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Exhibit 10.1
AGREEMENT AND PLAN OF DISTRIBUTION, dated as of
September 30, 1997 (this "Distribution Agreement"),
between ▇▇▇▇▇▇▇ ENTERTAINMENT COMPANY, a Delaware
corporation (the "Company"), and NEW ▇▇▇▇▇▇▇
ENTERTAINMENT COMPANY, a Delaware corporation and a
direct wholly owned subsidiary of the Company ("New
▇▇▇▇▇▇▇").
WHEREAS the Company, Westinghouse Electric Corporation, a
Pennsylvania corporation ("Parent"), and G Acquisition Corp., a Delaware
corporation and a wholly owned subsidiary of Parent ("Sub"), have entered into
an Agreement and Plan of Merger, dated as of February 9, 1997 (the "Merger
Agreement"), providing for the Merger (as defined in the Merger Agreement) of
Sub with and into the Company, with the Company as the surviving corporation;
WHEREAS the Board of Directors of the Company has approved
this Distribution Agreement, which is being entered into prior to the Effective
Time (as defined in Section 1.03 of the Merger Agreement), subject to the
issuance of the Tax Rulings (as defined in Section 10.03 of the Merger
Agreement), pursuant to and subject to the terms of which the Restructuring and
the Company Distribution (as such terms are hereinafter defined) will be
consummated;
WHEREAS after the Restructuring and the New ▇▇▇▇▇▇▇
Recapitalization (as hereinafter defined) and on the day immediately prior to
the Effective Time, subject to the satisfaction or waiver of the conditions set
forth in Article VIII of this Distribution Agreement, the Company will
distribute (the "Company Distribution") to each holder of record of shares of
Class A Common Stock, $.01 par value, of the Company ("Company Class A Common
Stock") and Class B Common Stock, $.01 par value, of the Company ("Company Class
B Common Stock" and, together with the Company Class A Common Stock, "Company
Common Stock") a number of shares of Common Stock, $.01 par value, of New
▇▇▇▇▇▇▇ ("New ▇▇▇▇▇▇▇ Common Stock") equal to one-third of the number of shares
of Company Common Stock held by such holder;
WHEREAS the purpose of the Restructuring and the Company
Distribution is to make possible the Merger by divesting the Company of all
businesses and operations (other than the Retained Business (as hereinafter
defined)) conducted by the Company and its Subsidiaries which Parent is
unwilling to acquire. This Dis-
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tribution Agreement sets forth or provides for certain agreements among the
Company and New ▇▇▇▇▇▇▇ in consideration of the separation of their ownership;
and
WHEREAS it is the intention of the parties to this
Distribution Agreement that (a) the Company Distribution shall qualify as a
transaction described in Section 355 of the Internal Revenue Code of 1986, as
amended (the "Code"), and shall be immediately preceded by a transfer of assets
and related liabilities that qualifies as a transaction described in Section 351
or 368(a)(1)(D) of the Code, (b) the New ▇▇▇▇▇▇▇ Recapitalization and certain
other transactions that are part of the Restructuring shall be tax-free
transactions under the Code and (c) the Merger shall qualify as a
"reorganization" within the meaning of Section 368(a)(1)(B) of the Code.
NOW, THEREFORE in consideration of the premises, and of the
respective representations, warranties, covenants and agreements set forth
herein, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. As used in this Distribution Agreement, the
following terms shall have the following respective meanings (capitalized terms
used but not defined herein shall have the respective meanings ascribed to them
in the Merger Agreement):
"Affiliate" of any Person means another Person that directly
or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with, such first Person; provided, however, that for
the purposes of this Distribution Agreement and the Post-Closing Covenants
Agreement, from and after the Time of Distribution, none of the Retained
Companies or the New ▇▇▇▇▇▇▇ Companies shall be deemed to be an Affiliate of any
New ▇▇▇▇▇▇▇ Company or Retained Company, respectively.
"Ancillary Agreements" shall mean the documents listed in
clauses (a)-(i) of Section 5.1 hereof.
"Affiliate Contracts" shall have the meaning set forth in
Section 4.1(c)(iii) hereof.
"Assumed Liabilities" shall have the meaning set forth in
Section 4.2 hereof.
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"Business Stationery" shall have the meaning set forth in
Section 5.2 hereof.
"Change in Control" shall have the meaning set forth in the
Listed Agreements.
"Closing Balance Sheet" shall have the meaning set forth in
Section 3.05 of the Post-Closing Covenants Agreement.
"Closing Date" shall have the meaning set forth in Section
1.02 of the Merger Agreement.
"CMT" shall have the meaning set forth in Section 4.1(c)(i)
hereof.
"CMT Asset Transfer" shall have the meaning set forth in
Section 4.1(c)(iii) hereof.
"CMT International Assets" shall have the meaning set forth in
Section 4.1(c)(iii) hereof.
"CMTV" shall mean the Country Music Television cable
television network.
"Code" shall have the meaning set forth in the Recitals.
"Company" shall have the meaning set forth in the Preamble.
"Company Class A Common Stock" shall have the meaning set
forth in the Recitals.
"Company Class B Common Stock" shall have the meaning set
forth in the Recitals.
"Company Common Stock" shall have the meaning set forth in the
Recitals.
"Company Disclosure Schedule" shall have the meaning set forth
in Section 4.01 of the Merger Agreement.
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"Company Distribution" shall have the meaning set forth in the
Recitals.
"Company Stock Plans" shall mean the GEC Amended and Restated
1993 Stock Option and Incentive Plan and the GEC Amended and Restated 1991 Stock
Option and Incentive Plan.
"Company VEBA" shall mean the ▇▇▇▇▇▇▇ Entertainment Company
VEBA.
"Contracts" shall have the meaning set forth in Section 4.01
(d) of the Merger Agreement.
"DGCL" shall mean the General Corporation Law of the State of
Delaware.
"Distribution Agreement" shall have the meaning set forth in
the Preamble.
"Effective Time" shall have the meaning set forth in Section
1.03 of the Merger Agreement.
"Entertainment Business" shall mean all of the businesses
conducted at or at any time prior to the Effective Time by the Company or any of
its Subsidiaries, excluding the Retained Business.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
"Idea" shall have the meaning set forth in Section 4.1(a)(i)
hereof.
"Information" of a party shall mean any and all information
that such party or any of its Representatives furnish or have furnished to the
receiving party or any of its Representatives whether furnished orally or in
writing or by any other means or gathered by inspection and regardless of
whether the same is specifically marked or designated as "confidential" or
"proprietary", together with any and all notes, memoranda, analyses,
compilations, studies or other documents (whether in hard copy or electronic
media) prepared by the receiving party or any of its Representatives which
contain or otherwise reflect such Information, together with any and all copies,
extracts or other reproductions of any of the same; provided,
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however, that for the purposes hereof all information relating to the Retained
Companies and the Retained Business in the possession of any New ▇▇▇▇▇▇▇ Company
at the Time of Distribution shall be deemed to have been furnished by the
Retained Companies and all information relating to the New ▇▇▇▇▇▇▇ Companies and
the Entertainment Business in the possession of any Retained Company at the Time
of Distribution shall be deemed to have been furnished by the New ▇▇▇▇▇▇▇
Companies; provided, further, however, that the term "Information" does not
include information that:
(a) is or becomes generally available to the public
through no wrongful act of the receiving party or its Representatives;
(b) is or becomes available to the receiving party on a
nonconfidential basis from a source other than the providing party or its
Representatives, provided that such source is not known by the receiving party
to be subject to a confidentiality agreement with the providing party; or
(c) has been independently acquired or developed by the
receiving party without violation of any of the obligations of the receiving
party or its Representatives under this Distribution Agreement.
"IRS" shall mean the United States Internal Revenue Service.
"Liabilities" shall mean any and all debts, liabilities,
commitments and obligations, whether fixed, contingent or absolute, matured or
unmatured, liquidated or unliquidated, accrued or not accrued, known or unknown,
whenever or however arising and whether or not the same would be required by
generally accepted accounting principles to be reflected in financial statements
or disclosed in the notes thereto.
"Listed Agreements" shall have the meaning set forth in
Section 7.6 hereof.
"Merger" shall have the meaning set forth in the Recitals to
the Merger Agreement.
"Merger Agreement" shall have the meaning set forth in the
Recitals.
"NEI" shall have the meaning set forth in Section 4.1(e)(i)
hereof.
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"New CMT" shall have the meaning set forth in Section 4.1(c)
(iii) hereof.
"New ▇▇▇▇▇▇▇" shall have the meaning set forth in the
Preamble.
"New ▇▇▇▇▇▇▇ Companies" shall mean New ▇▇▇▇▇▇▇ and its
Subsidiaries (determined after giving effect to the transactions contemplated by
Article IV of this Distribution Agreement).
"New ▇▇▇▇▇▇▇ Employees" shall mean all current and former
employees of the Company and its Subsidiaries other than the Retained Employees.
"New ▇▇▇▇▇▇▇ Old Class B Common Stock" shall have the meaning
set forth in Section 2.1 hereof.
"New ▇▇▇▇▇▇▇ Common Stock" shall have the meaning set forth in
the Recitals.
"New ▇▇▇▇▇▇▇ Old Common Stock" shall have the meaning set
forth in Section 2.1 hereof.
"New ▇▇▇▇▇▇▇ Pension Plan" shall have the meaning set forth in
Section 7.3(a) hereof.
"New ▇▇▇▇▇▇▇ Recapitalization" shall have the meaning set
forth in Section 2.2 hereof.
"New ▇▇▇▇▇▇▇ Savings Plan" shall have the meaning set forth in
Section 7.3(b) hereof.
"New ▇▇▇▇▇▇▇ Welfare Plans" shall have the meaning set forth
in Section 7.3(c) hereof.
"Nonqualified Plans" shall have the meaning set forth in
Section 7.3(e) hereof.
"NV" shall have the meaning set forth in Section 4.1(e)(i)(C)
hereof.
"NYSE" shall mean The New York Stock Exchange, Inc.
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"OKC" shall have the meaning set forth in Section 4.1(f)(i)(A)
hereof.
"Opryland USA" shall have the meaning set forth in Section
4.1(b) hereof.
"O&W" shall have the meaning set forth in Section 4.1(c)(i)
hereof.
"Parent" shall have the meaning set forth in the Recitals.
"Person" shall have the meaning set forth in Section 10.03 of
the Merger Agreement.
"Post-Closing Covenants Agreement" shall have the meaning set
forth in Section 3.01 of the Merger Agreement.
"Record Date" shall mean the date designated by or pursuant to
the authorization of the Board of Directors of the Company for closing of the
stock transfer books of the Company for the purpose of determining the
stockholders of the Company entitled to participate in the Company Distribution.
"Replacement Welfare Plans" shall have the meaning set forth
in Section 7.2(c) hereof.
"Representatives" of a party shall mean such party's
affiliates, directors, officers, stockholders, partners, employees, agents or
other representatives (including attorneys, accountants and financial advisors).
"Restructuring" shall have the meaning set forth in Section
4.1 hereof.
"Retained Business" shall mean the Company's businesses
included in its cable networks segment excluding certain businesses as described
in Annex D to the Merger Agreement.
"Retained Business Balance Sheet" shall have the meaning set
forth in Section 4.01(g) of the Merger Agreement.
"Retained Companies" shall have the meaning set forth in
Section 4.01 of the Merger Agreement.
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"Retained Employees" shall mean those Persons who are
employees of the Retained Companies or the New ▇▇▇▇▇▇▇ Companies whose names are
listed on SCHEDULE 1.1 attached hereto other than those who continue to be
employed after the Effective Time by one of the New ▇▇▇▇▇▇▇ Companies as
contemplated by Section 6.15(d) of the Merger Agreement.
"Retained Liabilities" shall have the meaning set forth in
Section 4.2 hereof.
"SEC" shall mean the United States Securities and Exchange
Commission.
"Securities Act" shall mean the Securities Act of 1933, as
amended.
"Sub" shall have the meaning set forth in the Recitals.
"Subsidiary" shall mean, with respect to any Person, any
corporation or other organization, whether incorporated or unincorporated, of
which (i) such Person or any other Subsidiary of such Person is a general
partner or (ii) at least 50% of the securities or other interests having by
their terms ordinary voting power to elect a majority of the Board of Directors
or others performing similar functions with respect to such corporation or other
organization or at least 50% of the value of the outstanding equity is directly
or indirectly owned or controlled by such Person or by any one or more of its
Subsidiaries, or by such Person and one or more of its Subsidiaries.
"SUDCOMP Plan" shall have the meaning set forth in Section
7.2(e) hereof.
"Tax Disaffiliation Agreement" shall have the meaning set
forth in Section 3.1 hereof.
"Taxes" shall have the meaning set forth in Section 1.35 of
the Tax Disaffiliation Agreement.
"Time of Distribution" shall mean the time as of which the
Company Distribution is effective.
"TNN" shall mean the TNN cable television network.
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"Transfer Agent" shall mean SunTrust Bank, Atlanta, the
transfer agent for the Company Common Stock.
"Word Agreement" shall have the meaning set forth in Section
4.1(a)(i) hereof.
"Word Assets" shall have the meaning set forth in Section 4.1
(a)(i) hereof.
"Word Music" shall have the meaning set forth in Section 4.1
(a)(ii) hereof.
"Nonqualified Plans" shall have the meaning set forth in
Section 7.3(e) hereof.
"WSM" shall have the meaning set forth in Section 4.1(d)(i)
hereof.
ARTICLE II
RECAPITALIZATION OF NEW ▇▇▇▇▇▇▇;
MECHANICS OF COMPANY DISTRIBUTION
2.1 Capitalization of New ▇▇▇▇▇▇▇. The authorized capital
stock of New ▇▇▇▇▇▇▇ currently consists of (a) 10,000 shares of common stock,
$100.00 par value ("New ▇▇▇▇▇▇▇ Old Common Stock"), of which 1,000 shares are
issued and outstanding and owned beneficially and of record by the Company, and
(b) 10,000 shares of class B common stock, $.01 par value ("New ▇▇▇▇▇▇▇ Old
Class B Common Stock"), of which no shares are issued and outstanding.
2.2 Recapitalization of New ▇▇▇▇▇▇▇. Immediately prior to the
Time of Distribution, the Company shall cause New ▇▇▇▇▇▇▇ to amend its
Certificate of Incorporation to (a) create the New ▇▇▇▇▇▇▇ Common Stock, (b)
increase the authorized number of shares of common stock of New ▇▇▇▇▇▇▇ and
convert the shares of New ▇▇▇▇▇▇▇ Old Common Stock into that number of shares of
New ▇▇▇▇▇▇▇ Common Stock equal to one-third the number of shares of Company
Common Stock outstanding immediately prior to the Record Date for the Company
Distribution (the "New ▇▇▇▇▇▇▇ Recapitalization"), and (c) authorize 100 million
shares of preferred stock, par value $.01 per share.
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2.3 Mechanics of Company Distribution. The Company
Distribution shall be effected by the distribution to each holder of record of
shares of Company Common Stock, as of the Record Date, of certificates
representing the number of shares of New ▇▇▇▇▇▇▇ Common Stock equal to one-third
the number of shares of Company Common Stock held by such holder; provided,
however, that no fractional shares of New ▇▇▇▇▇▇▇ Common Stock shall be issued
or delivered. In the event there are holders of Company Common Stock holding of
record on the Record Date a number of shares of Company Common Stock not evenly
divisible by three, the Transfer Agent shall distribute certificates
representing shares of New ▇▇▇▇▇▇▇ Common Stock to such holders on the basis of
the next number of shares of Company Common Stock held below the actual number
of shares held which is evenly divisible by three. The Transfer Agent shall
aggregate all shares of New ▇▇▇▇▇▇▇ Common Stock that would be distributable but
for the proviso to the first sentence of this Section 2.3, shall sell such
shares in the public market as soon as practicable after the Time of
Distribution and shall distribute the proceeds of the sale of such shares pro
rata among the holders of record of Company Common Stock holding such numbers of
shares of Company Common Stock not evenly divisible by three.
2.4 Timing of the Company Distribution. The Board of Directors
of the Company (i) shall formally declare the Company Distribution and (ii)
shall authorize the Company to effect the Company Distribution at the close of
business on the Closing Date, which shall be the day immediately prior to the
Effective Time, subject to the satisfaction or waiver of the conditions set
forth in Article VIII of this Distribution Agreement, by delivery of
certificates representing shares of New ▇▇▇▇▇▇▇ Common Stock to the Transfer
Agent for delivery to the holders entitled thereto. The Company Distribution
shall be deemed to be effective upon notification by the Company to the Transfer
Agent that the Company Distribution has been declared and that the Transfer
Agent is authorized to proceed with the distribution of shares of New ▇▇▇▇▇▇▇
Common Stock.
ARTICLE III
TAX MATTERS
3.1 Tax Disaffiliation Agreement. Prior to the Time of
Distribution, New ▇▇▇▇▇▇▇, the Company and Parent shall enter into an agreement
relating to past and future tax sharing and certain issues associated therewith
in the form attached to the Merger Agreement as Annex B (the "Tax Disaffiliation
Agreement").
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3.2 Tax Matters. Notwithstanding anything to the contrary in
this Distribution Agreement, Liabilities of the parties for Taxes are subject to
the terms of the Tax Disaffiliation Agreement. All obligations of New ▇▇▇▇▇▇▇
under the Tax Disaffiliation Agreement shall be treated as Assumed Liabilities
and not as Retained Liabilities under this Distribution Agreement and all
obligations of the Company under the Tax Disaffiliation Agreement shall be
treated as Retained Liabilities and not as Assumed Liabilities under this
Distribution Agreement.
ARTICLE IV
RESTRUCTURING AND ASSUMED LIABILITIES
4.1 Restructuring. Prior to the Time of Distribution, the
Company and New ▇▇▇▇▇▇▇ shall cause the following transactions to occur in the
order set forth below (the "Restructuring"), which transactions are intended to
separate the Entertainment Business from the Retained Business:
(a) The Company shall, effective as of January 6,
1997:
(i) contribute, as a capital contribution to
Idea Enter- tainment, Inc., a Delaware corporation and a wholly owned
subsidiary of the Company formerly known as Word Entertainment Group,
Inc. ("Idea"), (A) all of the Company's right, title and interest in
and to the assets (the "Word Assets") purchased pursuant to the Asset
Purchase Agreement, dated as of November 21, 1996, by and among ▇▇▇▇▇▇
▇▇▇▇▇▇, Inc., Word, Incorporated, Word Direct Partners, L.P. and the
Company (the "Word Agreement") and (B) all of the Company's rights and
obligations under the Word Agreement; and
(ii) cause Idea to contribute, as capital
contributions to Word Music Group, Inc., a Tennessee corporation and a
wholly owned subsidiary of Idea ("Word Music"), and to Word
Entertainment Direct LLC, a limited liability company that is 99%-owned
by Idea, all or a portion of the Word Assets. Thereafter, Word Music
may contribute all or a portion of such Word Assets to one or more of
its Subsidiaries, which may, in turn, contribute all or a portion of
such assets to one or more of Word Music's indirect Subsidiaries.
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(b) New ▇▇▇▇▇▇▇ shall cause its wholly owned
Subsidiary, Opryland USA Inc, a Delaware corporation ("Opryland USA"), to be
merged upstream with and into New ▇▇▇▇▇▇▇;
(c) New ▇▇▇▇▇▇▇ shall:
(i) pay the then outstanding balance of
any intercompany notes payable and accounts payable owed by New
▇▇▇▇▇▇▇, as successor to Opryland USA, to Country Music Television
Inc., a Tennessee corporation ("CMT") by transferring to CMT an equal
amount of intercompany notes payable and accounts payable owed by O&W
Corporation ("O&W"), a Tennessee corporation, to New ▇▇▇▇▇▇▇, as
successor to Opryland USA;
(ii) contribute to the capital of O&W the
then outstanding balance of intercompany notes payable and accounts
payable owed to New ▇▇▇▇▇▇▇, as successor to Opryland USA, by each of
O&W and Outdoor Entertainment, Inc., a Tennessee corporation;
(iii) cause CMT to transfer (A) all
assets listed on SCHEDULE 4.1(C)(III) attached hereto which
comprise the assets used in the business of CMT outside of the United
States and Canada (other than the trademarks and other intellectual
property used by CMT outside of the United States and Canada) (the
"CMT International Assets"), together with all Liabilities associated
therewith (other than the loans payable to Parent or any of its
Subsidiaries) which are currently held in the European, Latin American
and Asian divisions of CMT, (B) the excluded real and personal
property reflected on CMT's balance sheet which is included in Exhibit
1 to Section 4.01(g) of the Company Disclosure Schedule and (C) all
Contracts listed on SCHEDULE 4.1(C)(III-1) attached hereto as well as
any Contracts between CMT and its network affiliates ("Affiliate
Contracts") relating to the distribution of CMTV in Europe, Asia and
Latin America, except those Affiliate Contracts pursuant to which
CMT's network affiliates receive CMTV via the satellite that is used
to distribute CMTV inside the United States and Canada, to a newly
formed wholly owned direct Subsidiary corporation of CMT ("New CMT")
in exchange for all of the issued and outstanding capital stock of New
CMT (the "CMT Asset Transfer");
(iv) cause CMT to distribute, immediately
after the CMT Asset Transfer, all of the issued and outstanding capital
stock of New
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CMT to O&W, the holder of all of the issued and outstanding capital
stock of CMT; and
(v) cause O&W to distribute all of the
issued and outstanding capital stock of New CMT to New ▇▇▇▇▇▇▇,
as successor to Opryland USA, the holder of 67% of the capital stock
of O&W, in redemption of a portion of the O&W capital stock held by
New ▇▇▇▇▇▇▇ equal to the fair market value of the then outstanding
capital stock of New CMT.
(d) New ▇▇▇▇▇▇▇ shall:
(i) cause its wholly owned direct
Subsidiary, WSM, Incorporated, a Tennessee corporation ("WSM"), to be
merged upstream with and into New ▇▇▇▇▇▇▇; and
(ii) cause Hospitality & Leisure Management
Company, Inc., a Delaware corporation and, after the merger of WSM with
and into New ▇▇▇▇▇▇▇ described in (i) above, a wholly owned direct
Subsidiary of New ▇▇▇▇▇▇▇, to be merged upstream with and into New
▇▇▇▇▇▇▇.
(e) (i) New ▇▇▇▇▇▇▇, as successor to
Opryland USA, shall contribute, or shall cause to be contributed, as a capital
contribution to Network Enterprises, Inc., a Tennessee corporation and a
wholly owned direct Subsidiary of New ▇▇▇▇▇▇▇ ("NEI"), the following assets:
(A) all of the issued and
outstanding shares of capital stock of O&W held by New ▇▇▇▇▇▇▇, as
successor to Opryland USA;
(B) all of the issued and
outstanding capital stock of Peppercorn Productions, Inc., a Tennessee
corporation and a wholly owned, direct Subsidiary of New ▇▇▇▇▇▇▇, as
successor to Opryland USA;
(C) all of the issued and
outstanding shares of capital stock of NV International, Inc., a
Georgia corporation ("NV"), held by New ▇▇▇▇▇▇▇, as successor to
Opryland USA;
(D) all of New Gaylord's
contractual rights and obligations under the Distribution Agreement,
dated as of January 1, 1989, as amended, among New ▇▇▇▇▇▇▇, as
successor to Opryland USA, and
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Parent, as successor to Westinghouse Broadcasting Company, Inc., Group
W Television, Inc. and Group W Satellite Communications;
(E) all of New Gaylord's
contractual rights and obligations under the programming contracts for
programs (x) produced for and originally aired on or to be produced for
and originally aired on TNN and/or CMTV or (y) licensed from a third
party for exhibition on TNN and/or CMTV;
(F) all of New Gaylord's right,
title, interest and obligations in and to the program inventory in its
inventory tape library that was produced for and originally aired on
TNN and/or CMTV;
(G) all of New Gaylord's custodial
rights and obligations with respect to the program inventory in its
inventory tape library that was originally aired on TNN and is held by
New ▇▇▇▇▇▇▇ as custodian;
(H) all of New Gaylord's right,
title and interest in and to the assets (and related Liabilities)
reflected on the Retained Business Balance Sheet under the column
"GBCI" excluding those assets (and related Liabilities) disposed of in
the ordinary course of business since the date of the Retained Business
Balance Sheet and including all assets (and related Liabilities)
acquired since the date of the Retained Business Balance Sheet which
would have been reflected under the column "GBCI" if the Retained
Business Balance Sheet were prepared on the date that such assets were
contributed to NEI; and
(I) all of New Gaylord's and its
Subsidiaries' (other than NEI's and its Subsidiaries') right, title and
interest in and to (a) the trademarks and other owned and registered
intellectual property relating primarily to the Retained Business, as
set forth on SCHEDULE 4.1(E)(I)(I) attached hereto, (b) all
unregistered intellectual property used solely by the Retained
Business,except that listed on SCHEDULE 4.1(E)(I)(I-1) attached hereto,
and (c) all FCC licenses used solely in connection with the Retained
Business and FCC license number E-950243 (which is used in connection
with both the Entertainment Business and the Retained Business).
(J) all of New Gaylord's rights and
obligations under the Contracts set forth on SCHEDULE 4.1(E)(I)(J)
attached hereto, which
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Contracts have been entered into by New ▇▇▇▇▇▇▇ or Opryland USA for the
benefit of one or more of the Retained Companies.
(ii) New ▇▇▇▇▇▇▇ shall cause NEI to
assume all intercompany notes payable and accounts payable owed by New ▇▇▇▇▇▇▇
to NV and its Subsidiaries.
(iii) New ▇▇▇▇▇▇▇, as successor to Opryland
USA, shall assign to a newly formed wholly owned direct Subsidiary of NEI that
is a limited liability company all rights and obligations under or in connection
with the Program Agreement between Opryland USA d/b/a/ The ▇▇▇▇▇ ▇▇▇ ▇▇▇▇ and
the American Federation of Television and Radio Artists, dated January 1, 1996.
(f) The Company shall pay the then outstanding
balance of the intercompany note payable and accounts payable owed by the
Company to New ▇▇▇▇▇▇▇ in the following manner:
(i) the Company shall transfer to New
▇▇▇▇▇▇▇ the Company's aggregate interest in a minor league baseball
franchise, including, without limitation, the assets set forth below,
as payment of an amount of such balance equal to the agreed upon fair
market value of such assets:
(A) all of the capital stock of
Oklahoma City Athletic Club, Inc., an Oklahoma corporation ("OKC"),
held by the Company (50%);
(B) all of the Company's limited
partner interest (24.5%) in OKC Athletic Club, LP, an Oklahoma limited
partnership; and
(C) all of the Company's limited
partner interest (24.5%) in OKC Concession Services Limited
Partnership, an Oklahoma limited partnership; and
(ii) to the extent of any remaining balance,
the Company shall transfer to New ▇▇▇▇▇▇▇ an equal amount of
intercompany notes receivable and accounts receivable owed by New
▇▇▇▇▇▇▇ or one or more of its Subsidiaries to the Company, which shall
consist of (A) all or a portion of such receivables owed by NEI and
NEI's Subsidiaries to the Company (to the extent such receivables are
to be paid by NEI pursuant to
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Section 4.1(g)), (B) all or a portion of such receivables owed by New
▇▇▇▇▇▇▇ to the Company, and (C) a portion of such receivables owed by
the Company's Subsidiaries (other than New ▇▇▇▇▇▇▇, NEI and NEI's
Subsidiaries) to the Company which relate to the Entertainment
Business.
(g) New ▇▇▇▇▇▇▇ shall cause NEI to pay the
outstanding balance of intercompany notes receivable and accounts receivable
then owed by NEI and NEI's Subsidiaries to New ▇▇▇▇▇▇▇ (which were transferred
to New ▇▇▇▇▇▇▇ pursuant to Section 4.1(f)(ii)(A)) with the following assets that
have an aggregate agreed upon fair market value equal to such balance:
(i) all of NEI's general partner interest
(51%) in WHS Entertainment Ventures, a Tennessee general partnership;
(ii) all of NEI's right, title and
interest in and to the Wildhorse Saloon in Nashville, Tennessee,
including all intellectual property related thereto (other than
intellectual property (A) relating primarily to the Retained Business,
as set forth on SCHEDULE 4.1(E)(I)(I) attached hereto, or (B) used
solely by the Retained Business and not listed on SCHEDULE
4.1(E)(I)(I-1) attached hereto);
(iii) all of NEI's right, title and
interest in and to all real property and improvements thereto owned by
NEI, including, without limitation, the TNN headquarters building, the
Greenland building, the Gaslight building, improvements to the ▇▇▇▇▇
▇▇▇ ▇▇▇▇ House, the Scenic Shop, the antenna farm and the broadcast
service facilities field shop;
(iv) all of the capital stock of WHS
Licensing GP Corporation, a Tennessee corporation held by NEI (51%);
(v) all of NEI's limited partner interest
(50.49%) in WHS Licensing Limited Partnership, a Tennessee limited
partnership;
(vi) all of NEI's or NEI's Subsidiaries'
right, title and interest in and to Z Music, Inc. and the assets
thereof;
(vii) all of NEI's right, title and
interest in and to the assets set forth on SCHEDULE 4.1(G)(VII)
attached hereto; and
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(viii) all of NEI's and NEI's Subsidiaries'
right, title and interest in and to (A) all trademarks and other owned
and registered intellectual property relating primarily to the
Entertainment Business and (B) all unregistered intellectual property
other than such intellectual property used solely by the Retained
Business and not listed on SCHEDULE 4.1(E)(I)(I-1) attached hereto.
(h) The Company shall contribute, as a capital
contribution to New ▇▇▇▇▇▇▇, all of the outstanding capital stock of Idea.
(i) New ▇▇▇▇▇▇▇ may transfer to one or more of New
Gaylord's Subsidiaries (other than NEI or NEI's Subsidiaries) all or a portion
of (i) the assets received from NEI pursuant to Section 4.1(g) and (ii) the
assets received from the Company pursuant to Section 4.1(f).
(j) The Company shall contribute, as a capital
contribution to New ▇▇▇▇▇▇▇, the then outstanding balance of the intercompany
notes receivable and accounts receivable owed by the Company's Subsidiaries
(other than NEI and NEI's Subsidiaries) to the Company which relate to the
Entertainment Business.
(k) The Company shall contribute, as a capital
contribution to New ▇▇▇▇▇▇▇, the following assets:
(i) all of the Company's right, title and
interest (other than NEI's and NEI's Subsidiaries' right, title and
interest which is the subject of Section 4.1(g)(vi)) in and to Z Music,
Inc. and the assets thereof, the option to acquire 95% of the
outstanding stock of Z Music, Inc., the outstanding balance of any note
receivable and any accounts receivable owed by Z Music, Inc. to the
Company, and all other related rights;
(ii) all of the Company's right, title and
interest in and to all of the assets and Liabilities and rights and
obligations under any Contracts of the Company except those assets,
Liabilities and contractual rights and obligations set forth on
SCHEDULE 4.1(K)(II) attached hereto; and
(iii) all of the Company's right, title and
interest in and to (i) all trademarks and other owned and registered
intellectual property relating primarily to the Entertainment Business
and (ii) all unregistered intellectual property other than such
intellectual property used solely by the Retained Business and not
listed on SCHEDULE 4.1(E)(I)(I-1) attached hereto.
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(l) New ▇▇▇▇▇▇▇ shall assume all then outstanding
third-party bank debt of the Company and any intercompany notes and accounts
payable then owed by the Company to New Gaylord's Subsidiaries (other than those
owed to NEI on NEI's Subsidiaries).
(m) New ▇▇▇▇▇▇▇ shall distribute all of the issued
and outstanding capital stock of NEI to the Company.
4.2 Other Assumed Liabilities. The parties further agree that,
except as otherwise specifically set forth in this Distribution Agreement, the
Merger Agreement, the Post-Closing Covenants Agreement or the Tax Disaffiliation
Agreement, at or prior to the Time of Distribution, New ▇▇▇▇▇▇▇ shall, or shall
cause the appropriate New ▇▇▇▇▇▇▇ Subsidiary to, unconditionally assume and
undertake to pay, satisfy and discharge when due in accordance with their terms
all Liabilities (whether arising before or after the Time of Distribution) of
the Company and its Subsidiaries other than the Retained Liabilities
(collectively, the "Assumed Liabilities"), and the Company shall retain, or
shall, or shall cause the appropriate Retained Company to assume, and undertake
to pay, satisfy and discharge when due in accordance with their terms all
Liabilities (whether arising before or after the Time of Distribution
(including, without limitation, all Liabilities to be reflected on the Closing
Balance Sheet)) of the Company and its Subsidiaries to the extent arising out of
the Retained Business (the "Retained Liabilities").
4.3 OPUBCO Liabilities. The Company shall have a right of
subrogation to New Gaylord's right (as successor to the Company upon
consummation of the Restructuring) to indemnification pursuant to the
Distribution Agreement dated as of October 30, 1991 between the Company and The
Oklahoma Publishing Company and relating, inter alia, to Liabilities arising out
of or related to sites listed on the National Priorities List under the
Comprehensive Environment Response, Compensation, and Liability Act, including
the ▇▇▇▇▇▇▇/▇▇▇▇▇▇ site, the ▇▇▇▇▇▇ Road site and the Double Eagle Refining
site.
4.4 Intercompany Balances. The parties agree that following
the Restructuring there shall not be outstanding any indebtedness or accounts
payable or receivable between any of the Retained Companies, on the one hand,
and any of the New ▇▇▇▇▇▇▇ Companies, on the other hand.
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ARTICLE V
OTHER AGREEMENTS
5.1 Ancillary Agreements. Prior to the Time of Distribution,
the Company, or another of the Retained Companies, and New ▇▇▇▇▇▇▇, or another
of the New ▇▇▇▇▇▇▇ Companies, shall enter into (a) one or more mutually
satisfactory five-year agreements relating to the lease by the New ▇▇▇▇▇▇▇
Companies to the Retained Companies subsequent to the Time of Distribution of
certain real property described on ANNEX A attached hereto, with substantially
the terms set forth thereon, (b) a mutually satisfactory five-year agreement
relating to certain productions and promotional activities of the ▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Live and the Wildhorse Saloon subsequent to the Time of Distribution, with
substantially the terms set forth on ANNEX B attached hereto, (c) a mutually
satisfactory five-year agreement relating to certain promotional advertising
services consisting of the exhibition of the New ▇▇▇▇▇▇▇ Companies' promotional
advertising on TNN and CMTV subsequent to the Time of Distribution, with
substantially the terms set forth on ANNEX C attached hereto, (d) a mutually
satisfactory five-year agreement relating to certain operational, distribution,
marketing, sales, programming and administrative services to be provided to New
CMT by the Company subsequent to the Time of Distribution, with substantially
the terms set forth on ANNEX D attached hereto, (e) a mutually satisfactory
five-year agreement relating to the use by the New ▇▇▇▇▇▇▇ Companies subsequent
to the Time of Distribution of the GI-R transponder number 6 for Z Music
distribution, with substantially the terms set forth on ANNEX E attached hereto,
(f) a mutually satisfactory perpetual, exclusive (including with respect to the
Company), royalty-free license agreement relating to the use by New ▇▇▇▇▇▇▇ of
the CMT name outside of the United States and Canada and all related trademarks
owned by the Company with substantially the terms set forth on ANNEX F attached
hereto, (g) a mutually satisfactory one-year license agreement relating to the
use by the Company of the Opryland Duplicating Services with mandolin design
▇▇▇▇ and other license agreements as deemed necessary after the Time of
Distribution, with substantially the terms set forth on ANNEX G attached hereto,
(h) a mutually satisfactory perpetual license agreement relating to the use by
the Company of certain software owned by New ▇▇▇▇▇▇▇, with substantially the
terms set forth on ANNEX H attached hereto and (i) one or more mutually
satisfactory five-year transition services agreements relating to the services
set forth on ANNEXES I AND J with substantially the terms set forth thereon.
Each of the Company and New ▇▇▇▇▇▇▇ agree that the annual fair market values of
the rights and benefits to be received pursuant to the Annexes and provisions
referred to in this Section 5.1 by the Retained Companies, on the one hand, and
the New ▇▇▇▇▇▇▇ Companies, on the other hand, are intended to be equal.
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5.2 Use of "▇▇▇▇▇▇▇" and "Opryland" Names. From and after the
Effective Time, New ▇▇▇▇▇▇▇ shall have all rights in and use of the name
"▇▇▇▇▇▇▇" and all derivatives thereof and, except as contemplated by Annex G to
this Distribution Agreement, the name "Opryland" and all derivatives thereof. As
a result, after completion of the Restructuring, the Company shall take or cause
to be taken all action necessary to (a) change, immediately prior to the Time of
Distribution, the name of any of the Retained Companies (other than the Company)
to eliminate therefrom the names "▇▇▇▇▇▇▇" and "Opryland" and all respective
derivatives thereof and (b) promptly deliver to New ▇▇▇▇▇▇▇ all stationery,
business cards, brochures and other documents (collectively, "Business
Stationery"), including, without limitation, invoices and purchase orders,
bearing the name "▇▇▇▇▇▇▇" and all derivatives thereof and, except as
contemplated by Annex G to this Distribution Agreement, the name "Opryland" and
all derivatives thereof; provided, however, that the Company shall not be
required to deliver to New ▇▇▇▇▇▇▇ any Business Stationery that also contains
the name of any of the Retained Businesses or any derivative thereof, until
three (3) months following the Effective Time. Within three (3) months following
the Effective Time, the Company shall cause to be removed from display from all
of its facilities all demountable displays which contain the names "▇▇▇▇▇▇▇" or
"Opryland" and all respective derivatives thereof or any corporate symbol
related thereto and shall cause the removal of all signs displaying such name
and all derivatives thereof.
5.3 Books and Records. Prior to or as promptly as practicable
after completion of the Restructuring, the Company shall deliver to New ▇▇▇▇▇▇▇
all corporate books and records of the New ▇▇▇▇▇▇▇ Companies in the possession
of the Retained Companies and the relevant portions (or copies thereof) of all
corporate books and records of the Retained Companies relating directly and
primarily to the New ▇▇▇▇▇▇▇ Companies, the Entertainment Business or the
Assumed Liabilities, including, in each case, all active agreements, active
litigation files and government filings. From and after the completion of the
Restructuring, all such books, records and copies shall be the property of New
▇▇▇▇▇▇▇. The Company may retain copies of all such corporate books and records.
Prior to or as promptly as practicable after the completion of the
Restructuring, New ▇▇▇▇▇▇▇ shall deliver to the Company all corporate books and
records of the Retained Companies in the possession of any of the New ▇▇▇▇▇▇▇
Companies and relevant portions (or copies thereof) of all corporate books and
records of the New ▇▇▇▇▇▇▇ Companies relating directly and primarily to the
Retained Companies, the Retained Business or the Retained Liabilities,
including, in each case, all active agreements, active litigation files and
government filings. From and after the completion of the Restructuring, all such
books, records and copies shall be the property of the Company. New ▇▇▇▇▇▇▇ may
retain copies of all such corporate books and records.
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5.4 Access. From and after the Time of Distribution, each of
the Company and New ▇▇▇▇▇▇▇ shall afford to the other and to the other's
Representatives reasonable access and duplicating rights (at the requesting
party's expense), during normal business hours and upon reasonable advance
notice, to all information within the possession or control of any of the
Retained Companies or any of the New ▇▇▇▇▇▇▇ Companies, as the case may be, to
the extent relating to the business, assets or Liabilities of the other as they
existed prior to the completion of the Restructuring or to the extent relating
to or arising in connection with the relationship between any of the Retained
Companies or the New ▇▇▇▇▇▇▇ Companies, as the case may be, prior to the
Restructuring insofar as such access is reasonably required for a reasonable
purpose. Without limiting the foregoing, information may be requested under this
Section 5.4 for audit, accounting, claims, litigation and tax purposes, as well
as for purposes of fulfilling disclosure and reporting obligations.
5.5 Retention of Records. Except as provided in any of the
Transaction Agreements, if any information relating to the businesses, assets or
Liabilities of a Retained Company or a New ▇▇▇▇▇▇▇ Company is retained by a New
▇▇▇▇▇▇▇ Company or Retained Company, respectively, each of the Company and New
▇▇▇▇▇▇▇ shall, and shall cause the other Retained Companies and New ▇▇▇▇▇▇▇
Companies, respectively, to, retain all such information in the Retained
Companies' or New ▇▇▇▇▇▇▇ Companies' possession or under its control until such
information is at least ten years old except that if, prior to the expiration of
such period, any Retained Company or New ▇▇▇▇▇▇▇ Company wishes to destroy or
dispose of any such information that is at least three years old, prior to
destroying or disposing of any of such information, (a) the Company or New
▇▇▇▇▇▇▇, on behalf of the Retained Company or the New ▇▇▇▇▇▇▇ Company that is
proposing to dispose of or destroy any such information, shall provide no less
than 45 days' prior written notice to the other party, specifying the
information proposed to be destroyed or disposed of, and (b) if, prior to the
scheduled date of such destruction or disposal, the other party requests in
writing that any of the information proposed to be destroyed or disposed of be
delivered to such other party, the Company or New ▇▇▇▇▇▇▇, as applicable,
promptly shall arrange for the delivery of the requested information to a
location specified by, and at the expense of, the requesting party.
5.6 Confidentiality.
(a) Each party hereto shall keep, and shall
cause its Representatives to keep, the other party's Information strictly
confidential and will disclose such Information only to such of its
Representatives who need to know such Information and who agree to be bound by
this Section 5.6 and not to disclose such
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Information to any other Person. Without the prior written consent of the other
party, each party and its Representatives shall not disclose the other party's
Information to any Person or entity except as may be required by law or judicial
process and in accordance with this Section 5.6.
(b) In the event that either party or any of its
Representatives receives a request or is required by law or judicial process to
disclose to a court or other tribunal all or any part of the other party's
Information, the receiving party or its Representatives shall promptly notify
the other party of the request in writing, and consult with and assist the other
party in seeking a protective order or request for other appropriate remedy. In
the event that such protective order or other remedy is not obtained or the
other party waives compliance with the terms hereof, such receiving party or its
Representatives, as the case may be, shall disclose only that portion of the
Information or facts which, in the written opinion of the receiving party's
outside counsel, is legally required to be disclosed, and will exercise its
respective reasonable best efforts to assure that confidential treatment will be
accorded such Information or facts by the Persons or entities receiving the
same. The providing party will be given an opportunity to review the Information
or facts prior to disclosure.
5.7 Listing on NYSE. New ▇▇▇▇▇▇▇ shall use its reasonable best
efforts to list the shares of New ▇▇▇▇▇▇▇ Common Stock to be issued pursuant to
the Company Distribution on the NYSE, subject to official notice of issuance, or
to have such shares designated as a national market system security on the
interdealer quotation system by the National Association of Securities Dealers,
Inc.
5.8 Further Assurances. The parties agree that if, after the
Time of Distribution, either party holds assets which by the terms hereof or of
the Merger Agreement were intended to be assigned and transferred to, or
retained by, the other party, such party shall, at its expense, promptly assign
and transfer or cause to be assigned and transferred such assets to the other
party, and the parties agree that the transferring party will hold such assets
as trustee of the transferee party and all income and risk of loss of the
transferred assets to the Time of Distribution shall be for the account of the
intended owner. Each of the parties hereto, at its own cost and expense,
promptly shall execute such documents and other instruments and take such
further actions as may be reasonably required or desirable to carry out the
provisions hereof and to consummate the transactions contemplated hereby.
5.9 Cooperation. The parties shall cooperate with each other
in all reasonable respects to ensure (a) that the Restructuring and the
assumption of the
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Retained Liabilities ( to the extent necessary) and the Assumed Liabilities are
consummated in accordance with the terms hereof, (b) the retention by the
Company of the Retained Business, including, without limitation, allocating
rights and obligations under Contracts, if any, of the Retained Companies or the
New ▇▇▇▇▇▇▇ Companies that relate to the Retained Business, and (c) the
retention by New ▇▇▇▇▇▇▇ of the Entertainment Business, including, without
limitation, allocating rights and obligations under Contracts, if any, of the
New ▇▇▇▇▇▇▇ Companies or the Retained Companies that relate to the Entertainment
Business.
ARTICLE VI
RELEASES
6.1 Mutual Release. Effective as of the Time of Distribution
and except as otherwise specifically set forth in the Transaction Agreements,
each of the Company, on the one hand, and New ▇▇▇▇▇▇▇, on the other hand,
releases and forever discharges the other and its affiliates, and its and their
directors, officers, employees and agents of and from all debts, demands,
actions, causes of action, suits, accounts, covenants, contracts, agreements,
damages, and any and all claims, demands and Liabilities whatsoever of every
name and nature, both in law and in equity, against such other party or any of
its assigns, which the releasing party has or ever had, which arise out of or
relate to events, circumstances or actions taken by such other party prior to
the Time of Distribution; provided, however, that the foregoing general release
shall not apply to this Distribution Agreement, the Merger Agreement, the
Post-Closing Covenants Agreement or the Tax Disaffiliation Agreement or the
transactions contemplated hereby or thereby and shall not affect either party's
right to enforce this Distribution Agreement or any other agreement contemplated
hereby or thereby in accordance with its terms. Each party understands and
agrees that, except as otherwise specifically provided herein or in the Merger
Agreement, the Post- Closing Covenants Agreement or the Tax Disaffiliation
Agreement, neither the other party nor any of its Subsidiaries is, in this
Distribution Agreement or any other agreement or document, representing or
warranting to such party in any way as to the assets, business or Liabilities
transferred or assumed as contemplated hereby or thereby or as to any consents
or approvals required in connection with the consummation of the transactions
contemplated by this Distribution Agreement, the Merger Agreement, the
Post-Closing Covenants Agreement or the Tax Disaffiliation Agreement.
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ARTICLE VII
EMPLOYEE MATTERS
7.1 Employees. Effective as of the Time of Distribution, (a)
Retained Employees shall remain or become employees of the Retained Companies in
the same capacities as then held by such employees (or in such other capacities
and upon such terms and conditions as the Company shall determine in its sole
discretion) and (b) New ▇▇▇▇▇▇▇ Employees shall remain or become employees of
the New ▇▇▇▇▇▇▇ Companies in the same capacities as then held by such employees
(or in such other capacities and upon such terms and conditions as New ▇▇▇▇▇▇▇
shall determine in its sole discretion). Nothing contained in this Section 7.1
shall confer on any Retained Employee or any New ▇▇▇▇▇▇▇ Employee any right to
continued employment after the Time of Distribution, and such employees shall
continue to be employed "at-will".
7.2 Other Liabilities and Obligations. Effective as of the
Time of Distribution, New ▇▇▇▇▇▇▇ shall assume and be solely responsible for (i)
all liabilities and obligations related to the New ▇▇▇▇▇▇▇ Employees and (ii)
except as specifically provided in this Article VII and except to the extent
otherwise provided in this Distribution Agreement, the Merger Agreement or the
Post-Closing Covenants Agreement, all liabilities and obligations related to the
Retained Employees that were incurred on or before the Time of Distribution.
Effective as of the Time of Distribution, the Company shall assume and be solely
responsible for (i) all liabilities and obligations related to the Retained
Employees incurred after the Time of Distribution, (ii) all holiday, vacation
and sick day benefits of the Retained Employees accrued as of the Time of
Distribution to the extent reflected on the Closing Balance Sheet and (iii) all
other liabilities, including without limitation for worker's compensation and
medical benefits, to the extent reflected as a Current Liability on the Closing
Balance Sheet (as those terms are defined in the Post-Closing Covenants
Agreement). For purposes of this Section 7.2, a liability is "incurred" on
either the date the event giving rise to the liability occurs or, if the
liability is related to more than one event, the date the first event to which
the liability relates occurs. Notwithstanding the foregoing, (i) New ▇▇▇▇▇▇▇
shall assume all liabilities and obligations related to Retained Employees who
also perform services for the New ▇▇▇▇▇▇▇ Companies with respect to whom New
▇▇▇▇▇▇▇ continues to employ in accordance with Section 6.15(d) of the Merger
Agreement and (ii) the Company shall have no obligation or liability (including
severance liability) thereto. Notwithstanding the foregoing, deferred directors'
fees shall be the sole responsibility of New ▇▇▇▇▇▇▇.
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7.3 Employee Benefits. Without limiting the generality of
Section 7.2 above:
(a) Effective as of the Time of Distribution,
New ▇▇▇▇▇▇▇ shall assume sponsorship of the Retirement Plan for Employees of New
▇▇▇▇▇▇▇ and Affiliated and Adopting Corporations (the "New ▇▇▇▇▇▇▇ Pension
Plan") and the trust related thereto. As of the Time of Distribution, Retained
Employees shall cease to participate in the New ▇▇▇▇▇▇▇ Pension Plan and shall
be fully vested in their benefits accrued thereunder as of the Time of
Distribution, and the accrued benefits of Retained Employees shall be maintained
under the New ▇▇▇▇▇▇▇ Pension Plan until distributed in accordance with the
terms of the New ▇▇▇▇▇▇▇ Pension Plan.
(b) Effective as of the Time of Distribution,
New ▇▇▇▇▇▇▇ shall assume sponsorship of the GEC 401(k) Savings Plan (the "New
▇▇▇▇▇▇▇ Savings Plan") and the trust related thereto. As of the Time of
Distribution, Retained Employees shall cease to participate in the New ▇▇▇▇▇▇▇
Saving Plan, and shall be fully vested in their account balances thereunder as
of the Time of Distribution, and the account balances of Retained Employees
shall be maintained under the New ▇▇▇▇▇▇▇ Savings Plan until distributed in
accordance with the terms of the New ▇▇▇▇▇▇▇ Savings Plan.
(c) Effective as of the Time of Distribution,
New ▇▇▇▇▇▇▇ shall assume sponsorship of the employee welfare benefit plans (as
such term is defined in ERISA) maintained or sponsored by the Company
immediately prior to the Time of Distribution ("New ▇▇▇▇▇▇▇ Welfare Plans"). As
of the Time of Distribution, Retained Employees shall cease to participate in
the New ▇▇▇▇▇▇▇ Welfare Plans and, unless allowed to participate in Parent (or
any of its Subsidiaries) welfare plans, shall commence to participate in welfare
benefit plans of the Company (the "Replacement Welfare Plans"). The Company
will, or shall use its best efforts to cause Parent (or any of its Subsidiaries)
to, (i) waive all limitations as to pre-existing condition exclusions and
waiting periods with respect to participation and coverage requirements
applicable to Retained Employees under the Replacement Welfare Plans, other than
limitations or waiting periods that were in effect with respect to such
employees under the New ▇▇▇▇▇▇▇ Welfare Plans and that have not been satisfied
as of the Time of Distribution, and (ii) provide each Retained Employee with
credit for any co-payments and deductibles paid prior to the Time of
Distribution in satisfying any deductible or out-of-pocket requirements under
the Replacement Welfare Plans. Effective as of the Time of Distribution, New
▇▇▇▇▇▇▇ shall assume sponsorship of the Company VEBA.
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(d) Effective as of the Time of Distribution, with
respect to those collective bargaining agreements to which any of the Retained
Companies or the New ▇▇▇▇▇▇▇ Companies is a party and which cover New ▇▇▇▇▇▇▇
Employees, New ▇▇▇▇▇▇▇ shall assume liabilities and obligations of the Retained
Companies and the New ▇▇▇▇▇▇▇ Companies thereunder, to the extent that such
liabilities and obligations relate to New ▇▇▇▇▇▇▇ Employees and the
Entertainment Business.
(e) Effective as of the Time of Distribution, New
▇▇▇▇▇▇▇ will assume sponsorship of the Company's Opryland USA, Inc. Supplemental
Deferred Compensation Plan ("SUDCOMP Plan"), NLT Supplemental Executive
Retirement Plan, GEC Benefit Restoration Plan and the GEC Supplemental Executive
Retirement Plan (collectively, the "Nonqualified Plans"). As of the time of
Distribution, Retained Employees shall cease to participate in the Nonqualified
Plans and shall be fully vested in their benefits accrued thereunder or account
balances thereunder, as applicable, as of the Time of Distribution.
7.4 Preservation of Rights to Amend or Terminate Plans. Except
as otherwise provided in the Merger Agreement or this Distribution Agreement, no
provision of this Distribution Agreement shall be construed as a limitation on
the right of the Company or New ▇▇▇▇▇▇▇ to amend or terminate any employee
benefit plan, policy, or other perquisite of employment (hereinafter, "Employee
Benefit") which right the Company or New ▇▇▇▇▇▇▇ would otherwise have under the
terms of such Employee Benefit, and no provision of this Distribution Agreement
shall be construed to create a right in any employee or beneficiary of such
Employee Benefit that such employee or beneficiary would not otherwise have
under the terms of the plan or policy governing the Employee Benefit itself.
7.5 Reimbursement; Indemnification. New ▇▇▇▇▇▇▇ and the
Company acknowledge that the Company, on the one hand, and New ▇▇▇▇▇▇▇, on the
other hand, may incur costs and expenses (including, without limitation,
contributions to plans and the payment of insurance, or other similar premiums)
pursuant to any of the employee benefit or compensation plans, programs or
arrangements which are, as set forth in this Distribution Agreement, the
responsibility of the other party. Accordingly, the Company and New ▇▇▇▇▇▇▇
agree to reimburse each other, as soon as practicable but in any event within 30
days of receipt from the other party of appropriate verification, for all such
costs and expenses. All liabilities retained, assumed or indemnified by New
▇▇▇▇▇▇▇ pursuant to this Article VII shall in each case be deemed to be Assumed
Liabilities, and all liabilities retained, assumed or indemnified by the Company
pursuant to this Article VII shall in each case be deemed to be Retained
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Liabilities and, in each case, shall be subject to the indemnification
provisions set forth in Article II of the Post-Closing Covenants Agreement.
7.6 Employment, Consulting and Severance Agreements. Effective
as of the Time of Distribution, New ▇▇▇▇▇▇▇ shall assume all liabilities and
obligations attributable to New ▇▇▇▇▇▇▇ Employees under their respective
employment, consulting and severance agreements with the Retained Companies or
the New ▇▇▇▇▇▇▇ Companies, as the same are in effect immediately prior to the
Time of Distribution subject to the rights of New ▇▇▇▇▇▇▇ to alter such
agreements including, without limitation, the rights described in Sections 7.1
and 7.4 hereof except as otherwise provided in the Merger Agreement or this
Distribution Agreement. Effective as of the Time of Distribution, the Company
shall retain all liabilities and obligations attributable to Retained Employees
under their respective employment, consulting and severance agreements with the
Retained Companies or the New ▇▇▇▇▇▇▇ Companies to the extent disclosed in Annex
L attached hereto ("Listed Agreements"), as the same are in effect immediately
prior to the Time of Distribution subject to the rights of the Company to alter
such agreements including, without limitation, the rights described in Sections
7.1 and 7.4 hereof except as otherwise provided in the Merger Agreement or this
Distribution Agreement. The Company and New ▇▇▇▇▇▇▇ agree that the transactions
contemplated by this Distribution Agreement shall not constitute severance of
employment of any Retained Employee or any New ▇▇▇▇▇▇▇ Employee.
7.7 Equity Awards. Prior to the Time of Distribution, the
Company shall amend the Company Stock Plans, make adjustments and take actions
(and New ▇▇▇▇▇▇▇ shall take such actions as are reasonably required to implement
the same) with respect to the options, restricted stock and performance shares
which are outstanding immediately prior to the Time of Distribution to provide
that (i) effective immediately prior to the Time of Distribution all
restrictions with respect to restricted stock shall lapse and all performance
criteria with respect to performance shares shall be deemed satisfied as though
the "Company Performance Target" achieved was 150% pursuant to Exhibit A of the
restricted stock agreement evidencing the award of such performance shares, (ii)
any such options to acquire Company Common Stock which are held by New ▇▇▇▇▇▇▇
Employees shall become fully vested and exercisable and will be converted into
and represent options to acquire shares of New ▇▇▇▇▇▇▇ Common Stock, under an
equity incentive plan to be established by New ▇▇▇▇▇▇▇, with such other
amendments and adjustments as are reasonable and appropriate, and (iii) the
terms and/or number of such options to acquire Company Common Stock which are
held by Retained Employees will be adjusted in accordance with the Merger
Agreement.
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7.8 Certain Amendments. Prior to the Time of Distribution, the
Company shall amend the Listed Agreements and take actions (and New ▇▇▇▇▇▇▇
shall take such actions as are reasonably required to implement the same) to
provide that "Change in Control" (as such term is used in such Listed
Agreements) shall include the Company Distribution.
7.9 Actions By New ▇▇▇▇▇▇▇. Any action required to be taken
under this Article VII may be taken by any member of the New ▇▇▇▇▇▇▇ Companies.
ARTICLE VIII
CONDITIONS
The obligations of the Company and New ▇▇▇▇▇▇▇ to consummate
the Company Distribution shall be subject to the fulfillment of each of the
following conditions:
8.1 New ▇▇▇▇▇▇▇ Recapitalization. The New ▇▇▇▇▇▇▇
Recapitalization shall have been consummated in accordance with Section 2.2
hereof in all material respects.
8.2 Tax Disaffiliation Agreement. The Tax Disaffiliation
Agreement, in the form attached to the Merger Agreement as Annex B, shall have
been executed and delivered by each of the Company, New ▇▇▇▇▇▇▇ and Parent.
8.3 Certain Transactions. The Restructuring shall have been
consummated in accordance with Article IV in all material respects.
8.4 Conditions to Merger Satisfied. Each condition to the
closing of the Merger set forth in Article VII of the Merger Agreement, other
than (i) the condition to each party's obligations set forth in Section 7.01(f)
thereof as to the consummation of the transactions contemplated by this
Distribution Agreement and (ii) the condition to Parent's obligation set forth
in Section 7.02(e) thereof as to the satisfaction of conditions contained in the
Distribution Agreement shall have been satisfied or waived by the party for
whose benefit such provision exists.
8.5 Adequate Surplus. The Board of Directors of the Company
shall be reasonably satisfied that, after giving effect to the Restructuring,
(i) the Company will not be insolvent and will not have unreasonably small
capital with which to
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engage in its businesses and (ii) the Company's surplus will be sufficient to
permit, without violation of Section 170 of the DGCL, the Company Distribution.
ARTICLE IX
MISCELLANEOUS AND GENERAL
9.1 Modification or Amendment. The parties hereto may modify
or amend this Distribution Agreement by written agreement executed and delivered
by authorized officers of the respective parties.
9.2 Waiver; Remedies. The conditions to the Company's
obligation to consummate the Company Distribution are for the sole benefit of
the Company and may be waived in writing by the Company in whole or in part to
the extent permitted by applicable law. No delay on the part of any party hereto
in exercising any right, power or privilege hereunder will operate as a waiver
thereof, nor will any waiver on the part of any party hereto of any right, power
or privilege hereunder operate as a waiver of any other right, power or
privilege hereunder, nor will any single or partial exercise of any right, power
or privilege hereunder preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder. Unless otherwise
provided, the rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies which the parties may otherwise have at law
or in equity.
9.3 Counterparts. For the convenience of the parties hereto,
this Distribution Agreement may be executed in separate counterparts, each such
counterpart being deemed to be an original instrument, and which counterparts
shall together constitute the same agreement.
9.4 Governing Law. This Distribution Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to its conflicts of law principles.
9.5 Notices. Any notice, request, instruction or other
document to be given hereunder by any party to the other shall be in writing and
shall be deemed to have been duly given (i) on the date of delivery if delivered
by facsimile (upon confirmation of receipt) or personally, (ii) on the first
business day following the date of dispatch if delivered by Federal Express or
other next-day courier service, or (iii) on the third business day following the
date of mailing if delivered by registered or certified mail, return receipt
requested, postage prepaid. All notices hereunder shall
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be delivered as set forth below, or pursuant to such other instructions as may
be designated in writing by the party to receive such notice:
If to the Company:
▇▇▇▇▇▇▇ Entertainment Company
Westinghouse Building
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Cravath, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
If to New Gaylord:
New ▇▇▇▇▇▇▇ Entertainment Company
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇., Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
Skadden, Arps, Slate, ▇▇▇▇▇▇▇ & ▇▇▇▇ (Delaware)
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
9.6 Captions. All Article, Section and paragraph captions
herein are for convenience of reference only, do not constitute part of this
Distribution Agreement and shall not be deemed to limit or otherwise affect any
of the provisions hereof.
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9.7 Assignment. No party to this Distribution Agreement shall
convey, assign or otherwise transfer any of its rights or obligations under this
Distribution Agreement without the express written consent of the other party
hereto in its sole and absolute discretion, except that either party hereto may
assign any of its rights hereunder to a successor to all or any part of its
business or to any of its wholly owned Subsidiaries. Except as aforesaid, any
such conveyance, assignment or transfer without the express written consent of
the other party shall be void ab initio. No assignment of this Distribution
Agreement or any rights hereunder shall relieve the assigning party of its
obligations hereunder.
9.8 Third-Party Beneficiaries. Parent shall be a third-party
beneficiary of this Distribution Agreement. Nothing contained in this
Distribution Agreement is intended to confer upon any Person or entity other
than the parties hereto and their respective successors and permitted assigns
(other than Parent), any benefit, right or remedy under or by reason of this
Distribution Agreement, except that the provisions of Section 6.1 hereof shall
inure to the benefit of the Persons referred to therein.
9.9 Certain Obligations. Whenever this Distribution Agreement
requires any of the Subsidiaries of any party to take any action, this
Distribution Agreement will be deemed to include an undertaking on the part of
such party to cause such Subsidiary to take such action.
9.10 Specific Performance. In the event of any actual or
threatened default in, or breach of, any of the terms, conditions and provisions
of this Distribution Agreement, the party or parties who are or are to be
thereby aggrieved shall have the right of specific performance and injunctive
relief giving effect to its or their rights under this Distribution Agreement,
in addition to any and all other rights and remedies at law or in equity, and
all such rights and remedies shall be cumulative. The parties agree that the
remedies at law for any breach or threatened breach, including monetary damages,
are inadequate compensation for any loss and that any defense in any action for
specific performance that a remedy at law would be adequate is waived.
9.11 Severability. If any provision of this Distribution
Agreement or the application thereof to any Person or circumstance is determined
by a court of competent jurisdiction to be invalid, illegal or unenforceable,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof or the application of such provision to any other Persons or
circumstances. In the event that the terms and conditions of this Distribution
Agreement are materially altered as a result of this
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Section, the parties shall negotiate in good faith to agree upon a suitable and
equitable substitute provision to effect the original intent of the parties.
9.12 Entire Agreement. The Transaction Agreements (including
the documents and the instruments referred to herein and in the Merger
Agreement, the Annexes hereto and to the Merger Agreement, the Parent Disclosure
Schedule and the Company Disclosure Schedule), and the Confidentiality Agreement
(as defined in the Merger Agreement) constitute the entire agreement, and
supersede all prior agreements and understandings, both written and oral, among
the parties with respect to the subject matter hereof and thereof.
9.13 Jurisdiction. Each of the Company and New ▇▇▇▇▇▇▇ hereby
(i) consents to be subject to the jurisdiction of the United States District
Court for the District of Delaware and the jurisdiction of the courts of the
State of Delaware in any suit, action or proceeding seeking to enforce any
provision of, or based on any matter arising out of or in connection with, this
Distribution Agreement or the transactions contemplated hereby, (ii) agrees that
it will not attempt to deny or defeat such personal jurisdiction by motion or
other request for leave from any such court, (iii) agrees that it will not bring
any action relating to this Distribution Agreement or the transactions
contemplated hereby in any court other than the United States District Court for
the District of Delaware or the courts of the State of Delaware, (iv)
irrevocably waives (x) any objection that it may have or hereafter have to the
changing of venue of any such suit, action or proceeding in such court and (y)
any claim that any such suit, action or proceeding in any such court has been
brought in an inconvenient forum and (v) irrevocably consents to the service of
any and all process in any such suit, action or proceeding by the delivery of
such process to such party at the address and in the manner provided in Section
9.5 hereof.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, this Distribution Agreement has been duly
executed and delivered by the duly authorized officers of the parties hereto as
of the date first hereinabove written.
▇▇▇▇▇▇▇ ENTERTAINMENT COMPANY
By: /s/ ▇▇▇▇▇ ▇. London
---------------------------------
▇▇▇▇▇ ▇. London
President and Chief Executive Officer
NEW ▇▇▇▇▇▇▇ ENTERTAINMENT COMPANY
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
---------------------------------
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President and President-
Communications Group
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