWIRB. All shares of LWIRB to be issued to Liberty hereunder
have been duly authorized and, when issued and delivered to Liberty
pursuant to this Agreement, shall be validly issued, fully paid and
nonassessable. Livewire has reserved a sufficient number of authorized
shares of LWIRB in order to perform its obligations under this
Agreement.
5. Reconciliation.
5.1. Options Exercised. From the date of this Agreement through December
10, 2000, Carryover Options were exercised with respect to an aggregate of
489,523 shares of LMGA. Liberty acknowledges receipt of Notices of Exercise
hereunder with respect to such Carryover Options.
5.2. Funding Received by Livewire. Livewire acknowledges receipt from
Liberty of $5,093,077.97 pursuant to Section 2.3 of this Agreement.
5.3. Certificates Received by Liberty. Liberty acknowledges receipt from
Livewire of stock certificates representing 375,437 shares of LWIRB that were
intended to be delivered pursuant to the Original Fulfillment Agreement
(collectively, the "Old Certificates").
5.4. Correction. Based on the Notices of Exercise delivered to Liberty
by Livewire hereunder, the number of shares to which Liberty is entitled, in
exchange for the funding received by Livewire from Liberty hereunder, is 296,039
shares of LWIRB.
5.5. Cancellation and Exchange of Certificates. On or before February
23, 2001, Livewire will issue and deliver to Liberty one or more stock
certificates in proper form, duly executed and representing Liberty's ownership
of 296,039 shares of LWIRB issued to Liberty by Livewire hereunder
(collectively, the "New Certificates"), against delivery by Liberty to Livewire
of the Old Certificates, duly endorsed for cancellation or accompanied by duly
executed stock powers in proper form therefor. Upon the issuance and delivery of
the New Certificates as provided for herein, the Old Certificates (and an
additional certificate for 8,819 shares of LWIRB that was executed by Livewire
but never delivered to Liberty) shall immediately and automatically be cancelled
and terminated, without further consideration or action by any person, and shall
thereafter be null, void and of no force or effect whatsoever.
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6. Miscellaneous.
6.1. Applicable Law. This Agreement and the legal relations between the
parties hereunder shall be governed by and construed in accordance with the laws
of the State of Delaware, without regard to the conflict of laws rules thereof.
6.2. Assignment; Binding Effect; Benefit. Neither this Agreement nor any
of the rights, benefits or obligations hereunder may be assigned by any party
(whether by operation of law or otherwise) without the prior written consent of
each other party, which consent shall not be unreasonably withheld or delayed.
Subject to the immediately preceding sentence, this Agreement shall be binding
upon, inure to the benefit of and be enforceable by the parties and their
respective successors and assigns. Nothing in this Agreement, expressed or
implied, is intended to confer on any person other than the parties and their
respective successors and assigns, any rights, remedies, obligations or
liabilities under or by reason of this Agreement.
6.3. Counterparts. This Agreement may be executed in multiple and/or
separate counterparts, each of which shall be an original, and all of which
together shall constitute one and the same agreement.
6.4. Entire Agreement; Amendment. This Agreement constitutes the entire
agreement between the parties and supersedes all prior agreements and
understandings, oral and written, between the parties with respect to the
subject matter hereof, including without limitation the Original Fulfillment
Agreement, which is hereby rescinded as of the date thereof. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties.
6.5. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement.
6.6. Registration Rights. For the avoidance of doubt, all shares of
LWIRB issued to Liberty hereunder (and any shares of Class A Common Stock of
Livewire issued in respect thereof) shall constitute registrable shares under
the Registration Rights Agreement dated as of December 22, 2000, between Liberty
and Livewire.
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IN WITNESS WHEREOF, the parties hereto have executed this agreement as of
the date first above written.
LIBERTY MEDIA CORPORATION
By: /s/Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Title:EVP and General Counsel
LIBERTY LIVEWIRE CORPORATION
By: /s/Xxxxxxxxx X. Xxxxxxxxx
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Name: Xxxxxxxxx X. Xxxxxxxxx
Title: Senior Vice President
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