CONFIDENTIAL TREATMENT REQUESTED PURSUANT TO RULE 24B-2
Certain portions, indicated by [***], of this exhibit have been omitted
pursuant to a request for confidential treatment under Rule 24b-2 of the
Securities and Exchange Act of 1934. The omitted materials have been filed
separately with Securities and Exchange Commission.
EXHIBIT 10.9
PERSONAL SERVICES AGREEMENT
[▇▇▇▇▇▇ ▇▇▇▇▇]
This Personal Services Agreement is entered into this 3rd day of December 2002
effective the 1st day of September 2002, between SFX Entertainment, Inc., a
Delaware corporation, doing business as Clear Channel Entertainment (the
"Company") and ▇▇▇▇▇▇ ▇▇▇▇▇ (the "Executive"). This Personal Services Agreement
replaces any and all previous agreements, including the Employment Agreement
dated July 1, 1999, as amended.
WHEREAS, the Company and the Executive desire to enter into an employment
and personal services relationship under the terms and conditions set forth in
this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. TERM.
The Executive's term of employment ("Term") starts on the effective date
of this Agreement and ends on the close of business on December 31, 2007,
hereinafter the "Expiration Date," unless terminated earlier in accordance
herewith.
2. TITLE AND DUTIES.
The Executive's title is President of the Company's Music-Touring
Division. In this capacity Executive will render special, unique, unusual, and
extraordinary personal services based on the relationships he has developed with
and the experience he has had working with particular musical artists
(including, without limitation, those artists identified in Exhibit B), groups,
managers, and agents, his specialized knowledge of musical touring, his
experience in organizing musical tours, his connections, and his intellect, all
of which have peculiar value to the Company, and the loss of which cannot be
reasonably or adequately compensated in an action at law for damages. In
addition to performing these unique personal services, the Executive shall
perform other job duties that are usual and customary for this position, and
such additional duties, consistent with his position, as the Company may from
time to time direct. The Executive will report to the Co-CEOs of the Company's
Music Division, (currently) ▇▇▇ ▇▇▇ and ▇▇▇▇ ▇▇▇▇▇. The Executive will devote
his full working time and efforts to the business and affairs of the Company.
Although Executive will reside in California and his primary office will be in
Los Angeles, his duties will require him to travel extensively. Notwithstanding
the foregoing, the Executive shall be permitted, subject to his duties to avoid
competing with the Company, to devote a modest portion of his business time to
personal investments and commitments not related to the business of the Company,
provided that the time devoted thereto shall not interfere in any material
respect with the performance of the Executive's duties under this Agreement. In
addition, subject to the Executive's duty to avoid competing with the Company
and to the approval in advance of the Company's General Counsel, which approval
shall not be unreasonably withheld. Executive may serve on boards of directors
of not-for-profit organizations and companies which do not compete with the
Company, provided that service on any such board of directors shall not
interfere in any material respect with the performance of the Executive's
services under this Agreement. Unless separately consented to in writing,
nothing in this Agreement shall be construed to allow the Executive to serve as
an officer, director, consultant, or employee of Grand Entertainment, Inc.
("Grand Entertainment") or ▇▇▇▇▇▇▇ ▇▇▇▇, or any affiliate of any of the
foregoing, or to participate in the business in any fashion of Grand
Entertainment or ▇▇▇▇▇▇▇ ▇▇▇▇, other than by receiving
1
dividends distributed in respect of an ownership interest not to exceed five
(5%) percent of all issued and outstanding shares of Grand Entertainment, so
long as (i) such dividends represent not more than the Executive's proportionate
share of the dividends that Grand Entertainment is making to all holders of the
applicable class of Grand Entertainment equity securities and (ii) without the
prior written consent of the Company's General Counsel, which consent may be
withheld for any reason whatsoever, the Executive does not acquire additional
Grand Entertainment equity securities (other than in exchange for, or as a
distribution in respect of, the Executive's current Grand Entertainment equity
securities).
3. COMPENSATION AND BENEFITS
(a) BASE SALARY. The Company will pay the Executive an annual base salary
of $600,000. The Executive's base salary will be adjusted annually on January 1
of each year, beginning January 1, 2004, by a percentage equal to the percentage
increase, if any, in the regional cost of living index measured by the United
States Government for the Los Angeles standard metropolitan statistical area.
If and when the Executive's base salary is increased in accordance with this
Agreement, the new base salary shall constitute the Executive's base salary for
all purposes under this Agreement. All payments of base salary will be made in
installments according to the Company's regular payroll practice, prorated
monthly or weekly where appropriate.
(b) ADDITIONAL PAYMENTS. In addition to the other payments provided
herein, the Executive will be paid the following amounts by April 1 of the
applicable year: $30,000 in 2003; $24,000 in 2004; $18,000 in 2005; $12,000 in
2006; and, $6,000 in 2007. The Company shall pay $1,500 to Strategy Capital
Corporation and $1,500 to ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP within ten (10) days of
signing this Agreement, and $61,390.79 to Continental Trust on or before
December 3, 2002. As part of his next paycheck, the Executive will be paid
monies due him as the result of the salary increase in Paragraph 3(a), which as
per this Agreement is effective as of September 1, 2002.
(c) PERFORMANCE BONUS. Commencing with January 1, 2002, the Executive
shall be eligible to receive a Performance Bonus, which bonus shall be payable,
no later than March 31 of each calendar year following the year for which the
bonus is earned. The amount of the bonus shall be calculated as set forth in the
Performance Bonus Calculation attached as "Exhibit A" to this Agreement, and
incorporated by this reference. The payments of this bonus, if any, shall be
offset against the Bonus Advance to the Executive described in Paragraph 3(g) of
this Agreement until such time as the Bonus Advance is fully repaid to the
Company.
(d) KEY ACT BONUS. Beginning January 1, 2003, the Executive will be
eligible to earn and receive a Key Act Bonus as described in "Exhibit B" to this
Agreement and incorporated by this reference. Payments of the Key Act Bonus
shall be offset against the Bonus Advance to the Executive described in
Paragraph 3(g) of this Agreement until such time as the Bonus Advance is fully
repaid to the Company.
(e) EMPLOYMENT BENEFIT PLANS. The Executive will be entitled to
participate in all pension, profit sharing, and other retirement plans, all
incentive compensation plans, and all group health, hospitalization and
disability or other insurance plans, paid vacation, sick leave and other
Executive welfare benefit plans in which other similarly situated Executives of
the Company may participate as described in the Company's Employee Guide. To the
extent necessary to secure key man life insurance or such other insurance as the
Company may wish to buy, Executive agrees to submit himself, at the Company's
expense, upon request of the Company and within a reasonable period of time, to
a physical examination designated by the Company. The Company shall maintain the
confidentiality of the results of any such examination, except as may be
necessary for the Company to obtain the benefits of any such insurance. The
Executive's failure to pass any such physical inspection shall not constitute a
breach of this Agreement.
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(f) EXPENSES. The Company will pay or reimburse the Executive for all
normal and reasonable travel and entertainment expenses incurred by the
Executive in connection with the Executive's responsibilities to the Company
upon submission of proper vouchers in accordance with the Company's expense
reimbursement policy as applied to similarly situated executives. The Company
will provide Executive with access to a credit card subject to the approval of
credit card company and based on the Executive's credit history. Payment is the
responsibility of the Executive and should only be used for business purposes.
Employee shall be eligible for fringe benefits and perquisites that are
available to similarly situated executives.
(g) BONUS ADVANCE. The Company will advance One Million Five Hundred
Thousand Dollars ($1,500,000.00) to the Executive upon execution of this
Personal Services Agreement or at the direction of the Executive as a bonus
advance (the "Bonus Advance"). Executive will repay this Bonus Advance to the
Company during the course of his employment through offsets against any Key Act
Bonus or Performance Bonus earned by Executive. Assuming the Executive completes
the Term, any remaining Bonus Advance that has not been repaid to the Company by
offset shall be deemed earned by the Executive as a Completion Bonus. If the
Executive's employment is terminated before the Expiration Date, any remaining
unearned Bonus Advance shall be treated as follows: (i) the Executive shall
repay any Unearned Portion of the Bonus Advance within ten (10) business days
following termination, if the Executive is terminated for "Cause" or terminates
without "Good Reason"; (ii) the Executive shall be deemed to have earned any
(otherwise) Unearned Portion of the Bonus Advance if the Executive terminates
with "Good Reason" or is terminated without "Cause" or "Justification" or due
to death or disability; (iii) solely for purposes of this section and Section
10(c) below, if the Executive is terminated with "Justification," the Executive
shall repay any Unearned Portion of the Bonus Advance within ten (10) business
days following termination, however in calculating the amount to be repaid the
Executive, in addition to receiving credit for amounts already earned and offset
against the Bonus Advance, the Executive will be deemed to have earned 25% of
the Bonus Advance at the conclusion of each calendar year 2003-2006 during his
employment (by way of example only, if the Executive is terminated with
"Justification" in 2005, the Executive will be deemed to have earned 50%
($750,000) of the Bonus Advance, which amount will be added to any Bonus Advance
offsets previously earned, in determining the amount, if any, the Executive is
required to repay under this section). The "Unearned Portion of the Bonus
Advance" shall mean One Million Five Hundred Thousand Dollars ($1,500,000.00),
less any amounts in respect of any Performance Bonus or Key Act Bonus offset
against the Bonus Advance.
(h) In accordance with applicable law, the Company will deduct taxes and
other legally required or authorized payments from the annual base salary and
from all other payments to the Executive under this Agreement.
(i) In connection with all bonus calculations, the Executive shall have
the following audit rights: The Executive, a Big 4 accounting firm or a mutually
agreed upon certified public accountant on his behalf may, at the Company's
offices and at the Executive's expense, examine the Company's books and records
relevant to the calculation of his bonuses hereunder solely for the purposes of
verifying the accuracy of statements rendered by the Company to the Executive.
Such books and records may be examined as aforesaid only (a) during the
Company's normal business hours, (b) upon reasonable notice to the Company, and
(c) within three (3) months after the date the applicable statement is delivered
hereunder. The Executive shall not have the right to examine such books and
records more frequently than once in any twelve (12) month period or more than
once with respect to any particular statement. Each statement shall be deemed
final and binding upon the Executive as an account stated and shall not be
subject to any claim or objection by the Executive (i) unless the Executive
notifies the Company of his specific written objection to the applicable
statement, stating the basis thereof in reasonable detail within six (6) months
after the date such statement is delivered hereunder, and (ii) unless, within
six (6) months after delivering such written objection, the Executive makes
proper service of process upon the Company in a suit instituted in a court of
proper jurisdiction. Also, with each bonus
3
payment made under the Agreement, the Company shall provide a reasonably
detailed statement of the calculation of the amount of such payment.
(j) VACATION. Executive shall be entitled to five (5) weeks paid vacation
per calendar year during the Term.
4. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
(a) GENERAL CONFIDENTIALITY OBLIGATIONS. During the course of the
Executive's employment with the Company, the Company will provide the Executive
with access to, and Executive will likely develop for the Company certain
confidential information, trade secrets, and other matters which are of a
confidential or proprietary nature, including but not limited to the Company's
talent buying process and methods, talent contracts, touring agreements,
contracts with venues, contracts with promoters, contracts for the exploitation
of television, radio, cable, Internet, video, film, recording, publishing,
photographic, theatrical production, exhibition, management, merchandising,
licensing, marketing, or sponsorship contracts, methods, and, protocols,
contracts with partners, consultants, employees and joint venturers, valuation
of tours, the components and methodology of valuations of tours, customer lists,
pricing information, profit margins, including calculations of tour
profitability, production and cost data, compensation and fee information,
formal and informal strategic business plans, budgets, financial statements,
internal protocols and processes and other information the Company treats as
confidential or proprietary (collectively the "Confidential Information"). The
Company provides on an ongoing basis such Confidential Information as the
Company deems necessary or desirable to aid the Executive in the performance of
his duties. The Executive understands and acknowledges that all such
Confidential Information is confidential and proprietary, and agrees not to
disclose such Confidential Information to anyone outside the Company except to
the extent that (i) the Executive deems such disclosure or use reasonably
necessary or appropriate in connection with performing his duties on behalf of
the Company; (ii) the Executive is required by order of a court of competent
jurisdiction (by subpoena or similar process) to disclose or discuss any
Confidential Information, provided that in such case, the Executive shall
promptly inform the Company's General Counsel of such event, shall cooperate
with the Company in attempting to obtain a protective order or to otherwise
restrict such disclosure, and shall only disclose Confidential Information to
the minimum extent necessary to comply with any such court order; (iii) such
Confidential Information becomes generally known to and available for use in the
industries in which the Company does business, other than as a result of any
action or inaction by the Executive; or, (iv) such disclosure is reasonably
necessary to the Executive's legal representative to protect the interests of
the Executive in any dispute or potential dispute involving the Executive
(provided the Executive first obtains the written approval of the Company's
General Counsel, which approval will not be unreasonably withheld). The
Executive further agrees that he will not during employment or at any time ever
thereafter use such Confidential Information in competing, directly or
indirectly, with the Company, or disclose such Confidential Information outside
the Company. Insofar as the Executive is concerned, the Executive agrees that
all Confidential Information is the exclusive property of the Company.
(b) CONFIDENTIALITY AS TO GRAND ENTERTAINMENT AND ▇▇▇▇▇▇▇ ▇▇▇▇. The
Executive agrees not to disclose any information about the Company's business
operations, personnel, plans, finances, including but not limited to any
information about the Company's touring business, artists, contracts, protocols,
methods, and finances, whether or not the Company treats the information as
Confidential Information, to any employee, agent, or representative of Grand
Entertainment or ▇▇▇▇▇▇▇ ▇▇▇▇ at any time, except as necessary in the
performance of Executive's duties to the Company.
4
(c) PUBLIC STATEMENTS. During the Term, the Executive agrees that he will
not make any public statement or announcement concerning the Company to the
press or any media without coordination and approval of the statement or
announcement with the Company's public relations department.
(d) COMPANY USE OF EXECUTIVE'S LIKENESS OR QUOTES. During or after the
Term, without the Executive's prior written consent, the Company shall not use
or authorize the use of any likeness of Executive, or attribute any quote to
Executive.
(e) SURVIVAL. At such time as the Executive shall cease to be employed by
the Company, he will immediately turn over to the Company all Confidential
Information, including papers, directories, documents, writings, electronically
stored information in any form, other property, and all copies of them, provided
to or created by him during the course of his employment with the Company;
provided, however, that Executive shall be entitled to retain a copy of his
personal rolodex. This nondisclosure covenant is binding on the Executive, as
well as his heirs, successors, legal representatives and estate, and will
survive the termination of this Agreement for any reason.
5. NONSOLICITATION OF COMPANY EMPLOYEES.
To further preserve the rights of the Company pursuant to the
nondisclosure covenant discussed above, and for the consideration promised by
the Company under this Agreement, during the Term and for a period of 12 months
thereafter the Executive will not, directly or indirectly, (i) solicit or
encourage any current or prospective employee of the Company, or of any
subsidiary or affiliate of the Company who works, or has worked or been offered
employment by the Company within the preceding 12-month period (other than
Executive's personal assistant), to terminate his/her employment with the
Company or any subsidiary or affiliate of the Company; or (ii) solicit or
encourage any such employee to accept employment with any business, operation,
corporation, partnership, association, agency, or other person or entity. This
provision shall apply regardless of the reason for termination of employment.
6. NON-COMPETITION DURING TERM.
To further preserve the rights of the Company pursuant to the
nondisclosure covenant discussed above, and for the consideration promised by
the Company under this Agreement, during the Term, the Executive will not,
directly or indirectly, as an owner, director, principal, agent, officer,
employee, partner, consultant, servant, or otherwise, carry on, operate, manage,
control, or become involved in any manner with any business, operation,
corporation, partnership, association, agency, or other person or entity which
is in the same or similar lines of business as the Company, as of the date
hereof, which business includes the business of presenting, promoting, and
producing of touring concert events and other live entertainment events and the
exploitation of intellectual property rights associated with any tour or event,
and the representation of artists or groups, in any location in which the
Company, or any subsidiary or affiliate of the Company, operates or has plans
or has projected to operate during the Executive's employment with the Company,
including any area within a 75-mile radius of any such location. The Executive
agrees that during the Term, he will inform the Company of each material
business opportunity related to the Company's business promptly following his
becoming aware of the opportunity, and that he will not, directly or indirectly,
exploit any such opportunity for his own account or for the account of any other
person or entity. The foregoing shall not prohibit the Executive from owning up
to five percent (5%) of the issued and outstanding stock of any publicly held
company or Grand Entertainment (subject to the limitations set forth in clauses
(i) and (ii) of Paragraph 2, which is a potential competitor of the Company's
Music Touring Division. Further, the Executive agrees not to receive or accept,
directly or indirectly, compensation, remuneration, commissions, bonuses,
special dividends, special distributions, gifts or any other transfer of
anything of value or other consideration of any kind, from Grand Entertainment
or ▇▇▇▇▇▇▇ ▇▇▇▇, and will not perform any services for Grand Entertainment or
▇▇▇▇▇▇▇ ▇▇▇▇
5
during the period of his employment by the Company. This provision shall apply
regardless of the reason for termination of employment, except that this
provision shall not apply if the Executive is terminated by the Company without
"Cause" or "Justification" or terminates for "Good Reason." If the Executive is
terminated without "Cause" or "Justification" or terminates for "Good Reason,"
the Executive agrees to comply with this provision for twelve (12) months
following the termination of employment, provided that the Company abides by the
applicable provisions of Paragraph 10(c) below.
7. NONSOLICITATION OF TALENT, GROUPS, ACTS, VENDORS AND CUSTOMERS AND
NON-DISPARAGEMENT.
To further preserve the rights of the Company pursuant to the
nondisclosure covenant contained in this Agreement and the Company's substantial
investment in its business, and for the consideration promised by the Company
under this Agreement, during the Term and for a period of twelve months after
the Term, the Executive will not, directly or indirectly, either for himself or
for any other business, operation, corporation, partnership, association,
agency, or other person or entity, call upon, compete for, solicit, divert, or
take away, or attempt to divert or take away current or prospective talent,
group, act, promoter, venue, agent, vendor, or customer with whom the Company
or any subsidiary or affiliate of the Company (i) has an existing agreement or
business relationship; (ii) has had an agreement or business relationship
within the twelve-month period preceding the Executive's last day in the later
of an employment or any consulting relationship with the Company; or (iii) is in
negotiations to enter an agreement or business relationship. This provision
shall apply regardless of the reason for termination of employment, except that
this provision shall not apply if the Executive is terminated by the Company
without "Cause" or "Justification" or terminates for "Good Reason." If the
Executive is terminated without "Cause" or "Justification" or terminates for
"Good Reason," the Executive agrees to comply with this provision for twelve
(12) months following the termination of employment, provided the Company abides
by the applicable provisions of Paragraph 10(c) below. The Executive and the
Company further agree that during the same period, neither shall disparage the
other.
8. ENFORCEMENT OF PARAGRAPHS 4, 5, 6, AND 7.
The Company and the Executive agree that the restrictions and commitments
contained in Paragraphs 4, 5, 6, 7, 10 and 13(c) of this Agreement are
reasonable in scope and duration and are necessary to protect the Company's
business interests and/or Confidential Information. If any provision of these
covenants as applied to the Executive in any circumstance is adjudged by a court
or arbitrator to be invalid or unenforceable, the remaining obligations of the
Company under this Agreement shall be rendered void and unenforceable. The
parties agree and acknowledge that the breach of these covenants will cause
irreparable damage to the Company, and that the Company shall be entitled to
seek injunctive relief therefor in any court with jurisdiction and that the
Company's right to seek injunctive relief shall in no way limit any other
remedies that the Company may have (including, without limitation, the right to
seek monetary damages). Should the Executive violate the provisions of any of
paragraphs 4, 5, 6, or 7 of this Agreement, in addition to all other rights and
remedies available to the Company at law or in equity, the duration of these
covenants shall automatically be extended for a period of time equivalent to the
period of the breach.
9. TERMINATION.
The Executive's employment with the Company may be terminated under the
following circumstances:
(a) DEATH. The Executive's employment with the Company shall terminate
upon the death of the Executive.
6
(b) DISABILITY. The Company may terminate the Executive's employment in
the event of Executive's "Disability, which shall mean Executive's incapacity to
perform substantially all of the essential functions of his position under this
Agreement for one hundred twenty (120) days or more within any period of three
hundred sixty-five (365) consecutive days because of mental or physical
condition, illness or injury, consistent with applicable state and federal law.
In the event of any dispute regarding the existence of Employee's Disability,
the matter will be resolved, at the Company's expense, by the determination of a
physician qualified to practice medicine in the State of California, selected by
Employee and approved by Company, or, failing such approval, by a majority of
three physicians qualified to practice medicine in the State of California, one
to be selected by Company, one to be selected by Employee and the third to be
selected by the two designated physicians. As an alternative to termination of
employment, the Company may elect to provide long term disability coverage for
the Executive, cease the further accrual of obligations to pay compensation and
bonus payments (other than Key Act Bonuses with respect to artists already
signed) to the Executive, and maintain the Executive's health insurance benefits
until the earlier of exhaustion of long term disability payments, or the
Expiration Date. If the Executive is "disabled" and the Company elects not to
terminate the Executive, the Executive shall be excused from performing his
duties under Paragraph 2 only of this Agreement during the period of disability.
(c) TERMINATION BY THE COMPANY. The Company may terminate the Executive's
employment for "Cause" or for "Justification;" provided, however, that the right
to terminate for Justification shall expire upon a "Change in Control" (as
defined below).
"Cause" shall mean: (i) conduct by the Executive constituting a
material act of misconduct or gross negligence in connection with the
performance of his duties, including, without limitation, violation of the
Company's policy on harassment or discrimination, misappropriation of funds or
property of the Company or any of its affiliates other than the occasional,
customary and de minimis use of Company property for personal purposes, or other
similar misconduct as reasonably determined by the Company; (ii) the Executive's
refusal or failure to follow lawful directives consistent with his title and
position where such refusal or failure has continued for more than 10 days
following written notice of such refusal or failure; (iii) a conviction of the
Executive for, or a plea of nolo contendere by the Executive to, any felony or
other lesser crime involving battery, fraud, embezzlement, or misappropriation
of the property of the Company or other conduct by the Executive that, as
reasonably determined by the Company, has resulted in, or would result in injury
to the reputation or potential liability of the Company if he were retained in
his position with the Company; (iv) a breach by the Executive of any of the
provisions contained in Paragraphs 5, 6, or 7 or a material breach by the
Executive of Paragraph 4 of this Agreement; or (v) a material violation by the
Executive of the Company's employment policies or procedures of which Executive
had notice.
"Justification" shall mean: (i) the failure by the Executive to use
his commercially reasonable best efforts to present the Company with at least
six (6) touring opportunities that are reasonably expected to achieve a level of
profitability consistent with historical levels for successful tours and the
budgets established by the Music division in consultation with the Executive or
(ii) the failure by the Executive to correct performance deficiencies validly
identified and documented by the Company in an annual review of the Executive's
business performance. For purposes of this Agreement, any touring opportunity
presented by the Company's Music-Touring Division in which the Executive has
material involvement shall be deemed presented by the Executive. The Company may
terminate the Executive's employment for "Justification" by delivering notice to
the Executive (with specific reference to this Paragraph 9(c)) specifying that
the Company terminating the Term pursuant to this provision of Paragraph 9(c).
The Executive will be given a reasonable opportunity to cure any
violations of the "Cause" (30 days maximum) or "Justification" (60 days maximum)
provisions (above) which are susceptible to being cured.
7
(d) TERMINATION BY THE EXECUTIVE. The Executive may terminate his
employment with the Company only for "Good Reason," which shall mean (i) breach
by the Company of a material provision of this Agreement; (ii) a material
adverse change in the Executive's title, authority, reporting, compensation or
responsibilities, including the Company ceasing to pursue its music touring line
of business; (iii) a breach by the Company of the provision in Paragraph 2 of
the Agreement that states the Executive will reside in California and have his
primary office in Los Angeles; or (iv) a failure by the Company to use its
commercially reasonable best efforts in reviewing for approval the Key Act tour
proposals presented by the Executive. The Company will be given a reasonable
opportunity to cure (30 days maximum) any violations of this provision which are
susceptible to being cured.
10. COMPENSATION UPON TERMINATION.
(a) DEATH. If the Executive's employment with the Company terminates by
reason of the death of the Executive, the Company will, within 90 days or such
shorter period as may be required by law, pay in a lump sum amount to such
person as the Executive shall designate in a notice filed with the Company or,
if no such person is designated, to the Executive's estate, the Executive's
accrued and unpaid base salary and vacation pay and earned Performance or Key
Act Bonuses, if any, calculable (to the extent reasonably practicable) as of and
through the date of death, reimbursement of any expenses incurred but not yet
paid as of the date of death, and any payments to which the Executive's spouse,
beneficiaries, or estate may be entitled under any applicable Executive benefit
plan (in accordance with the terms of such plans and policies). Should there be
any Unearned Portion of the Bonus Advance at the date of death, the Company
shall cancel any obligation to repay this amount as a death benefit to the
person designated by the Executive, or if no person is designated, to the
Executive's estate. For the avoidance of doubt, the foregoing is not intended,
nor shall it be construed, to limit the Company's obligation to pay Key Act
Bonuses following the date of death with respect to any Key Act signed before
the date of death.
(b) DISABILITY. If the Executive's employment with the Company terminates
by reason of his "Disability" (as defined herein), the Company shall, within 90
days or such shorter period as may be required by law, pay in a lump sum amount
to the Executive his accrued and unpaid base salary and vacation pay and earned
Performance or Key Act Bonuses, if any, calculable (to the extent reasonably
practicable) as of and through the date of termination, and any payments to
which Executive may be entitled under any applicable employee benefit plan (in
accordance with the terms of such plans and policies). Should there be any
Unearned Portion of the Bonus Advance as of the date of termination because of
disability, the Company shall cancel any obligation to repay this amount as a
disability benefit to the Executive. For the avoidance of doubt, the foregoing
is not intended, nor shall it be construed, to limit the Company's obligation to
pay Key Act Bonuses following the date of termination because of disability with
respect to any Key Act signed before the date of disability.
(c) TERMINATION BY THE COMPANY OR BY THE EXECUTIVE. If the Executive's
employment with the Company is terminated by the Company for Cause or
Justification or if the Executive terminates his employment with the Company for
any reason other than for Good Reason, the Company will promptly pay in a lump
sum amount to the Executive his accrued and unpaid base salary and vacation pay,
if any, as of the date of termination. The Company will, within 90 days, pay
earned Performance or Key Act Bonuses, if any, calculable (to the extent
reasonably practicable) as of and through the date of termination, and any
payments to which he may be entitled under any applicable employee benefit plan
(in accordance with the terms of such plans and policies). If the Company
terminates Executive's employment for Cause, or if the Executive terminates for
any reason other than for Good Reason, Executive shall promptly repay to the
Company any Unearned Portion of the Bonus Advance. If the Company terminates
Executive's employment for Justification,
8
the Bonus Advance shall be deemed earned as of the date of termination in
accordance with the following schedule: as of December 31, 2003, 25%; as of
December 31, 2004, 50%; as of December 31, 2005, 75%; as of December 31, 2006,
100% and consistent with the provisions of Section 3(g)(iii) above. It is agreed
that the Company can offset any payments due the Executive with any payments due
to the Company by the Executive in respect of the Unearned Portion of the Bonus
Advance before making any payment to the Executive. If the Company terminates
Executive's employment without Cause or Justification or if the Executive
terminates his employment with the Company for Good Reason as defined by this
Agreement, the Company shall continue to pay the Executive the base salary
payable pursuant to Paragraph 3(a) of this Agreement at the time of such
termination, less required withholdings, during the Payment Period specified
below (the "Payments"). As used herein, the "Payment Period" shall mean the
shorter of 18 consecutive months or the time remaining until the Expiration
Date. As a condition to the Company's obligation to make the Payments, Executive
shall execute a general release of all employment-related claims (the "Release")
that Executive may have against the Company for the Company's terminating
Executive's employment, and shall comply with the terms of Paragraphs 5-7 of
this Agreement for a period of 12 months from the date of termination, as well
as Paragraph 4 as written. The Release shall include a release of all
employment-related claims, including without limitation, any and all claims for:
breach of this Agreement; the termination of the Executive's employment;
wrongful termination; discrimination, harassment or retaliation; breach of
contract; breach of a covenant of good faith and fair dealing; and violation of
any federal, state or municipal statute, including, but not limited to, Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1967, the Americans with Disabilities Act of
1990, the Family and Medical Leave Act, the Fair Labor Standards Act, the Worker
Adjustment Retraining Notifications Act, the Older Workers Benefit Protection
Act, the California Fair Employment and Housing Act, and Labor Code Sections
201, et seq. The Payments shall not be subject to mitigation, offset or
reduction based on the Executive's finding of other gainful employment or his
failure to find other gainful employment. For the avoidance of doubt, the
foregoing is not intended, nor shall it be construed, to limit the Company's
obligation to pay Key Act Bonuses following the date of termination for
Justification with respect to any Key Act signed before the date of termination
for Justification.
(d) EFFECT OF COMPLIANCE WITH COMPENSATION UPON TERMINATION PROVISIONS.
Upon complying with Subparagraphs 10(a) through 10(c) above, as applicable, the
Company will have no further obligations to the Executive under this Agreement,
except as otherwise expressly provided under this Agreement, provided that such
compliance will not adversely affect or alter the Executive's rights to receive
any vested benefits under any employee benefit plan of the Company in which the
Executive is a participant, unless, otherwise provided in such employee benefit
plan or any agreement or other instrument attendant thereto.
11. PARTIES BENEFITED; ASSIGNMENTS.
This Agreement shall be binding upon the Executive, his heirs and his
personal representative or representatives, and upon the Company and its
respective successors and assigns. Neither this Agreement nor any rights or
obligations hereunder may be assigned by the Executive, except that Executive
may designate beneficiaries to receive any amounts that would otherwise be paid
to Executive's estate. The Executive shall have the right to modify or revoke
any designation of beneficiaries, by written notice to the Company. The Company
may not assign or transfer this Agreement or any rights or obligations
hereunder. For purposes of this Agreement, a "Change in Control," meaning a sale
of all or substantially all of the assets of Clear Channel Entertainment, the
Company's Music Division or the Company's Music Touring Division, or any
transaction or series of related transactions (including without limitation, any
merger, reorganization, consolidation or purchase of outstanding equity
interests) resulting in the transfer of 50% or more of the outstanding voting
securities of Clear Channel Entertainment, shall not be considered an
assignment.
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12. NOTICES.
Any notice provided for in this Agreement will be in writing and will be
deemed to have been given when delivered or mailed by United States registered
or certified mail, return receipt requested, postage prepaid. If to the Board or
the Company, the notice will be sent to ▇▇▇ ▇▇▇, ▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇., ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇., ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
and a copy of the notice will be sent to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and ▇▇▇▇ ▇. Head, Clear
Channel Entertainment, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. If
to the Executive, the notice will be sent to ▇▇▇▇▇▇ ▇▇▇▇▇ at ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ and a copy of the notice will be sent to ▇▇▇▇ ▇.
▇▇▇▇▇, Esq., ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ & ▇▇▇▇▇ LLP, ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇., ▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇. Such notices may alternatively be sent to such other
address as any party may have furnished to the other in writing in accordance
with this Agreement, except that notices of change of address shall be effective
only upon receipt.
13. GOVERNING LAW, DISPUTE RESOLUTION AND LIMITATION ON DAMAGES.
(a) GOVERNING LAW. Except with regard to matters involving the
indemnification of the Executive under Delaware law as set forth in Paragraph
16, this Agreement shall be governed by and construed in accordance with the
internal laws of the State of California without giving effect to any choice of
law or conflict provisions or rule (whether of the State of California or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of California. The parties agree that the
venue for any Court-filed dispute will be the Central District of California.
(b) ARBITRATION OF DISPUTES. Except for the Company's right to obtain
injunctive relief, Executive and Employer agree that any dispute or claim,
whether based on contract, tort, discrimination (including, without limitation,
claims arising under Title VII of the Civil Rights Act of 1964, as amended, the
Age Discrimination in Employment Act, the Americans with Disabilities Act, the
Equal Pay Act, the Family and Medical Leave Act, and all comparable state or
local laws, retaliation, violation of public policy, or otherwise, relating to,
arising from, or connected in any manner with this Agreement, or Executive's
employment or Consulting exclusively shall be resolved through final and binding
arbitration. Arbitration shall proceed in accord with the National Rules for
the Resolution of Employment Disputes of the American Arbitration Association
("AAA") (the "Rules") in effect at the time the claim or dispute arose, unless
other rules are agreed upon by the parties. Executive may obtain a copy of the
Rules from ▇▇▇.▇▇▇.▇▇▇. Notwithstanding any AAA rule to the contrary, the
parties shall be allowed to conduct any discovery otherwise allowed by
California law.
The arbitration shall be held in Los Angeles, California and, except with
regard to matters involving the indemnification of the Executive under Delaware
law as set forth in Paragraph 16 the substantive law of the State of California
shall apply. The arbitration shall be conducted by one arbitrator, selected by
mutually agreeable means, who is a member of the AAA, unless the parties
mutually agree to the appointment of an alternative arbitrator. The arbitrator
shall have jurisdiction to determine any claim, including the arbitrability of
any claim, submitted to her or him. The arbitrator may grant any relief
authorized by law for any properly established claim, including dispositive or
other motions which may determine the merits of any claim or defense, and
discovery motions. The arbitrator shall neither disregard nor refuse to enforce
the Employer's lawful policies, nor shall the arbitrator require the Employer to
adopt a policy which previously was not adopted lawfully.
Each party will bear her, his or its own arbitration costs, unless they
are unreasonable. Prior to the hearing, the parties shall agree, determine and
allocate filing and administrative fees and the arbitrator's hearing and study
fees between the parties. Notwithstanding any rule to the contrary (including
AAA Rules), the parties
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shall be allowed to recover any relief damages, in law or in equity, which the
parties could otherwise obtain in a court of competent jurisdiction for the
claims or defenses raised. Additionally, the arbitrator shall have the authority
to award costs to the prevailing party.
The arbitrator's decision shall be in writing, including a statement of
the reason for the decision. The award shall be subject to judicial review in
accordance with the prevailing standards for judicial review of arbitral awards
in effect at the time. The interpretation and enforceability of this paragraph
of this Agreement exclusively shall be governed and construed in accord with the
United States Federal Arbitration Act, 9 U.S.C. Section 1, et seq. If any
portion of this Section is not enforceable or void, the Parties expressly
authorize and require that any such portion or portions to be stricken entirely
or amended/modified so as to be in compliance with applicable law.
(c) LIMITATION ON DAMAGES. The parties agree to the following:
(i) The parties hereto agree that the payments set forth in the
applicable provision of Paragraph 10(c) constitute fair and adequate
compensation for damages for any termination by the Company without "Cause"
or "Justification" or by the Executive for "Good Reason."
(ii) If the Executive is terminated for "Cause" or "Justification" or
terminates without "Good Reason," the Company may only seek money damages
for any violations of sections 4-7 and/or the "Cause" provision, and to
recoup any unrepaid Bonus Advance and/or any improper expenses.
It is agreed and understood that this provision shall in no way limit
either party's ability to obtain injunctive or other relief that is otherwise
available under the Agreement or applicable law.
14. DEFINITION OF COMPANY.
As used in this Agreement, the term "Company" shall include Clear Channel
Entertainment, SFX Entertainment, Inc., any of their past, present and future
divisions, operating companies, subsidiaries, affiliates and parents.
15. LITIGATION AND REGULATORY COOPERATION.
During and after the Executive's employment, the Executive shall
reasonably cooperate with the Company in the truthful defense or prosecution of
any claims or actions now in existence or which may be brought in the future
against or on behalf of the Company which relate to events or occurrences that
transpired while the Executive was employed by the Company. The Executive's
cooperation in connection with such claims or actions shall include, but not be
limited to, being available to meet with counsel to prepare for discovery or
trial and to act as a witness on behalf of the Company at mutually convenient
times. During and after the Executive's employment, the Executive also shall
cooperate fully and truthfully with the Company in connection with any
investigation or review of any federal, state or local regulatory authority as
any such investigation or review relates to events or occurrences that
transpired while the Executive was employed by the Company. The Company will pay
the Executive on an hourly basis (to be derived from his starting base salary)
for his time spent responding to any litigation or regulatory matters at the
Company's request that occurs after the termination of his employment
relationship with the Company, and reimburse the Executive for all costs and
expenses incurred in connection with his performance under this paragraph,
including, but not limited to, reasonable attorneys' fees and costs.
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16. INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES.
The Company shall indemnify the Executive to the fullest extent permitted
by the laws of the State of Delaware, as in effect at the time of the subject
act or omission, and shall advance to the Executive reasonable attorneys' fees
and expenses as such fees and expenses are incurred (subject to an undertaking
from the Executive to repay such advances if it shall be finally determined by a
judicial decision which is not subject to further appeal that the Executive was
not entitled to the reimbursement of such fees and expenses), and the Executive
will be entitled to the protection of any applicable insurance policies that the
Company may elect to maintain generally for the benefit of certain of its
directors and officers against costs, charges and expenses incurred or sustained
by him in connection with actions, suits or proceedings to which he may be made
a party by reason of his being or having been a director, officer or Executive
of the Company or any of its subsidiaries, or his serving or having served any
other enterprise as a director, officer or Executive at the request of the
Company (other than any dispute, claim or controversy arising under or relating
to this Agreement).
The Executive shall indemnify the Company to the fullest extent permitted
by the law, and shall hold the Company harmless of and from any claims, demands,
suits, causes of action, complaints, charges, damages, and awards of any kind
which arise from or are related to any wrongful acts or malfeasance by the
Executive which constitutes sexual harassment or embezzlement in violation of
the law.
17. REPRESENTATIONS AND WARRANTIES OF THE EXECUTIVE.
The Executive represents and warrants to the Company that he is under no
contractual or other restriction which is inconsistent with the execution of
this Agreement, the performance of his duties hereunder or the other rights of
Company hereunder. The Executive also represents and warrants to the Company
that he is under no physical or mental disability that would prevent the
performance of his duties under this Agreement, with reasonable accommodations.
18. MISCELLANEOUS.
This Agreement contains the entire agreement of the parties relating to
the subject matter hereof. This Agreement supersedes any prior written or oral
agreements or understandings between the parties relating to the subject matter
hereof. No modification or amendment of this Agreement shall be valid unless in
writing and signed by or on behalf of the parties hereto. The failure of a party
to require performance of any provision of this Agreement shall in no manner
affect the right of such party at a later time to enforce any provision of this
Agreement. A waiver of the breach of any term or condition of this Agreement
shall not be deemed to constitute a waiver of any subsequent breach of the same
or any other term or condition. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. Except to the extent otherwise provided by
Paragraph 8 of this Agreement, if any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be held invalid or unenforceable, such invalidity and
unenforceability shall not affect the remaining provisions hereof or the
application of such provisions to other persons or circumstances, all of which
shall be enforced to the greatest extent permitted by law. The headings in this
Agreement are inserted for convenience of reference only and shall not be a part
of or control or affect the meaning of any provision hereof. The rights and
obligations of the parties under this Agreement shall survive any termination of
this Agreement to the extent necessary to the intended preservation of these
rights and obligations.
12
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first written above.
DATED: DEC 2/2002 /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇▇▇▇▇
DATED: ____________________
DATED: 12/3/02 SFX ENTERTAINMENT, INC.
By: /s/ ▇▇▇▇ ▇. Head
----------------------
Name: ▇▇▇▇ ▇. Head
Title: Executive Vice President
and General Counsel
13
AMENDMENT
WHEREAS SFX Entertainment, Inc. d/b/a Clear Channel Entertainment
(hereinafter referred to as "Company") and ▇▇▇▇▇▇ ▇▇▇▇▇ (hereinafter referred to
as "Executive") entered into a Personal Services Agreement (hereinafter referred
to as "Agreement") effective from the 1st day of September, 2002 and ending on
December 31, 2007;
WHEREAS, the parties desire to amend the above-referenced Agreement to be
effective upon execution of this Amendment;
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged by the parties hereto, the parties
enter into this Amendment.
1. The parties wish to amend Section 2 "Title and Duties" solely as it
relates to his title and lines of reporting; the remainder of this Section shall
remain unchanged. The Executive's title shall be "President, TNA International"
and he shall report to the President and CEO, Global Music, currently ▇▇▇▇▇▇▇
▇▇▇▇▇▇.
2. The parties wish to delete Section 3(c) "Performance Bonus" and the
attached "Exhibit A" in their entirety, to be replaced as follows:
(c) NON-KEY ACT BONUS. Executive will be eligible to earn and receive a
Non-Key Act Bonus, as set forth below, based on the Tour Profit on all
touring acts booked,
(i) Definition: "Non-Key Act:" For purposes of this section "non-key
acts" shall be defined as all touring acts booked excluding those acts
described in Exhibit B to the Agreement, i.e.: [***].
(ii) 2004 Bonus: If a total Tour Profit of $5,000,000.00 is reached
for non-key acts booked in 2004, Executive shall be eligible to
receive a bonus in the amount of $450,000.00 payable on January
15, 2005.
(iii) 2005 Bonus: If a total cumulative profit for calendar years 2004
and 2005 of $10,000,000.00 is reached for non-key acts, Executive
shall be eligible to receive a bonus in the amount of $320,000.00
payable on January 15, 2006.
2. This Addendum represents the complete and total understanding of the
parties with respect to the content thereof, and cannot be modified or
altered except if done so in writing, executed by both parties.
______________
***Confidential
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3. This Addendum shall in no way modify, alter, change or otherwise delete
any provision of the Agreement unless specifically done so by the terms of
this Addendum, and all the remaining provisions of the Agreement shall
remain in full force and effect.
AGREED:
EXECUTIVE: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇ DATE: JAN 13/05
----------------
▇▇▇▇▇▇ ▇▇▇▇▇
COMPANY: /s/ ▇▇▇▇ ▇▇▇▇▇ DATE: 1-20-05
-------------
BY: ▇▇▇▇ ▇▇▇▇▇
Chief Administrative Officer
SFX ENTERTAINMENT, INC.,
D/B/A CLEAR CHANNEL ENTERTAINMENT
2