Confidentiality, Non-Solicitation and Non-Competition Agreement
EXHIBIT
10.2
EXECUTION
VERSION
This
Confidentiality, Non-Solicitation and Non-Competition Agreement, dated as of
December 22, 2006, is hereby entered into between The DirecTV Group, Inc.,
a
Delaware corporation (the “Company”), and News Corporation, a Delaware
corporation (“News”).
WHEREAS,
News through its wholly owned subsidiary Fox Entertainment Group, Inc. (“FEG”)
owns certain shares of common stock, par value $.01 per share, of the Company
(the “Common Stock”);
WHEREAS,
News has entered into an agreement with Liberty Media Corporation (“Liberty”) to
cause to be transferred to Liberty all of the Common Stock in exchange for
the
transfer to News by Liberty and its affiliates of certain shares of Class A
common stock, par value $.01 per share, and certain shares of Class B common
stock, par value $0.01 per share, of News (the “Transaction”);
WHEREAS,
in connection with the Transaction, News has formed, a special purpose entity
which is a Delaware corporation (“Splitco”) to hold, among other things, all of
the Common Stock;
WHEREAS,
as of the closing of the Transaction, (i) Liberty will acquire 100% of the
issued and outstanding common stock, par value $0.01 per share of Splitco and,
through such ownership of Splitco, indirectly own 100% of the Common Stock
and
(ii) News will not own directly or indirectly any shares of common stock, par
value $.01 per share, of the Company or any other equity or other voting
securities of the Company;
WHEREAS,
in connection with the Transaction, the Company has provided certain
confidential information regarding the Company and its subsidiaries and
affiliates to Liberty pursuant to a confidentiality agreement, dated as of
August 28, 2006, between the Company and Liberty;
WHEREAS,
News acknowledges the highly competitive nature of the businesses of the Company
and its subsidiaries and affiliates and further acknowledges that it has been
provided with access to sensitive, proprietary and confidential information
of
the Company and has been provided with the opportunity to develop relationships
with customers, vendors, prospective customers, prospective vendors, employees
and other agents of the Company, which, in each case, News acknowledges and
agrees constitute valuable assets of the Company;
NOW,
THEREFORE, in consideration of the foregoing and the covenants and agreements
herein contained, and for other good and valuable consideration, the receipt
and
sufficiency of which are hereby acknowledged, each of the parties hereby agrees
as follows:
1. Definitions.
(a) “affiliate”
shall mean, with respect to any person, any other person that, directly or
indirectly, through one or more intermediaries, controls, is controlled by,
or
is under common control with, such person; provided, however that the
term “affiliate” when used with respect to News or any affiliate of News shall
not include the Company or any of its subsidiaries. The term
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a person, whether
through the ownership of voting securities, by contract or otherwise, including
the ability to elect the members of the board of directors or other governing
body of a person, and the terms “controlled” and “controlling” have correlative
meanings.
(b) “Effective
Date” shall mean the date on which the Transaction is consummated.
(c) “Proprietary
Information” shall mean all non-public, proprietary or confidential information
obtained by News or its Representatives in connection with News’ prior ownership
of shares of Common Stock or as a result of certain individuals affiliated
with
News or its Representatives serving on the Board of Directors of the Company,
including without limitation 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, 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 the Company
or
any of its subsidiaries or affiliates. “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 News or its
Representatives, (ii) was or becomes available to News from a person other
than
the Company or any of the Company’s Representatives who is not known by News, in
good faith, to be bound by a confidentiality agreement with the Company or
any
of the Company’s Representatives, or is otherwise not known by News, in good
faith, to be under an obligation to the Company or any of the Company’s
Representatives not to disclose the information, or (iii) News can establish
was
or is independently developed by News or its Representatives without reliance
upon any Proprietary Information.
(d) “Representative”
shall mean, with respect to any person, such person’s subsidiaries and
affiliates and such person’s and their subsidiaries’ and controlled affiliates’
directors, officers, employees, agents, advisors (including, without limitation,
financial advisors, legal counsel and accountants) and controlling
persons.
(e) “person”
shall mean any corporation, limited liability company, partnership, other entity
or individual.
2. Confidentiality. News
agrees that, it will, and it will cause its Representatives to, keep
all Proprietary Information in its possession as of the Effective Date
confidential and refrain from using such Proprietary Information;
provided, that, notwithstanding anything to the contrary herein, News may
use such Proprietary Information to the extent reasonably necessary for purposes
of preparing and filing tax returns, corresponding with tax authorities,
preparing accounting records, and in connection with any litigation, including,
without limitation, litigation arising out of, relating to resulting from the
Transaction or the subject matter of such Proprietary
Information. News agrees to be responsible for any breach of this
Agreement by any of its Representatives.
3. Non-Solicitation/Non-Hire. News
acknowledges that the Company’s employees are a key component to the Company’s
success and that the preservation of the Company’s employee base is critical to,
among other things, the Company’s prospects. Consequently, News
agrees that, for a period of two (2) years from the Effective Date, without
the
prior written consent of the Company, News 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 the Company at the
Effective Date or at any time thereafter to leave his or her employment with
the
Company or interfere with the employment relationship between the Company and
any individual who is an executive officer or other member of senior management
of the Company at the Effective Date or at any time thereafter, or (b) hire
any
individual who is an executive officer or other member of senior management
of
the Company at the Effective Date or at any time thereafter or any individual
was an executive officer or other member of senior management of the Company
during the twelve (12) month period preceding the Effective Date;
provided that the foregoing restrictions shall not shall not prohibit
News or its affiliates from soliciting or hiring any individuals through the
placement of general advertisements of employment opportunities which are not
specifically directed at employees of the Company.
4. Non-Competition.
(a) News
covenants and agrees that, for a period of four (4) years from the Effective
Date (the “Restricted Period”), News shall not, and shall cause its affiliates
not to, directly or indirectly, as a stockholder, owner, equityholder, manager,
operator, lender, investor, consultant, member, partner, licensor, contractor,
agent or in any other capacity, engage or participate in a Restricted Business
(as defined below) anywhere in North America or South America where the
Restricted Business was operated by the Company prior to the Effective
Time. The term “Restricted Business” means the business of providing
direct-to-home delivery of video services by satellite.
(b) Notwithstanding
anything herein to the contrary, the restrictions set forth herein shall not
be
applicable to any of the following: (i) any acquisition, directly or indirectly,
after the date of this Agreement by News or any of its affiliates (whether
by
merger, share exchange, purchase of securities or assets or otherwise) of a
person or any interest therein which is engaged in a Restricted Business so
long
as the Restricted Business conducted by such other person and its affiliates
does not constitute more than ten percent (10)% of its business (as measured
by
such person’s consolidated revenues for each of the two last fiscal years prior
to such acquisition); provided that News will promptly inform the Company in
the
event of the acquisition of control of any such person (and, if so requested
by
the Company, provide the Company with such information as the Company may
reasonably require for the purposes of enabling the Company to verify that
the
Restricted Business in question accounts for no more than ten percent (10%)
of
such person’s total business (as measured by such person’s consolidated revenues
for each of the two last fiscal years prior to such acquisition)) and further
that it will, or will cause its affiliate to, sell or otherwise dispose of
the
Restricted Business to a third party or to the Company as soon as practicable
after such acquisition of control (but in no event later than six (6) months
after such acquisition) and News will, or will cause its affiliate to, permit
the Company to participate in any sale process relating to the disposal of
the
Restricted Business as a potential purchaser thereof on a basis no less
preferential to any other potential purchaser; (ii) the acquisition, directly
or
indirectly, by News of securities listed on any securities exchange of any
person that is engaged or participates in a Restricted Business, provided that
(x) such person is not primarily engaged in a Restricted Business (as measured
by such person’s consolidated revenues for each of the two last fiscal years
prior to such acquisition) and (y) News and its affiliates would not, in the
aggregate (after giving effect to such acquisition), own directly or indirectly
five percent (5%) or more of the outstanding voting power or capital stock
of
such person at the time of such acquisition; or (iii) the acquisition, directly
or indirectly, by News of securities not listed on any securities exchange
of
any person that is engaged or participates in a Restricted Business, provided
that (x) such person is not primarily engaged in a Restricted Business (as
measured by such person’s consolidated revenues for each of the two last fiscal
years prior to such acquisition) and (y) News and its affiliates would not,
in
the aggregate (after giving effect to such acquisition), own directly or
indirectly more than ten percent (10%) of the outstanding voting power or
capital stock of such person at the time of such acquisition and neither News
nor its affiliates would possess any management or other rights to direct the
operations of such person (after giving effect to such
acquisition).
5. Remedies. It
is understood and agreed that monetary damages may not be sufficient remedy
of
any breach of this Agreement by either of the parties or their respective
Representatives and that each party may be entitled to seek equitable relief,
including seeking an injunction and specific performance, as a remedy for such
breach. Without prejudice to the rights and remedies otherwise available to
a
party, including monetary damages, each party agrees that the parties shall
be
entitled to seek equitable relief by way of injunction or otherwise if a party
or any of its Representatives breach or threaten to breach any of the provisions
of this Agreement.
6. Governing
Law. This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
7. Jurisdiction. The
parties hereby irrevocably and unconditionally consent to submit to the
nonexclusive jurisdiction of the courts of the Southern District of New York
and
of the United States of America located in the Southern District of New York
with respect to any actions, suits or proceedings arising out of or relating
to
this agreement and the transactions contemplated hereby, and further agree
that
service of any process, summons, notice or document by U.S. registered mail
to
the respective addresses set forth on the first page of this agreement shall
be
effective service of process for any action, suit or proceeding brought against
the parties in any such court. The parties hereby irrevocably and
unconditionally waive any objection to the laying of venue of any action, suit
or proceeding arising out of this agreement or the transactions contemplated
hereby, in the courts of the Southern District of New York and of the United
States of America located in the Southern District of New York, and hereby
further irrevocably and unconditionally waive and agree not to plead or claim
in
any such court that any such action, suit or proceeding brought in any such
court has been brought in an inconvenient forum.
8. Assignment;
Third Party Beneficiaries. Any assignment of this Agreement by a
party without the prior written consent of the other party shall be
void. This Agreement is for the benefit of the parties hereto and
their respective successors and assigns, and no other person shall have any
rights under or be deemed a third party beneficiary of this Agreement except
as
expressly provided in this Section 8. The parties intend for the
benefits, rights and remedies of this Agreement to extend to Splitco, as an
express third party beneficiary of this Agreement, from and after the Effective
Date but solely until the first date, if any, upon which Splitco and its
affiliates shall cease to hold voting securities representing, in the aggregate,
10% of the aggregate voting power of the Company (or any successor to the
Company, whether by consolidation, business combination, acquisition, or merger,
or any entity which shall acquire a majority of the Company’s voting power,
whether tender or exchange offer or otherwise, or any entity to which the
Company shall sell, lease or otherwise transfer all or substantially all of
its
assets). Any right of Splitco to enforce this Agreement will be
subordinate to the Company’s rights of enforcement and may be undertaken only
following a request to the Company and the Company’s failure to take the actions
reasonably requested by Splitco. For purposes of enforcement of this
Agreement, in the event that Splitco has the right to enforce this Agreement
pursuant to the immediately preceding sentence, Splitco will be deemed to have
all rights and remedies available to the Company, except that, in determining
any monetary damages payable to Splitco in any such action, such monetary
damages will be equal to Splitco’s proportionate interest (based on its
ownership of the outstanding equity of the Company) in the monetary damages
suffered or incurred by the Company as a whole.
9. Severability. It
is expressly understood and agreed that although News and the Company consider
the restrictions contained in this Agreement to be reasonable, if a final
judicial determination is made by a court of competent jurisdiction that the
time or territory or any other restriction contained in this Agreement is an
unenforceable restriction against News or its affiliates, the provisions of
this
Agreement shall not be rendered void but shall be deemed amended to apply as
to
such maximum time and territory and to such maximum extent as such court may
judicially determine or indicate to be enforceable (provided that in no event
shall any such amendment broaden the time period or scope of any restriction
herein). Alternatively, if any court of competent jurisdiction finds
that any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding shall
not affect the enforceability of any of the other restrictions contained
herein
10. Entire
Agreement; Amendments; Waiver. This Agreement contains the entire agreement
between you and us concerning the terms of this Agreement. No
modification or amendment of this Agreement or waiver of the terms and
conditions hereof shall be binding upon you, us or, for as long as Splitco
is a
third party beneficiary of this Agreement, Splitco, unless approved in writing
by each of you, us and, for as long as Splitco is a third party beneficiary
of
this Agreement, Splitco. No failure or delay by a party in exercising
any right, power or privilege hereunder shall operate as a waiver thereof,
nor
shall any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any right, power or privilege
hereunder.
11. Counterparts. This
Agreement may be executed via facsimile and in separate counterparts, each
of
which shall be deemed to constitute an original which is part of the same
document.
12. Effectiveness.
This Agreement shall take effect upon the Effective Date.
IN
WITNESS WHEREOF, each of the
undersigned has duly executed this agreement as of the date first written
above.
THE
DIRECTV GROUP, INC.
By:_/s/
XXXXX X. XXXXXX
Name: Xxxxx
X. Xxxxxx
Title: Executive
Vice President & General Counsel
NEWS
CORPORATION
By:
_/s/ XXXXX NOVA
Name:
Xxxxx Nova
Title:
Senior Vice President
