Exhibit 10.3

 

FORM OF
ASCENT CAPITAL GROUP, INC.
2008 INCENTIVE PLAN
RESTRICTED STOCK AWARD AGREEMENT

 

THIS AGREEMENT (this “Agreement”) is made as of                  (the “Grant
Date”), by and between ASCENT CAPITAL GROUP, INC., a Delaware corporation (the
“Company”), and the person signing as “Grantee” on the signature page hereof
(“Grantee”).

 

The Company has adopted the Ascent Capital Group, Inc. 2008 Incentive Plan (the
“Plan”), a copy of which is attached to this Agreement as Exhibit A and by this
reference made a part hereof, for the benefit of eligible employees of the
Company and its Subsidiaries.  Capitalized terms used and not otherwise defined
in this Agreement will have the meaning ascribed to them in the Plan.

 

Pursuant to the Plan, the Compensation Committee (the “Committee”) has
determined that it would be in the interest of the Company and its stockholders
to award shares of common stock to Grantee, subject to the conditions and
restrictions set forth herein and in the Plan, in order to provide Grantee with
additional remuneration for services rendered, to encourage Grantee to remain in
the employ of the Company or its Subsidiaries and to increase Grantee’s personal
interest in the continued success and progress of the Company.

 

The Committee has also determined that it would be in the best interest of the
Company and its stockholders to enter into an employment agreement with Grantee
(the “Employment Agreement”), which will replace and supersede any outstanding
employment agreement between Grantee and the Company or any of its Subsidiaries
in effect at the effective time of the Employment Agreement.

 

The Company and Grantee therefore agree as follows:

 

1.             Award.  Pursuant to the terms of the Plan and in consideration of
the covenants and promises of Grantee herein contained, the Company hereby
awards to Grantee as of the Grant Date the number of shares of Ascent Capital
Group, Inc. Series A Common Stock, par value $0.01 per share, set forth on
Schedule 1 hereto, subject to the conditions and restrictions set forth below
and in the Plan (the “Restricted Shares”).  This award of Restricted Shares
granted to Grantee under this paragraph 1 is subject to forfeiture in the event
that the Grantee fails to execute and deliver the Employment Agreement by
                .

 

2.             Issuance of Restricted Shares at Beginning of the Restriction
Period.  Upon issuance of the Restricted Shares, such Restricted Shares will be
registered in a book entry account (the “Account”) in the name of Grantee. 
During the Restriction Period, each of the Account, any certificates
representing the Restricted Shares that may be issued during the Restriction
Period, and any securities constituting Retained Distributions will bear a
restrictive legend to the effect that ownership of the Restricted Shares (and
such Retained Distributions), and the enjoyment of all rights appurtenant
thereto, are subject to the restrictions, terms and conditions provided in the
Plan and this Agreement.  Any such certificates will remain in the

 

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custody of the Company, and upon their issuance Grantee will deposit with the
Company stock powers or other instruments of assignment, each endorsed in blank,
so as to permit retransfer to the Company of all or any portion of the
Restricted Shares and any securities constituting Retained Distributions that
will be forfeited or otherwise not become vested in accordance with the Plan and
this Agreement.

 

3.             Restrictions.  Restricted Shares will constitute issued and
outstanding shares of the Company’s Series A Common Stock for all corporate
purposes.  Grantee will have the right to vote such Restricted Shares, to
receive and retain such dividends and distributions, as the Committee may in its
sole discretion designate, paid or distributed on such Restricted Shares and to
exercise all other rights, powers and privileges of a holder of Series A Common
Stock with respect to such Restricted Shares, except that (a) Grantee will not
be entitled to delivery of the stock certificate or certificates representing
such Restricted Shares until the Restriction Period shall have expired and
unless all other vesting requirements with respect thereto shall have been
fulfilled or waived, (b) the Company will retain custody of any stock
certificate or certificates representing the Restricted Shares during the
Restriction Period as provided in Section 8.2 of the Plan, (c) other than such
dividends and distributions as the Committee may in its sole discretion
designate, the Company or its designee will retain custody of all Retained
Distributions made or declared with respect to the Restricted Shares (and such
Retained Distributions will be subject to the same restrictions, terms and
vesting and other conditions as are applicable to the Restricted Shares) until
such time, if ever, as the Restricted Shares with respect to which such Retained
Distributions shall have been made, paid or declared shall have become vested,
and such Retained Distributions will not bear interest or be segregated in a
separate account, (d) Grantee may not sell, assign, transfer, pledge, exchange,
encumber or dispose of the Restricted Shares or any Retained Distributions or
Grantee’s interest in any of them during the Restriction Period and (e) a breach
of any restrictions, terms or conditions provided in the Plan or established by
the Committee with respect to any Restricted Shares or Retained Distributions
will cause a forfeiture of such Restricted Shares and any Retained Distributions
with respect thereto.

 

4.             Vesting and Forfeiture of Restricted Shares.  Subject to earlier
vesting in accordance with the provisions of Paragraph 7(b) below, Grantee will
become vested as to (a)     % of the Restricted Shares subject to this Agreement
on each of                   , (b)     % of the Restricted Shares subject to
this Agreement on each of                          and (c)     % of the
Restricted Shares subject to this Agreement on each of               , each such
date being a Vesting Date; provided, however, that Grantee will not vest,
pursuant to this Paragraph 4, in Restricted Shares as to which Grantee would
otherwise vest as of a given date if Grantee has not been continuously employed
by the Company or its Subsidiaries from the date of this Agreement through such
date (the vesting or forfeiture of such shares in such event to be governed
instead by the provisions of Paragraph 5).  Notwithstanding the foregoing, if
any date on which vesting would otherwise occur is a Saturday, Sunday or a
holiday, such vesting will instead occur on the business day next following such
date.

 

5.             Early Termination or Vesting.  Subject to Section 25 hereof:

 

(a)           If Grantee dies while employed by the Company or a Subsidiary of
the Company (a “Company Subsidiary”), then the Award, to the extent not
theretofore vested, will immediately become fully vested;

 

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(b)           If Grantee’s employment with the Company or a Company Subsidiary
terminates by reason of Disability, then the Award, to the extent not
theretofore vested, will immediately become fully vested;

 

(c)           If the Company or a Company Subsidiary terminates the Grantee’s
employment, and such termination constitutes a Termination Without Cause (as
such term is defined in Grantee’s employment agreement), then the Restricted
Shares that otherwise would become vested during the remainder of the calendar
year in which the Grantee’s employment is terminated will vest on the date of
the Grantee’s termination of employment; [provided, however, if Grantee’s
employment with the Company or a Company Subsidiary is so terminated  prior to
                    , Grantee will become vested as to 20% of the Restricted
Shares subject to this Agreement on the date of Grantee’s termination of
employment;](1)

 

 

(d)           If Grantee’s employment with the Company or a Company Subsidiary
terminates and such termination constitutes a Termination With Good Reason (as
such term is defined in Grantee’s employment agreement), then the Restricted
Shares that otherwise would become vested during the remainder of the calendar
year in which the Grantee’s employment is terminated will vest on the date of
the Grantee’s termination of employment; [provided, however, if Grantee’s
employment with the Company or a Company Subsidiary is so terminated  prior to
                    , Grantee will become vested as to 20% of the Restricted
Shares subject to this Agreement on the date of Grantee’s termination of
employment;](2) and

 

(e)           Unless otherwise determined by the Committee in its sole
discretion, if Grantee’s employment with the Company or a Company Subsidiary
terminates for any reason other than death, Disability, Termination Without
Cause (as defined in Grantee’s employment agreement), or Termination With Good
Reason (as defined in Grantee’s employment agreement), then the Award, to the
extent not theretofore vested, will be forfeited immediately.

 

6.             Completion of the Restriction Period.  On each Vesting Date with
respect to each award of Restricted Shares, and the satisfaction of any other
applicable restrictions, terms and conditions (a) the applicable portion of such
Restricted Shares will become vested and (b) any Retained Distributions with
respect to such Restricted Shares will become vested to the extent that the
Restricted Shares related thereto shall have become vested, all in accordance
with the terms of this Agreement.  Any Restricted Shares and Retained
Distributions that shall not become vested by the final Vesting Date will be
forfeited to the Company, and Grantee will not thereafter have any rights
(including dividend and voting rights) with respect to such Restricted Shares or
any Retained Distributions that are so forfeited.

 

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(1)  To be included only in grant agreements for executives of both Ascent
Capital Group, Inc. and Monitronics International, Inc.

(2)  To be included only in grant agreements for executives of both Ascent
Capital Group, Inc. and Monitronics International, Inc.

 

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7.             Adjustments; Early Vesting in Certain Events.

 

(a)           The Restricted Shares will be subject to adjustment (including,
without limitation, as to the number of Restricted Shares) in the sole
discretion of the Committee and in such manner as the Committee may deem
equitable and appropriate in connection with the occurrence of any of the events
described in Section 4.2 of the Plan following the Grant Date.

 

(b)           Upon the occurrence of any Approved Transaction, Board Change or
Control Purchase, the restrictions in Paragraph 3 will lapse.  Notwithstanding
the foregoing, the Committee may, in its sole discretion, determine that the
restrictions in Paragraph 3 will not lapse on an accelerated basis in connection
with an Approved Transaction if the Board or the surviving or acquiring
corporation, as the case may be, makes or causes to be made effective provision
for the taking of such action as in the opinion of the Committee is equitable
and appropriate to substitute a new Award for the Award evidenced by this
Agreement or to assume this Agreement and the Award evidenced hereby and in
order to make such new or assumed Award, as nearly as may be practicable
equivalent to the Award evidenced by this Agreement as then in effect (but
before giving effect to any acceleration of the exercisability hereof unless
otherwise determined by the Committee), taking into account, to the extent
applicable, the kind and amount of securities, cash or other assets into or for
which shares of Series A Common Stock may be changed, converted or exchanged in
connection with the Approved Transaction.

 

8.             Mandatory Withholding for Taxes.  Upon the expiration of the
Restriction Period, Grantee (or Beneficiary, as defined in Paragraph 10 below)
must remit to the Company the amount of all federal, state or other governmental
withholding tax requirements imposed upon the Company with respect to the
vesting of Restricted Shares, unless provisions to pay such withholding
requirements have been made to the satisfaction of the Company.  Upon the
payment of any cash dividends with respect to Restricted Shares during the
Restriction Period, the amount of such dividends will be reduced to the extent
necessary to satisfy any withholding tax requirements applicable thereto prior
to payment to Grantee.

 

9.             Delivery by the Company.  As soon as practicable after vesting in
Restricted Shares pursuant to Paragraphs 4, 5 or 7, but no later than 30 days
after such vesting occurs, and subject to the withholding referred to in
Paragraph 8, the Company will (i) cause to be removed from the Account the
restriction described in Paragraph 2 or cause to be issued and delivered to
Grantee (in certificate or electronic form) Shares equal to the number of
Restricted Shares that have vested, and (ii) shall cause to be delivered to
Grantee any Retained Distributions with respect to such vested Shares.  If
delivery of certificates is by mail, delivery of shares of Series A Common Stock
will be deemed effected for all purposes when a stock transfer agent of the
Company shall have deposited the certificates in the United States mail,
addressed to Grantee.

 

10.           Nontransferability of Restricted Shares Before Vesting.  Before
vesting and during Grantee’s lifetime, the Restricted Shares are not
transferable (voluntarily or involuntarily) other than pursuant to a Domestic
Relations Order.  The Grantee may designate a beneficiary or beneficiaries
(each, a “Beneficiary”), to whom the Restricted Shares will pass upon Grantee’s
death and may change such designation from time to time by filing a written
designation of Beneficiary with the Committee on the form annexed hereto as
Exhibit B or such other form as may be prescribed by the Committee, provided
that no such designation will be effective unless

 

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so filed prior to the death of Grantee.  If no such designation is made or if
the designated Beneficiary does not survive the Grantee’s death, the Restricted
Shares will pass by will or the laws of descent and distribution.  Following
Grantee’s death, the Restricted Shares will pass accordingly to the designated
Beneficiary, and such Beneficiary will be deemed the Grantee for purposes of any
applicable provisions of this Agreement.

 

11.           Company’s Rights.  The existence of this Agreement will not affect
in any way the right or power of the Company or its stockholders to accomplish
any corporate act, including, without limitation, the acts referred to in
Section 11.16 of the Plan.

 

12.           Limitation of Rights.  Nothing in this Agreement or the Plan will
be construed to:

 

(a)           give Grantee any right to be awarded any further Restricted Shares
other than in the sole discretion of the Committee; or

 

(b)           give Grantee or any other person any interest in any fund or in
any specified asset or assets of the Company or any Company Subsidiary.

 

13.           Prerequisites to Benefits.  Neither Grantee nor any person
claiming through Grantee will have any right or interest in the Restricted
Shares awarded hereunder, unless and until there shall have been full compliance
with all the terms, conditions and provisions of this Agreement and the Plan
which affect the Grantee or such other person.

 

14.           Restrictions Imposed by Law.  Without limiting the generality of
Section 11.8 of the Plan, Grantee will not require the Company to deliver any
Restricted Shares and the Company will not be obligated to deliver any
Restricted Shares if counsel to the Company determines that such delivery or
payment would violate any applicable law or any rule or regulation of any
governmental authority or any rule or regulation of, or agreement of the Company
with, any securities exchange or association upon which the Series A Common
Stock is listed or quoted.  The Company will in no event be obligated to take
any affirmative action in order to cause the delivery of any Restricted Shares
to comply with any such law, rule, regulation or agreement.

 

15.           Notice.  Unless the Company notifies Grantee in writing of a
different procedure or address, any notice or other communication to the Company
with respect to this Agreement will be in writing and will be delivered
personally or sent by first class mail, postage prepaid, to the following
address:

 

Ascent Capital Group, Inc.
[Address 1]
[Address 2]

Attn:  General Counsel

 

Any notice or other communication to Grantee with respect to this Agreement will
be in writing and will be delivered personally, or will be sent by first class
mail, postage prepaid, to Grantee’s home address set forth below his signature
on this Agreement, unless the Company has received written notification from
Grantee of a change of address.

 

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16.           Amendment.  Notwithstanding any other provision hereof, this
Agreement may be supplemented or amended from time to time as approved by the
Committee as contemplated by Section 11.7(b) of the Plan.  Without limiting the
generality of the foregoing, without the consent of Grantee,

 

(a)           this Agreement may be amended or supplemented from time to time as
approved by the Committee (i) to cure any ambiguity or to correct or supplement
any provision herein which may be defective or inconsistent with any other
provision herein, (ii) to add to the covenants and agreements of the Company for
the benefit of Grantee or surrender any right or power reserved to or conferred
upon the Company in this Agreement, subject to any required approval of the
Company’s stockholders and provided, in each case, that such changes or
corrections will not adversely affect the rights of Grantee with respect to the
Award evidenced hereby or (iii) to make such other changes as the Company, upon
advice of counsel, determines are necessary or advisable because of the adoption
or promulgation of, or change in or of the interpretation of, any law or
governmental rule or regulation, including any applicable federal or state
securities laws; and

 

(b)           subject to any required action by the Board or the Company’s
stockholders, the Award evidenced by this Agreement may be canceled by the
Committee and a new Award made in substitution therefor, provided that the Award
so substituted will satisfy all of the requirements of the Plan as of the date
such new Award is made and no such action will adversely affect the Restricted
Shares to the extent then vested.

 

17.           Grantee Employment.  Nothing contained in this Agreement, and no
action of the Company or the Committee with respect hereto, will confer or be
construed to confer on Grantee any right to continue in the employ of the
Company or any of its Subsidiaries or interfere in any way with the right of the
Company or any employing Company Subsidiary to terminate Grantee’s employment at
any time, with or without cause; subject, however, to the provisions of any
employment agreement between Grantee and the Company or any Company Subsidiary.

 

18.           Governing Law.  This Agreement will be governed by, and construed
in accordance with, the internal laws of the State of Delaware.  Each party
irrevocably submits to the general jurisdiction of the state and federal courts
located in the State of Delaware in any action to interpret or enforce this
Agreement and irrevocably waives any objection to jurisdiction that such party
may have based on inconvenience of forum.

 

19.           Construction.  References in this Agreement to “this Agreement”
and the words “herein,” “hereof,” “hereunder” and similar terms include all
Exhibits and Schedules appended hereto, including the Plan.  This Agreement is
entered into, and the Award evidenced hereby is granted, pursuant to the Plan
and will be governed by and construed in accordance with the Plan and the
administrative interpretations adopted by the Committee thereunder.  All
decisions of the Committee upon questions regarding the Plan or this Agreement
will be conclusive.  Unless otherwise expressly stated herein, in the event of
any inconsistency between the terms of the Plan and this Agreement, the terms of
the Plan will control.  The headings of the paragraphs of this Agreement have
been included for convenience of reference only, are not to be considered a part
hereof and will in no way modify or restrict any of the terms or provisions
hereof.

 

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20.           Duplicate Originals.  The Company and Grantee may sign any number
of copies of this Agreement.  Each signed copy will be deemed to be an original,
but all of them together represent the same agreement.

 

21.           Rules by Committee.  The rights of Grantee and the obligations of
the Company hereunder will be subject to such reasonable rules and regulations
as the Committee may adopt from time to time hereafter.

 

22.           Entire Agreement.  This Agreement is in satisfaction of and in
lieu of all prior discussions and agreements, oral or written, between the
Company and Grantee, with respect to the subject matter hereof.  Grantee and the
Company hereby declare and represent that no promise or agreement not herein
expressed has been made and that this Agreement contains the entire agreement
between the parties hereto with respect to the Restricted Shares and replaces
and makes null and void any prior agreements between Grantee and the Company
regarding the Restricted Shares.

 

23.           Grantee Acceptance.  Grantee shall signify acceptance of the terms
and conditions of this Agreement by signing in the space provided at the end
hereof and returning a signed copy to the Company.

 

24.           Code Section 409A Compliance.  If any provision of this Agreement
would result in the imposition of an excise tax under Section 409A of the Code
and related regulations and Treasury pronouncements (“Section 409A”), that
provision will be reformed to avoid imposition of the excise tax and no action
taken to comply with Section 409A (or to provide that the Restricted Shares are
exempt from Section 409A) shall be deemed to impair a benefit under this
Agreement.

 

25.           Change in Control.

 

(a)           If Grantee’s employment with the Company or a Company Subsidiary
terminates and such termination constitutes a Termination With Good Reason (as
such term is defined in Grantee’s employment agreement) or a Termination Without
Cause (as such term is defined in Grantee’s employment agreement), and such
termination occurs within 12 months following a Change in Control, all
Restricted Shares held by Grantee on the date of termination, to the extent not
theretofore vested, will vest fully on the date of such termination.

 

(b)           For purposes of this Section 25, “Change in Control” means any of
the following that otherwise meets the definition of a “change in ownership,” a
“change in effective control” or a “change in ownership of a substantial portion
of the assets” of the Company within the meaning of Code Section 409A:

 

i.              the acquisition by any person or group (excluding John C. Malone
and/or any family member(s) of John C. Malone and/or any company, partnership,
trust or other entity or investment vehicle controlled by any of the foregoing
persons or the holdings of which are for the primary benefit or any of such
persons (collectively, the “Permitted Holders”)) of ownership of stock of the
Company that, together with stock already held by such person or

 

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group, constitutes more than 50% of the total fair market value or more than 50%
of the total voting power of the stock of the Company;

 

ii.             the acquisition by any person or group (other than the Permitted
Holders), in a single transaction or in multiple transactions all occurring
during the 12-month period ending on the date of the most recent acquisition by
such person or group, assets from the Company that have a total gross fair
market value equal to or exceeding 40% of the total gross fair market value of
all of the assets of the Company immediately prior to such acquisition or
acquisitions; or

 

iii.            the acquisition by any person or group (other than the Permitted
Holders), in a single transaction or in multiple transactions all occurring
during the 12-month period ending on the date of the most recent acquisition by
such person or group, of ownership of stock of the Company possessing 30% or
more of the total voting power of the stock of Company or the replacement of a
majority of the Company’s Board of Directors during any 12-month period by
directors whose appointment or election is not endorsed by a majority of the
members of the Company’s Board of Directors before the date of appointment or
election.

 

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IN WITNESS WHEREOF, each of the parties hereto has executed this Agreement as of
the Grant Date.

 

 

 

ASCENT CAPITAL GROUP, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

 

 

 

 

ACCEPTED:

 

 

 

 

 

 

 

                              , Grantee

 

Address:

 

 

 

SSN:

 

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Exhibit A to Restricted Stock Award Agreement

dated as of                between

Ascent Capital Group, Inc. and Grantee

 

Ascent Capital Group, Inc. 2008 Incentive Plan

 

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Exhibit B to Restricted Stock Award Agreement

dated as of                between

Ascent Capital Group, Inc. and Grantee

 

Designation of Beneficiary

 

I,                                                                       

(the “Grantee”), hereby declare that upon my death

 

 

(the “Beneficiary”) of

Name

 

 

 

 

 

 

,

Street Address

City

State

Zip Code

 

who is my

 

, will be entitled to the

 

Relationship to the Grantee

 

 

Restricted Shares and all other rights accorded the Grantee by the
above-referenced grant agreement (the “Agreement”).

 

It is understood that this Designation of Beneficiary is made pursuant to the
Agreement and is subject to the conditions stated herein, including the
Beneficiary’s survival of the Grantee’s death.  If any such condition is not
satisfied, such rights will devolve according to the Grantee’s will or the laws
of descent and distribution.

 

It is further understood that all prior designations of beneficiary under the
Agreement are hereby revoked and that this Designation of Beneficiary may only
be revoked in writing, signed by the Grantee, and filed with the Committee prior
to the Grantee’s death.

 

 

 

 

 

Date

 

Grantee

 

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Schedule 1 to Restricted Stock Award

Agreement dated as of               

between Ascent Capital Group, Inc. and Grantee

 

Grantee:

 

Grant Date:

 

Restricted Shares:

 

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