Document:

QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.9  

 
 

FORM OF
  DISCOVERY HOLDING COMPANY
  TRANSITIONAL STOCK ADJUSTMENT PLAN    
    

ARTICLE I

Purpose Of Plan  

        The purpose of the Plan is to provide for the supplemental grant of both stock options to purchase the common stock of Discovery Holding Company (the "Company")
and of restricted shares of the Company's common stock to holders of certain outstanding options, stock appreciation rights and restricted shares issued under certain stock-based plans administered by
Liberty Media Corporation ("LMC") in connection with adjustments made to outstanding LMC stock incentive awards and restricted shares of LMC common stock as a result of the spin off of the Company
from LMC. 

ARTICLE II

Definitions  

        2.1   Definitions. For purposes of the Plan, the following terms shall have the meanings below stated. 

        "Approved Transaction" means any transaction in which the Board (or, if approval of the Board is not required as a matter of law, the
stockholders of the Company) shall approve (i) any consolidation or merger of the Company, or binding share exchange, pursuant to which shares of Common Stock of the Company would be changed or
converted into or exchanged for cash, securities, or other property, other than any such transaction in which the common stockholders of the Company immediately prior
to such transaction have the same proportionate ownership of the Common Stock of, and voting power with respect to, the surviving corporation immediately after such transaction, (ii) any
merger, consolidation or binding share exchange to which the Company is a party as a result of which the Persons who are common stockholders of the Company immediately prior thereto have less than a
majority of the combined voting power of the outstanding capital stock of the Company ordinarily (and apart from the rights accruing under special circumstances) having the right to vote in the
election of directors immediately following such merger, consolidation or binding share exchange, (iii) the adoption of any plan or proposal for the liquidation or dissolution of the Company,
or (iv) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company. 

        "Board" means the Board of Directors of the Company. 

        "Board Change" means, during any period of two consecutive years, individuals who at the beginning of such period constituted the entire
Board cease for any reason to constitute a majority thereof unless the election, or the nomination for election, of each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the period. 

        "Code" means the Internal Revenue Code of 1986, as amended from time to time, or any successor statute or statutes thereto. Reference to
any specific Code section shall include any successor section. 

        "Committee" means the committee of the Board appointed to administer this Plan pursuant to Article VII. 

        "Common Stock" each or any (as the context may require) series of the Company's common stock.

 

        "Company" means Discovery Holding Company, a Delaware corporation, and any successor thereto. 

        "Control Purchase" means any transaction (or series of related transactions) in which (1) any person (as such term is defined in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act), corporation or other entity (other than the Company, any Subsidiary of the Company or any employee benefit plan sponsored by
the Company or any Subsidiary of the Company) shall purchase any Common Stock of the Company (or securities convertible into Common Stock of the Company) for cash, securities or any other
consideration pursuant to a tender offer or exchange offer, without the prior consent of the Board, or (2) any person (as such term is so defined), corporation or other entity (other than the
Company, any Subsidiary of the Company, any employee benefit plan sponsored by the Company or any Subsidiary of the Company or any Exempt Person (as defined below)) shall become the  "beneficial
owner" (as such term is defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 20% or more of the combined voting power of the then outstanding securities of the Company ordinarily (and apart from the rights
accruing under special circumstances) having the right to vote in the election of directors (calculated as provided in Rule 13d-3(d) under the Exchange Act in the case of
rights to acquire the Company's securities), other than in a transaction (or series of related transactions) approved by the Board. For purposes of this definition,  "Exempt Person" means each of (a) the Chairman of the Board, the President and each of the
directors of the Company as of the Distribution Date, and (b) the respective family members, estates and heirs of each of the persons referred to in clause (a) above and any trust
or other investment vehicle for the primary benefit of any of such persons or their respective family members or heirs. As used with respect to any person, the term  "family member" means the spouse, siblings and lineal descendants of such person. 

        "Distribution" means the distribution by LMC to the holders of LMC Common Stock of all of the issued and outstanding shares of Common
Stock. 

        "Distribution Date" means the date on which the Distribution occurs. 

        "Exchange Act" means the Securities Exchange Act of 1934, as amended. 

        "Fair Market Value" of a share of any series of Common Stock on any day means the last sale price (or, if no last sale price is reported,
the average of the high bid and low asked prices) for a share of such series of Common Stock on such day (or, if such day is not a trading day, on the next preceding trading day) as reported on the
consolidated transaction reporting system for the principal national securities exchange on which shares of such series of Common Stock are listed on such day or if such shares are not then listed on
a national securities exchange, then as reported on Nasdaq. If for any day the Fair Market Value of a share of the applicable series of Common Stock is not determinable by any of the foregoing means,
then the Fair Market Value for such day shall be determined in good faith by the Committee on the basis of such quotations and other considerations as the Committee deems appropriate. 

        "Incentive Plan" means the Liberty Media Corporation 2000 Incentive Plan (As Amended and Restated Effective April 19, 2004) and any
other stock option or incentive plan assumed by LMC pursuant to which any Participant holds an outstanding LMC Award as of the Record Date. Depending on the context, "Incentive Plan" shall mean all of
such plans or a particular one of such plans. 

        "LMC" means Liberty Media Corporation, a Delaware corporation. 

        "LMC Award" means (1) an unexercised and unexpired option to purchase LMC Common Stock, (2) an LMC SAR or (3) an
unvested award of restricted shares of LMC Common Stock.

 

        "LMC Committee" means the Incentive Plan Committee of the Board of Directors of LMC. 

        "LMC Common Stock" means each or any (as the context may require) series of LMC's common stock. 

        "LMC Corporate Holder" means an individual who, as of Record Date, is (1) an LMC employee or (2) a member of the Board of
Directors of LMC. The Committee may, in its discretion, determine that (i) an individual who does not meet any of the foregoing criteria should be classified as an LMC Corporate Holder or
(ii) an individual who otherwise would qualify as an LMC Corporate Holder, should not be classified as such. 

        "LMC SAR" means a stock appreciation right with respect to any series of LMC Common Stock. 

        "Nasdaq" means The NASDAQ Stock Market. 

        "Option" means an option to purchase Common Stock, granted by the Company to a Participant pursuant to Section 6.1 of the Plan. 

        "Participant" means a person who is an LMC Corporate Holder and who, as of the Record Date, holds an outstanding LMC Award. 

        "Person" means an individual, corporation, limited liability company, partnership, trust, incorporated or unincorporated association,
joint venture or other entity of any kind. 

        "Plan" means the Discovery Holding Company Transitional Stock Adjustment Plan, as set forth herein and as from time to time amended. 

        "Record Date" means 5:00 p.m., New York City time, on July 15, 2005. 

        "Restricted Stock Award" means an award of restricted shares of Common Stock, granted by the Company to a Participant pursuant to
Section 5.1. 

        "Stock Incentives" refers collectively to Restricted Stock Awards and Options. 

        "Subsidiary" of a Person means any present or future subsidiary (as defined in Section 424(f) of the Code) of such Person or
any business entity in which such Person owns, directly or indirectly, 50% or more of the voting, capital or profits interests. An entity shall be deemed a subsidiary of a Person for purposes of this
definition only for such periods as the requisite ownership or control relationship is maintained. 

ARTICLE III

Reservation of Shares  

        The aggregate number of shares of Common Stock which may be issued under this Plan shall not exceed
[                ] shares,
subject to adjustment as hereinafter provided. Any part of such [                ] shares may be issued pursuant to Restricted Stock Awards. The shares of Common
Stock
which may be granted pursuant to Stock Incentives will consist of either authorized but unissued shares of Common Stock or shares of Common Stock which have been issued and reacquired by the Company,
including shares purchased in the open market. The total number of shares authorized under this Plan shall be subject to increase or decrease in order to give effect to the adjustment provision of
Section 9.3 and to give effect to any amendment adopted as provided in Section 8.1. 

ARTICLE IV

Participation in Plan  

        4.1   Eligibility to Receive Stock Incentives. Stock Incentives under this Plan may be granted only to persons who are
Participants.

 

        4.2   Participation Not Guarantee of Employment. Nothing in this Plan or in the instrument evidencing the grant of a Stock
Incentive shall in any manner be construed to limit in any way the right of the Company, LMC or any of their respective Subsidiaries to terminate a Participant's employment at any time, without regard
to the effect of such termination on any rights such Participant would otherwise have under the Plan or any Incentive Plan, or give any right to such a Participant to remain employed by the Company,
LMC or any of their respective Subsidiaries in any particular position or at any particular rate of compensation. 

ARTICLE V

Stock Awards  

        5.1   Grant of Restricted Stock Awards. 

        (a)   Grant. Restricted Stock Award(s) shall be granted to each Participant who, as of the Record Date, holds an outstanding
LMC Award(s) consisting of unvested restricted shares of LMC Common Stock. 

        (b)   Award of Shares. Each Restricted Stock Award shall be for the same series of Common Stock as the corresponding award of
restricted shares of LMC Common Stock to which such Restricted Stock Award relates. The number of shares of Common Stock covered by a Restricted Stock Award shall be 0.10 shares of Common Stock for
each share of LMC Common Stock under the corresponding award of restricted shares of LMC Common Stock which such Restricted Stock Award replaces;  provided, however, no fractional shares of Common Stock shall be awarded under a Restricted Stock Award,
and, if the foregoing adjustment results in any fractional shares, LMC will deliver cash in lieu of such fractional share interest to the applicable Participant in the same manner as cash in lieu of
fractional share interests is paid to record holders of LMC Common Stock in the Distribution. Each Restricted Stock Award and the restricted shares of Common Stock issued thereunder shall continue to
be subject to all the terms and conditions of the applicable Incentive Plan and associated instrument under which the corresponding award of restricted shares of LMC Common Stock was made and any such
terms, conditions and restrictions as may be determined to be appropriate by the Committee. 

        (c)   Lapse of Restrictions. The restrictions on each Restricted Stock Award shall lapse in accordance with the terms and
conditions of the applicable Incentive Plan and associated instrument under which the corresponding award of restricted shares of LMC Common Stock was made; provided, however, that a Participant's
employment or service with the Company, LMC or any of their respective Subsidiaries shall be deemed to be employment or service with the Company and LMC for all purposes under a Restricted Stock
Award. 

        (d)   Award Documentation. Restricted Stock Awards shall be evidenced in such form as the Committee shall approve and contain
such terms and conditions as shall be contained therein or incorporated by way of reference to the Incentive Plan or any associated instrument governing the corresponding award of restricted shares of
LMC Common Stock, which need not be the same for all Restricted Stock Awards. 

        (e)   Rights with Respect to Shares. No Participant who is granted a Restricted Stock Award shall have any rights as a
stockholder by virtue of such grant until shares are actually issued or delivered to the Participant.

 

ARTICLE VI

Options  

        6.1   Grant of Options. 

        (a)   Grant. Option(s) shall be granted to each Participant who, as of the Record Date, holds an outstanding LMC Award(s)
consisting of an option to purchase shares of LMC Common Stock or an LMC SAR. Except as otherwise provided in this Plan, each Option shall continue to be subject to all the terms and conditions of the
applicable Incentive Plan and associated instrument under which the corresponding option to purchase LMC Common Stock or LMC SAR (to the extent such terms and conditions would be applicable to the
grant of an Option) was made and any such terms, conditions and restrictions as may be determined to be appropriate by the Committee. 

        (b)   Option Shares. Each Option shall be for the same series of Common Stock as the corresponding option for LMC Common Stock
or LMC SAR to which such Option relates. The number of shares of Common Stock exercisable under an Option shall be the number of shares of Common Stock that a Participant would have received in the
Distribution if the applicable option for LMC Common Stock
had been exercised immediately prior to the Record Date or, in the case of an LMC SAR, the same number of shares of Common Stock that would have been received in the Distribution if the LMC SAR has
been an option exercised immediately prior to the Record Date for the number of shares of LMC Common Stock, subject to the LMC SAR; provided,  however, no
fractional shares of Common Stock shall be awarded under an Option, and, if the conversion of an option to purchase shares of LMC Common
Stock or an LMC SAR into an Option results in any fractional shares, the number of shares of Common Stock to be exercisable under an Option shall be rounded up to the nearest whole number of shares. 

        (c)   Option Price. The purchase price per share of Common Stock under each Option shall be established by the Committee. The
Option price shall be subject to adjustment in accordance with the provisions of Section 9.3 hereof. 

        (d)   Option Documentation. Options shall be evidenced in such form as the Committee shall approve and contain such terms and
conditions as shall be contained therein or incorporated by way of reference to the Incentive Plan or any associated instrument governing the corresponding option to purchase LMC Common Stock or LMC
SAR (to the extent such terms and conditions would be applicable to the grant of an Option), which need not be the same for all Options. 

        6.2   Exercise and/or Termination of Options. 

        (a)   Terms of Option. Options granted under this Plan may be exercised at the same time and in the same manner as the
corresponding option to purchase LMC Common Stock or LMC SAR (to the extent applicable to the grant of an Option). Options granted under this Plan shall expire at the same time and in the same manner
as the corresponding option to purchase LMC Common Stock or LMC SAR (to the extent applicable to the grant of an Option), as provided in the applicable Incentive Plan and any associated instrument
governing such option to purchase LMC Common Stock or LMC SAR; provided, however, that a Participant's employment or service with the Company, LMC or any of their respective Subsidiaries shall be
deemed to be employment or service with the Company and LMC for all purposes under an Option. 

        (b)   Payment on Exercise. No shares of Common Stock shall be issued on the exercise of an Option unless paid for in full at
the time of purchase. Payment for shares of Common Stock purchased upon the exercise of an Option and any amounts required under Section 9.4 shall be determined by the Committee and may consist
of (i) cash, (ii) check, (iii) promissory note (subject to applicable law), (iv) whole shares of any series of Common Stock, (v) the withholding of shares of the
applicable series of Common Stock issuable upon such exercise of the Option, (vi) the

 
delivery, together with a properly executed exercise notice, of irrevocable instructions to a broker to deliver promptly to the Company the amount of sale or loan proceeds required to pay the purchase
price, or (vii) any combination of the foregoing methods of payment, or such other consideration and method of payment as may be permitted for the issuance of shares under the Delaware General
Corporation Law. The permitted method or methods of payment of the amounts payable upon exercise of an Option, if other than in cash, shall be set forth in the applicable Option agreement and may be
subject to such conditions as the Committee deems appropriate. 

        (c)   Value of Shares. Unless otherwise determined by the Committee and provided in the applicable Option agreement, shares of
any series of Common Stock delivered in payment of all or any part of the amounts payable in connection with the exercise of an Option, and shares of any series of Common Stock withheld for such
payment, shall be valued for such purpose at their Fair Market Value as of the exercise date. 

        (d)   Issuance of Shares. The Company shall effect the transfer of the shares of Common Stock purchased under the Option as
soon as practicable after the exercise thereof and payment in full of the purchase price therefor and of any amounts required by Section 9.4, and within a reasonable time thereafter, such
transfer shall be evidenced on the books of the Company. Unless otherwise determined by the Committee and provided in the applicable Option agreement, (i) no Participant or other person
exercising an Option shall have any of the rights of a stockholder of the Company with respect to shares of Common Stock subject to an Option granted under the Plan until due exercise and full payment
has been made, and (ii) no adjustment shall be made for cash dividends or other rights for which the record date is prior to the date of such due exercise and full payment. 

ARTICLE VII

Administration of Plan  

        7.1   The Committee. This Plan shall be administered solely by the Compensation Committee of the Board or such other committee
of the Board as the Board shall designate to administer the Plan. A majority of the Committee shall constitute a quorum thereof and the actions of a majority of the Committee at a meeting at which a
quorum is present, or actions unanimously approved in writing by all members of the Committee, shall be the actions of the Committee. Vacancies occurring on the Committee shall be filled by the Board.
The Committee shall have full and final authority to interpret this Plan and any instruments evidencing Stock Incentives granted hereunder, to prescribe, amend and rescind rules and regulations, if
any, relating to this Plan and to make all determinations necessary or advisable for the administration of this Plan. The Committee's determination in all matters referred to herein shall be
conclusive and binding for all purposes and upon all persons including, but without limitation, the Company, LMC, the shareholders of the Company, the shareholders of LMC, the Committee and each of
the members thereof, and the Participants, and their respective successors in interest. The Committee may delegate any of its rights, powers and duties to any one or more of its members, or to any
other person, by written action as provided herein, acknowledged in writing by the delegate or delegates, except that the Committee may not delegate to any person the authority to grant Stock
Incentives to, or take other action with respect to, Participants who are subject to Section 16 of the Exchange Act. Such delegation may include, without limitation, the power to execute any
documents on behalf of the Committee. 

        7.2   Liability of Committee. No member of the Committee shall be liable for any action or determination made or taken by him
or the Committee in good faith with respect to the Plan. The Committee shall have the power to engage outside consultants, auditors or other professionals to assist in the fulfillment of the
Committee's duties under this Plan at the Company's expense.

 

        7.3   Determinations of the Committee. The Committee may, in its sole discretion, waive any provisions of any Stock Incentive,
provided such waiver is not inconsistent with the terms of the applicable Incentive Plan, any associated instrument or this Plan as then in effect. 

ARTICLE VIII

Amendment and Termination of Plan  

        8.1   Amendment, Modification, Suspension or Termination. The Board may from time to time amend, modify, suspend or terminate
the Plan for the purpose of meeting or addressing any changes in legal requirements or for any other purpose permitted by law except that (i) subject to Section 9.6, no amendment or
alteration that would impair the rights of any Participant under any Stock Incentive awarded to such Participant shall be made without such Participant's consent and (ii) no amendment or
alteration shall be effective prior to approval by the Company's shareholders to the extent such approval is then required pursuant to applicable legal requirements or the applicable requirements of
the securities exchange on which the Company's Common Stock is listed. With the consent of the Participant, or as otherwise permitted under Section 9.6, and subject to the terms and conditions
of the Plan, the Committee may amend outstanding Stock Incentive agreements with any Participant, including any amendment which would (i) accelerate the time or times at which the Stock
Incentive may be exercised and/or (ii) extend the scheduled expiration date of the Stock Incentive. 

        8.2   Termination. The Board may at any time terminate this Plan as of any date specified in a resolution adopted by the Board.
If not earlier terminated, this Plan shall terminate on the last date that any Option granted hereunder may be exercised or any restriction applicable to a Restricted Stock Award granted hereunder has
lapsed, whichever occurs later. 

ARTICLE IX

Miscellaneous Provisions  

        9.1   Exclusion from Pension and Profit-Sharing Computation. By acceptance of a Stock Incentive, unless otherwise provided in
the applicable Stock Incentive agreement, each Participant shall be deemed to have agreed that such Stock Incentive is special incentive compensation that will not be taken into account, in any
manner, as salary, compensation or bonus in determining the amount of any payment under any pension, retirement or other employee benefit plan, program or policy of the Company or any Subsidiary of
the Company. In addition, each beneficiary of a deceased Participant shall be deemed to have agreed that such Stock Incentive will not affect the amount of any life insurance coverage, if any,
provided by the Company on the life of the Participant which is payable to such beneficiary under any life insurance plan covering employees of the Company or any Subsidiary of the Company. 

        9.2   Government and Other Regulations. The obligation of the Company with respect to Stock Incentives shall be subject to all
applicable laws, rules and regulations and such approvals by any governmental agencies as may be required, including the effectiveness of any registration statement required under the Securities Act
of 1933, and the rules and regulations of any securities exchange or association on which the Common Stock may be listed or quoted. For so long as any series of Common Stock is registered under the
Exchange Act, the Company shall use its reasonable efforts to comply with any legal requirements (i) to maintain a registration statement in effect under the Securities Act of 1933 with respect
to all shares of the applicable series of Common Stock that may be issued to Participants under the Plan and (ii) to file in a timely manner all reports required to be filed by it under the
Exchange Act. 

        9.3   Adjustments. 

        (a)   If
the Company subdivides its outstanding shares of any series of Common Stock into a greater number of shares of such series of Common Stock (by stock dividend, stock
split,

 
reclassification, or otherwise) or combines its outstanding shares of any series of Common Stock into a smaller number of shares of such series of Common Stock (by reverse stock split,
reclassification, or otherwise) or if the Committee determines that any stock dividend, extraordinary cash dividend, reclassification, recapitalization, reorganization, split-up,
spin-off, combination, exchange of shares, warrants or rights offering to purchase such series of Common Stock or other similar corporate event (including mergers or consolidations other
than those which constitute Approved Transactions, adjustments with respect to which shall be governed by Section 9.3(b)) affects any series of Common Stock so that an adjustment is required to
preserve the benefits or potential benefits intended to be made available under the Plan, then the Committee, in its sole discretion and in such manner as the Committee may deem equitable and
appropriate, may make such adjustments to any or all of (i) the number and kind of shares of stock subject to outstanding Stock Incentives, and (ii) the purchase or exercise price with
respect to any of the foregoing, provided, however, that the number of shares subject to any Stock Incentive shall always be a whole number.
Notwithstanding the foregoing, if all shares of any series of Common Stock are redeemed, then each outstanding Stock Incentive shall be adjusted to substitute for the shares of such series of Common
Stock subject thereto the kind and amount of cash, securities or other assets issued or paid in the redemption of the equivalent number of shares of such series of Common Stock and otherwise the terms
of such Stock Incentive, including, in the case of Options or similar rights, the aggregate exercise price, shall remain constant before and after the substitution (unless otherwise determined by the
Committee and provided in the applicable Stock Incentive agreement). The Committee may, if deemed appropriate, provide for a cash payment of a Stock Incentive to a Participant in connection with any
adjustment made pursuant to this Section 9.3(a). 

        (b)   Approved Transactions; Board Change; Control Purchase. In the event of any Approved Transaction, Board Change or Control
Purchase, notwithstanding any contrary waiting period, installment period, vesting schedule or restriction period in any Stock Incentive agreement or in the Plan, unless the applicable Stock Incentive
agreement provides otherwise: (i) in the case of an Option, each such outstanding Option granted under the Plan shall become exercisable in full in respect of the aggregate number of shares
covered thereby; and (ii) in the case of Common Stock awarded under a Restricted Stock Award, any restriction period applicable to each such Common Stock shall be deemed to have expired and all
such Common Stock shall become vested. Notwithstanding the foregoing, unless otherwise provided in the applicable Stock Incentive agreement, the Committee may, in its discretion, determine that any or
all outstanding Stock Incentives of any or all types granted pursuant to the Plan will not vest or become exercisable on an accelerated basis in connection with an Approved Transaction if effective
provision has been made for the taking of such action which, in the opinion of the Committee, is equitable and appropriate to substitute a new Stock Incentive or to assume such Stock Incentive and to
make such new or assumed Stock Incentive, as nearly as may be practicable, equivalent to the old Stock Incentive (before giving effect to any acceleration of the vesting or exercisability thereof),
taking into account, to the extent applicable, the kind and amount of securities,
cash or other assets into or for which the applicable series of Common Stock may be changed, converted or exchanged in connection with the Approved Transaction. 

        9.4   Withholding of Taxes. The Company's obligation to deliver shares of Common Stock or pay cash in respect of any Stock
Incentives under the Plan shall be subject to applicable federal, state and local tax withholding requirements. Federal, state and local withholding tax due upon the exercise of any Option or upon the
vesting of, or expiration of restrictions with respect to Common Stock granted under Restricted Stock Awards, may, in the discretion of the Committee, be paid in shares of the applicable series of
Common Stock already owned by the Participant or through the withholding of shares otherwise issuable to such Participant, upon such terms and conditions (including the conditions referenced in
Section 6.2) as the Committee shall determine. If the Participant shall fail to pay, or

 
make arrangements satisfactory to the Committee for the payment of, all such federal, state and local taxes required to be withheld with respect to a Stock Incentive, then the Company shall, to the
extent permitted by law, have the right to deduct from any payment of any kind otherwise due to such Participant an amount equal to any federal, state or local taxes of any kind required to be
withheld with respect to such Stock Incentive. 

        9.5   Restrictions on Benefit. Notwithstanding any provision of this Plan to the contrary, the provisions of any Incentive Plan
concerning restrictions on benefits (in order to avoid excise taxes on the Participant under Section 4999 of the Code or the disallowance of a deduction to the Company pursuant to
Section 280G of the Code) are specifically incorporated by this reference. 

        9.6   Section 409A. Notwithstanding any provision in this Plan or the Incentive Plan to the contrary, if any Plan or
Incentive Plan provision or any Stock Incentive thereunder would result in the imposition of an additional tax under Code Section 409A and related regulations and United States Department of
the Treasury pronouncements ("Section 409A"), that Plan or Incentive Plan provision and/or that Stock Incentive will be reformed to avoid imposition of the applicable tax and no action taken to
comply with Section 409A shall be deemed to adversely affect the Participant's right to a Stock Incentive or require the consent of the Participant. 

 

        IN
WITNESS WHEREOF, this document has been executed effective as of the Record Date. 

	

 	
 	

DISCOVERY HOLDING COMPANY
	

 	
 	

By:	
 	

	 	 	Name:	 	 
	 	 	Title:	 	 

QuickLinks

FORM OF DISCOVERY HOLDING COMPANY TRANSITIONAL STOCK ADJUSTMENT PLANQuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.14  

 
 

INDEMNIFICATION AGREEMENT    
    

        This AGREEMENT is made and entered into this [    ] day of
[                        ], 2005, by and between
Discovery Holding Company, a Delaware corporation (the "Company"), and [                        ] (the "Indemnitee"). 

        WHEREAS,
it is essential to the Company and its mission to retain and attract as officers and directors the most capable persons available; 

        WHEREAS,
the Company has asked Indemnitee to serve as a(n) [officer]/[director] of the Company; 

        WHEREAS,
both the Company and Indemnitee recognize the omnipresent risk of litigation and other claims that are routinely asserted against officers and directors of companies operating
in the public arena in the current environment, and the attendant costs of defending even wholly frivolous claims; 

        WHEREAS,
it has become increasingly difficult to obtain insurance against the risk of personal liability of officers and directors on terms providing reasonable protection to the
individual at reasonable cost to the companies; 

        WHEREAS,
the certificate of incorporation and Bylaws of the Company provide certain indemnification rights to the officers and directors of the Company, as provided by Delaware law; 

        WHEREAS,
to induce Indemnitee to become a(n) [officer]/[director] of the Company, in recognition of Indemnitee's need for substantial
protection against personal liability in order to enhance Indemnitee's continued service to the Company in an effective manner, the increasing
difficulty in obtaining and maintaining satisfactory insurance coverage, and Indemnitee's reliance on assurance of indemnification, the Company wishes to provide in this Agreement for the
indemnification of and the advancing of expenses to Indemnitee to the fullest extent permitted by law (whether partial or complete) and as set forth in this Agreement, and, to the extent insurance is
maintained, for the continued coverage of Indemnitee under the Company's directors' and officers' liability insurance policies; 

        NOW,
THEREFORE, in consideration of the premises, the mutual covenants and agreements contained herein and Indemnitee's continuing to serve as an officer of the Company, the parties
hereto agree as follows: 

        1.    Certain Definitions:    

        (a)    Change in Control:    shall be deemed to have occurred if (i) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), other than a trustee or other fiduciary holding securities under an employee benefit plan of the Company or a corporation
owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company, is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under such Act), directly or indirectly, of securities of the Company representing 20% or more of the total voting power represented by the Company's then outstanding
Voting Securities, or (ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board of Directors of the Company and any new director
whose election by the Board of Directors or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds (662/3%) of the directors
then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a majority
thereof, or (iii) the stockholders of the Company approve a merger or consolidation of the Company with any other corporation, other than a merger or consolidation which would result in the
Voting Securities of the

 
Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into Voting Securities of the surviving entity) at least 80% of the total
voting power represented by the Voting Securities of the Company or such surviving entity outstanding immediately after such merger or consolidation, or the stockholders of the Company approve a plan
of complete liquidation of the Company or an agreement for the sale or disposition by the Company of (in one transaction or a series of transactions) all or substantially all the Company's assets. 

        (b)    Claim:    any threatened, pending or completed action, suit or proceeding, whether instituted by the Company or
any other party, or any inquiry or investigation that Indemnitee in good faith believes might lead to the institution of any such action, suit or proceeding, whether civil (including intentional and
unintentional tort claims), criminal, administrative, investigative or other. 

        (c)    Expenses:    include attorneys' fees and all other costs, expenses and obligations paid or incurred in
connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in, any Claim relating to any
Indemnifiable Event. 

        (d)    Indemnifiable Event:    any event or occurrence related to the fact that Indemnitee is or was a director,
officer, employee, agent or fiduciary of the Company, or is or was serving at the request of the Company as a director, officer, employee, trustee, agent or fiduciary of another corporation,
partnership, joint venture, employee benefit plan, trust or other enterprise, or by reason of anything done or not done by Indemnitee in any such capacity. 

        (e)    Independent Legal Counsel:    an attorney or firm of attorneys, selected in accordance with the provisions of
Section 3, who shall not have otherwise performed services for the Company or Indemnitee within the last five years (other than with respect to matters concerning the rights of Indemnitee under
this Agreement, or of other indemnitees under similar indemnification agreements). 

        (f)    Reviewing Party:    any appropriate person or body consisting of a member or members of the Company's Board of
Directors or any other person or body appointed by the Company's Board of Directors who is not a party to the particular Claim for which Indemnitee is seeking indemnification, or Independent Legal
Counsel. 

        (g)    Voting Securities:    shares of any series or class of common stock or preferred stock of the Company, in each
case, entitled to vote generally upon all matters that may be submitted to a vote of stockholders of the Company at any annual or special meeting thereof. 

        2.    Basic Indemnification Arrangement.    

        (a)   In
the event Indemnitee was, is or becomes a party to or witness or other participant in, or is threatened to be made a party to or witness or other participant in, a
Claim by reason of (or arising in part out of) an Indemnifiable Event, the Company shall indemnify Indemnitee to the fullest extent permitted by law as soon as practicable but in any event no later
than thirty days after written demand is presented to the Company, against any and all Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and
other charges paid or payable in connection with or in respect of such Expenses, judgments, fines, penalties or amounts paid in settlement) of such Claim. If so requested by Indemnitee, the Company
shall advance (within two business days of such request) any and all Expenses to Indemnitee as incurred (an "Expense Advance"). 

        (b)   Notwithstanding
the foregoing, (i) the obligations of the Company under Section 2(a) shall be subject to the condition that the Reviewing Party shall not
have determined (in a

 
written opinion, in any case in which the Independent Legal Counsel referred to in Section 3 hereof is involved) that Indemnitee would not be permitted to be indemnified under applicable law,
and (ii) the obligation of the Company to make an Expense Advance pursuant to Section 2(a) shall be subject to the condition that, if, when and to the extent that the Reviewing Party
determines that Indemnitee would not be permitted to be so indemnified under applicable law, the Company shall be entitled to be reimbursed by Indemnitee (who hereby agrees to reimburse the Company)
for all such amounts theretofore paid; provided, however, that if Indemnitee has commenced or thereafter commences legal proceedings in a court of competent jurisdiction to secure a determination that
Indemnitee should be indemnified under applicable law, any determination made by the Reviewing Party that Indemnitee would not be permitted to be indemnified under applicable law shall not be binding
and Indemnitee shall not be required to reimburse the Company for any Expense Advance until a final judicial determination is made with respect thereto (as to which all rights of appeal therefrom have
been exhausted or lapsed). If there has not been a Change in Control, the Reviewing Party shall be selected by the Board of Directors, and if there has been such a Change in Control (other than a
Change in Control which has been approved by a majority of the Company's Board of Directors who were directors immediately prior to such Change in Control), the Reviewing Party shall be the
Independent Legal Counsel referred to in Section 3 hereof. If there has been no determination by the Reviewing Party or if the Reviewing Party determines that Indemnitee substantively would not
be permitted to be indemnified in whole or in part under applicable law, Indemnitee shall have the right to commence litigation in any court in Delaware having subject matter jurisdiction thereof and
in which venue is proper seeking an initial determination by the court or challenging any such determination by the Reviewing Party or any aspect thereof, including the legal or factual bases
therefor, and the Company hereby consents to service of process and agrees to appear in any such proceeding. Any determination by the Reviewing Party otherwise shall be conclusive and binding on the
Company and Indemnitee. 

        3.    Change in Control.    The Company agrees that if there is a Change in Control of the Company (other than a
Change in Control which has been approved by a majority of the Company's Board of Directors who were directors immediately prior to such Change in Control) then with respect to all matters thereafter
arising concerning the rights of Indemnitee to indemnity payments and Expense Advances under this Agreement or any other agreement or Company Bylaw or charter provision now or hereafter in effect
relating to Claims for Indemnifiable Events, the Company shall seek legal advice only from Independent Legal Counsel selected by Indemnitee and approved by the Company (which approval shall not be
unreasonably withheld). Such counsel, among other things, shall render its written opinion to the Company and Indemnitee as to whether and to what extent Indemnitee would be permitted to be
indemnified under applicable law. The Company agrees to pay the reasonable fees of the Independent Legal Counsel referred to above and to fully indemnify such counsel against any and all expenses
(including attorneys' fees), claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto. 

        4.    Indemnification for Additional Expenses.    The Company shall indemnify Indemnitee against any and all expenses
(including attorneys' fees) and, if requested by Indemnitee, shall (within two business days of such request) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with
any action brought by Indemnitee (whether pursuant to Section 17 of this Agreement or otherwise) for (i) indemnification or advance payment of Expenses by the Company under this
Agreement or any other agreement or Company Bylaw or charter provision now or hereafter in effect relating to Claims for Indemnifiable Events or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, to the fullest extent permitted by law, regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.

 

        5.    Partial Indemnity.    If Indemnitee is entitled under any provision of this Agreement to indemnification by the
Company for some or a portion of the Expenses, judgments, fines, penalties and amounts paid in settlement of a Claim but not, however, for all of the total amount thereof, the Company shall
nevertheless indemnify Indemnitee for the portion thereof to which Indemnitee is entitled. Moreover, notwithstanding any other provision of this Agreement, to the extent that Indemnitee has been
successful on the merits or otherwise in defense of any or all Claims relating in whole or in part to an Indemnifiable Event or in defense of any issue or matter therein, including dismissal without
prejudice, Indemnitee shall be indemnified against all Expenses incurred in connection therewith. 

        6.    Burden of Proof.    In connection with any determination by the Reviewing Party or otherwise as to whether
Indemnitee is entitled to be indemnified hereunder, the burden of proof shall be on the Company to establish that Indemnitee is not so entitled. 

        7.    No Presumptions.    For purposes of this Agreement, the termination of any claim, action, suit or proceeding, by
judgment, order, settlement (whether with or without court approval) or conviction, or upon a plea of nolo contendere, or its equivalent, shall not create a presumption that Indemnitee did not meet
any particular standard of conduct or have any particular belief or that a court has determined that indemnification is not permitted by applicable law. In addition, neither the failure of the
Reviewing Party to have made a determination as to whether Indemnitee has met any particular standard of conduct or had any particular belief, nor an actual determination by the Reviewing Party that
Indemnitee has not met such standard of conduct or did not have such belief, prior to the commencement of legal proceedings by Indemnitee to secure a judicial determination that Indemnitee should be
indemnified under applicable law shall be a defense to Indemnitee's claim or create a presumption that Indemnitee has not met any particular standard of conduct or did not have any particular belief. 

        8.    Nonexclusivity; Subsequent Change in Law.    The rights of the Indemnitee hereunder shall be in addition to any
other rights Indemnitee may have under the Company's Bylaws or certificate of incorporation or under Delaware law, or otherwise. To the extent that a change in Delaware law (whether by statute or
judicial decision) permits greater indemnification by agreement than would be afforded currently under
the Company's Bylaws and certificate of incorporation and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such
change. 

        9.    Liability Insurance.    To the extent the Company maintains an insurance policy or policies providing directors'
and officers' liability insurance, Indemnitee shall be covered by such policy or policies, in accordance with its or their terms, to the maximum extent of the coverage available for any Company
director or officer. 

        10.    Amendments; Waiver.    No supplement, modification or amendment of this Agreement shall be binding unless
executed in writing by both of the parties hereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions hereof (whether or not
similar) nor shall such waiver constitute a continuing waiver. 

        11.    Subrogation.    In the event of payment under this Agreement, the Company shall be subrogated to the extent of
such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and shall do everything that may be necessary to secure such rights, including the execution of such
documents necessary to enable the Company effectively to bring suit to enforce such rights. 

        12.    No Duplication of Payments.    The Company shall not be liable under this Agreement to make any payment in
connection with any Claim made against Indemnitee to the extent Indemnitee has

 
otherwise actually received payment (under any insurance policy, Bylaw or otherwise) of the amounts otherwise indemnifiable hereunder. 

        13.    Binding Effect.    This Agreement shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and their respective successors (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business or assets of the
Company), assigns, spouses, heirs, executors and personal and legal representatives. This Agreement shall continue in effect regardless of whether Indemnitee continues to serve as an officer of the
Company or of any other enterprise at the Company's request. 

        14.    Severability.    The provisions of this Agreement shall be severable in the event that any of the provisions
hereof (including any provision within a single section, paragraph or sentence) is held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable in any respect, and the
validity and enforceability of any such provision in every other respect and of the remaining provisions hereof shall not be in any way impaired and shall remain enforceable to the fullest extent
permitted by law. 

        15.    Effective Date.    This Agreement shall be effective as of the date hereof and shall apply to any claim for
indemnification by the Indemnitee on or after such date. 

        16.    Governing Law.    This Agreement shall be governed by and construed and enforced in accordance with the laws of
the State of Delaware applicable to contracts made and to be performed in such state without giving effect to the principles of conflicts of laws. 

        17.    Injunctive Relief.    The parties hereto agree that Indemnitee may enforce this Agreement by seeking specific
performance hereof, without any necessity of showing irreparable harm or posting a bond, which requirements are hereby waived, and that by seeking specific performance, Indemnitee shall not be
precluded from seeking or obtaining any other relief to which he may be entitled. 

 

        IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date set forth above. 

	 	 	DISCOVERY HOLDING COMPANY
	

 	
 	

By:	

	

 	
 	

INDEMNITEE
	

 	
 	

QuickLinks

INDEMNIFICATION AGREEMENT

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00087-of-00352.parquet"}]]