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EX-31.5 - EX-31.5 - Ascent Capital Group, Inc. | v55445a1exv31w5.htm |
EX-31.6 - EX-31.6 - Ascent Capital Group, Inc. | v55445a1exv31w6.htm |
EX-31.4 - EX-31.4 - Ascent Capital Group, Inc. | v55445a1exv31w4.htm |
Table of Contents
UNITED STATES SECURITIES AND
EXCHANGE COMMISSION
Washington, D.C.
20549
Form 10-K/A
(Amendment
No. 1)
þ
|
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the fiscal year ended December 31, 2009 | ||
or
|
||
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
For the transition period from to |
Commission file number
001-34176
ASCENT MEDIA
CORPORATION
(Exact name of Registrant as
specified in its charter)
State of Delaware
|
26-2735737 | |
(State or other jurisdiction
of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
12300 Liberty Boulevard
Englewood, Colorado (Address of principal executive offices) |
80112 (Zip Code) |
Registrants telephone number, including area code:
(720) 875-5622
Securities registered pursuant to Section 12(b) of the
Act:
Title of Each Class
|
Name of Exchange on Which Registered
|
|
Series A Common Stock, par value $.01 per share | The Nasdaq Stock Market LLC |
Securities registered pursuant to Section 12(g) of the
Act:
Series B Common Stock, par value $.01 per share
Indicate by check mark if the registrant is a well-known
seasoned issuer, as defined in Rule 405 of the Securities
Act. Yes o No þ
Indicate by check mark if the registrant is not required to file
reports pursuant to Section 13 or
Section 15(d). Yes o No þ
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Sections 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding
12 months, and (2) has been subject to the filing
requirements for at least the past
90 days. Yes þ No o
Indicate by check mark whether the registrant has submitted
electronically and posted on its corporate Web site, if any,
every Interactive Data File required to be submitted and posted
pursuant to Rule 405 of
Regulation S-T
(§ 229.405 of this chapter) during the preceding
12 months (or for such shorter period that the registrant
was required to submit and post such
files). Yes o No o
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of
Regulation S-K
is not contained herein, and will not be contained, to the best
of Registrants knowledge, in definitive proxy or
information statements incorporated by reference in
Part III of this
Form 10-K
or any amendment to this
Form 10-K. þ
Indicate by check mark whether the registrant is a large
accelerated filer, an accelerated filer, a non-accelerated
filer, or a smaller reporting company. See the definitions of
large accelerated filer, accelerated
filer and smaller reporting company in
Rule 12b-2
of the Exchange Act. (Check one):
Large accelerated filer o
|
Accelerated filer þ | Non-accelerated filer o | Smaller reporting company o | |||
(Do not check if a smaller reporting company) |
Indicate by check mark whether the registrant is a shell company
(as defined in
Rule 12b-2
of the Exchange
Act). Yes o No þ
The aggregate market value of the voting stock held by
nonaffiliates of Ascent Media Corporation computed by reference
to the last sales price of such stock, as of the closing of
trading on June 30, 2009, was approximately
$354 million.
The number of shares outstanding of Ascent Media
Corporations common stock as of March 31, 2010 was:
Series A common stock 13,457,149 shares; and
Series B common stock 734,127 shares.
Table of Contents
EXPLANATORY
NOTE
The Registrant is filing this Amendment No. 1 on
Form 10-K/A
(this
Form 10-K/A)
to its Annual Report on
Form 10-K
for the fiscal year ended December 31, 2009 (the
Form 10-K)
to include all of the Part III information required by
applicable SEC rules and regulations. The Registrant intended to
satisfy its obligations by incorporating by reference into
Part III of the
Form 10-K
the Registrants definitive proxy statement for its 2010
Annual Meeting of Stockholders. However, the Registrant will be
unable to file its definitive proxy statement within the time
period allotted for incorporation by reference under applicable
rules and regulations of the Securities and Exchange Commission
(SEC). Accordingly, the Registrant hereby
amends and replaces in their entirety Items 10, 11, 12, 13
and 14 in the
Form 10-K.
As required by
Rule 12b-15,
the Registrants principal executive officer and principal
financial officers are providing
Rule 13a-14(a)/15(d)-14(a)
certifications. Accordingly, the Registrant hereby amends
Item 15 in the
Form 10-K
to add such reports as Exhibits.
Except as described above, this
Form 10-K/A
does not amend, update or change any other items or disclosures
in the
Form 10-K,
including any of the financial information disclosed in
Parts II and IV of the
Form 10-K,
and does not purport to reflect any information or events
subsequent to the filing thereof.
We refer to Ascent Media Corporation as Ascent
Media, us, we and our
in this report.
ASCENT
MEDIA CORPORATION
2009 ANNUAL REPORT ON FORM 10-K/A
(Amendment No. 1)
Table of Contents
2009 ANNUAL REPORT ON FORM 10-K/A
(Amendment No. 1)
Table of Contents
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Table of Contents
PART III
Item 10. | Directors, Executive Officers and Corporate Governance. |
Directors
and Executive Officers
The following lists our directors and executive officers, their
ages and a description of their business experience, including
such persons professional background and positions held
with our company, and where applicable, positions with our
predecessors. The following also includes, as to each of our
directors, how long such person has been a director of our
company, other public company directorships and other factors
considered in the determination that such person possesses the
requisite qualifications and skills to serve as a member of our
board of directors.
William
R. Fitzgerald
| Professional Background: A director of our company since September 2008. Mr. Fitzgerald is Chairman of the Board and Chief Executive Officer of our company. Mr. Fitzgerald has served as Chairman of Ascent Media Group, Inc., a predecessor of Ascent Media Group, LLC, our principal operating subsidiary (AMG), since July 2000. Mr. Fitzgerald has also served as a Senior Vice President of Liberty Media Corporation (Liberty Media), a media and communications company, since July 2000. Prior to joining Liberty Media, Mr. Fitzgerald served as Executive Vice President and Chief Operating Officer, Operations Administration for AT&T Broadband (formerly known as Tele-Communications, Inc. (TCI)), a cable television company, from 1999 to 2000 and was Executive Vice President and Chief Operating Officer of TCI Communications, Inc. from 1998 to 1999. | |
| Other Public Company Directorships: Mr. Fitzgerald has served as a director of Expedia, Inc. since March 2006. In addition, Mr. Fitzgerald served as a director of Cablevision Systems Corporation from 1999 to 2000. | |
| Age: 52 | |
| Board Membership: Mr. Fitzgerald brings to our board 30 years of experience in the media and telecommunications industries. He has an in-depth understanding of our operating business and the history of our organization coupled with significant executive and leadership experience. |
Philip J.
Holthouse
| Professional Background: A director of our company since September 2008. Mr. Holthouse is a partner with Holthouse Carlin & Van Trigt LLP, where he provides tax planning and tax consulting services for privately held businesses and high net-worth individuals primarily in the real estate, entertainment and service industries. | |
| Other Public Company Directorships: Mr. Holthouse served on the board and audit committee of Napster, Inc. from January 2004 to October 2008. | |
| Age: 51 | |
| Board Membership: Mr. Holthouse brings to our board experience as a public company director and an audit committee member, coupled with an understanding of the entertainment and service industries in which we operate. His tax and accounting training enables him to provide our board with sophisticated financial insight. |
John C.
Malone
| Professional Background: A director of our company since January 2010. Mr. Malone has served as the Chairman of the Board and a director of Liberty Media since 1994, as the Chief Executive Officer of Liberty Media from August 2005 to February 2006 and as the Chief Executive Officer of TCI from January 1994 to March 1997. | |
| Other Public Company Directorships: Mr. Malone has served as the Chairman of the Board of Liberty Global, Inc. (LGI) since June 2005 and Chairman of the Board of DIRECTV since November 2009. |
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Previously, he served as Chairman of the Board of LGIs predecessor, Liberty Media International, Inc., from March 2004 to June 2005, as Chairman of the Board of DIRECTVs predecessor, The DIRECTV Group, Inc., from February 2008 to November 2009 and as Chairman of the Board of TCI from November 1996 until March 1999. He has served as a director of Discovery Communications Inc. since September 2008 and served as Chairman of the Board of its predecessor, Discovery Holding Corporation (DHC), from March 2005 to September 2008, and as a director of DHC from May 2005 to September 2008. Mr. Malone has served as a director of (i) InterActiveCorp since May 2006, (ii) Expedia, Inc. since August 2005, (iii) Sirius XM Radio Inc. (Sirius) since April 2009 and (iv) Live Nation Entertainment, Inc. since January 2010. Mr. Malone served as a director of (i) the Bank of New York Company, Inc. from June 2005 to April 2007, (ii) Cablevision Systems Corp. from March 2005 to June 2005 and (iii) UnitedGlobalCom, Inc. from January 2002 to June 2005. |
| Age: 69 | |
| Board Membership: Mr. Malone, as President of TCI, co-founded Liberty Media and is considered one of the preeminent figures in the media and telecommunications industry. He is well known for his sophisticated problem solving and risk assessment skills and provides our board with executive leadership experience and long-term vision. |
Brian C.
Mulligan
| Professional Background: A director of our company since September 2008. Mr. Mulligan is the vice chairman of the media and telecom group of Deutsche Bank Securities. From February 2005 through August 2009, Mr. Mulligan was chairman of Brooknol Advisors, LLC, an advisory and investment firm specializing in media and entertainment. From April 2004 through January 2005, Mr. Mulligan was a senior executive advisor media and entertainment with Cerberus Capital Management, L.P., an investment firm. From September 2002 to March 2004, Mr. Mulligan was a founder of and principal with Universal Partners, a group formed to acquire Universal Entertainment. Prior to that, Mr. Mulligan held various senior-level positions, including senior executive advisor with The Boston Consulting Group, Inc., chairman for Fox Television, Inc., chief financial officer of The Seagram Company Ltd., an entertainment and beverage company, co-chairman of Universal Pictures, Inc., executive vice president of operations at Universal Entertainment and executive vice president corporate development and strategy at MCA Inc., an entertainment and media conglomerate. | |
| Other Public Company Directorships: Mr. Mulligan served on the board of Napster, Inc. from March 2003 to October 2008 and was a director of AMG from December 2002 to September 2003. | |
| Age: 50 | |
| Board Membership: Mr. Mulligan brings to our board extensive executive experience in the entertainment and media sector coupled with financial expertise and the perspective of an investment banker. In addition, having previously served as a director of AMG, he has an understanding of our operating business and the history of our organization. |
William
E. Niles
| Professional Background: Mr. Niles has served as Executive Vice President and General Counsel of AMG since January 2002, and, since the spin-off of our company from DHC in September 2008 (which we refer to as the spin-off), has also served as Executive Vice President and General Counsel of our company. From August 2006 through February 2008, Mr. Niles was a member of AMGs executive committee. Prior to 2002, Mr. Niles was a senior executive handling legal and business affairs within AMG and its predecessor companies. | |
| Age: 46 |
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John A.
Orr
| Professional Background: Mr. Orr has served as Senior Vice President, Corporate Development, of our company since September 2008. Mr. Orr worked with Liberty Media from August 1996 until December 2008, spearheading numerous acquisition opportunities and serving most recently as Vice President of Investor Relations from 2003 until December 2008. | |
| Age: 47 |
George C.
Platisa
| Professional Background: Mr. Platisa has served as Executive Vice President and Chief Financial Officer of AMG since May 2001, and, since the spin-off, has also served as Executive Vice President and Chief Financial Officer of our company. From August 2006 through February 2008, Mr. Platisa was a member of AMGs executive committee. | |
| Age: 53 |
Michael
J. Pohl
| Professional Background: A director of our company since September 2008. Mr. Pohl serves as an advisor to companies in the technology, media and telecommunications industries. From December 2008 through April 2009, Mr. Pohl served as a consultant to ARRIS Group, Inc., a communications technology company specializing in the design and engineering of broadband networks, where he served as the interim Vice President and General Manager of the On Demand Systems Division from December 2007 through December 2008. Mr. Pohl was President of Global Strategies at C-COR Incorporated from January 2005 to December 2007, when C-COR Incorporated was acquired by ARRIS Group, Inc. Mr. Pohl served as the President and Chief Executive Officer of nCUBE Corporation from 1999 to 2005. | |
| Other Public Company Directorships: Mr. Pohl has served on the board and compensation committee of BigBand Networks, Inc. (BigBand) since May 2009 and on its audit committee since June 2009. In addition, Mr. Pohl was appointed as Chairman of the Board of BigBand in February 2010. | |
| Age: 58 | |
| Board Membership: Mr. Pohl brings to our board valuable technological insight and 25 years of extensive experience in the media and telecommunications industries. His management experience and financial expertise is complemented by his knowledge of applied sciences. |
Jose A.
Royo
| Professional Background: A director of our company since September 2008. Mr. Royo has served as President and Chief Executive Officer of AMG since February 2008, and since the spin-off, has also served as President and Chief Operating Officer of our company. From July 2001 until his appointment as CEO, Mr. Royo served in various positions at AMG, including Vice President of the New Products Division, Senior Vice President of the Digital Services Group, and Chief Technology Officer. | |
| Other Public Company Directorships: None. | |
| Age: 44 | |
| Board Membership: Mr. Royo brings to our board an intimate knowledge of our business and our technology which was acquired as he rose through the management ranks of our company. Considered a true leader in our organization, his experience assists our board in formulating strategic alternatives and creating a long-term vision. |
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Carl E.
Vogel
| Professional Background: A director of our company since December 2009. Mr. Vogel is currently a Senior Advisor to DISH Networks Corporation (DISH), a publicly-traded company providing pay-TV services, and served as President of DISH from September 2006 until February 2008 and Vice Chairman of DISH from June 2005 until March 2009. Mr. Vogel is also a partner of SCP Worldwide LLC, a sports, media and entertainment company that owns and operates a variety of companies including the St. Louis Blues of the National Hockey League and Real Salt Lake of Major League Soccer. From October 2007 until March 2009, Mr. Vogel served as a Senior Advisor to EchoStar Corporation (EchoStar), a publicly-traded company in the digital set-top box and satellite services businesses. From 2001 until 2005, Mr. Vogel served as the President and CEO of Charter Communications Inc. (Charter), a publicly-traded company providing cable television and broadband services. Prior to joining Charter, Mr. Vogel worked as an executive officer in various capacities for companies affiliated with Liberty Media. Mr. Vogel held various executive positions with DISH from 1994 until 1997, including serving as the President from 1995 until 1997. | |
| Other Public Company Directorships: Mr. Vogel has served on the board of DISH since May 2005. In addition Mr. Vogel is serving on the board of directors and audit committees of Shaw Communications, Inc., Universal Electronics Inc. and NextWave Wireless Inc. Mr. Vogel is also currently serving as the chair of NextWave Wireless Inc.s audit committee. From October 2007 until March 2009, Mr. Vogel served as the Vice Chairman of the board of directors of EchoStar. From October 2001 to January 2005, Mr. Vogel served on the board of Charter. | |
| Age: 52 | |
| Board Membership: Mr. Vogel brings to our board of directors extensive executive leadership experience and board experience in the media and telecommunications industries, along with professional accounting and financial expertise. |
There is no family relationship between any of our executive
officers or directors, by blood, marriage or adoption. During
the past ten years, none of the above persons has had any
involvement in any legal proceedings that would be material to
an evaluation of his ability or integrity.
Section 16(a)
Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires our executive
officers and directors, and persons who own more than ten
percent of a registered class of our equity securities, to file
reports of ownership and changes in ownership with the SEC.
Officers, directors and greater than ten-percent stockholders
are required by SEC regulation to furnish us with copies of all
Section 16 forms they file.
Based solely on a review of the copies of the Forms 3, 4
and 5 and amendments to those forms furnished to us during our
most recent fiscal year, or written representations that no
Forms 5 were required, we believe that, during the year
ended December 31, 2009, all Section 16(a) filing
requirements applicable to our officers, directors and greater
than ten-percent beneficial owners were met.
Code of
Ethics
We have adopted a code of ethics that applies to all of our
employees, directors and officers, which constitutes our
code of ethics within the meaning of
Section 406 of the Sarbanes-Oxley Act. Our code of ethics
is available on our website at
www.ascentmediacorporation.com/Business-Conduct-Compliance-Programs.aspx.
Audit
Committee and Audit Committee Financial Expert
Our board of directors has established an audit committee, whose
chairman is Philip J. Holthouse and whose other members are
Brian C. Mulligan, Michael J. Pohl and Carl E. Vogel. Each of
the members of the audit committee meets the applicable
independence rules and regulations of NASDAQ and the SEC, as
such rules and regulations exist on the date of this report, and
each is financially literate as determined by our board of
directors in
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light of applicable regulatory standards. Our board of directors
has determined that each of Mr. Holthouse,
Mr. Mulligan and Mr. Vogel is an audit committee
financial expert under applicable SEC rules and
regulations.
Risk
Assessment in Compensation Programs
Following the completion of a risk assessment of our
compensation programs applicable to all employees, we have
concluded that the design and operation of our compensation
programs do not provide our employees with incentive to engage
in business activities or other actions that would threaten the
value of our company or the investment of our stockholders. We
have also concluded that any risks associated with our
compensation programs are not reasonably likely to have a
material adverse effect on our company.
Item 11. | Executive Compensation |
This section sets forth information relating to, and an analysis
and discussion of, compensation paid by our company to:
| William R. Fitzgerald; | |
| George C. Platisa; | |
| William E. Niles; | |
| John A. Orr; and | |
| Jose A. Royo. |
Mr. Fitzgerald is our principal executive officer;
Mr. Platisa is our principal financial officer; and
Messrs. Niles, Orr and Royo are executive officers of our
company. Currently our company does not have any other executive
officers. We refer to Messrs. Fitzgerald, Platisa, Niles,
Orr and Royo in this proxy statement collectively as our
named executive officers.
Compensation
Discussion and Analysis
Overview
The compensation committee of our board of directors has
responsibility for overseeing the compensation of our named
executive officers and ensuring that their compensation packages
are consistent with the companys compensation objectives.
In furtherance of this purpose, our compensation committee
reviews and makes recommendations regarding all cash-based
components of the executive officers compensation packages
and approves periodic corporate goals and objectives upon which
compensation decisions are made. The compensation committee also
administers our equity incentive plans and has the authority to
make and modify grants under, and to approve or disapprove
participation in, such plans.
Objectives
The compensation program for our named executive officers was
designed to meet the following objectives that align with and
support our strategic business goals:
| attracting and retaining executive managers with the industry knowledge, skills, experience and talent to help our company attain its strategic objectives and build long-term company value; | |
| emphasizing variable performance-based compensation components, which include equity-based compensation, by linking individual compensation with corporate operating metrics as well as individual professional achievements; | |
| aligning the interests of management of our company with the interests of our shareholders; and | |
| aligning the interests of management of AMG with the interests of our shareholders. |
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Principles
The following principles are used to guide the design of our
executive compensation program and to ensure that the program is
consistent with the objectives described above:
| Competitive Positioning. We believe that our executive compensation program must provide compensation to our named executive officers that is both reasonable in relation to, and competitive with, the compensation paid to similarly situated employees of companies in our industry and companies with which we compete for talent. These companies include major motion picture studios, broadcast and cable programmers, numerous independent creative services providers, technology suppliers and companies in various industries that operate or manage data and communications networks. See Setting Executive Compensation below. | |
| Pay for Performance Philosophy. We believe our compensation program should align the interests of our named executive officers with the interests of our company and our shareholders by strengthening the link between pay and company and individual performance. Variable compensation, including plan-based awards, may represent a significant portion of the total compensation mix for our named executive officers. |
Role
of Chief Executive Officer in Compensation
Decisions
Our Chief Executive Officer provides recommendations to the
compensation committee with respect to all elements of
compensation proposed to be paid to the other named executive
officers in conjunction with his evaluation of their performance.
Setting
Executive Compensation
Consistent with the principles outlined above, the compensation
committee considers compensation data relating to other
companies in reviewing and approving the compensation packages
of our named executive officers. In 2008, the compensation
committee engaged an outside consultant to compile compensation
data for a select group of peer companies that operate in
various markets within the technology, media, communications and
entertainment industries, and include client-based,
business-to-business
service providers and operators of global data networks. This
peer group was comprised of the following 14 publicly traded
U.S. companies, with which our company shares various
business characteristics, and which we compete for talent:
Activision Blizzard
|
Akamai Technologies | |
Crown Media Holdings
|
DreamWorks Animation | |
Hughes Communications
|
Liberty Media Corporation | |
Lions Gate Entertainment
|
Navarre | |
Palm
|
RealNetworks | |
Schawk
|
Take-Two Interactive Software | |
ValueClick
|
VeriSign |
The compensation committee reviewed and analyzed this
comparative data and, coupled with the committee members
general business and industry knowledge and experience,
established compensation levels for our named executive officers
that the compensation committee believes to be both reasonable
and competitive. The compensation committee did not establish
any specific benchmarking targets in connection with its
comparative review.
Elements
of 2009 Executive Compensation
For 2009, the principal components of compensation for our named
executive officers were:
| base salary; | |
| bonus or non-equity incentive compensation; | |
| equity incentive compensation; and | |
| limited perquisites and personal benefits. |
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A summary of each element of the compensation program for our
named executive officers is set forth below. We believe that
each element complements the others and that together they serve
to achieve our compensation objectives.
Base
Salary
We provide competitive base salaries to attract and retain
high-performing executive talent. We believe that a competitive
base salary is an important component of compensation as it
provides a degree of financial stability for executives. The
base salary level of each named executive officer is generally
determined based on the responsibilities performed by such
officer, his or her experience, overall effectiveness and
demonstrated leadership ability, the performance expectations
set for such officer, and competitive market factors.
Notwithstanding the compensation committees favorable
assessment of the named executive officers performance,
the compensation committee determined not to make any changes to
the base salaries of the named executive officers for 2009 as
part of our companys overall cost containment initiatives.
Bonus
Also consistent with our companys cost containment
initiatives, none of our named executive officers, except for
Mr. Orr, received a cash bonus for services to our company
for the 2009 calendar year. The compensation committee
determined to grant Mr. Orr a cash bonus based on its
positive review of Mr. Orrs performance in 2009 and
an evaluation of market data. The compensation committee took
into account a number of qualitative factors in determining to
grant Mr. Orr a bonus for 2009, without giving a specific
weight to any single factor. In addition, based on the
compensation committees review of market data for
comparable executives, the compensation committee determined
that Mr. Orrs total cash compensation for 2009 was
significantly below that of his peers and, accordingly, he
should be awarded a cash bonus for his 2009 performance. The
other named executive officers, who also received favorable
reviews for their 2009 performance, received an equity award
grant in lieu of a cash bonus. See Equity
Incentive Compensation below.
Non-Equity
Incentive Compensation
MIP. The compensation committee determined not
to grant any awards in 2009 under AMGs Management
Incentive Plan (which we refer to as the
MIP). The MIP has historically provided for
annual cash incentive awards based on company and individual
performance. In response to the impact of the global economic
recession, AMG decided to suspend the MIP for the 2009 calendar
year as a cost saving measure.
LTIP. Each of Messrs. Niles, Platisa and
Royo participates in AMGs 2006 Long-Term Incentive Plan,
as amended and restated as of September 9, 2008 (which we
refer to as the LTIP). The LTIP provides for
the grant by AMG of awards which we refer to as phantom
appreciation rights or PARs to key
employees of AMG. Subject to vesting in accordance with the
LTIP, each PAR measures the increase, if any, in the Value (as
defined below) of a phantom unit under the LTIP from the grant
date to the date of exercise, in each case as defined in
accordance with the LTIP. The LTIP is administered by a
committee, which has authority to determine eligibility under
the LTIP, to grant PARs to eligible personnel thereunder, to
interpret the LTIP for all purposes, including the authority to
make the calculations required by the LTIP in accordance with
the terms thereof, and to make any adjustments provided for
under the LTIP (including, as discussed below, certain
adjustments to PAR Values), subject, in certain cases, to the
approval of our compensation committee.
Pursuant to the LTIP, the Value of a phantom
unit under the LTIP as of any valuation date is equal to the sum
of (i) 6% of cumulative free cash flow (as defined in the
LTIP) over a period of up to six years, divided by 500,000
(which we refer to as the Free Cash Flow
Component) plus (ii) the calculated value of AMG,
based on a formula set forth in the LTIP, divided by 10,000,000
(which we refer to as the Company Value
Component). A maximum of 500,000 PARs may be granted
under the LTIP. PARs that are exercised and paid, and PARs that
are forfeited or canceled or otherwise not paid, are available
for re-grant under the Plan. As of March 31, 2010, an
aggregate of 337,000 PARs have been granted and are outstanding
under the LTIP.
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Under the LTIP, cumulative free cash flow is defined as the
aggregate free cash flow, as of any valuation date, for all
calendar years beginning on or after January 1, 2006 and
ending on or before the applicable valuation date. Under the
LTIP, free cash flow is defined as, for any calendar year:
| the aggregate EBITDA of AMG; | |
| less the sum of the capital expenditures of AMG for such year; | |
| plus the aggregate cash amount actually expended by AMG for such year for payment of taxes other than federal or state income taxes; | |
| plus the portion of any debt service payments allocable to interest on any outstanding debt of AMG for such year. |
The LTIP defines the value of AMG for the purpose of calculating
the Company Value Component as the sum of:
| 7.5 times the aggregate EBITDA of AMG for the calendar year last ended, excluding for this purpose EBITDA under certain long-term networks services contracts (which we refer to as the Value EBITDA Component); plus | |
| the present value of the free cash flow projected to be generated over the life of such long-term networks services contracts, using a 10% discount rate (which we refer to as the Value FCF Component); |
minus the sum of any indebtedness of AMG, the liquidation value
of any preferred equity interests, and the aggregate amount of
AMGs obligations under the then outstanding vested PARs,
and any amounts that are or may become payable under certain
deferred compensation arrangements entered into by AMG or
subsidiaries of AMG (which we refer to as the Value
Additional Adjustments Component); calculated in each
case as provided under the LTIP. Such value is calculated on a
periodic basis pursuant to the terms of the LTIP.
In connection with a September 2008 amendment relating to our
sale of the AccentHealth business, (which we refer to as the
LTIP Amendment), AMG distributed to grantees
who held PARs at the date of the sale certain amounts (which we
refer to as AH Distributions) representing
the increase in Value of a phantom unit under the LTIP
attributable to the increase in the value of AccentHealth and
the cumulative cash flow of AccentHealth from adoption of the
LTIP through the date of the sale. The AH Distributions
commenced in February 2009 and will be made, with respect to
Messrs. Niles, Platisa and Royo, as follows:
Name
|
February 2009 | August 2009 | February 2010 | August 2010 | February 2011 | Total | ||||||||||||||||||
William E. Niles
|
$ | 418,000 | $ | 83,600 | | | | $ | 501,600 | |||||||||||||||
George C. Platisa
|
$ | 418,000 | $ | 83,600 | | | | $ | 501,600 | |||||||||||||||
Jose A. Royo
|
$ | 295,398 | $ | 74,550 | $ | 25,783 | $ | 25,783 | $ | 25,783 | $ | 447,297 |
Following the date of the LTIP Amendment, the Value of phantom
units under the LTIP no longer includes the value and free cash
flow of AccentHealth, and the grant date Value of outstanding
PARs was adjusted to reflect the exclusion, as described below.
As of December 31, 2009, (i) Messrs. Niles,
Platisa and Royo had received grants, made as of August 3,
2006, of 60,000 PARs, 60,000 PARs and 35,000 PARs, respectively
(which we refer to as the August 2006 Grants)
and (ii) Mr. Royo had received an additional grant,
made as of February 11, 2008, of 35,000 PARs (which we
refer to as the February 2008 Grant), in each
case subject to vesting as described below. The initial Value of
the PARs granted pursuant to the August 2006 Grants was $50.50
as of the date of such grants, and was adjusted downward to
$45.25 pursuant to the LTIP Amendment. The initial Value of the
PARs granted pursuant to the February 2008 Grant was $49.91 as
of the date of such grant, and was adjusted downward to $40.72
pursuant to the LTIP Amendment. There were no grants under the
LTIP in 2009.
The amount, if any, by which the Value of a phantom unit on the
exercise date of a PAR exceeds the grant date Value of a phantom
unit is referred to under the LTIP as the PAR Value
of such PAR. As of December 31, 2009, all PARs granted
prior to such date had a PAR Value of zero (if exercised on such
date) because the Value of each such PAR was less than the grant
date Value of such PAR.
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Awards under the LTIP (including the right to receive any future
AH Distributions, as applicable) are subject to vesting. Unless
otherwise determined by the committee in connection with any
grant, and set forth in the applicable grant agreement, each
award under the LTIP will vest in 12 equal quarterly
installments over the
36-month
period following the Grant Date, so long as the grantee remains
continuously employed by our company on a full-time basis. A
grantee who dies or becomes disabled while employed will be 100%
vested in his or her PARs as of the date of death or disability.
Upon the termination of employment of a grantee, for any reason
other than a termination for Cause as defined in the LTIP, such
grantee will be deemed to exercise all of his or her vested PARs
on the grantees termination date, based on the PAR Value
as of the valuation date last preceding or on the date of
termination, and all unvested PARs will be terminated. All PARs,
whether vested or unvested, will automatically terminate
unexercised upon any termination of employment of the grantee
for Cause. All vested PARs then outstanding will be
automatically exercised upon a change of control (as defined in
the LTIP) or, if no change of control has then occurred, on
March 31, 2012, which is referred to under the LTIP as the
Payment Date. Pursuant to the LTIP, PARs may
not be exercised in any other manner except as described above.
Following the exercise of vested PARs, if the PAR Value of such
vested PARs is greater than zero, the grantee shall be entitled
to receive consideration in the amount of such PAR Value,
including interest (in the event of an exercise upon a change of
control) from the date of exercise to the date of payment at the
rate of three month LIBOR as published in the Wall Street
Journal. Such consideration shall be payable at the earlier of
the Payment Date and six months after the grantees
separation from service (as defined in the LTIP). Any such
consideration and all AH Distributions shall be payable in cash
or, at the discretion of the committee, in shares of any
publicly-traded class or series of common stock of AMG (if AMG
is at such time a publicly-traded corporation) or of any
corporate affiliate of AMG designated by the committee.
Equity
Incentive Compensation
Consistent with our compensation philosophy, we seek to align
the interests of our named executive officers with those of
stockholders by awarding equity-based incentive compensation,
ensuring that our executives have a continuing stake in the
long-term success of our company and our subsidiaries.
The Ascent Media Corporation 2008 Incentive Plan (which we refer
to as the incentive plan) provides for the
grant of a variety of incentive awards, including non-qualified
stock options, stock appreciation rights (which we refer to as
SARs), restricted shares, stock units, cash
awards and performance awards and is administered by our
compensation committee. On January 16, 2009, under the
incentive plan, each of Messrs. Niles and Platisa received
a grant of options to purchase 27,640 shares of our
Series A common stock and Mr. Royo received a grant of
options to purchase 41,460 shares of our Series A
common stock at an exercise price of $25.09 (which was the
closing market price on the grant date). Those options vest
quarterly over a four-year period and have a term of ten years,
subject to certain specified early termination events.
Messrs. Fitzgerald and Orr did not participate in this
grant because they had already received equity awards at the end
of 2008.
In addition, on March 1, 2010 the compensation committee
granted each of Messrs. Fitzgerald, Royo, Platisa and Niles
an award of restricted shares to reward them for their 2009
performance. The restricted shares vest in four equal quarterly
installments with the first such installment having vested on
March 17, 2010. These restricted shares were granted in
lieu of cash bonuses to better align the interests of such
executive officers with our stockholders and were based on the
compensation committees favorable review of each of their
performance in 2009. The compensation committee took into
account a number of qualitative factors in determining to reward
these named executive officers for their 2009 performance,
without giving a specific weight to any single factor.
Mr. Orr did not participate in this grant because he had
received a grant in 2008 consisting of both options and
restricted shares, and the compensation committee determined
that his existing equity compensation is a significant enough
portion of his total compensation to ensure that his interests
are aligned with those of our stockholders. Rather, Mr. Orr
received a cash bonus for his services in 2009 as described
under Bonus above.
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Perquisites
and Personal Benefits
In the year ended December 31, 2009, the limited
perquisites and personal benefits provided to our named
executive officers consisted generally of term life insurance
premiums and 401(k) matching contributions. We also offered our
named executive officers other benefits that are available on
the same basis to all of our salaried employees, such as medical
and disability insurance premiums.
Relocation
Assistance and Related Tax
Gross-Up
Consistent with our objective to attract and retain a
high-performing executive management team, we may recruit
candidates from throughout the U.S. to fill executive level
openings and will reimburse the newly hired executive for
relocation costs. To the extent such reimbursement is taxable to
the recipient, we may also provide a cash payment to the
recipient to offset the tax payable on such reimbursement, in
whole or in part, taking into account the tax payable by the
recipient on such tax
gross-up as
well.
Changes
to Compensation Programs for 2010
The compensation committee has reviewed the compensation to be
paid to Mr. Orr for the 2010 calendar year in light of his
experience and responsibilities as an officer of our company and
has determined to increase Mr. Orrs annual base
salary to better align his base salary with those of his market
peers. The base salaries of the other named executive officers
for 2010 will remain the same as part of our companys cost
containment initiatives. In February 2010, AMG determined not to
implement the MIP for the 2010 plan year. To date, there have
been no grants under the LTIP in 2010. We expect that any cash
bonus paid to our executive officers for their 2010 performance
will be determined in the discretion of the compensation
committee.
Summary
Compensation Table
The following table sets forth information regarding the
compensation paid to our named executive officers during the
years ended December 31, 2009, 2008 and 2007 for services
to Ascent Media and its subsidiaries. Such compensation includes
amounts paid:
| following the date of our spin-off, by us directly; | |
| following the date of our spin-off, to Mr. Fitzgerald and Mr. Orr by Liberty Media for which we reimbursed Liberty Media pursuant to the terms of the Services Agreement, dated as of July 21, 2005 (which we refer to as the services agreement), between DHC and Liberty Media, which was assigned by DHC to our company in connection with the spin-off; | |
| prior to the date of the spin-off, to Mr. Fitzgerald by Liberty Media, to the extent allocated to services provided by Mr. Fitzgerald to DHC and its subsidiaries, including AMG, under the services agreement; and | |
| to Messrs. Niles, Platisa and Royo, by AMG. |
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SUMMARY
COMPENSATION TABLE
Non-Equity |
||||||||||||||||||||||||||||||||
Stock |
Option |
Incentive Plan |
All Other |
|||||||||||||||||||||||||||||
Name and Principal Position
|
Year | Salary | Bonus | Awards(1)(2) | Awards(1) | Compensation(3) | Compensation | Total | ||||||||||||||||||||||||
William R. Fitzgerald
|
2009 | $ | 426,248 | (4) | | | | | $ | 5,384 | (5)(9) | $ | 431,632 | |||||||||||||||||||
Chairman and Chief
|
2008 | $ | 415,188 | (6) | $ | 59,108 | $ | 1,999,999 | $ | 3,789,884 | | $ | 30,707 | (6) | $ | 6,294,886 | ||||||||||||||||
Executive Officer
|
2007 | $ | 332,500 | (6) | | | | | $ | 49,875 | (6) | $ | 382,375 | |||||||||||||||||||
William E. Niles
|
2009 | $ | 509,845 | | | $ | 336,655 | | $ | 8,770 | (9) | $ | 855,270 | |||||||||||||||||||
Executive Vice
|
2008 | $ | 488,842 | | | | $ | 687,663 | (7)(8) | $ | 8,501 | (9) | $ | 1,185,006 | ||||||||||||||||||
President, General
|
2007 | $ | 440,000 | | | | $ | 143,320 | (7) | $ | 7,948 | (9) | $ | 591,268 | ||||||||||||||||||
Counsel and Secretary
|
||||||||||||||||||||||||||||||||
John A. Orr
|
2009 | $ | 321,250 | $ | 125,000 | | | | $ | 1,826 | (9) | $ | 448,076 | |||||||||||||||||||
Senior Vice President
|
2008 | $ | 83,389 | $ | 54,844 | $ | 799,993 | $ | 1,432,356 | | $ | 11,119 | (6) | $ | 2,381,701 | |||||||||||||||||
2007 | | | | | | | | |||||||||||||||||||||||||
George C. Platisa
|
2009 | $ | 509,845 | | | $ | 336,655 | | $ | 10,320 | (9) | $ | 856,820 | |||||||||||||||||||
Executive Vice
|
2008 | $ | 490,323 | | | | $ | 680,872 | (7)(8) | $ | 9,951 | (9) | $ | 1,181,146 | ||||||||||||||||||
President and Chief
|
2007 | $ | 475,000 | | | | $ | 147,595 | (7) | $ | 9,484 | (9) | $ | 632,079 | ||||||||||||||||||
Financial Officer
|
||||||||||||||||||||||||||||||||
Jose A. Royo
|
2009 | $ | 623,077 | | | $ | 504,983 | | $ | 8,886 | (9) | $ | 1,136,946 | |||||||||||||||||||
President and Chief
|
2008 | $ | 563,846 | | | | $ | 661,908 | (7)(8) | $ | 1,377 | (9) | $ | 1,227,131 | ||||||||||||||||||
Operating Officer
|
2007 | $ | 337,731 | (10) | | | | $ | 77,006 | (7) | $ | 372 | (9) | $ | 415,109 |
(1) | The aggregate grant date fair value of stock awards and option awards has been computed in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for estimated forfeitures. For a description of the assumptions applied in these calculations, see Note 12 to our consolidated financial statements for the year ended December 31, 2009 (which are included in our Annual Report on Form 10-K as filed with the SEC on March 12, 2010). | |
(2) | Does not include restricted stock awards granted in March 2010 for services rendered in 2009. See Compensation Discussion and Analysis Elements of 2009 Executive Compensation Equity Incentive Compensation above. | |
(3) | Amounts granted pursuant to the LTIP (which include PARs and the AH Distributions) represent Non-Equity Incentive Plan Compensation. Because the Value of each PAR granted to our named executive officers does not exceed the initial Value of such PARs, as of December 31, 2009, the PAR Value of each such PAR, as of December 31, 2009, is zero. Accordingly, no amounts are recorded in the Summary Compensation Table reflecting the value of any outstanding PARs held by our named executive officers. The full amounts of the AH Distributions (including future payments) are recorded in the Summary Compensation Table. See footnote (7) below. | |
(4) | Includes amounts for Mr. Fitzgeralds salary for January 2009 paid to Liberty Media pursuant to the services agreement. | |
(5) | Includes amounts paid to Mr. Fitzgerald for tax preparation fees. | |
(6) | Includes amounts paid by our company and/or DHC, as applicable, to Liberty Media pursuant to the services agreement for portions of the applicable officers salary and benefits. | |
(7) | Includes, as applicable, the following amounts paid pursuant to the MIP: |
Amounts ($) | ||||||||
Name
|
2008 | 2007 | ||||||
William E. Niles
|
186,063 | 143,320 | ||||||
George C. Platisa
|
179,272 | 147,595 | ||||||
Jose A. Royo
|
214,611 | 77,006 |
(8) | Includes, as applicable, the following amounts paid, and to be paid, as AH Distributions: |
Name
|
Amounts ($) | |||
William E. Niles
|
501,600 | |||
George C. Platisa
|
501,600 | |||
Jose A. Royo
|
447,297 |
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(9) | Includes the following matching contributions to the applicable named executive officers 401(k) account: |
Amounts ($) | ||||||||||||
Name
|
2009 | 2008 | 2007 | |||||||||
William E. Niles
|
8,250 | 7,750 | 7,500 | |||||||||
George C. Platisa
|
9,800 | 9,200 | 9,000 | |||||||||
John A. Orr
|
1,498 | | | |||||||||
Jose A. Royo
|
8,250 | | |
Includes the following term life insurance premiums:
Amounts ($) | ||||||||||||
Name
|
2009 | 2008 | 2007 | |||||||||
William R. Fitzgerald
|
384 | | | |||||||||
William E. Niles
|
520 | 751 | 448 | |||||||||
John A. Orr
|
328 | | | |||||||||
George C. Platisa
|
520 | 751 | 484 | |||||||||
Jose A. Royo
|
636 | 1,377 | 372 |
(10) | Includes $10,231 paid to retroactively increase Mr. Royos salary for the year ended December 31, 2006. |
Employment
Agreements
Each of Messrs. Fitzgerald and Orr has entered into an
employment agreement with our company, and each of
Messrs. Platisa, Niles and Royo has entered an employment
agreement with AMG, which agreements in each case set forth the
respective terms and conditions of the applicable named
executive officers employment. The material terms of the
employment agreements of our named executive officers are set
forth below.
Term
The term of the employment agreements of each of
Messrs. Fitzgerald and Orr is five years, commencing
effective as of September 17, 2008 (the date of the
spin-off of our company from DHC) and ending on
September 16, 2013. The term of the employment agreements
of each of Messrs. Niles, Platisa and Royo is five years,
commencing on September 1, 2006 and ending on
August 31, 2011.
Base
Salary
Pursuant to their respective employment agreements, each of our
named executive officers receives a base salary that is subject
to an annual review for increase by the compensation committee.
The 2009 base salaries for each of our named executive officers
are set forth in the Summary Compensation Table
above.
Bonus
Each of Messrs. Fitzgerald and Orr is eligible to receive a
bonus in a certain range based on percentages of the applicable
named executive officers base salary (75% to 150% in the
case of Mr. Fitzgerald, and 50% to 75% in the case of
Mr. Orr). Each of Messrs. Fitzgeralds and
Orrs entitlement to receive such bonus, and the actual
amount thereof, is determined by the compensation committee in
its sole discretion based on the applicable named executive
officers achievement of certain performance criteria as
the compensation committee may establish in its sole discretion.
Equity
Incentive Awards
Each of the employment agreements of Messrs. Fitzgerald and
Orr memorialized stock option and restricted stock grants
previously made under the incentive plan to the applicable named
executive officer, as previously reported.
Mr. Fitzgeralds employment agreement provided for the
grant of the following equity awards: (i) options to
purchase 347,059 shares of our Series A common stock
at an exercise price of $21.81 and (ii) 91,701 restricted
shares of our Series A common stock. Mr. Orrs
employment agreement provided for the grant of the following
14
Table of Contents
equity awards: (i) options to purchase 121,799 shares
of our Series A common stock at an exercise price of $23.16
and (ii) 34,542 restricted shares of our Series A
common stock. See Outstanding Equity Awards at
Fiscal Year-End below.
Non-Equity
Incentive Awards
The employment agreements of each of Messrs. Platisa, Niles
and Royo entitle the applicable named executive officer to
participate in the MIP and the LTIP or any similar plan. For a
description of the MIP and the LTIP, and amounts paid thereunder
with respect to the fiscal year ended December 31, 2009,
see Compensation Discussion and
Analysis Elements of 2009 Executive
Compensation Non-Equity Incentive Compensation
above.
Termination
The terms and conditions of compensation payable upon
termination of the employment of each named executive officer
are summarized in Potential Payments Upon
Termination or
Change-in-Control
below.
Gross-Up
Under Mr. Fitzgeralds employment agreement, if any
payment or distribution in the nature of compensation (as
defined in Section 280G(b)(2) of the Code) to or for the
benefit of Mr. Fitzgerald would be subject to excise tax
imposed by Section 4999 of the Code, Mr. Fitzgerald
will be entitled to receive a
gross-up
payment equivalent on an after-tax basis to the amount of such
excise tax.
Effect
on Prior Arrangements
From the date of the spin-off until the date of their respective
employment agreements, each of Messrs. Fitzgerald and Orr
provided services to our company under the services agreement.
Under the services agreement, Liberty Media agreed to make
available the services of certain Liberty Media personnel,
including Messrs. Fitzgerald and Orr, to our company and we
agreed to reimburse Liberty Media for that portion of such
personnels salary and benefits as allocated to such
personnels service to our company.
As a result of the execution of Mr. Fitzgeralds
employment agreement, beginning in February 2009, we pay
Mr. Fitzgeralds base salary directly and have no
reimbursement obligation to Liberty Media with respect thereto.
Mr. Fitzgeralds base salary for January 2009 was
payable by Liberty Media pursuant to the services agreement and
partially reimbursable by our company. Liberty Media ceased
providing compensation to Mr. Orr, and our reimbursement
obligation to Liberty Media respect thereto ceased, on
December 31, 2008. See Item 13. Certain
Relationships and Related Transactions, and Director
Independence Transactions with Related
Persons Services Agreement with Liberty Media.
Grants of
Plan-Based Awards
The following table contains information regarding plan-based
incentive awards granted during the year ended December 31,
2009.
All Other Option |
||||||||||||||||
Awards: Number of |
||||||||||||||||
Securities |
Exercise or Base |
Grant Date Fair |
||||||||||||||
Underlying Options |
Price of Option |
Value of Stock and |
||||||||||||||
Name
|
Grant Date | (#)(1) | Awards ($) | Option Awards ($) | ||||||||||||
William R. Fitzgerald
|
| | | | ||||||||||||
William E. Niles
|
1/16/2009 | 27,640 | $ | 25.09 | $ | 336,655 | ||||||||||
John A. Orr
|
| | | | ||||||||||||
George C. Platisa
|
1/16/2009 | 27,640 | $ | 25.09 | $ | 336,655 | ||||||||||
Jose A. Royo
|
1/16/2009 | 41,460 | $ | 25.09 | $ | 504,983 |
(1) | Vests quarterly over 4 years from grant date. See Compensation Discussion and Analysis Elements of 2009 Executive Compensation Equity Incentive Compensation above. |
15
Table of Contents
Outstanding
Equity Awards at Fiscal Year-End
The following table contains information regarding unexercised
options to acquire shares of our common stock, and unvested
restricted stock awards, which were outstanding as of
December 31, 2009 and held by any of our named executive
officers, including those awards granted during 2009 and
reflected in the Grants of Plan-Based Awards table
above.
Option Awards | Stock Awards | |||||||||||||||||||||||
Number of |
Number of |
|||||||||||||||||||||||
Securities |
Securities |
|||||||||||||||||||||||
Underlying |
Underlying |
Market Value of |
||||||||||||||||||||||
Unexercised |
Unexercised |
Option |
Option |
Number of Shares or |
Shares or Units of |
|||||||||||||||||||
Options- |
Options- |
Exercise |
Expiration |
Units of Stock That |
Stock That Have Not |
|||||||||||||||||||
Name
|
Exercisable | Unexercisable | Price ($) | Date | Have Not Vested (#) | Vested ($) | ||||||||||||||||||
William R. Fitzgerald
|
||||||||||||||||||||||||
Option Awards
|
||||||||||||||||||||||||
Series A
|
86,763 | 260,296 | (1) | $ | 21.81 | 9/17/2018 | | | ||||||||||||||||
Stock Awards
|
||||||||||||||||||||||||
Series A
|
| | | | 63,045 | (3) | $1,609,539 | |||||||||||||||||
William E. Niles
|
||||||||||||||||||||||||
Option Awards
|
||||||||||||||||||||||||
Series A
|
5,181 | 22,459 | (2) | $ | 25.09 | 1/16/2019 | | | ||||||||||||||||
Stock Awards
|
||||||||||||||||||||||||
Series A
|
| | | | | | ||||||||||||||||||
John A. Orr
|
||||||||||||||||||||||||
Option Awards
|
||||||||||||||||||||||||
Series A
|
30,448 | 91,351 | (1) | $ | 23.16 | 9/17/2018 | | | ||||||||||||||||
Stock Awards
|
||||||||||||||||||||||||
Series A
|
| | | | 23,748 | (3) | $606,286 | |||||||||||||||||
George C. Platisa
|
||||||||||||||||||||||||
Option Awards
|
||||||||||||||||||||||||
Series A
|
5,181 | 22,459 | (2) | $ | 25.09 | 1/16/2019 | | | ||||||||||||||||
Stock Awards
|
||||||||||||||||||||||||
Series A
|
| | | | | | ||||||||||||||||||
Jose A. Royo
|
||||||||||||||||||||||||
Option Awards
|
||||||||||||||||||||||||
Series A
|
7,773 | 33,687 | (2) | $ | 25.09 | 1/16/2019 | | | ||||||||||||||||
Stock Awards
|
||||||||||||||||||||||||
Series A
|
| | | | | |
(1) | Vests quarterly over five years from September 17, 2008. | |
(2) | Vests quarterly over four years from January 16, 2009. | |
(3) | Vests quarterly over four years from September 17, 2008. |
16
Table of Contents
Option
Exercises and Stock Vested
No options to purchase shares of our common stock were exercised
by our named executive officers during the year ended
December 31, 2009.
The following table sets forth information regarding the vesting
of restricted stock held by our named executive officers, in
each case, during the year ended December 31, 2009.
Stock Awards | ||||||||
Number of Shares |
||||||||
Acquired on Vesting |
Value Realized on |
|||||||
Name
|
(#)(1) | Vesting ($) | ||||||
William R. Fitzgerald
|
||||||||
Series A
|
22,925 | $ | 583,270 | |||||
John A. Orr
|
||||||||
Series A
|
8,635 | $ | 219,697 |
(1) | Includes shares withheld in payment of withholding taxes at election of holder. |
Potential
Payments Upon Termination or
Change-in-Control
Each of the employment agreements of our named executive
officers provides for certain severance payments in the event of
the termination of the employment of the applicable named
executive officer, with adjustments to be made to such severance
payments if such named executive officers employment is
terminated concurrently with or following a change of control of
our company.
Change
of Control
Under each of the employment agreements of
Messrs. Fitzgerald and Orr, a change of control of our
company will be deemed to have occurred if any of the following
occurs:
(i) any person or group (other than Mr. Malone and
certain affiliates, each of whom we refer to as an
Ascent Permitted Holder) acquires, together
with stock already held by such person or group, more than 50%
of the total fair market value or more than 50% of the total
voting power of the stock of our company;
(ii) any person or group (other than an Ascent Permitted
Holder) acquires, in a single transaction or in multiple
transactions during a
12-month
period, assets of our company having a gross fair market value
of 40% or more of the total gross fair market value of all of
our companys assets immediately prior to such acquisition
or acquisitions;
(iii) any person or group (other than an Ascent Permitted
Holder) acquires, in a single transaction or in multiple
transactions during a
12-month
period, 30% or more of the total voting power of the stock of
our company; or
(iv) a majority of our companys board of directors is
replaced during any
12-month
period by directors whose appointment or election is not
endorsed by a majority of the board of directors before the date
of appointment or election.
Under each of the employment agreements of Messrs. Royo,
Niles and Platisa, a change of control of AMG will be deemed to
have occurred if any person or group (other than one or more of
a parent entity of AMG, Mr. Malone and certain affiliates
of each, each of whom we refer to as an AMG Permitted Holder):
(i) acquires, directly or indirectly, all or substantially
all of the assets of AMG; or
(ii) becomes the beneficial owner of more than 50% of the
aggregate voting power of AMGs outstanding voting
securities, and such person or group beneficially owns a greater
percentage of such aggregate voting power than owned in the
aggregate by the AMG Permitted Holders, subject to certain
exceptions.
17
Table of Contents
Termination
for Cause
If our company (in the case of Messrs. Fitzgerald and Orr)
or AMG (in the case of Messrs. Niles, Platisa and Royo)
terminates any named executive officers employment for
Cause, our company or AMG, as applicable, will have
no further liability or obligations under the applicable
agreement to such named executive officer other than accrued but
unpaid base salary, vacation days and expenses.
Cause is defined in each employment agreement to
include: breaches of material obligations under the applicable
employment agreement; continued failure to perform the
applicable named executive officers duties; material
violations of company policies or applicable laws and
regulations; fraud, dishonesty or misrepresentation; gross
negligence in the performance of duties; conviction of a felony
or crime of moral turpitude; and other misconduct that is
materially injurious to our financial condition or business
reputation.
Termination
Without Cause
If our company terminates the employment of Mr. Fitzgerald
or Mr. Orr without cause, our company becomes obligated to
pay the applicable named executive officer:
(i) accrued but unpaid base salary and vacation time;
(ii) a severance payment equal to:
| if termination occurs prior to a change of control, as defined in the employment agreement, the product of 2 (in the case of Mr. Fitzgerald) or 1 (in the case of Mr. Orr) times the sum of (A) the named executive officers base salary (B) plus the named executive officers minimum target bonus (equal to 75%, in the case of Mr. Fitzgerald, or 50%, in the case of Mr. Orr, of the named executive officers base salary); or | |
| if termination occurs concurrently with or following such a change of control, the product of 2.5 (in the case of Mr. Fitzgerald) or 1.5 (in the case of Mr. Orr) times the sum of (A) the named executive officers base salary (B) plus the named executive officers minimum target bonus (equal to 75%, in the case of Mr. Fitzgerald, or 50%, in the case of Mr. Orr, of the named executive officers base salary); |
(iii) accrued but unpaid bonus for the calendar year prior
to the year in which the termination occurs; and
(iv) incurred but unpaid expenses.
If AMG terminates the employment of Mr. Royo,
Mr. Niles or Mr. Platisa without cause, AMG becomes
obligated to pay the applicable named executive officer:
(i) accrued but unpaid base salary and vacation time;
(ii) a severance payment equal to:
| if termination occurs prior to a change of control, as defined in the employment agreement, the named executive officers base salary times 2.0; or | |
| if termination occurs concurrently with or following such a change of control, the product of 2.5 times the sum of (A) the named executive officers base salary and (B) an amount equal to the named executive officers average bonus award under the MIP for the preceding two years (or, if greater, 60% of the named executive officers target award under the MIP for the year of termination), in each case calculated as a percentage of base salary and applied to the named executive officers then current base salary; |
(iii) in lieu of any award payable under the MIP with
respect to the applicable year of termination:
| if termination occurs prior to a change of control, as defined in the employment agreement, and (i) on a date that is on or prior to June 30 of the calendar year in which the termination occurs, an amount equal to the product of the named executive officers base salary for the year of termination multiplied by the named executive officers average bonus award under the MIP |
18
Table of Contents
for the preceding two years, calculated as a percentage of base salary and applied to the named executive officers then current base salary (or, if greater, 60% of the named executive officers target award under the MIP for the year of termination), in each case calculated as a percentage of base salary, or (ii) on a date that is after June 30 of such calendar year, the greater of the amount determined in item (i) above or an amount equal to the named executive officers actual bonus award under the MIP for the applicable year, in each case prorated to the date of termination; or |
| if termination occurs concurrently with or following such change of control, an amount equal to the named executive officers average bonus award under the MIP for the preceding two years (or, if greater, 60% of the named executive officers target award under the MIP for the year of termination), in each case calculated as a percentage of base salary and applied to the named executive officers then current base salary, prorated to the date of termination; and |
(iv) incurred but unpaid expenses.
Termination
with Good Reason
Subject to certain notice provisions and our companys
rights with respect to a cure period or AMGs rights with
respect to a renegotiation period, as applicable, each of our
named executive officers may terminate his employment for
Good Reason and receive the same payments as if such
named executive officers employment was terminated without
Cause. Good Reason is defined in each employment
agreement to include:
| in the case of Mr. Fitzgerald, a material reduction in base salary, a material reduction in Mr. Fitzgeralds responsibilities with our company, a material change in the office or location at which Mr. Fitzgerald is required to perform services and a material breach by our company of any provision in the Fitzgerald Employment Agreement; | |
| in the case of Mr. Orr, a material reduction in base salary and a material breach by our company of any provision of the Orr Employment Agreement; and | |
| in the case of Messrs. Niles, Platisa and Royo, a reduction in base salary, a breach by AMG of any material term of the applicable employment agreement, the relocation of the applicable named executive officers principal place of employment by more than 35 miles and the failure of the parties to negotiate a new, mutually acceptable employment agreement following a change of control. |
Death
or Disability
In the event any of our named executive officers dies or becomes
disabled during such named executive officers term of
employment, our company or AMG, as applicable, becomes obligated
to pay such named executive officer (or his legal
representative, as applicable):
(i) any accrued but unpaid base salary and vacation time;
(ii) incurred but unpaid expenses;
(iii) in the case of Mr. Fitzgerald, a lump sum amount
equal to Mr. Fitzgeralds annual base salary in effect
on the date of termination multiplied by 2 (except if
Mr. Fitzgerald is covered by our companys basic life
insurance group benefit plan, in which case the lump sum will be
reduced to an amount equal to Mr. Fitzgeralds annual
base salary in effect on the date of termination);
(iv) in the case of Messrs. Niles or Platisa, a lump
sum amount equal to such named executive officers monthly
base salary in effect on the date of termination for the lesser
of six months or the remainder of the term of the applicable
employment agreement; and
(v) in the case of Mr. Royo an amount equal to the
present value of the payments of base salary Mr. Royo would
have received during the
24-month
period following such termination, calculated by applying a 6%
annual rate of interest without compounding.
19
Table of Contents
Non-Renewal
Each of the employment agreements of Messrs. Fitzgerald,
Niles, Platisa and Royo provides that, absent a prior change of
control, if a new employment agreement is not executed to
continue the applicable named executive officers
employment beyond the term of the employment agreement, such
named executive officer will be deemed terminated without Cause
(except that if such named executive officer does not accept an
offered employment agreement on terms at least as favorable as
the employment agreement then in effect, such named executive
officer shall be entitled to 1.0 times base salary, rather than
2.0 times base salary, as a severance payment).
LTIP
For a description of the LTIP and the PARs granted thereunder,
see Compensation Discussion and
Analysis Elements of 2009 Executive
Compensation Non-Equity Incentive
Compensation LTIP above. In the event of a
change of control of AMG with respect to each PAR granted to a
grantee that remains an employee of AMG or one of its
subsidiaries on the date of such change of control:
| the grantee will become 100% vested in such grantees PARs as of the date of such change of control; and | |
| the grantee will be deemed to have exercised such grantees PARs as of the date of such change of control, with the applicable PAR Value to be determined by the LTIP committee in good faith based on the fair market value of the net proceeds received in connection with the change of control. |
Under the LTIP, a change in control will be deemed
to have occurred if there occurs a change in ownership of AMG or
a change in ownership in a substantial portion of AMGs
assets. A change in ownership is deemed to have occurred if any
person acquires ownership of the equity of AMG that constitutes
more than 50% of the total fair market value or more than 50% of
the total voting power of the equity of AMG. However, if any
person or group already owns more than 50% of the total fair
market value or more than 50% of the total voting power of AMG
equity at the time of such acquisition, the acquisition of
additional equity by the same person or group is not considered
to cause a change in ownership. A change in the ownership of a
substantial portion of AMGs assets is deemed to have
occurred if any person or group acquires 40% or more of the
total gross fair market value of AMGs assets. In either
case, there is no change in control when there is a transfer to
a person that is controlled by the shareholders of AMG
immediately after the transfer.
Incentive
Plan
Under certain conditions, including the occurrence of certain
approved transactions, a board change or a control purchase (all
as defined in the incentive plan), options and SARs will become
immediately exercisable, the restrictions on restricted shares
will lapse and stock units will become fully vested, unless
individual agreements state otherwise. At the time an award is
granted, the compensation committee will determine, and the
relevant agreement will provide for, any vesting or early
termination, upon a holders termination of employment with
our company, of any unvested options, SARs, stock units or
restricted shares, and the period following any such termination
during which any vested options, SARs and stock units must be
exercised. Unless otherwise provided in the relevant agreement,
(1) no option or SAR may be exercised after its scheduled
expiration date, (2) if the holders service
terminates by reason of death or disability (as defined in the
incentive plan), his or her options or SARs shall remain
exercisable for a period of at least one year following such
termination (but not later than the scheduled expiration date)
and (3) any termination of the holders service for
cause (as defined in the incentive plan) will result
in the immediate termination of all options, SARs and stock
units and the forfeiture of all rights to any restricted shares
retained distributions, unpaid dividend equivalents and related
cash amounts held by such terminated holder. If a holders
service terminates due to death or disability, options and SARs
will become immediately exercisable, the restrictions on
restricted shares will lapse and stock units will become fully
vested, unless individual agreements state otherwise.
20
Table of Contents
Benefits
Payable Upon Termination
The following table sets forth benefits that would have been
payable to each named executive officer if the employment of
such named executive officer had been terminated on
December 31, 2009, assumes that all salary, bonus and
expense reimbursement amounts due on or before December 31,
2009 had been paid in full as of such date and does not include
any amounts payable pursuant to the LTIP as the PAR Value of all
PARs granted prior to December 31, 2009 was zero on such
date. For more information regarding the number of PARs held by
our named executive officers see PARs
below.
Termination |
||||||||||||||||||||||||
Termination |
Without Cause or |
|||||||||||||||||||||||
Without Cause or |
for Good Reason |
|||||||||||||||||||||||
Voluntary |
Termination |
for Good Reason |
(No Change in |
|||||||||||||||||||||
Name
|
Termination | for Cause | (Change in Control) | Control) | Death | Disability | ||||||||||||||||||
William R. Fitzgerald
|
||||||||||||||||||||||||
Severance
|
| | $ | 1,863,750 | $ | 1,491,000 | $ | 852,000 | $ | 852,000 | ||||||||||||||
Bonus
|
| | | | | | ||||||||||||||||||
Restricted Stock
|
| | $ | 1,609,539 | | $ | 1,609,539 | $ | 1,609,539 | |||||||||||||||
Options
|
$ | 322,766 | | $ | 1,291,059 | $ | 322,766 | $ | 1,291,059 | $ | 1,291,059 | |||||||||||||
Total
|
$ | 322,766 | | $ | 4,764,348 | $ | 1,813,766 | $ | 3,752,598 | $ | 3,752,598 | |||||||||||||
William E. Niles
|
||||||||||||||||||||||||
Severance
|
| | $ | 1,661,421 | $ | 982,000 | $ | 245,500 | $ | 245,500 | ||||||||||||||
Bonus
|
| | $ | 173,569 | $ | 173,569 | | | ||||||||||||||||
Restricted Stock
|
| | | | | | ||||||||||||||||||
Options
|
$ | 2,281 | | $ | 12,162 | $ | 2,281 | $ | 12,162 | $ | 12,162 | |||||||||||||
Total
|
$ | 2,281 | | $ | 1,847,152 | $ | 1,157,850 | $ | 257,662 | $ | 257,662 | |||||||||||||
John A. Orr
|
||||||||||||||||||||||||
Severance
|
| | $ | 731,250 | $ | 487,500 | | | ||||||||||||||||
Bonus
|
| | | | | | ||||||||||||||||||
Restricted Stock
|
| | $ | 606,286 | | $ | 606,286 | $ | 606,286 | |||||||||||||||
Options
|
$ | 72,167 | | $ | 288,664 | $ | 72,167 | $ | 288,664 | $ | 288,664 | |||||||||||||
Total
|
$ | 72,167 | | $ | 1,626,200 | $ | 559,667 | $ | 894,950 | $ | 894,950 | |||||||||||||
George C. Platisa
|
||||||||||||||||||||||||
Severance
|
| | $ | 1,643,009 | $ | 982,000 | $ | 245,500 | $ | 245,500 | ||||||||||||||
Bonus
|
| | $ | 166,204 | $ | 166,204 | | | ||||||||||||||||
Restricted Stock
|
| | | | | | ||||||||||||||||||
Options
|
$ | 2,281 | | $ | 12,162 | $ | 2,281 | $ | 12,162 | $ | 12,162 | |||||||||||||
Total
|
$ | 2,281 | | $ | 1,821,375 | $ | 1,150,485 | $ | 257,662 | $ | 257,662 | |||||||||||||
Jose A. Royo
|
||||||||||||||||||||||||
Severance
|
| | $ | 1,956,750 | $ | 1,200,000 | $ | 1,133,784 | $ | 1,133,784 | ||||||||||||||
Bonus
|
| | $ | 182,700 | $ | 182,700 | | | ||||||||||||||||
Restricted Stock
|
| | | | | | ||||||||||||||||||
Options
|
$ | 3,421 | | $ | 18,242 | $ | 3,421 | $ | 18,242 | $ | 18,242 | |||||||||||||
Total
|
$ | 3,421 | | $ | 2,157,692 | $ | 1,386,121 | $ | 1,152,026 | $ | 1,152,026 |
PARs. The following sets forth (i) the
number of PARs held by our named executive officers that had
vested as of December 31, 2009 and (ii) the number of
PARs held by our named executive officers that would have vested
as of December 31, 2009 assuming a change of control had
occurred prior to such date:
Number of Pars Held |
||||||||
That Would Have Vested |
||||||||
Number of Pars Held |
As of December 31, |
|||||||
That had Vested as of |
2009 Assuming a Change |
|||||||
Name
|
December 31, 2009 | of Control | ||||||
William R. Fitzgerald
|
| | ||||||
William E. Niles
|
60,000 | 60,000 | ||||||
John A. Orr
|
| | ||||||
George C. Platisa
|
60,000 | 60,000 | ||||||
Jose A. Royo
|
58,333 | 70,000 |
21
Table of Contents
Compensation
of Directors
Our directors who are also employees of our company receive no
additional compensation for their services as directors. Each of
our non-employee directors receives compensation for services as
a director and, as applicable, for services as a member of any
board committee, as described below. All of our directors are
reimbursed for travel expenses relating to the attendance of our
board or committee meetings.
Director Fees. Each of our non-employee
directors is paid an annual retainer fee of $55,000, payable
quarterly in arrears effective as of September 17, 2009.
Director Plan. The Ascent Media Corporation
2008 Non-employee Director Incentive Plan (which we refer to as
the director plan) is administered by our
entire board of directors. Our board has full power and
authority to grant eligible persons the awards described below
and to determine the terms and conditions under which any awards
are made. The director plan is designed to provide our
non-employee directors with additional remuneration for services
rendered, to encourage their investment in our common stock
(thereby increasing their proprietary interest in our business
and increasing their personal interest in the continued success
and progress of our company) and to aid in attracting persons of
exceptional ability to become non-employee directors of our
company. Our board may grant non-qualified stock options, SARs,
restricted shares, stock units and cash awards or any
combination of the foregoing under the director plan (which we
refer to, collectively, as director awards).
The maximum number of shares of our common stock with respect to
which director awards may be issued under the director plan is
500,000, subject to anti-dilution and other adjustment
provisions of the director plan. Shares of our common stock
issuable pursuant to director awards are made available from
either authorized but unissued shares or shares that have been
issued but reacquired by us (including shares purchased in the
open market).
2009 Equity Grants. On December 23, 2009,
each of our non-employee directors received grants of restricted
shares of our Series A common stock with a grant date fair
value of $75,000. In addition, as compensation for our
non-employee directors participation on the committees of
our board of directors, on December 23, 2009, each of the
chairs of our executive, audit, compensation and nominating and
corporate governance committees received a grant of restricted
shares of our Series A common stock with a grant date fair
value of $15,000 and each member of our audit, compensation and
nominating and corporate governance committees (excluding the
chairs) received a grant of restricted shares of our
Series A common stock with a grant date fair value of
$5,000. All grants were made pursuant to our director plan. The
restricted shares vest quarterly over two years and the first
installment vested on February 13, 2010.
Director
Compensation Table
The following table sets forth compensation earned or paid to
our non-employee directors for services to our company during
the year ended December 31, 2009.
Fees Earned or Paid |
Stock Awards |
|||||||||||
Name
|
in Cash ($) | ($)(1)(2) | Total ($) | |||||||||
Philip J. Holthouse
|
$ | 55,000 | $ | 100,009 | $ | 155,009 | ||||||
Brian C. Mulligan
|
$ | 55,000 | $ | 100,009 | $ | 155,009 | ||||||
Michael J. Pohl
|
$ | 55,000 | $ | 100,009 | $ | 155,009 | ||||||
Carl E. Vogel
|
$ | 4,219 | $ | 95,022 | $ | 99,241 |
(1) | The aggregate grant date fair value of stock awards has been computed in accordance with FASB ASC Topic 718, but (pursuant to SEC regulations) without reduction for estimated forfeitures. For a description of the assumptions applied in these calculations, see Note 12 to our consolidated financial statements for the year ended December 31, 2009 (which are included in our Annual Report on Form 10-K as filed with the SEC on March 12, 2010). |
22
Table of Contents
(2) | As of December 31, 2009, our non-employee directors held the following stock incentive awards: |
Philip J. Holthouse | Brian C. Mulligan | Michael J. Pohl | Carl E. Vogel | |||||||||||||
Options
|
||||||||||||||||
Series A
|
11,030 | 11,030 | 11,030 | | ||||||||||||
Restricted Stock
|
||||||||||||||||
Series A
|
4,604 | 4,604 | 4,604 | 3,830 |
Compensation
Committee Interlocks and Insider Participation
In 2009, the compensation committee of our board of directors
consisted of Michael J. Pohl, Philip J. Holthouse and Brian C.
Mulligan. No member of the compensation committee is or has been
an officer or employee of our company, or has engaged in any
related party transaction in which our company was a participant.
Compensation
Committee Report
The compensation committee has reviewed and discussed with the
companys management the Compensation Discussion and
Analysis included under Item 11. Executive
Compensation above. Based on such review and discussions,
the compensation committee recommended to the companys
board of directors that the Compensation Discussion and
Analysis be included in this Form 10K/A.
Submitted by the Members of the Compensation Committee
Philip J. Holthouse
Brian C. Mulligan
Michael J. Pohl
23
Table of Contents
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters. |
Security
Ownership of Certain Beneficial Owners
The following table sets forth information concerning shares of
our common stock beneficially owned by each person or entity
(excluding any of our directors and executive officers) known by
us to own more than five percent of the outstanding shares of
any series of our common stock. All of such information is based
on publicly available filings.
The security ownership information is given as of March 31,
2010, and, in the case of percentage ownership information, is
based upon 13,457,149 shares of our Series A common
stock and 734,127 shares of our Series B common stock,
in each case, outstanding on that date. The percentage voting
power is presented on an aggregate basis for all series of
common stock.
Amount and |
||||||||||||||
Nature of |
||||||||||||||
Name and Address |
Title of |
Beneficial |
Percent of |
Voting |
||||||||||
of Beneficial Owner
|
Class | Ownership | Class | Power | ||||||||||
Robert R. Bennett
|
Series A | 17,980 | (1)(2)(3) | * | 3.8 | % | ||||||||
c/o Liberty
Media Corporation
|
Series B | 76,212 | (1)(2) | 10.4 | % | |||||||||
12300 Liberty Boulevard
Englewood, CO 80112 |
||||||||||||||
BlackRock, Inc.
|
Series A | 1,184,307 | (4) | 8.8 | % | 5.7 | % | |||||||
40 East 52nd Street
New York, NY 10022 |
||||||||||||||
FMR LLC
|
Series A | 857,185 | (5) | 6.4 | % | 4.1 | % | |||||||
82 Devonshire Street
Boston, MA 02109 |
||||||||||||||
Mario J. Gabelli
|
Series A | 1,177,969 | (6) | 8.8 | % | 5.7 | % | |||||||
c/o GAMCO
Investors, Inc.
One Corporate Center Rye, NY 10580 |
||||||||||||||
T. Rowe Price Associates, Inc.
|
Series A | 873,977 | (7) | 6.5 | % | 4.2 | % | |||||||
100 E. Pratt Street
Baltimore, MD 21202 |
* | Less than one percent. | |
(1) | Based upon the Schedule 13D filed on February 22, 2010 by Robert R. Bennett, which states that Mr. Bennett has sole voting power and sole dispositive power over 17,980 shares of Series A common stock and 76,212 shares of Series B common stock. | |
(2) | Includes 12,472 shares of Series A Common Stock and 76,210 shares of Series B common stock jointly held by Mr. Bennett and his wife, Deborah Bennett. Also includes 5,491 shares of Series A Common Stock and 2 shares of Series B Common Stock owned by Hilltop Investments, LLC, which is jointly owned by Mr. Bennett and his wife, Deborah Bennett. | |
(3) | Does not include beneficial ownership of shares of our Series A common stock issuable upon exercise of conversion rights relating to shares of our Series B common stock held by Mr. Bennett. | |
(4) | Based upon the Schedule 13G filed on January 29, 2010 by BlackRock, Inc., which states that BlackRock, Inc., a parent holding company, has sole voting power and sole dispositive power over 1,184,307 shares. All shares covered by the Schedule 13G are held by subsidiaries of BlackRock, Inc. | |
(5) | Based upon Amendment No. 1 to Schedule 13G filed on February 16, 2010 by FMR LLC, a parent holding company (FMR). Fidelity Management & Research Company, a wholly-owned subsidiary of FMR, is the beneficial owner of 781,124 shares as a result of acting as an investment adviser. Strategic Advisers, Inc., a wholly-owned subsidiary of FMR (SAI), is the beneficial owner of 11 shares as a result of acting as an investment adviser. Pyramis Global Advisors Trust Company, an indirect wholly-owned subsidiary of FMR |
24
Table of Contents
(PGATC), is the beneficial owner of 76,050 shares as a result of acting as an investment manager. The Schedule 13G states that FMR has sole voting power over the 76,061 shares beneficially owned by SAI and PGATC and sole dispositive power over 857,185 shares. | ||
(6) | Based upon Amendment No. 9 to Schedule 13D filed on March 15, 2010 by Gabelli Funds, LLC, GAMCO Asset Management Inc., Gabelli Securities, Inc., Teton Advisors, Inc., Gabelli Foundation, Inc., GGCP, Inc., GAMCO Investors, Inc. and Mario J. Gabelli (whom we collectively refer to as the Gabelli Reporting Persons). In addition to shares of our Series A common stock held directly by Mr. Gabelli, Mr. Gabelli is deemed to have beneficial ownership of those shares of our common stock held by the other Gabelli Reporting Persons. The Schedule 13D states that Mr. Gabelli has sole voting power and sole dispositive power over 1,300 shares. | |
(7) | Based upon Amendment No. 2 to Schedule 13G filed on February 12, 2010 by T. Rowe Price, an investment advisor, which states that T. Rowe Price has sole voting power over 241,429 shares and sole dispositive power over 873,977 shares. T. Rowe Price is deemed the beneficial owner of such shares as a result of acting as an investment advisor. |
25
Table of Contents
Security
Ownership of Management
The following table sets forth information with respect to the
ownership by each of our directors, each of our named executive
officers and by all of our directors and executive officers as a
group, of shares of Series A common stock and Series B
common stock. The security ownership information is given as of
March 31, 2010, and, in the case of percentage ownership
information, is based upon 13,457,149 shares of
Series A common stock and 734,127 shares of
Series B common stock, in each case, outstanding on that
date. Such outstanding share amounts do not include shares of
our common stock that may be issued upon the exercise of stock
options, including stock options disclosed in the table below.
The percentage voting power is presented in the table below on
an aggregate basis for all series of common stock.
Shares of restricted stock that have been granted pursuant to
our equity incentive plans are included in the outstanding share
numbers provided throughout this proxy statement. Shares of
common stock issuable upon exercise or conversion of options,
warrants and convertible securities that were exercisable or
convertible on or within 60 days after March 31, 2010,
are deemed to be outstanding and to be beneficially owned by the
person holding the options, warrants or convertible securities
for the purpose of computing the percentage ownership of the
person, but are not treated as outstanding for the purpose of
computing the percentage ownership of any other person. For
purposes of the following presentation, beneficial ownership of
shares of our Series B common stock, though convertible on
a
one-for-one
basis into shares of our Series A common stock, is reported
as beneficial ownership of our Series B common stock only,
and not as beneficial ownership of our Series A common
stock. So far as is known to us, the persons indicated below
have sole voting power with respect to the shares indicated as
owned by them, except as otherwise stated in the notes to the
table.
Amount and |
||||||||||||||
Nature of |
||||||||||||||
Title of |
Beneficial |
Percent of |
Voting |
|||||||||||
Name of Beneficial Owner
|
Class | Ownership | Class | Power | ||||||||||
William R. Fitzgerald
|
Series A | 192,083 | (1)(2) | 1.4 | % | * | ||||||||
Chairman of the Board and Chief
|
Series B | | | |||||||||||
Executive Officer
|
||||||||||||||
Philip J. Holthouse
|
Series A | 13,468 | (1)(2)(3) | * | * | |||||||||
Director
|
Series B | | | |||||||||||
John C. Malone
|
Series A | 150,617 | (4)(5)(6) | 1.1 | % | 30.5 | % | |||||||
Director
|
Series B | 618,525 | (4)(5) | 84.3 | % | |||||||||
Brian C. Mulligan
|
Series A | 13,448 | (1)(2) | * | * | |||||||||
Director
|
Series B | | | |||||||||||
William E. Niles
|
Series A | 10,410 | (1)(2) | * | * | |||||||||
Executive Vice President,
|
Series B | | | |||||||||||
General Counsel and Secretary
|
||||||||||||||
John A. Orr
|
Series A | 67,548 | (1)(2) | * | * | |||||||||
Senior Vice President
|
Series B | | | |||||||||||
George C. Platisa
|
Series A | 10,410 | (1)(2) | * | * | |||||||||
Executive Vice President and Chief
|
Series B | | | |||||||||||
Financial Officer
|
||||||||||||||
Michael J. Pohl
|
Series A | 13,448 | (1)(2) | * | * | |||||||||
Director
|
Series B | | | |||||||||||
Jose A. Royo
|
Series A | 16,502 | (1)(2) | * | * | |||||||||
President, Chief Operating Officer
|
Series B | | | |||||||||||
and Director
|
||||||||||||||
Carl E. Vogel
|
Series A | 3,830 | (1) | * | * | |||||||||
Director
|
Series B | | | |||||||||||
All directors and executive officers as a group (10 persons)
|
Series A |
491,764 | (1)(2)(3) | 3.6 | % | 31.8 | % | |||||||
(4)(5)(6) | ||||||||||||||
Series B | 618,525 | (4)(5) | 84.3 | % |
26
Table of Contents
* | Less than one percent | |
(1) | Includes, as applicable, the following restricted shares of our Series A common stock which remain subject to vesting as of March 31, 2010: |
Name
|
Restricted Shares | |||
William R. Fitzgerald
|
61,570 | |||
Philip J. Holthouse
|
3,958 | |||
Brian C. Mulligan
|
3,958 | |||
William E. Niles
|
1,330 | |||
John A. Orr
|
21,590 | |||
George C. Platisa
|
1,330 | |||
Michael J. Pohl
|
3,958 | |||
Jose A. Royo
|
2,660 | |||
Carl E. Vogel
|
3,352 |
(2) | Includes, as applicable, beneficial ownership of the following shares of our Series A common stock that may be acquired upon exercise of stock options that are exercisable within 60 days of March 31, 2010: |
Name
|
Option Shares | |||
William R. Fitzgerald
|
104,115 | |||
Philip J. Holthouse
|
8,271 | |||
Brian C. Mulligan
|
8,271 | |||
William E. Niles
|
8,637 | |||
John A. Orr
|
36,537 | |||
George C. Platisa
|
8,637 | |||
Michael J. Pohl
|
8,271 | |||
Jose A. Royo
|
12,956 |
(3) | Includes 20 shares of our Series A common stock owned by Mr. Holthouse jointly with his wife. | |
(4) | Includes 26,833 shares of our Series A common stock and 17,046 shares of our Series B common stock held by Mr. Malones wife, Leslie Malone, as to which shares Mr. Malone has disclaimed beneficial ownership. | |
(5) | Includes 16 and 55,317 shares of our Series A common stock held by two trusts with respect to which Mr. Malone is the sole trustee and, with his wife, retains a unitrust interest in the trust. Also includes 2,570 shares of our Series A common stock and 9,178 shares of our Series B common stock held by two trusts which are managed by an independent trustee, of which the beneficiaries are Mr. Malones adult children and in which Mr. Malone has no pecuniary interest. Mr. Malone retains the right to substitute assets held by the trusts but has disclaimed beneficial ownership of the shares held by the trusts for the benefit of his children. | |
(6) | Includes 1 share of our Series A common stock held by an IRA account. |
Changes
in Control
We know of no arrangements, including any pledge by any person
of our securities, the operation of which may at a subsequent
date result in a change in control of our company.
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Securities
Authorized for Issuance Under Equity Compensation
Plans
The following table sets forth information as of
December 31, 2009, with respect to shares of our common
stock authorized for issuance under our equity compensation
plans.
Number of |
||||||||||||
Securities |
||||||||||||
Remaining |
||||||||||||
Number of |
Available for Future |
|||||||||||
Securities to be |
Issuance Under |
|||||||||||
Issued Upon |
Weighted-Average |
Equity |
||||||||||
Exercise of |
Exercise Price of |
Compensation |
||||||||||
Outstanding |
Outstanding |
Plans (Excluding |
||||||||||
Options, Warrants |
Options, Warrants |
Securities Reflected |
||||||||||
Plan Category
|
and Rights | and Rights | in First Column) | |||||||||
Equity compensation plans approved by security holders:
|
||||||||||||
Ascent Media Corporation 2008 Incentive Plan:
|
1,288,159 | (1) | ||||||||||
Series A common stock
|
585,598 | $ | 22.79 | |||||||||
Series B common stock
|
| | ||||||||||
Ascent Media Corporation 2008 Non-Employee Director Incentive
Plan:
|
447,549 | (1) | ||||||||||
Series A common stock
|
33,090 | $ | 21.81 | |||||||||
Series B common stock
|
| | ||||||||||
Equity compensation plans not approved by security
holders None:
|
| | | |||||||||
Total:
|
1,735,708 | (1) | ||||||||||
Series A common stock
|
618,688 | |||||||||||
Series B common stock
|
|
(1) | Each plan permits grants of, or with respect to, shares of our Series A common stock or Series B common stock subject to a single aggregate limit. |
Item 13. | Certain Relationships and Related Transactions, and Director Independence |
Review
and Approval of Related Party Transactions
We adopted a code of ethics and corporate governance guidelines
to govern the review and approval of related party transactions.
Under our code of ethics, any transaction which may involve an
actual or potential conflict of interest and is required to be
disclosed pursuant to Item 404 of
Regulation S-K
promulgated by the SEC must be approved by the audit committee,
or another independent body of the board of directors designated
by our board. Under our corporate governance guidelines, if a
director has an actual or potential conflict of interest, the
director must promptly inform our Chief Executive Officer and
the chair of our audit committee. All directors must recuse
themselves from any discussion or decision that involves or
affects their personal, business or professional interests. In
addition, an independent committee of our board, designated by
our board, will resolve any conflict of interest issue involving
a director, our Chief Executive Officer or any other executive
officer. No related party transaction (as defined by
Item 404(a) of
Regulation S-K
promulgated by the SEC) may be effected without the approval of
such independent committee. Our board has designated the audit
committee as the independent committee generally charged with
this duty. The nominating and corporate governance committee
also has the authority to review and approve such transactions,
if requested to do so by our board, the chairman of the board or
our Chief Executive Officer.
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Table of Contents
Transactions
with Related Persons
Services
Agreement with Liberty Media
Pursuant to the services agreement between Liberty Media and
DHC, which was assumed by Ascent Media in connection with the
spin-off, Liberty Media agreed to provide certain general and
administrative services including legal, tax, accounting,
treasury and investor relations support, as and to the extent
requested by Ascent Media. Ascent Media agreed to reimburse
Liberty Media for direct,
out-of-pocket
expenses incurred by Liberty Media in providing these services
and for Ascent Medias allocable portion of costs
associated with any shared services or personnel. The services
agreement provides for Liberty Media and Ascent Media to review
cost allocations every six months and adjust such charges, if
appropriate. John C. Malone, a director of our company, is the
Chairman of the Board of Liberty Media and beneficially owns
Liberty Media common stock representing approximately 35.2% of
Liberty Medias aggregate voting power as of March 31,
2010. In 2009, we reimbursed Liberty Media approximately
$156,000 for (i) certain general and administrative
services provided by Liberty Media and (ii) the applicable
portion of the 2009 base salary for Mr. Fitzgerald, our
Chairman of the Board and Chief Executive Officer, each pursuant
to the services agreement. See Item 11. Executive
Compensation Employment Agreements
Effect on Prior Arrangements.
Director
Independence
It is our policy that a majority of the members of our board of
directors be independent of our management. For a director to be
deemed independent, our board of directors must affirmatively
determine that the director has no disqualifying direct or
indirect material relationship with our company. To assist our
board of directors in determining which of our directors qualify
as independent for purposes of The Nasdaq Stock Market rules as
well as applicable rules and regulations adopted by the SEC, the
nominating and corporate governance committee of our board
follows the Corporate Governance Rules of The Nasdaq Stock
Market on the criteria for director independence.
Our board of directors has determined that each of Philip J.
Holthouse, Brian C. Mulligan, Michael J. Pohl and Carl E. Vogel
qualifies as an independent director of our company.
Item 14. | Principal Accountant Fees and Services |
Audit
Fees and All Other Fees
The following table presents fees for professional audit
services rendered by KPMG LLP for the audit of our consolidated
financial statements for 2009 and 2008, and fees billed for
other services rendered by KPMG LLP following the spin-off of
our company from DHC in September 2008:
2009 | 2008 | |||||||
Audit fees
|
$ | 1,228,444 | 1,052,352 | |||||
Audit related fees(1)
|
67,000 | | ||||||
Audit and audit related fees
|
1,295,444 | 1,052,352 | ||||||
Tax fees(2)
|
224,049 | 72,847 | ||||||
Total fees
|
$ | 1,519,493 | 1,125,199 |
(1) | Audit related fees consist of audits of financial statements of certain employee benefit plans. | |
(2) | Tax fees consist of tax compliance and consultations regarding the tax implications of certain transactions. |
Our audit committee has considered whether the provision of
services by KPMG LLP to our company other than auditing is
compatible with KPMG LLP maintaining its independence and
believes that the provision of such other services is compatible
with KPMG LLP maintaining its independence.
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Table of Contents
Policy on
Pre-Approval of Audit and Permissible Non-Audit Services of
Independent Auditor
Our audit committee adopted a policy dated November 6, 2008
regarding the pre-approval of all audit and permissible
non-audit services provided by our independent auditor. Pursuant
to this policy, our audit committee has approved the engagement
of our independent auditor to provide the following services
(all of which are collectively referred to as pre-approved
services):
| audit services as specified in the policy, including (i) financial audits of our company and our subsidiaries, (ii) services associated with our periodic reports, registration statements and other documents filed or issued in connection with a securities offering (including comfort letters and consents), (iii) attestations of our managements reports on internal controls and (iv) consultations with management as to accounting or disclosure treatment of transactions; | |
| audit related services as specified in the policy, including (i) due diligence services, (ii) financial audits of employee benefit plans, (iii) consultations with management as to accounting or disclosure treatment of transactions not otherwise considered audit services, (iv) attestation services not required by statute or regulation, (v) certain audits incremental to the audit of our consolidated financial statements, (vi) closing balance sheet audits related to dispositions and (vii) general assistance with implementation of SEC rules or listing standards; and | |
| tax services as specified in the policy, including federal, state, local and international tax planning, compliance and review services, and tax due diligence. |
Notwithstanding the foregoing general pre-approval, any
individual project involving the provision of pre-approved
services that is likely to result in fees in excess of $100,000
requires the specific prior approval of our audit committee. Any
engagement of our independent auditors for services other than
the pre-approved services requires the specific approval of our
audit committee. Our audit committee has delegated the authority
for the foregoing approvals to the chairman of the audit
committee, subject to his subsequent disclosure to the entire
audit committee of the granting of any such approval. Philip J.
Holthouse currently serves as the chairman of our audit
committee.
Our pre-approval policy prohibits the engagement of our
independent auditor to provide any services that are subject to
the prohibition imposed by Section 201 of the
Sarbanes-Oxley Act.
All services provided by our independent auditor during 2009
were approved in accordance with the terms of the policy.
PART IV
Item 15. | Exhibits and Financial Statement Schedules |
(b) Exhibits The exhibits listed in the
Exhibit Index at the end of this report are filed as Exhibits to
this Amendment No. 1 on
Form 10-K/A
and are meant to supplement the Exhibits listed
and/or filed
in the Registrants Annual Report on
Form 10-K
for the year ended December 31, 2009.
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Table of Contents
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
ASCENT MEDIA CORPORATION
By |
/s/ William
E. Niles
|
William E. Niles
Executive Vice President, General Counsel and Secretary
Dated: April 30, 2010
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EXHIBIT INDEX
31 | .4 | Rule 13a-14(a)/15d-14(a) Certification* | ||
31 | .5 | Rule 13a-14(a)/15d-14(a) Certification* | ||
31 | .6 | Rule 13a-14(a)/15d-14(a) Certification* |
* | Filed herewith. |
32