Document:

exv10w7

Exhibit 10.7

INDEMNIFICATION AGREEMENT

          THIS INDEMNIFICATION AGREEMENT (this “Agreement”) is made and entered into this [ ]
day of [                      ], 2008, by and between Ascent Media Corporation, 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 constituted 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 (66-2/3%) 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

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	 	 	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

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	 	 	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.

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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, 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

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continues to serve as a director, officer, employee, agent or fiduciary 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.

	 	 	 	 	 
	 	ASCENT MEDIA CORPORATION

 	 
	 	By:  	 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 
	 	INDEMNITEE

 	 
	 	  	 	 
	 	 	Name:  	 	 
	 	 	 	 
	 

6exv10w8

EXHIBIT 10.8

EMPLOYMENT AGREEMENT

     This Employment Agreement (the “Agreement”), dated as of September 1, 2006, is entered into by
and between Ascent Media Group, LLC, a Delaware limited liability company (the “Company”), and
William E. Niles (“Executive”).

INTRODUCTION

     The Company and its operating subsidiaries (“Affiliates”) are engaged in the business of
providing technical and creative services to the entertainment industry. The Company desires to
employ Executive, and Executive desires to accept such employment, under the terms and conditions
set forth herein.

     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

ARTICLE I

EMPLOYMENT; TERM; DUTIES

     1.1 Employment. Upon the terms and conditions hereinafter set forth, the Company
hereby employs Executive, and Executive hereby accepts employment, as Executive Vice President and
General Counsel of the Company.

     1.2 Term. Subject to Article IV below, Executive’s employment hereunder shall be for
a term of five (5) years commencing as of September 1, 2006 (the “Commencement Date”), and expiring
at the close of business on August 31, 2011 (the “Term”).

     1.3 Duties. During the Term, Executive shall perform such executive duties for the
Company and/or its Affiliates, consistent with his position hereunder, as may be assigned to him
from time to time by the Chief Executive Officer of the Company (or, at any time that the position
of Chief Executive Officer is vacant, the Chairman of the Company). Executive shall devote his
entire productive business time, attention and energies to the performance of his duties hereunder.
Executive shall use his best efforts to advance the interests and business of the Company and its
Affiliates. Executive shall abide by all rules, regulations and policies of the Company, as may be
in effect from time to time. Notwithstanding the foregoing, Executive may act for his own account
in passive-type investments as provided in Section 5.3, or as a member of boards of directors of
other companies, where the time allocated for those activities does not materially interfere with
or create a conflict of interest with the discharge of his duties for the Company.

 

     1.4 Reporting. Executive shall report directly to the Chief Executive Officer of the
Company (or, at any time that the position of Chief Executive Officer is vacant, the Chairman of
the Company).

     1.5 Exclusive Agreement. Executive represents and warrants to the Company that there
are no agreements or arrangements, whether written or oral, in effect which would prevent Executive
from rendering his exclusive services to the Company during the Term.

ARTICLE II 

COMPENSATION

     2.1 Compensation. For all services rendered by Executive hereunder and all covenants
and conditions undertaken by him pursuant to this Agreement, the Company shall pay, and Executive
shall accept, as full compensation, the amounts set forth in this Article II.

     2.2 Base Salary. The base salary shall be an annual salary of $440,000 (the “Base
Salary”), payable by the Company in accordance with the Company’s normal payroll practices.
Beginning in 2008, the Base Salary shall be reviewed on an annual basis during the Term for
increase in the sole discretion of the Company.

     2.3 Bonus. During the Term, in addition to the Base Salary, Executive shall
participate in the Ascent Media Group, LLC Management Incentive Plan (as amended and restated
effective January 1, 2006, and as it may be further amended during the Term, the “MIP”), or, in the
event the MIP is terminated during the Term, such other reasonably equivalent incentive bonus plan,
with an annual “Target Award” of fifty percent (50%) of Executive’s “Annual Base Salary” (as such
capitalized terms are defined in the MIP). Except as set forth in Sections 4.2, 4.3 and 4.8
below, (a) Executive’s participation in the MIP will be subject to all of the terms and conditions
of the MIP, and (b) nothing in this Agreement shall be construed to guarantee the payment of any
amount to Executive pursuant to the MIP (i.e., except as set forth in Sections 4.2, 4.3 and 4.8
below, the amount of any bonus payable to Executive under the MIP shall be determined pursuant to
and in accordance with the terms and conditions of the MIP).

     2.4 Long-Term Incentive Plan. The Company has been evaluating the creation of a new
long-term incentive plan that would be tied directly to the performance of the Company and its
subsidiaries. While the terms, conditions and plan participants have not yet been specifically
defined or approved by the shareholder of the Company, the Company is actively evaluating the
various alternatives available to it associated with the creation of a new plan. If and when such
a plan is implemented, Executive will be considered for participation in the plan. However, the
Company cannot guarantee that such a plan will be created or that Executive will participate in the
plan.

     2.5 Deductions. The Company shall deduct from the compensation described in Sections
2.2, 2.3 and 2.4 any federal, state or local withholding taxes, social security contributions and
any other amounts which may be required to be deducted or withheld by the Company pursuant to any
federal, state or local laws, rules or regulations.

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     2.6 Disability Adjustment. Any compensation otherwise payable to Executive pursuant
to Sections 2.2 and 2.3 in respect of any period during which Executive is disabled (as
contemplated in Section 4.4) shall be reduced by any amounts payable to Executive for loss of
earnings or the like under any insurance plan or policy sponsored by the Company.

ARTICLE III

BENEFITS; EXPENSES

     3.1 Benefits. During the Term, Executive shall be entitled to participate in such
group life, health, accident, disability or hospitalization insurance plans, pension plans and
retirement plans as the Company may make available to its other senior executive employees as a
group, subject to the terms and conditions of any such plans. Executive’s participation in all
such plans shall be at a level, and on terms and conditions, that are commensurate with his
positions and responsibilities at the Company.

     3.2 Expenses. The Company agrees that Executive is authorized to incur reasonable and
appropriate expenses in the performance of his duties hereunder and in promoting the business of
the Company in accordance with the terms of the Company’s Travel & Entertainment Policy (as the
same may be modified or amended by the Company from time to time in its sole discretion).

     3.3 Vacation. Executive shall accrue a total of one hundred sixty (160) hours of
vacation per year following the date of this Agreement. If, at any time during the Term, Executive
accumulates two hundred forty (240) of earned but unused vacation time (the “Accrual Cap”),
Executive will not accrue additional vacation time until he has taken a portion of the previously
earned vacation. Executive will again accrue paid vacation time when his accumulated amount of
earned but unused vacation time falls below the Accrual Cap. Upon termination of Executive’s
employment, any accrued but unused vacation time will be paid to Executive.

     3.4 Key Man Insurance. The Company may secure in its own name or otherwise, and at
its own expense, life, health, accident and other insurance covering Executive alone or with
others, and Executive shall not have any right, title or interest in or to such insurance other
than as expressly provided herein. Executive agrees to assist the Company in procuring such
insurance by submitting to the usual and customary medical and other examinations to be conducted
by such physicians as the Company or such insurance company may designate and by signing such
applications and other written instruments as may be required by the insurance companies to which
application is made for such insurance. Executive’s failure to submit to such usual and customary
medical and other examinations shall be deemed a material breach of this Agreement.

ARTICLE IV

TERMINATION; DEATH; DISABILITY

     4.1 Termination of Employment For Cause. In addition to any other remedies available
to the Company at law, in equity or as set forth in this Agreement, the Company shall have the
right, upon written notice to Executive, to terminate Executive’s employment hereunder at any time

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for “Cause” (a “Termination For Cause”). In the event of a Termination For Cause, Executive’s
employment will terminate and the Company shall have no further liability or obligation to
Executive (other than the Company’s obligation to pay Base Salary and vacation time accrued but
unpaid as of the date of termination and reimbursement of expenses incurred prior to the date of
termination in accordance with Section 3.2 above).

     For purposes of this Agreement, “Cause” shall mean: (a) any act or omission that constitutes
a breach by Executive of any of his material obligations under this Agreement; (b) the continued
failure or refusal of Executive (i) to substantially perform the material duties required of him as
an Executive of the Company and/or (ii) to comply with reasonable directions of the Chief Executive
Officer of the Company (or, at any time that the position of Chief Executive Officer is vacant, the
Chairman of the Company); (c) any material violation by Executive of any (i) policy, rule or
regulation of the Company or (ii) any law or regulation applicable to the business of the Company
or any of its affiliates; (d) Executive’s material act or omission constituting fraud, dishonesty
or misrepresentation, occurring subsequent to the commencement of his employment with the Company;
(e) Executive’s gross negligence in the performance of his duties hereunder; (f) Executive’s
conviction of any crime (whether or not involving the Company) which constitutes a felony or crime
of moral turpitude or is punishable by imprisonment of thirty (30) days or more, provided,
however, that nothing in this Agreement shall obligate the Company to pay Base Salary or
any bonus compensation or benefits during any period that Executive is unable to perform his duties
hereunder due to any incarceration, and provided, further, that nothing shall
prevent Executive’s termination under any other subsection of this Section 4.1 if it provides
independent grounds for termination; or (g) any other misconduct by Executive that is materially
injurious to the financial condition or business reputation of, or is otherwise materially
injurious to, the Company.

     Notwithstanding the foregoing, no purported Termination For Cause pursuant to (a), (b), (c),
(d), (e) and (g) of this Section 4.1 shall be effective unless all of the following provisions
shall have been complied with: (i) Executive shall be given written notice by the Company of the
intention to effect a Termination For Cause, such notice to state in detail the particular
circumstances that constitute the grounds on which the proposed Termination For Cause is based; and
(ii) Executive shall have ten (10) business days after receiving such notice in which to cure such
grounds, to the extent such cure is possible, as determined in the sole discretion of the Company.

     4.2 Termination of Employment Without Cause. During the Term, the Company may at any
time, in its sole discretion, terminate the employment of Executive hereunder for any reason (other
than those set forth in Section 4.1 above) upon written notice (the “Termination Notice”) to
Executive (a “Termination Without Cause”). In such event, the Company shall pay Executive an
amount equal to the sum of the following:

	 	(a)	 	any Base Salary and vacation time accrued but unpaid as of the date of
termination;
	 
	 	(b)	 	subject to Section 4.6 below, an amount (the “Severance Payment”) equal to:

(i) if the termination of Executive’s employment occurs prior to a Change in Control
(as defined in Section 4.9), an amount equal to Executive’s annual Base Salary in
effect on the date of termination multiplied by 2, or

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(ii) if the termination of Executive’s employment occurs concurrently with or
following a Change in Control, the sum of (A) Executive’s annual Base Salary in
effect on the date of termination multiplied by 2.5, plus (B) the Change in Control
Termination Year Annual Award (determined in accordance with Section 4.8(b) below)
multiplied by 2.5;

	 	(c)	 	subject to Section 4.6 below, in lieu of any Award payable under the MIP with
respect to the calendar year in which termination occurs, an amount (the “Pro Rated
Bonus”) equal to:

(i) if the termination of Executive’s employment occurs prior to a Change in Control
(as defined in Section 4.9), an amount equal to the Termination Year Annual Award
determined as provided in Section 4.8(a) below, multiplied by the percentage obtained
by dividing (A) the number of days during the period beginning on January 1 of the
calendar year in which such termination occurs and ending on the date of termination,
by (B) 365 or 366, as applicable (the “Pro Rata Percentage”); or

(ii) if the termination of Executive’s employment occurs concurrently with or
following a Change in Control, an amount equal to the Change in Control Termination
Year Annual Award (determined in accordance with Section 4.8(b) below), multiplied by
the Pro Rata Percentage;

	 	(d)	 	subject to Section 4.6 below, notwithstanding the provisions of Section 6 of
the MIP, any Award (as defined in the MIP) to which Executive otherwise has become
entitled with respect to the calendar year preceding the year in which termination
occurs if such Award has not previously been paid to Executive; and

	 	(e)	 	any reimbursement for expenses incurred in accordance with Section 3.2.

Subject to Section 4.6 and 4.10, (i) any Severance Payment or Pro Rated Bonus to which Executive
becomes entitled shall be payable in a lump sum on the tenth (10th) business day
following the last day of the Consideration Period, except that any Prorated Bonus determined with
reference to Section 4.8(a)(ii) shall be paid on April 15th of the year following the
year in which the date of termination occurs (or, if such April 15th is not a business
day, on the first business day thereafter), and (ii) any Award payable pursuant to the terms of
Section 4.2(d) shall be payable on the Payment Date (as defined in the MIP) relating to such Award
(which shall in no event be later than December 31st of the calendar year in which
termination occurs).

     In addition, subject to Sections 4.5 and 4.6 below, to the extent such coverage is available
and is elected by Executive under the Consolidated Omnibus Budget Reconciliation Act of 1985
(“COBRA”), the Company shall contribute to the health insurance plan maintained by the Company and
covering the Executive and his dependents as of the date of termination, or any successor plan
maintained by the Company, that amount that reflects the proportionate part of the premium for such
coverage that is paid by the Company as of the date of termination (the “Benefits Payments”), such
Benefits Payments to be made monthly in accordance with the Company’s normal procedures for the
payment of health insurance premiums, throughout the period beginning on the date of termination
and ending on the earlier of the 24-month anniversary of the date of termination and the
expiration of the coverage period specified in COBRA, such period to be determined as of the date

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of termination (the “Reimbursement Period”) (i.e., Executive shall bear responsibility for
that portion of the health insurance premiums in excess of the Benefits Payments), or, alternately,
in the Company’s sole discretion, the Company shall reimburse Executive the amount of the Benefits
Payment on a monthly basis during the Reimbursement Period, upon Executive’s submission to the
Company of adequate proof of payment of the full COBRA premium by Executive; provided,
however, that if Executive becomes employed with another employer during the Reimbursement
Period and is eligible to receive health and/or medical benefits under such other employer’s plans,
the Company’s payment obligation under this paragraph shall be reduced to the extent that
comparable benefits and/or coverage is provided under such other employer’s plans. For the
avoidance of doubt, Executive shall be responsible for paying any U.S. federal or state income
taxes associated with the Benefits Payments.

     Provided that a Change in Control (as defined in Section 4.9 below) has not then occurred,
within the period beginning on the date that is six (6) months prior to the expiration of the Term
and ending on the date that is three (3) months prior to the expiration of the Term (the “Notice
Period”), the Company shall deliver a written notice to Executive stating either (i) that the
Company does not intend to offer Executive a new employment agreement to take effect at the
expiration of the Term (a “Non-Renewal Notice”) or (ii) that the Company offers Executive a new
employment agreement to take effect at the expiration of the Term upon terms (other than the length
of the term of such new employment agreement) that are at least as favorable to Executive as the
terms of this Agreement, and the material terms of such offer shall be summarized or set forth in
the notice (“Renewal Notice”). If the Company delivers a Non-Renewal Notice, or if the Company
fails to deliver either a Renewal Notice or a Non-Renewal Notice within the Notice Period,
Executive’s employment shall be terminated at the expiration of the Term (or at such earlier date
as may be set forth in the Non-Renewal Notice), and such termination shall be a Termination Without
Cause, whereupon, subject to Sections 4.5 and 4.6 below, Executive shall be entitled to receive the
amounts and benefits as provided under this Section 4.2. If the Company delivers a Renewal Notice
and Executive fails to accept such offer in writing prior to the date that is ninety (90) days
following delivery of the Renewal Notice, Executive’s employment shall be terminated as of such
90th day and such termination shall be a Termination Without Cause, whereupon, subject
to Sections 4.5 and 4.6 below, Executive shall be entitled to receive the amounts and benefits as
provided under this Section 4.2 except that “1” shall be substituted for “2” in Section 4.2(b)(i)
for purposes of calculating Executive’s Severance Payment and “12-month anniversary” shall be
substituted for “24-month anniversary” for purposes of calculating Executive’s Benefits Payments
and Reimbursement Period under this Section 4.2.

     Executive acknowledges that the payments and benefits referred to in this Section 4.2,
together with any rights or benefits under any written plan or agreement which have vested on or
prior to the termination date of Executive’s employment under this Section 4.2, constitute the only
payments which Executive shall be entitled to receive from the Company hereunder in the event of
any termination of his employment pursuant to this Section 4.2, and the Company shall have no
further liability or obligation to him hereunder or otherwise in respect of his employment.

     4.3 Termination of Employment With Good Reason. In addition to any other remedies
available to Executive at law, in equity or as set forth in this Agreement, Executive shall have
the right during the Term, upon written notice to the Company, to terminate his employment
hereunder upon the occurrence of any of the following events without the prior written consent of
Executive: (a) a reduction in Executive’s then current Base Salary; (b) the relocation by the
Company of

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Executive’s principal place of employment to a location more than 35 miles from Executive’s
principal place of employment prior to such relocation, (c) a breach by the Company of any material
provision of this Agreement, or (d) following a Change in Control, the failure of the Company and
the Executive, within twelve months following the date of such Change in Control or the remainder
of the Term, whichever is shorter (the “Negotiation Period”), to execute a new employment agreement
upon terms that are mutually acceptable to Executive and the Company (in each party’s sole and
absolute discretion) governing the terms and conditions of Executive’s employment relationship with
the Company (a “Termination With Good Reason”).

     Notwithstanding the foregoing, no purported Termination With Good Reason pursuant to Section
4.3(a), (b) or (c) shall be effective unless all of the following provisions shall have been
complied with: (i) the Company shall be given written notice by Executive of the intention to
effect a Termination With Good Reason, such notice to state in detail the particular circumstances
that constitute the grounds on which the proposed Termination With Good Reason is based and to be
given no later than ninety (90) days after Executive first learns of such circumstances; and (ii)
the Company shall have fifteen (15) days after receiving such notice in which to cure such grounds,
to the extent such cure is possible. With respect to a Termination With Good Reason pursuant to
Section 4.3(d), no purported Termination With Good Reason shall be effective unless, within ninety
(90) days following the expiration of the Negotiation Period, Executive delivers to the Company
written notice of Executive’s intention to effect a Termination With Good Reason effective on the
30th day following delivery of such notice (even if such date occurs after the natural
expiration of the Term).

     In the event that a Termination With Good Reason occurs, then, subject to Sections 4.5 and 4.6
below, Executive shall have the same entitlement to the amounts and benefits as provided under
Section 4.2 for a Termination Without Cause.

     Executive acknowledges that the payments and benefits referred to in this Section 4.3,
together with any rights or benefits under any written plan or agreement which have vested on or
prior to the termination date of Executive’s employment under this Section 4.3, constitute the only
payments which Executive shall be entitled to receive from the Company hereunder in the event of
any termination of his employment pursuant to this Section 4.3, and the Company shall have no
further liability or obligation to him hereunder or otherwise in respect of his employment.

     4.4 Death; Disability. In the event that Executive dies or becomes Disabled (as
defined herein) during the Term, Executive’s employment shall terminate when such death or
Disability occurs and the Company shall pay Executive (or his legal representative, as the case may
be) as follows:

	 	(a)	 	any Base Salary and vacation time accrued but unpaid as of the date of death or
termination for Disability;
	 
	 	(b)	 	any reimbursement for expenses incurred in accordance with Section 3.2.; and
	 
	 	(c)	 	an amount equal to Executive’s monthly Base Salary in effect on such
termination date for the lesser of (i) six (6) months or (ii) the remainder of the
Term, payable in a single lump sum on the tenth (10th) business day following the
termination date.

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     For the purposes of this Agreement, Executive shall be deemed to be “Disabled” or have a
“Disability” if, because of Executive’s physical or mental disability, he has been substantially
unable to perform his duties hereunder for twelve (12) work weeks in any twelve (12) month period.
Executive shall be considered to have been substantially unable to perform his duties hereunder
only if he is either (a) unable to reasonably and effectively carry out his duties with reasonable
accommodations by the Company or (b) unable to reasonably and effectively carry out his duties
because any reasonable accommodation which may be required would cause the Company undue hardship.
In the event of a disagreement concerning Executive’s perceived Disability, Executive shall submit
to such examinations as are deemed appropriate by three practicing physicians specializing in the
area of Executive’s Disability, one selected by Executive, one selected by the Company, and one
selected by both such physicians. The majority decision of such three physicians shall be final
and binding on the parties. Nothing in this paragraph is intended to limit the Company’s right to
invoke the provisions of this paragraph with respect to any perceived Disability of Executive.

     Notwithstanding the foregoing, to the extent and for the period required by any state or
federal family and medical leave law, upon Executive’s request (i) he shall be considered to be on
unpaid leave of absence and not terminated, (ii) his group health benefits shall remain in full
force and effect, and (iii) if Executive recovers from any such Disability, at that time, to the
extent required by any state or federal family and medical leave law, upon Executive’s request, he
shall be restored to his position hereunder or to an equivalent position, as the Company may
determine, and the Term of Executive’s employment hereunder shall be reinstated effective upon such
restoration. The Term shall not be extended by reason of such intervening leave of absence or
termination, nor shall any compensation or benefits accrue in excess of those required by law
during such intervening leave of absence or termination. Upon the expiration of any such rights,
unless Executive has been restored to a position with the Company, he shall thereupon be considered
terminated.

     Executive acknowledges that the payments referred to in this Section 4.4, together with any
rights or benefits under any written plan or agreement which have vested on or prior to the
termination date of Executive’s employment under this Section 4.4, constitute the only payments
which Executive (or his legal representative, as the case may be) shall be entitled to receive from
the Company hereunder in the event of a termination of his employment for death or Disability, and
the Company shall have no further liability or obligation to him (or his legal representatives, as
the case may be) hereunder or otherwise in respect of his employment.

     4.5 No Mitigation by Executive. Except as otherwise expressly provided herein,
Executive shall not be required to mitigate the amount of any payment provided for in this
Agreement by seeking other employment or otherwise, nor shall the amount of any payment provided
for herein be reduced by any compensation earned by Executive as the result of employment by
another employer; provided, however, that if Executive becomes employed with
another employer and is eligible to receive health and/or medical benefits under such other
employer’s plans, Executive’s continued benefits and/or plan coverage as set forth in Section 4.2
or 4.3, as the case may be, shall be reduced to the extent that comparable benefits and/or coverage
is provided under such other employer’s plans.

     4.6 Severance Agreement and Release. In the event that Executive incurs a termination
of employment pursuant to (i) a Termination Without Cause (as defined in Section 4.2 above), or

8

 

(ii) a Termination With Good Reason (as defined in Section 4.3 above), payment by the Company of
the amounts described in said sections shall be subject to the execution by Executive of the
Company’s standard severance agreement and release (the “Release”).

     The Release shall be delivered to Executive, in the case of a Termination Without Cause, at
the time of delivery of the Termination Notice, and, in the case of a Termination With Good Reason,
upon delivery of written notice by the Executive to the Company. Executive shall have a period of
twenty-one (21) days after the effective date of termination of this Agreement (the “Consideration
Period”) in which to execute and return the original, signed Release to the Company. If Executive
delivers the original, signed Release to the Company prior to the expiration of the Consideration
Period, then the Reimbursement Period shall be deemed to have commenced as of the first day of the
Consideration Period and Executive shall be entitled to the amounts and benefits set forth in
Section 4.2 or 4.3, as the case may be.

     If Executive does not deliver the original, signed Release to the Company prior to the
expiration of the Consideration Period, then:

	 	(a)	 	the Company shall pay Executive an amount equal to the sum of (i) any Base
Salary and vacation time accrued but unpaid as of the date of termination, plus (ii)
any reimbursement for expenses incurred in accordance with Section 3.2; and
	 
	 	(b)	 	the Company shall have no obligation to (i) pay to Executive the Severance
Payment (as that term is defined in Section 4.2(b) above), the Pro Rated Bonus (as that
term is defined in Section 4.2(c) above) or the Award (as that term is defined in
Section 4.2(d) above) or (ii) make the Benefits Payments during the Reimbursement
Period (as those terms are defined in Section 4.2 above).

     4.7 Continued Compliance. Executive and the Company hereby acknowledge that the
amounts or benefits payable by the Company under Sections 4.2(b), (c) and (d), 4.3, and 4.4(c) and
the Benefits Payments payable by the Company under Sections 4.2 or 4.3 are part of the
consideration for Executive’s undertakings under Article V below. Such amounts and benefits are
subject to Executive’s continued compliance with the provisions of Article V. If Executive
violates the provisions of Article V, then the Company will have no obligation to make any of the
payments that remain payable by the Company under Sections 4.2(b), (c) or (d), 4.3 or 4.4 or the
Benefits Payments that remain payable by the Company under Sections 4.2 or 4.3 on or after the date
of such violation.

     4.8 Termination Year Annual Award; Change in Control Termination Year Annual Award.
If a Termination Without Cause under Section 4.2 or a Termination With Good Reason under Section
4.3 occurs with respect to Executive, there shall be calculated in accordance with this Section 4.8
the amount of the Award, if any, to which Executive otherwise would be entitled to receive under
the MIP with respect to the calendar year in which such termination occurs, and the amount so
determined in accordance with this Section 4.8 will be used in determining the amount of any
Pro-Rated Bonus and, to the extent applicable, any Severance Payment that may become payable to
Executive pursuant to Section 4.2 or 4.3 above, as set forth in those Sections.

	 	(a)	 	If such termination occurs prior to a Change in Control and (i) on a date that
is on or prior to June 30 of the calendar year in which such termination occurs, the
Award

9

 

	 	 	 	(the “Termination Year Annual Award”) will be determined by multiplying Executive’s
Annual Base Salary for the year of termination by the arithmetic average of the
percentages, calculated for each of the two years immediately preceding the year of
termination, obtained by dividing the actual Award (if any) received by Executive
under the MIP with respect to such year by Executive’s annual Base Salary for such
year (such resulting arithmetic average, the “Two-Year Percentage”), or (ii) on a
date that is after June 30 of such calendar year, the Termination Year Annual Award
will be the greater of the amount determined under Section 4.8(a)(i) above or the
actual Award for the year of termination, determined as provided under the MIP.

	 	(b)	 	If such termination occurs concurrently with or following a Change in Control,
the Award (the “Change in Control Termination Year Annual Award”) shall be equal to
Executive’s Annual Base Salary for the year of termination, multiplied by the greater
of (a) 60% of Executive’s Target Award (as defined in the MIP) for the year of
termination, or (b) the Two-Year Percentage.

     4.9 Change in Control. For purposes of this Agreement, a “Change in Control” will be
deemed to have occurred if any person or group (other than one or more Permitted Holders):

	 	(a)	 	acquires, directly or indirectly, all or substantially all of the assets of the
Company, either in a single transaction or in a series of related transactions; or

	 	(b)	 	becomes the beneficial owner of more than 50% of the aggregate voting power of
all outstanding classes or series of the Company’s Voting Securities and such person or
group beneficially owns a greater percentage of such aggregate voting power than is at
the time beneficially owned by the Permitted Holders, in the aggregate; provided,
however, that a person or group shall not be deemed the beneficial owner of (i) any
securities tendered pursuant to a tender or exchange offer made by or on behalf of such
person or group until such tendered securities are accepted for purchase or exchange
thereunder, or (ii) any securities the beneficial ownership of which (A) arises solely
as a result of a revocable proxy delivered in response to a proxy or consent
solicitation and (B) is not then reportable on Schedule 13D (or any successor schedule)
under the Exchange Act.

Notwithstanding any other provision of this Section 4.9, in no event will a direct or indirect
spin-off of the Company from DHC or Holdco (whether structured as a pro rata distribution, as an
exchange offer or otherwise) constitute a Change in Control of the Company.

     For purposes of this Section 4.9, the following definitions shall apply:

     “Affiliated Persons” means (i) with respect to any specified Person that is not a natural
person, any other Person directly or indirectly controlling or controlled by or under direct or
indirect common control with such specified Person and each of the officers, directors, partners,
members and Persons performing similar functions of such other Person; and (ii) with respect to any
specified Person that is a natural person, (A) such specified Person’s parents, spouse, siblings,
descendants, step children, step grandchildren, nieces and nephews and their respective spouses,
(B) the estate, legatees and devisees of such specified Person and each of the Persons referred to
in clause (A), and

10

 

(C) any company, partnership, trust or other entity or investment vehicle controlled by any of
the Persons referred to in clause (A) or (B) or the holdings of which are for the primary benefit
or any of such Persons.

     A “beneficial owner” will be determined in accordance with Rule 13d-3 and Rule 13d-5 under the
Exchange Act, as in effect on the Commencement Date, provided, however, that a Person will be
deemed to be the beneficial owner of Voting Securities of the Company or of the ultimate parent
entity (within the meaning of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended)
of the Company, as applicable, that may be acquired by such Person (disregarding any legal
impediments to such beneficial ownership), whether within 60 days or thereafter, upon the
conversion, exchange or exercise of any warrants, options, rights or other rights to acquire such
Voting Securities and “beneficially own,” “beneficially owned” and “beneficially ownership” have
meanings correlative to that of beneficial owner.

     “DHC” means Discovery Holding Company, a Delaware corporation, and any successor (by merger,
consolidation, transfer or otherwise) to all or substantially all of its assets; provided, that if
a Transferee Parent becomes the beneficial owner of all or substantially all of the equity
securities of the Company then beneficially owned by DHC as to which DHC has dispositive power, the
term “DHC” shall also mean such Transferee Parent and any successor (by merger, consolidation,
transfer or otherwise) to all or substantially all of its assets. “Transferee Parent” for this
purpose means, in the event of any transaction or series of related transactions involving the
direct or indirect transfer (or relinquishment of control) by DHC of any Person (a “Transferred
Person”) that holds equity securities of the Company beneficially owned by DHC, such Transferred
Person or its successor in such transaction or any ultimate parent entity (within the meaning of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) of such Transferred Person or
its successor if immediately after giving effect to such transaction or the last transaction in
such series, Voting Securities representing at least a majority of the voting power of the
outstanding Voting Securities of such Transferred Person, successor or ultimate parent entity are
beneficially owned by any combination of DHC, Persons who immediately prior to such transaction
were beneficial owners of a majority of, or a majority of the voting power of, the outstanding
Voting Securities of DHC (or of any publicly traded class or series of Voting Securities of DHC
designed to track the economic performance of a specified group of assets or businesses).

     “Exchange Act” means the Securities Exchange Act of 1934, as amended.

     “HoldCo” means any Person that is or becomes the ultimate parent entity (within the meaning of
the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended) of the Company, provided that
immediately after giving effect to the transaction or series of transactions in which such Person
became the ultimate parent entity of the Company, Voting Securities representing at least a
majority of the aggregate voting power of all the outstanding classes or series of the Voting
Securities of such Person are beneficially owned by any combination of Persons who immediately
prior to such transaction were beneficial owners of a majority of, or a majority of the aggregate
voting power of, all the outstanding classes or series of the Voting Securities of the Company or
the Person that was the ultimate parent entity of the Company immediately prior to such
transaction.

     “Permitted Holders” means any one or more of (i) DHC, (ii) any HoldCo, (iii) Dr. John C.
Malone, (iv) each of the respective Affiliated Persons of the Persons referred to in clauses (i),
(ii)

11

 

and (iii), and (v) any Person a majority of the aggregate voting power of all Voting
Securities of which are beneficially owned by any one or more of the Persons referred to in clauses
(i), (ii), (iii) or (iv).

     “person” and “group” have the meanings given to them for purposes of Section 13(d) and 14(d)
of the Exchange Act or any successor provisions, and the term “group” includes any group acting for
the purpose of acquiring, holding or disposing of securities within the meaning of rule 13d-5(b)(1)
under the Exchange Act, or any successor provision.

     “Person” means any natural person, corporation, limited liability company, partnership
(whether limited or general), joint venture, trust, association, unincorporated organization or
other entity.

     “unissued shares” means shares of voting stock not outstanding that are subject to options,
warrants, rights to purchase or conversion privileges exercisable within 60 days of the date of
determination of a Change in Control.

     “Voting Securities” means securities generally entitling the holder thereof to vote in the
election of directors or other similar governing officials of a Person.

     4.10 Timing of Payments Under Certain Circumstances. With respect to any amount that
becomes payable to Executive under this Agreement upon termination of Executive’s employment with
the Company for any reason, the provisions of this Section 4.10 will apply, notwithstanding any
other provision of this Agreement to the contrary. If the Company determines in good faith that
Executive is a “specified employee” within the meaning of Section 409A(a)(2)(B)(i) of the Internal
Revenue Code, any regulations promulgated thereunder and any guidance issued by the Internal
Revenue Service relating thereto (collectively, “Code Section 409A”) and that any amount that is
payable to Executive upon termination of Executive’s employment with the Company is subject to the
provisions of Code Section 409A, then (i) any amount that becomes payable to Executive upon
termination of Executive’s employment with the Company and that otherwise would be payable prior to
the date that is six months after the date of Executive’s “separation from service” (as defined
under Code Section 409A) with the Company (the “Alternate Payment Date”) shall be payable on the
Alternate Payment Date, and (ii) any amount that becomes payable to Executive upon termination of
Executive’s employment with the Company and that otherwise would be payable on or after the
Alternate Payment Date shall be payable on the date otherwise specified for payment in this
Agreement.

ARTICLE V

OWNERSHIP OF PROCEEDS OF EMPLOYMENT; NON-DISCLOSURE;

NON-COMPETITION

     5.1 Ownership of Proceeds of Employment.

          5.1.1 The Company shall be the sole and exclusive owner throughout the universe in perpetuity
of all of the results and proceeds of Executive’s services, work and labor in connection with
Executive’s employment by the Company, free and clear of any and all claims, liens or

12

 

encumbrances. Executive shall promptly and fully disclose to the Company, with all necessary detail
for a complete understanding of the same, any and all developments, client and potential client
lists, know how, discoveries, inventions, improvements, conceptions, ideas, writings, processes,
formulae, contracts, methods, works, whether or not patentable or copyrightable, which are
conceived, made, acquired, or written by Executive, solely or jointly with another, while employed
by the Company or within six months thereafter (whether or not at the request or upon the
suggestion of the Company) and which are substantially related to the business or activities of the
Company or any of its Affiliates, or which Executive conceives as a result of his employment by the
Company or its Affiliates, or as a result of rendering advisory or consulting services to the
Company or its Affiliates (collectively, “Proprietary Rights”).

          5.1.2 Executive hereby assigns and transfers, and agrees to assign and transfer, all his
rights, title, and interests in the Proprietary Rights to the Company or its nominee. In addition,
Executive shall deliver to the Company any and all drawings, notes, specifications, and data
relating to the Proprietary Rights. All copyrightable Proprietary Rights shall be considered to be
“works made for hire.” Whenever requested to do so by the Company, Executive shall execute and
deliver to the Company any and all applications, assignments and other instruments and do such
other acts that the Company shall request to apply for and obtain patents and/or copyrights in any
and all countries or to otherwise protect the Company’s interest in the Proprietary Rights and/or
to vest title thereto to the Company; provided, however, in accordance with California Labor Code
Section 2870 and 2872, the provisions of this Section 5.1 shall not apply to any Proprietary Rights
that Executive developed entirely on his own time without using the Company’s equipment, supplies,
facilities or proprietary information, except for Proprietary Rights that (a) at the time of
conception or reduction to practice of the Proprietary Rights, relate to the Company’s business, or
actual or demonstrably anticipated research or development of the Company, or (b) result from any
work performed by Executive for the Company.

          5.1.3 Executive shall assist the Company in obtaining such copyrights and patents during the
term of this Agreement, and any time thereafter on reasonable notice and at mutually convenient
times, and Executive agrees to testify in any prosecution or litigation involving any of the
Proprietary Rights; provided, however, Executive shall be reasonably compensated for his time and
reimbursed for any out-of-pocket expenses incurred in rendering such assistance or giving or
preparing to give such testimony.

          5.1.4 Contemporaneously with the execution and delivery of this Agreement, Executive is
executing and delivering an acknowledgment in the form of Exhibit A hereto.

     5.2 Non-Disclosure of Confidential Information. As used herein, “Confidential
Information” means any and all information affecting or relating to the business of the Company and
its Affiliates, including without limitation, financial data, customer lists and data, licensing
arrangements, business strategies, pricing information, product development, intellectual,
artistic, literary, dramatic or musical rights, works, or other materials of any kind or nature
(whether or not entitled to protection under applicable copyright laws, or reduced to or embodied
in any medium or tangible form), including without limitation, all copyrights, patents, trademarks,
service marks, trade secrets, contract rights, titles, themes, stories, treatments, ideas,
concepts, technologies, art work, logos, hardware, software, and as may be embodied in any and all
computer programs, tapes, diskettes, disks, mailing lists, lists of actual or prospective customers
and/or suppliers, notebooks, documents, memoranda, reports, files, correspondence, charts, lists
and all other written, printed or

13

 

otherwise recorded material of any kind whatsoever and any other information, whether or not
reduced to writing, including “know-how”, ideas, concepts, research, processes, and plans.
“Confidential Information” does not include information that is in the public domain, information
that is generally known in the trade, or information that Executive can prove he acquired wholly
independently of his employment with the Company. Executive shall not, at any time during the Term
or thereafter, directly or indirectly, disclose or furnish to any other person, firm or corporation
any Confidential Information, except in the course of the proper performance of his duties
hereunder or as required by law (in which event Executive shall give prior written notice to
Company and shall cooperate with Company and Company’s counsel in complying with such legal
requirements). Promptly upon the expiration or termination of Executive’s employment hereunder for
any reason or whenever the Company so requests, Executive shall surrender to the Company all
documents, drawings, work papers, lists, memoranda, records and other data (including all copies)
constituting or pertaining in any way to any of the Confidential Information.

     5.3 Non-Competition. Executive shall not, during the Term or during the Consideration
Period, directly: (a) compete with the Company; or (b) have an interest in, be employed by, be
engaged in or participate in the ownership, management, operation or control of, or act in any
advisory or other capacity for, any Competing Entity which conducts its business within the
Territory (as such terms are hereinafter defined); provided, however, that
notwithstanding the foregoing, Executive may make solely passive investments in any Competing
Entity the common stock of which is “publicly held,” and of which Executive shall not own or
control, directly or indirectly, in the aggregate securities which constitute more than one (1%)
percent of the voting rights or equity ownership of such Competing Entity; or (c) solicit or divert
any business or any customer from the Company or assist any person, firm or corporation in doing so
or attempting to do so; or (d) cause or seek to cause any person, firm or corporation to refrain
from dealing or doing business with the Company or assist any person, firm or corporation in doing
so or attempting to do so.

     For purposes of this Section 5.3, (i) the term “Competing Entity” shall mean any entity which
presently or during the period referred to above engages in any business activity in which the
Company or any of its Affiliates is then engaged; and (ii) the term “Territory” shall mean any
geographic area in which the Company or any of its Affiliates conducts business during such period;
provided, however, that, during the Consideration Period, the term “Territory”
shall mean only Los Angeles County, California and New York County, New York.

     Notwithstanding the foregoing, in the event that Executive elects, during the Consideration
Period, to either (a) compete with the Company, or (b) have an interest in, be employed by, be
engaged in or participate in the ownership, management, operation or control of, or act in any
advisory or other capacity for, any Competing Entity which conducts its business within the
Territory (the foregoing subsections (a) and (b), collectively, the “Competitive Activities”),
then, at least ten (10) business days prior to commencing any such Competitive Activities,
Executive shall deliver to the Company a written notice (the “Competition Notice”) advising the
Company of (i) Executive’s intent to commence Competitive Activities, and (ii) the commencement
date for such Competitive Activities. Executive’s election to participate in any Competitive
Activities during the Consideration Period shall not be deemed a breach of this Agreement; rather,
in the event Executive delivers the Competition Notice (and thereafter engages in Competitive
Activities prior to the expiration of the Consideration Period), then (x) Executive shall forfeit
any Severance Payment, Pro Rated Bonus or Benefits Payment otherwise payable pursuant to Section
4.2 or 4.3 above, and (y)

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the Company shall have no obligation to make any Severance Payment or Pro Rated Bonus to Executive
or any Benefits Payment under Section 4.2 or 4.3.

     5.4 Non-Solicitation.

          5.4.1 Executive shall not, for a period of eighteen (18) months from the date of any
termination or expiration of his employment hereunder, directly or indirectly: (a) acquire any
financial interest in or perform any services for himself or any other entity in connection with a
business in which Executive’s interest, duties or activities would inherently require Executive to
reveal any Confidential Information; or (b) solicit or cause to be solicited the disclosure of or
disclose any Confidential Information for any purpose whatsoever or for any other party.

          5.4.2 Executive shall not, for a period of eighteen (18) months from the date of any
termination or expiration of his employment hereunder, solicit, directly or indirectly, or cause or
permit others to solicit, directly or indirectly, any person employed by the Company (a “Current
Employee”) to leave employment with the Company. The term “solicit” includes, but is not limited to
the following (regardless of whether done directly or indirectly): (i) requesting that a Current
Employee change employment, (ii) informing a Current Employee that an opening exists elsewhere,
(iii) assisting a Current Employee in finding employment elsewhere, (iv) inquiring if a Current
Employee “knows of anyone who might be interested” in a position elsewhere, (v) inquiring if a
Current Employee might have an interest in employment elsewhere, (vi) informing others of the name
or status of, or other information about, a Current Employee, or (vii) any other similar conduct,
the effect of which is that a Current Employee leaves the employment of the Company.

     5.5 Breach of Provisions. In the event that Executive shall breach any of the
provisions of this Article V, or in the event that any such breach is threatened by Executive, in
addition to and without limiting or waiving any other remedies available to the Company at law or
in equity, the Company shall be entitled to immediate injunctive relief in any court, domestic or
foreign, having the capacity to grant such relief, without the necessity of posting a bond, to
restrain any such breach or threatened breach and to enforce the provisions of this Article V.
Executive acknowledges and agrees that there is no adequate remedy at law for any such breach or
threatened breach and, in the event that any action or proceeding is brought seeking injunctive
relief, Executive shall not use as a defense thereto that there is an adequate remedy at law.

     5.6 Reasonable Restrictions. The parties acknowledge that the foregoing restrictions,
the duration and the territorial scope thereof as set forth in this Article V, are under all of the
circumstances reasonable and necessary for the protection of the Company and its business.

     5.7 Definition. For purposes of this Article V, the term “Company” shall be deemed to
include (i) any predecessor to, or successor of the Company, (ii) any subsidiary of the Company
(including, without limitation, any entity in which the Company owns 50% or more of the issued and
outstanding equity), and (iii) any entity that is under the control or common control of the
Company (including, by way of illustration and not as a limitation, any joint venture to which the
Company or one of its subsidiaries is a party).

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ARTICLE VI

MISCELLANEOUS

     6.1 Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective legal representatives, heirs, distributees, successors and
assigns.

     6.2 Assignment. The Company may assign this Agreement to any successor in interest to
its business, or to any subsidiary of the Company, and Executive hereby agrees to be employed by
such assignee as though such assignee were originally the employer named herein. Executive hereby
acknowledges that the services to be rendered by Executive are unique and personal, and,
accordingly, Executive may not assign any of his rights or delegate any of his duties or
obligations under this Agreement.

     6.3 Notices. Any notice provided for herein shall be in writing and shall be deemed
to have been given or made when personally delivered or three (3) days following deposit for
mailing by first class registered or certified mail, return receipt requested, or if delivered by
facsimile transmission, upon confirmation of receipt of the transmission, to the address of the
other party set forth below or to such other address as may be specified by notice given in
accordance with this Section 6.3:

          (a) If to the Company:

Ascent Media Group, LLC

520 Broadway, 5th Floor

Santa Monica, CA 90401

Attention: Chief Executive Officer

Fax No.: (310) 434-7007

With a copy to:

Ascent Media Group, LLC

520 Broadway, 5th Floor

Santa Monica, CA 90401

Attention: General Counsel

Fax No.: (310) 434-7005

          (b) If to Executive:

William E. Niles

34405 Pacific Coast Highway

Malibu, CA 90265

     6.4 Severability. If any provision of this Agreement, or portion thereof, shall be
held invalid or unenforceable by a court of competent jurisdiction, such invalidity or
unenforceability shall attach only to such provision or portion thereof, and shall not in any
manner affect or render invalid or unenforceable any other provision of this Agreement or portion
thereof, and this Agreement shall be carried out as if any such invalid or unenforceable provision
or portion thereof

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were not contained herein. In addition, any such invalid or unenforceable provision or portion
thereof shall be deemed, without further action on the part of the parties hereto, modified,
amended or limited to the extent necessary to render the same valid and enforceable.

     6.5 Confidentiality. The parties hereto agree that they will not, during the Term or
thereafter, disclose to any other person or entity the terms or conditions of this Agreement
(excluding the financial terms hereof) without the prior written consent of the other party, except
as required by law, regulatory authority or as necessary for either party to obtain personal loans
or financing. Approval of the Company and of Executive shall be required with respect to any press
releases regarding this Agreement and the activities of Executive contemplated hereunder.

     6.6 Arbitration. If any controversy, claim or dispute arises out of or in any way
relates to this Agreement, the alleged breach thereof, Executive’s employment with the Company or
termination therefrom, including without limitation, any and all claims for employment
discrimination or harassment, civil tort and any other employment laws, excepting only claims which
may not, by statute, be arbitrated, both Executive and the Company (and its directors, officers,
employees or agents) agree to submit any such dispute exclusively to binding arbitration. Both
Executive and the Company acknowledge that they are relinquishing their right to a jury trial in
civil court. Executive and the Company agree that arbitration is the exclusive remedy for all
disputes arising out of or related to Executive’s employment with the Company.

     The arbitration shall be administered, at the election of the party initiating the arbitration
proceeding, either by JAMS in accordance with the Employment Arbitration Rules & Procedures of JAMS
then in effect and subject to JAMS Policy on Employment Arbitration Minimum Standards or by the
American Arbitration Association in accordance with the Employment Dispute Resolution Rules of the
American Arbitration Association, except as provided otherwise in this Agreement. Arbitration shall
be commenced and heard in Los Angeles County, California. Only one arbitrator shall preside over
the proceedings. The arbitrator shall apply the substantive law (and the law of remedies, if
applicable) of California or federal law, or both, as applicable to the claim(s) asserted. In any
arbitration, the burden of proof shall be allocated as provided by applicable law. The arbitrator
shall have the authority to award any and all legal and equitable relief authorized by the law
applicable to the claim(s) being asserted in the arbitration, as of the claim(s) were brought in a
court of law. Either party may bring an action in court to compel arbitration under this Agreement
and to enforce an arbitration award. Discovery, such as depositions or document requests, shall be
available to the Company and Executive as though the dispute were pending in California state
court. The arbitrator shall have the ability to rule on pre-hearing motions, as though the matter
were in a California state court, including the ability to rule on a motion for summary judgment.

     Unless otherwise permitted under applicable law, the fees of the arbitrator and any other fees
for the administration of the arbitration that would not normally be incurred if the action were
brought in a court of law (e.g., filing fees, room rental fees, etc.) shall be paid by the Company,
provided that Executive shall be required to pay the amount of filing fees equal to that which
Executive would be required to pay to file an action in California state court. The arbitrator
must provide a written decision which is subject to limited judicial review consistent with
applicable law. If any part of this arbitration provision is deemed to be unenforceable by an
arbitrator or a court of law, that part may be severed or reformed so as to make the balance of
this arbitration provision enforceable.

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     6.7 Waiver. No waiver by a party hereto of a breach or default hereunder by the other
party shall be considered valid unless in writing signed by such first party, and no such waiver
shall be deemed a waiver of any subsequent breach or default of the same or any other nature.

     6.8 Controlling Nature of Agreement. To the extent any terms of this Agreement are
inconsistent with the terms or provisions of the Company’s Employee Handbook or any other personnel
policy statements or documents, the terms of this Agreement shall control. To the extent that any
terms and conditions of Executive’s employment are not covered in this Agreement, the terms and
conditions set forth in the Employee Handbook or any similar document shall control such terms.

     6.9 Entire Agreement. This Agreement sets forth the entire agreement between the
parties with respect to the subject matter hereof, and supersedes any and all prior agreements or
understanding between the Company and Executive, whether written or oral, fully or partially
performed relating to any or all matters covered by and contained or otherwise dealt with in this
Agreement.

     6.10 Amendment. No modification, change or amendment of this Agreement or any of its
provisions shall be valid unless in writing and signed by the party against whom such claimed
modification, change or amendment is sought to be enforced.

     6.11 Authority. The parties each represent and warrant that they have the power,
authority and right to enter into this Agreement and to carry out and perform the terms, covenants
and conditions hereof.

     6.12 Applicable Law. This Agreement, and all of the rights and obligations of the
parties in connection with the employment relationship established hereby, shall be governed by and
construed in accordance with the substantive laws of the State of California without giving effect
to principles relating to conflicts of law.

[Remainder of this page intentionally left blank]

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     6.13 Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, and all of which together shall constitute one and the same
instrument.

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year
first above written.

	 	 	 	 	 
	 	“COMPANY”

ASCENT MEDIA GROUP, LLC

 	 
	 	By:  	/s/ William R. Fitzgerald
 	 
	 	 	William R. Fitzgerald 	 
	 	 	Chairman 	 
	 
	 	“EXECUTIVE”

 	 
	 	/s/  William E. Niles
 	 
	 	William E. Niles 	 
	 	 	 

19

 

	 	 	 	 	 

Exhibit A

Form of Acknowledgment Under Section 2870 of the California Labor Code

Section 2870 of the California Labor Code provides:

(a) Any provision in an employment agreement which provides that an employee shall assign or offer
to assign any of his or her rights in an invention to his or her employer shall not apply to an
invention that the employee developed entirely on his or her own time without using the employer’s
equipment, supplies, facilities, or trade secret information except for those inventions that
either: (1) Relate at the time of conception or reduction to practice of the invention to the
employer’s business, or actual or demonstrably anticipated research or development of the employer;
(2) Result from any work performed by the employee for the employer.

(b) To the extent a provision in an employment agreement purports to require an employee to assign
an invention otherwise excluded from being required to be assigned under subdivision (a), the
provision is against the public policy of this state and is unenforceable.

ACKNOWLEDGEMENT

     This Acknowledgement is entered into in connection with that Employment Agreement (the
“Agreement”) between me and Ascent Media Group, LLC, a Delaware limited liability company (the
“Company”), dated as of the date hereof.

     1. I hereby acknowledge that the provisions of the Agreement relating to rights to
inventions which I have executed does not apply to an invention for which no equipment, supplies,
facility, or trade secret information of the Company was used and which was developed entirely on
my own time, unless (a) the invention relates (i) to the business of the Company, or (ii) to the
Company’s actual or demonstrably anticipated research or development, or (b) the invention results
from any work performed by me for the Company. I hereby acknowledge receipt of a copy of
California Labor Code Section 2870 (hereinafter referred to as the “Act”) which relates to
employer/employee rights to inventions.

     2. I understand that I have an obligation to disclose to the Company all my inventions,
made solely or jointly with others, during the term of the employment, even though I believe that
some fall within the provisions of the Act. I agree that at the time I disclose any such invention
to the Company that I shall declare in writing if I believe the invention falls within the
provisions of the Act. Failure to provide such written notice shall be construed as an admission
that all rights in the invention belong to the Company.

     3. I understand that the burden is on me to prove that an invention qualifies under the
provisions of the Act. I understand that if I fail to prove that an invention qualifies under the
Act, the Company shall be entitled to the invention as provided in the Agreement.

20

 

     4. I further agree that the provisions of this Acknowledgement shall not apply if I am
transferred, with my prior written consent, to a subsidiary, office, division or unit of the
Company outside of the State of California, and that, as a result, the Company may have greater
rights with respect to inventions than those provided in the Agreement or the Act.

Date: September 19, 2006

	 	 	 	 	 
	 	 	 
	 	   /s/ William E. Niles
 	 
	 	William E. Niles 	 
	 	 	 
	 

21

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