EXHIBIT 99.04
LIBERTY LIVEWIRE CORPORATION
(FORMERLY KNOWN AS THE TODD-AO CORPORATION)
RESTATED 1997 STOCK OPTION PLAN
1. PURPOSE.
The 1997 Stock Option Plan is intended to provide long term incentives to
key Company personnel in the form of options to purchase shares of Old Todd
Class A Common Stock (as defined herein). Pursuant to the Merger Agreement,
dated as of December 10, 1999, as amended (the "Merger Agreement"), among AT&T
Corp. ("AT&T"), B-Group Merger Corp., a wholly owned subsidiary of AT&T ("Merger
Sub"), Liberty Media Corporation ("Liberty") and the Company, (i) the Company
reclassified (the "Reclassification") each share of its Class A Common Stock
(the "Old Todd Class A Common Stock") and its Class B Common Stock (the "Old
Todd Class B Common Stock") into (i) 0.4 of a share of new Todd Class A Common
Stock (the "New Todd Class A Common Stock" or "Livewire Class A Common Stock"))
and (ii) 0.6 of a share of new Todd Class B Common Stock (the "New Todd Class B
Common Stock" or "Livewire Class B Common Stock") and (ii) after the
Reclassification, Merger Sub merged (the "Merger") with and into the Company,
with the Company remaining as the surviving corporation in the Merger and
changing its name to "Liberty Livewire Corporation". The Reclassification and
the Merger both became effective on June 9, 2000 (the "Effective Time"). Also
pursuant to Section 2.6 of the Merger Agreement, each of the Company's stock
options ("Company Stock Option") were rolled over (the "Rollover") into options
(the "Rollover Options") to purchase (i) that number of shares of AT&T's Class A
Liberty Media Group Common Stock, par value $1.00 per share ("Class A Liberty
Group Stock"), equal to the number of shares of Old Todd Class A Common Stock
subject to such Company Stock Option immediately prior to the Reclassification
times 0.50 (after taking into account the 2-for-1 stock split for the Class A
Liberty Group Stock consummated on June 9, 2000) and (ii) that number of shares
of Livewire Class A Common Stock equal to the number of shares of Old Todd Class
A Common Stock subject to such Company Stock Option immediately prior to the
Reclassification times 0.4, for an aggregate exercise price equal to the
exercise price under such Company Stock Option as in effect immediately prior to
the Effective Time. Section 2.5(f) of the Merger Agreement specifies that no
fractional shares of Class A Liberty Group Stock or Livewire Class A Common
Stock will be issued. The Class A Liberty Group Stock is a tracking stock meant
to reflect the economic performance of the businesses and assets of the Liberty
Media Group (as defined in the Merger Agreement). The Company shall continue to
be responsible for all Rollover Options. The Company's 1997 Stock Option Plan is
being restated in order to reflect the Rollover provided for in the Merger
Agreement. Immediately prior to the Effective Time, Company Stock Options for
86,850 shares of Old Todd Class A Common Stock were outstanding under the
Company's 1997 Stock Option Plan.
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2. DEFINITIONS.
The following terms shall have the indicated meanings:
2.1 Act. "Act" shall mean the Securities Act of 1933, as amended.
2.2 Class A Liberty Shares. Unless the context otherwise requires, "Class A
Liberty Shares" shall mean shares of Class A Liberty Group Stock.
2.3 Code. "Code" shall mean the Internal Revenue Code of 1986, as amended.
2.4 Company. "Company" shall include Liberty Livewire Corporation (formerly
known as The Todd-AO Corporation) and any of its subsidiary corporations which
meet the definition set forth in Section 425(f) of the Code.
2.5 Committee. "Committee" shall mean the Board of Directors or any
Committee appointed by the Board of Directors to administer the Plan.
2.6 Exchange Act. "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
2.7 Fair Market Value. "Fair Market Value" shall be the last sale price in
The New York Stock Exchange or the NASDAQ National Market System, as applicable,
on a given date as published in the Wall Street Journal or if no report is
available for such date, the next preceding date for which a report is
available. If the shares are hereafter listed on one or more securities
exchanges, "fair market value" thereafter shall be the highest closing price on
any exchange for the date in question, or if such date is not a trading date,
the next preceding trading date. The Fair Market Value of Livewire Class B
Common Stock shall be determined by the Committee in good faith.
2.8 Incentive Options. "Incentive options" shall be those options described
in Section 422(a) of the Code.
2.9 Livewire Shares. Unless the context otherwise requires, "Livewire
Shares" shall mean the shares of Livewire Class A Common Stock.
2.10 Non-Qualified Options. "Non-qualified options" shall mean options
which are not incentive options.
3. SHARES OF STOCK SUBJECT TO THE PLAN.
The shares that may be issued under the Plan shall be (i) validly issued,
fully paid and non-assessable Class A Liberty Shares and (ii) authorized and
unissued or reacquired shares of the Livewire Class A Common Stock. The
aggregate number of Shares which may be issued under the Plan shall not exceed
77,500 Class A Liberty Shares and the aggregate number of Livewire Shares which
may be issued under the Plan shall not exceed 62,000 Livewire Shares unless an
adjustment is required by Sections 12 and 13. To the extent that options granted
under
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the Plan terminate, expire or are canceled prior to exercise, new options may be
granted with respect to such shares.
As of the date hereof, 43,425 Class A Liberty Shares and 34,740 Livewire
Shares are needed to fulfill the Company's obligations under the Plan.
4. ELIGIBILITY.
Options may be granted under the Plan to any director, employee,
prospective employee or consultant to the Company. The Committee shall
determine, within the limitations of the Plan, the persons to whom options are
to be granted and the exercise price, vesting schedule and other terms of the
option. Each option shall be evidenced by a written agreement between the
Company and the optionee.
5. APPROVAL OF SHAREHOLDERS.
The Plan shall be subject to the approval of a majority of the total
combined votes of all outstanding shares of stock entitled to vote. Options
granted prior to such approval shall not become exercisable unless and until
such approval is obtained. The Merger Agreement (which provided for the
Reclassification, the Merger and the Rollover) was approved by the Company's
stockholders on June 9, 2000.
6. ADMINISTRATION.
6.1 Composition of Committee. The Plan shall be administered by a Committee
to be appointed by the Board of Directors of the Company. The Committee shall
consist of at least two directors who are "Non-Employee Directors" within the
meaning of Exchange Act Rule 16b-3. The Committee shall be entitled to take any
action which it deems appropriate to comply with Exchange Act Rule 16b-3 and
related provisions (as presently existing or hereafter amended), including
without limitation submission of any transaction to the entire Board of
Directors or the shareholders for approval.
6.2 Non-Uniform Determinations. The Committee's determinations under the
Plan need not be uniform and may be made by it selectively among persons who
participate (or who are eligible to participate) in the Plan, whether or not
such persons are similarly situated. Without limiting the generality of the
foregoing, the Committee shall be entitled to make non-uniform and selective
determinations as to the amount and terms of options and leaves of absence.
6.3 Interpretation of Plan. The Committee shall have the power to interpret
and construe the Plan, and its interpretation and construction of any provisions
of the Plan within its authority shall be final. No member of the Committee
shall be liable for any action or determination made in good faith with respect
to the Plan or any option granted under it.
7. TERM OF OPTIONS AND EFFECT OF TERMINATION.
7.1 Date of Grant. The date on which any Option is granted shall be the
date of the Committee's approval of such grant.
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7.2 Termination Date. Options may be granted under the Plan until August
31, 2006, the date of termination of the Plan. Notwithstanding any other
provision of the Plan, no option granted under the Plan shall be exercisable
after August 31, 2006.
7.3 Effect of Termination. In the event that any outstanding option under
the Plan expires by reason of lapse of time or otherwise is terminated for any
reason, then the unissued shares shall again become available in the pool of
shares of Common Stock for which options may be granted under the Plan.
8. ASSIGNABILITY.
No Incentive Option shall be assignable or transferable by the optionee
except by will, by the laws of descent and distribution or pursuant to a
qualified domestic relations order as defined in the Code. During the lifetime
of the optionee, the Incentive Option shall be exercisable only by the optionee,
and no other person shall acquire any rights therein. The Committee in its
absolute discretion may permit assignment of the vested portion of any
Non-Qualified Option outstanding under the Plan.
9. TERMS AND CONDITIONS OF OPTIONS.
Options granted pursuant to the Plan shall be evidenced by agreements in
such form as the Committee shall from time to time determine, which agreements
shall comply with the terms and conditions of the Plan and shall state the
following, subject to the limitations imposed by Section 10 with respect to
Incentive Options:
9.1 Number of Shares. Each option agreement shall state the number of
shares of Livewire Class A Common Stock and Class A Liberty Media Group Stock to
which the option pertains.
9.2 Option Price. Each option agreement shall state the option price per
each "option" (i.e., the total price for (i) 0.4 of a share of Livewire Class A
Common Stock and (ii) 0.5 of a share of Class A Liberty Media Group Stock,
unless amended pursuant to Sections 12 and 13 hereof). The option price per
"option" for Non-Qualified Options shall be not less than 34% of the Fair Market
Value of Livewire Class A Common Stock and 42% of the Fair Market Value of Class
A Liberty Media Group Stock, as applicable, on the date that the option is
granted.
9.3 Vesting. An option shall be exercisable in annual installments over a
period specified by the Committee. Except as specifically otherwise provided
herein, if the optionee ceases to serve as a director, employee or consultant
prior to the eligibility date of an installment, the option shall terminate with
respect to that installment (without pro ration for fractional years of service)
and all subsequent installments. After the optionee has become eligible to
exercise an installment, the right to exercise with respect to that installment
shall remain in effect until the expiration or sooner termination of the option.
9.4 Medium and Time of Payment. The option price shall be payable upon the
exercise of an option in cash or, at the discretion of the Committee, in shares
of the of Livewire Class A Common Stock and Class A Liberty Media Group Stock or
in a combination of cash and such shares. The Company shall have the right to
require the optionee to remit to the Company
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an amount sufficient to satisfy federal, state and local withholding tax
requirements. Upon receipt of payment and applicable tax remittance, the Company
shall, subject to Section 9.6, deliver to the optionee (or person entitled to
exercise the option) a certificate or certificates for the shares of Livewire
Class A Common Stock and Class A Liberty Media Group Stock to which the option
pertains.
9.5 Partial Exercise. To the extent that an option has become exercisable,
it may, subject to the restrictions and limitations set forth in this Plan and
the option agreement, be exercised in whole or in part; provided, however, that
no "option" shall be exercised for less than four shares of Livewire Class A
Common Stock or five shares of Class A Liberty Media Group Stock. If exercised
in part, the unexercised portion of an option shall continue to be held by the
option holder and may thereafter be exercised as herein provided within the term
of the option.
9.6 Securities Law Restrictions. No option may be exercised until the
applicable listing requirements of any securities exchange, or the registration
or qualification requirements of any governmental authority have been complied
with. Unless the shares issuable upon exercise of an option have been registered
under the Act, the option holder shall, as a condition of issuance, provide
written representations satisfactory to the Company's counsel to the effect that
the shares are being acquired for the optionee's own account as an investment
and not with a view to, or for sale in connection with, the distribution of any
such shares and that no transfers of the shares shall be made except in
compliance with the Act and any rules and regulations promulgated thereunder. A
legend to this effect may be endorsed upon unregistered shares so issued.
9.7 Other Provisions. The option agreements authorized under the Plan shall
contain such other provisions as the Committee shall deem advisable.
10. RESTRICTIONS ON INCENTIVE OPTIONS.
Incentive Options under the Plan, if any, may be granted only to directors
who are also officers or key employees of the Company. The aggregate fair market
value (determined as of the date of grant) with respect to which Incentive
Options are exercisable for the first time by any individual during any calendar
year (under all Incentive Stock Option plans of the employer corporation and its
parents and subsidiaries) shall not exceed $100,000. The option price for
Incentive Options shall be not less than 100% of Fair Market Value on the date
of the grant. No Incentive Option shall be exercisable for more than ten years
after the date of its grant. In addition, if the recipient of an Incentive
Option owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company, the option price shall be not less than
110% of Fair Market Value on the date of the grant and the option shall not be
exercisable for more than 5 years from the date of its grant.
11. TERMINATION OF SERVICES.
11.1 Termination of Services - Generally. In the event that an optionee
shall cease to be an employee, consultant or director of the Company for any
reason other than death or disability, the option shall be exercisable, to the
extent it was exercisable at the date the optionee ceased to be an employee,
consultant or director, for a period of three months after such date and
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prior to the date on which the option expires by its terms. If not so exercised,
the option shall terminate.
11.2 Death or Disability. If an optionee dies or becomes permanently
disabled within the meaning of Section 22(e)(3) of the Code while serving as an
employee, consultant or director of the Company, or within the three-month
period after termination of such status during which exercise of an option is
permitted in accordance with Section 11.1, such option may, to the extent it was
exercisable at the time of death or disability, be exercised for a period not to
exceed the lesser of: (i) one year after the optionee's death or disability; or
(ii) the period prior to the date on which the option expires by its terms. In
the event of death, the option may be exercised by any person or persons
designated by the optionee on a Beneficiary Designation Form adopted by the
Committee for such purposes, or, if there is no effective Beneficiary
Designation Form on File with the Committee, by the executors or administrators
of the optionee's estate or by any person or persons who shall have acquired the
option directly from the optionee by his will or the applicable law of descent
and distribution.
12. ADJUSTMENTS.
Adjustments to the options and the Livewire Shares covered by the Plan
shall be made as follows:
12.1 Recapitalizations. The number of shares of Livewire Class A Common
Stock covered by the Plan, the number of shares and price per share of each
outstanding option, and the number of shares subject to each outstanding option
shall be proportionately adjusted for any increase or decrease in the number of
issued and outstanding shares of Livewire Class A Common Stock resulting from:
(i) a subdivision or consolidation of shares; (ii) the payment of a stock
dividend of more than 2%; or (iii) any other increase or decrease of more than
2% in the number of issued and outstanding shares of Livewire Class A Common
Stock effected without receipt of consideration by the Company.
12.2 Rights Offerings. In the event the Company shall issue rights,
warrants or options to its shareholders on a pro rata basis entitling them to
purchase shares of Livewire Class A Common Stock or Class B Common Stock at a
price less than Fair Market Value of such stock, the option price for
outstanding options shall be proportionately reduced (and/or the number of
shares subject to the option proportionately increased) to reflect as nearly as
practicable the benefit that the option holder would have received had the
option been exercised immediately prior to the record date for such rights,
warrants or options.
12.3 Reorganizations. If any merger, consolidation or similar transaction
in which the Company is the surviving corporation (and which is not a Change in
Control as hereinafter defined) shall affect any outstanding option under the
Plan, the Committee shall take such action as is equitable or appropriate to
substitute a new option for such affected option and to make the new option
equivalent to the affected option as nearly as practicable.
12.4 Changes in Control-Definition. A "Change in Control" shall be deemed
to have occurred if:
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(a) there shall be consummated: (i) any reorganization, consolidation
or merger of the Company in which the Company is not the continuing or
surviving corporation, or (ii) any sale or other transfer of all or
substantially all of the Company's assets (in one transaction or a series
of related transactions); or
(b) the stockholders of the Company shall have approved a plan or
proposal for the liquidation or dissolution of the Company; or
(c) there shall be consummated a sale to any person or group (as
defined in the Securities Exchange Act of 1934) of Livewire Class A Common
Stock and/or Livewire Class B Common Stock shares entitled to cast more
than 50% of the total combined votes of all outstanding Livewire Class A
Common Stock and Livewire Class B Common Stock shares; or
(d) the Board of Directors of the Company shall otherwise have
determined that a Change in Control has otherwise occurred.
12.5 Changes in Control - Effect. A Change in Control shall cause each
outstanding option to terminate effective one hundred eighty days after the
consummation thereof, unless any agreement relating to a Change in Control shall
otherwise provide. Notwithstanding the foregoing, agreements relating solely to
a transaction described in paragraph (c) of Section 12.4 may not terminate an
outstanding option earlier than one hundred eighty days after the consummation
thereof unless the optionee consents to an earlier termination. Effective
concurrently with the Change in Control (whether or not the option is terminated
or affected by the Change in Control) each optionee shall be entitled to
exercise his option in full without regard to any limitations on exercisability
and such option shall be considered fully vested.
12.6 Committee's Authority. The Committee, in its discretion, shall make
such other and further adjustments as are equitable and appropriate with respect
to any transaction affecting the capitalization of the Company.
12.7 Company's Rights Unimpaired. The grant of an option pursuant to the
Plan shall not affect in any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes of its capital or
business structure or to merge or to consolidate or to dissolve, liquidate or
sell, or transfer all or any part of its business or assets.
13. ADJUSTMENTS PERTAINING TO CLASS A LIBERTY GROUP STOCK.
Adjustments to the options and the Class A Liberty Shares covered by the
Plan shall be made as follows:
13.1 Changes in Capitalization. Subject to any required action by AT&T's
stockholders or holders of Class A Liberty Group Stock, the number of Class A
Liberty Shares covered by each outstanding option, the number of Class A Liberty
Shares which have been authorized for issuance under the Plan but as to which no
options have yet been granted or which have been returned to the Plan upon
cancellation or expiration of an option, as well as the price per Class A
Liberty Share covered by each such outstanding option shall be proportionately
adjusted for any increase or decrease in the number of issued and outstanding
Class A Liberty
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Shares resulting from a stock split, reverse stock split, stock dividend,
combination or reclassification of the Class A Liberty Group Stock, or any other
increase or decrease in the number of issued and outstanding Class A Liberty
Shares effected without receipt of consideration by AT&T; provided, however,
that conversion of any securities convertible into shares of Class A Liberty
Group Stock shall not be deemed to have been "effected without receipt of
consideration." Except as expressly provided herein, no issuance by AT&T of
shares of stock of any class, or securities convertible into shares of stock of
any class shall affect, and no adjustment by reason thereof shall be made with
respect to, the number or price of Class A Liberty Shares subject to an option.
13.2 Dissolution or Liquidation. In the event of the proposed dissolution
or liquidation of the Liberty Media Group, to the extent that an option has not
been previously exercised, it shall terminate immediately prior to the
consummation of such proposed action.
13.3 Merger or Asset Sale. In the event of a merger or other business
combination affecting AT&T or any subsidiary thereof, and, as a result of such
merger or business combination, the Class A Liberty Stock is converted into or
mandatorily exchanged for securities of another entity, options for Class A
Liberty Stock will become options exercisable for such new security. If any such
merger or other business combination shall affect any outstanding option under
the Plan, the Committee shall take such action as is equitable or appropriate to
substitute a new option for such affected option and to make the new option
equivalent to the affected option as nearly as practicable.
14. AMENDMENT OF THE PLAN.
14.1 Generally. The Board of Directors may, insofar as permitted by law,
from time to time, suspend or discontinue the Plan or revise or amend it in any
respect whatsoever, except that no such amendment shall alter or impair or
diminish any rights or obligations under any option theretofore granted under
the Plan without the consent of the person to whom such option was granted. In
addition, without further shareholder approval or ratification, no such
amendment shall: (i) materially increase the benefits accruing to participants
in the Plan; (ii) materially increase the number of shares subject to the Plan
(except as authorized by Sections 12 and 13); (iii) materially modify the
requirements as to eligibility for participation in the Plan; (iv) extend the
terms during which options may be exercised; or (v) extend the final date upon
which options under the Plan may be granted. Notwithstanding the foregoing, the
Board of Directors may adopt such amendments as the Board shall in good faith
deem necessary in order to conform the Plan to the requirements of Exchange Act
Rule 16b-3.
14.2 Modifications to Options. Subject to the terms of the Plan and with
the consent of the optionee where appropriate, the Committee may amend
outstanding option agreements, including, without limitation, amendments which
accelerate exercisability of any option; or cancel an option and issue a new
option in substitution therefor.
15. MISCELLANEOUS.
15.1 No Rights as Shareholder. An optionee or transferee of an option shall
have no rights as a shareholder with respect to any shares covered by an option
until the date of the
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receipt of payment (including any amounts required by the Company to satisfy
withholding tax requirements) by the Company. No adjustment shall be made as to
any option for dividends (ordinary or extraordinary, whether in cash, securities
or other property) or distributions or other rights for which the record date is
prior to such date, except as provided in Sections 12.3 and 13.3.
15.2 Application of Funds. The proceeds received by the Company from the
sale of shares pursuant to the exercise of options will be used for general
corporate purposes.
15.3 No Obligation to Exercise Option. The granting of an option shall
impose no obligation upon the optionee to exercise such option.
15.4 Agreement to Govern. In the event of any inconsistency between the
terms of the option agreement and the description thereof contained herein, the
terms of the agreement shall prevail.
Effective January 8, 1997, amended February 24, 1998, restated June 9,
2000.
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