EMPLOYMENT AGREEMENT
Exhibit 10.1
This Employment Agreement is entered into and is effective as of this 1st day of
May (the “Effective Date”), 2006 between SFX Entertainment, Inc. d/b/a Live Nation (the “Company”)
and Xxxxxxx Xxxxxx (the “Employee”).
WHEREAS, the Company and the Employee desire to enter into an employment 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 OF EMPLOYMENT.
The Employee’s term of employment starts on the Effective Date of this Agreement and ends on
the close of business on May 1, 2008 (the “Employment Period” or “Term of Employment”).
2. TITLE AND DUTIES.
(a) Duties. The Employee’s title is President, North America Music. The Employee will perform
job duties that are usual and customary for this position, and will perform additional services and
duties that the Company may from time to time designate that are consistent with the usual and
customary duties of this position. The Employee will report to the President and CEO currently
Xxxxxxx Xxxxxx. Employee’s service shall be rendered at Company’s office located in Los Angeles,
California and Employee shall not be required to render services elsewhere without his prior
written consent. The Employee will devote his full working time and efforts to the business and
affairs of Company.
(b) Exclusive Services. During employment with the Company, Employee shall not be employed
elsewhere or engage in any competitive activity and, except as set forth in the preceding clause
(a) of this Section 2, shall not render any services to any other person or business, or acquire
any interest of any type in any other business which is in competition with Company, provided,
however, that the foregoing shall not be deemed to prohibit Employee from acquiring, solely as an
investment, (i) up to 10% of any securities of a partnership, trust, corporation or other entity so
long as Employee remains a passive investor in such entity and such entity is not, directly or
indirectly, in competition with Company or (ii) up to 5.0% of the outstanding equity interests of
any publicly held company.
3. COMPENSATION AND BENEFITS
(a) Base Salary. The Company will pay the Employee an annual base salary of $450,000.00. The
Employee shall receive annual raises in the amount of not less than 4% to be effective on each
anniversary date of 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,
and subject to any increases that are determined to be appropriate by the Board or its Compensation
Committee.
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(b) Performance Bonus. Employee will be eligible to receive a performance bonus as set forth
in the Performance Bonus Calculation attached as “Exhibit A” to this Employment Agreement.
Employee’s Target Bonus is $200,000.00. The Company reserves the right to modify the Performance
Bonus Plan due to business circumstances such as business acquisition, business sale, accounting or
non-operational circumstances.
(c) Employment Benefit Plans. The Employee 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
employee welfare benefit plans in which other similarly situated employees of the Company may
participate as stated in the employee guide.
(d) Vacation. Employee shall be eligible for a minimum of twenty (20) paid vacation days
annually, to be awarded and taken in accordance with Company policy, as amended from time to time.
(e) Expenses. The Company will pay or reimburse the Employee for all normal and reasonable
travel and entertainment expenses incurred by the Employee in connection with the Employee’s
responsibilities to the Company upon submission of proper vouchers in accordance with the Company’s
expense reimbursement policy. For business related travel, Employee is eligible for Business Class
air travel. The Company will provide the Employee with access to a credit card, subject to the
approval of the credit card company and based on the Employee’s credit history, and which should
only be used for business purposes. Payment is the responsibility of the Employee. Company, at its’
expense, will provide Employee with DSL connection and an office phone line at his residence.
(f) Stock Options. Any future stock option grants will be granted based upon the performance
of the Employee, which will be assessed in the sole discretion of the Company and the Compensation
Committee of the Board. All option grants shall be made under the terms and conditions set forth
in the applicable stock option plan under which they are issued. The Company reserves the right to
modify any future Company stock option plan with respect to the change of control or any other
provision of said plan. The Company’s obligations under this agreement to the Employee in the area
of stock options are conditioned upon and subject to the Company’s decision, in its sole
discretion, to: 1) alter, suspend or discontinue its stock option grant program; or 2) replace the
program with an alternative form or method of compensation.
4. NONDISCLOSURE OF CONFIDENTIAL INFORMATION.
During the course of the Employee’s employment with the Company, the Company will provide the
Employee with access to certain confidential information, trade secrets, and other matters which
are of a confidential or proprietary nature, including but not limited to the Company’s venue,
booking and operations information, artist and venue contracts, , production and cost data,
compensation and fee information, strategic business plans, budgets, financial statements, 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 Employee in the performance of his duties. The
Employee understands and acknowledges that 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 Employee deems
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such disclosure or use reasonably necessary or appropriate in connection with performing his duties
on behalf of the Company; (ii) the Employee is required by order of a court of competent
jurisdiction (by subpoena or similar process) or by government authority to disclose or discuss any
Confidential Information, provided that in such case, the Employee shall promptly inform the
Company 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 or other government authority; or
(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 Employee. In addition to the foregoing, Employee shall have the right to disclose Confidential
Information to his attorneys or accountants in the course of their representation of Employee. The
Employee further agrees that he will not during employment and/or at any time thereafter use such
Confidential Information in competing, directly or indirectly, with the Company. At such time as
the Employee shall cease to be employed by the Company, he will immediately turn over to the
Company all Confidential Information, including papers, documents, writings, electronically stored
information, other property, and all copies of them, provided to or created by him during the
course of his employment with the Company. This nondisclosure covenant is binding on the Employee,
as well as his heirs, successors, and legal representatives, and will survive the termination of
this Agreement for any reason.
5. NONHIRE 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 of
the Employee’s employment with the Company and for a period of 12 months thereafter, regardless of
the reason for termination of employment, the Employee will not, directly or indirectly, (i) hire
any then current employee of the Company (other than Employee’s Assistant), or any subsidiary or
affiliate of the Company; (ii) solicit or encourage any such employee to terminate their
employment with the Company, or any subsidiary or affiliate of the Company; or (iii) solicit or
encourage any such employee to accept employment with any business, operation, corporation,
partnership, association, agency, or other person or entity with which the Employee may be
associated.
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
Employee’s employment with the Company the Employee 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
business as the Company 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 Employee’s employment with
the Company, including any area within a 50-mile radius of any such location. The foregoing shall
not prohibit the Employee from owning up to 5.0% of the outstanding stock of any publicly held
company.
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The Company and the Employee agree that the restrictions contained in this noncompetition
covenant are reasonable in scope and duration and are necessary to protect the Company’s business
interests and Confidential Information.
7. TERMINATION.
The Employee’s employment with the Company may be terminated under the following
circumstances:
(a) Death. The Employee’s employment with the Company shall terminate upon his death.
(b) Disability. Subject to the requirements of the Americans with Disabilities Act and any
other applicable laws, the Company may terminate the Employee’s employment with the Company if, as
a result of the Employee’s incapacity due to physical or mental illness, the Employee is unable to
perform his duties under this Agreement on a full-time basis for more than 90 days in any 12 month
period, as determined by the Company.
(c) Termination By The Company. The Company may terminate this Employment Agreement with or
without Cause. A termination for Cause must be for one or more of the following reasons: (i)
conduct by the Employee constituting a material act of willful misconduct in connection with the
performance of his duties, including, without limitation, violation of the Company’s policy on
sexual harassment, 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;
(ii) continued, willful and deliberate non-performance by the Employee of his duties hereunder
(other than by reason of the Employee’s physical or mental illness, incapacity or disability) where
such non-performance has continued for more than 10 business days following written notice of such
non-performance; (iii) the Employee’s refusal or failure to follow lawful directives consistent
with Employee’s title and position hereunder and with Company’s otherwise applicable policies,
where such refusal or failure has continued for more than 30 days following written notice of such
refusal or failure; (iv) a criminal conviction of the Employee, a plea of nolo contendere by the
Employee to a felony; (v) a material breach by the Employee of any of the provisions of this
Agreement or (vi) a violation by the Employee of the Company’s employment policies. If Company
elects to terminate for Cause under c(v) or c(vi) Employee shall have five (5) days after the
written notice within which to cure, except where such cause, by its nature, is not curable or the
termination is based upon a recurrence of an act previously cured by Employee.
(d) Termination By The Employee For Good Reason. Employee may terminate this Agreement at any
time for “Good Reason,” which is defined as one of the following: (i) a failure of the Company to
comply with a material term of this Agreement after written notice by the Employee specifying the
alleged failure; or (ii) a change in Employee’s position, duties, responsibilities, or authority
without an offer of additional reasonable compensation as determined by Company in light of
compensation levels for similarly situated employees; or (iii) a reduction in Employee’s title,
duties, responsibilities or authority. If Employee elects to terminate this Agreement for “Good
Reason” as described above in this paragraph, the Company shall have five (5) days after the
written notice within which to cure. If Company fails to cure within the applicable period,
Employee’s termination for good reason shall become effective at the end of the 5th day of such
cure period.
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(e) Termination by the Employee Without Cause. The Employee may terminate this Agreement
without Cause by providing Company with 12 months advance written notice of his intent to terminate
the employment relationship. If Employee terminates under this section, the Company may determine
an earlier termination date on which employment will end. The Company shall not be required to
continue employment during the notice period.
8. COMPENSATION UPON TERMINATION.
(a) Death. If the Employee’s employment with the Company terminates by reason of his death,
the Company shall, within the time period as required under the laws of the State of California,
pay in a lump sum amount to such person as the Employee shall designate in a notice filed with the
Company or, if no such person is designated, to the Employee’s estate, the Employee’s accrued and
unpaid base salary and prorated bonus, if any (See Exhibit A), unreimbursed expenses, and any
payments to which the Employee’s spouse, beneficiaries, or estate may be entitled under any
applicable employee benefit plan (according to the terms of such plans and policies).
(b) Disability. If the Employee’s employment with the Company terminates by reason of his
disability, the Company shall, within the time period as required under the laws of the State of
California, pay in a lump sum amount to the Employee his accrued and unpaid base salary and
prorated bonus, if any (See Exhibit A), unreimbursed expenses, and any payments to which he may be
entitled under any applicable employee benefit plan (according to the terms of such plans and
policies).
(c) Termination By The Company For Cause or Termination by Employee Without Cause. If this
Agreement is terminated by the Company for Cause, or terminated by the Employee Without Cause, the
Company will, within the time period as required under the laws of the State of California, pay in
a lump sum amount to the Employee his accrued and unpaid base salary, unreimbursed expenses, and
any payments to which he may be entitled under any applicable employee benefit plan (according to
the terms of such plans and policies).
(d) Termination With Severance
(1) Termination By The Company Without Cause or Termination by Employee for Good Reason.
(A) If the Employee’s employment with the Company is terminated by the Company Without
Cause, the Company will, within the time period as required under the laws of the State of
California, pay in a lump sum amount to the Employee his accrued and unpaid base salary,
prorated bonus, if any (See Exhibit A), unreimbursed expenses; any payments to which he may
be entitled under any applicable employee benefit plan (according to the terms of such plans
and policies), and in addition, any stock options granted to Employee pursuant to Section
3(f) during the term of this Agreement shall vest at a rate of 20% per year up to the date
of termination.
(B) If the Employee’s employment with the Company is terminated by the Employee for
Good Reason, the Company will, within the time period as required under the laws of the
State of California, pay in a lump sum amount to the Employee his
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accrued and unpaid base salary, prorated bonus, if any (See Exhibit A), unreimbursed
expenses; and any payments to which he may be entitled under any applicable employee benefit
plan (according to the terms of such plans and policies).
(C) Additionally, Employee may select either option (C)(i) or (C)(ii) below:
(i) If the Employee signs a general release of claims in a form and manner
satisfactory to the Company, the Company will, within 5 business days, pay to the
Employee a lump sum amount equal to six (6) months of the Employee’s annual base
salary, less applicable federal and state withholding and all other ordinary payroll
deductions. Notwithstanding the foregoing, if Employee terminates his employment
for Good Reason, then the foregoing lump sum shall be an amount equal to six (6)
months of the Employee’s annual base salary, less applicable federal and state
withholding and all other ordinary payroll deductions.
OR
(ii) Employee may elect to become a part-time consultant to Company in exchange for
severance pay and agrees to: (1) serve as an exclusive part-time consultant for the
six (6) months after the date of termination (“Consulting Period”); (2) agrees not
to compete with Employer, directly or indirectly, during the Consulting Period in
accordance with Section 2(b) and Section 6; and (3) agrees to and signs a general
release of claims in a form and manner satisfactory to the Company. Company will pay
to Employee:
a.) a lump sum amount equal to six (6) months of the Employee’s annual base
salary, less applicable federal and state withholding and all other ordinary payroll
deductions (“Severance Payment”); and,
b.) an amount equal to six (6) months base salary, payable in periodic payments
in accordance with ordinary payroll practices and deductions during the Consulting
Period (“Consulting Payments”).
(D) In addition to the payments set forth in subparagraphs (d)(1)(A) through (C) above,
Company shall pay to Employee, on a gross-up basis for taxes, the amount Employee is
required to pay for continuing health insurance coverage through the earlier of the date
twelve (12) months after the date of termination and the date on which Employee becomes
covered under the health insurance plan of a subsequent employer.
(2) Pro Rata Bonus. If the Company terminates employment without cause or if Employee
terminates employment for Good Reason, Employee shall be eligible for a pro-rata bonus as follows:
If Employee’s termination date is on or between January 1 and May 31, then Employee shall receive
an amount equal to the prorated portion of the bonus earned in the previous year. If Employee’s
termination date is on or after June 1, he will receive payment of the prorated portion of the
bonus for the year in which is he is terminated, to be payable by March 31 of the following year.
(3) Intentionally deleted.
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(e) Effect Of Compliance With Compensation Upon Termination Provisions. Upon complying with
Subparagraphs 8(a) through 8(d) above, as applicable, the Company will have no further obligations
to the Employee except as otherwise expressly provided under this Agreement, provided that such
compliance will not adversely affect or alter the Employee’s rights under any employee benefit plan
of the Company in which the Employee has a vested interest, unless, otherwise provided in such
employee benefit plan or any agreement or other instrument attendant thereto.
9. PARTIES BENEFITED; ASSIGNMENTS.
This Agreement shall be binding upon the Employee, 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 Employee, other than by
will or by the laws of descent and distribution.
10. GOVERNING LAW.
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 any other jurisdiction) that would cause the application of the
laws of any jurisdiction other than the State of California and the Employee and Company each
hereby expressly consents to the personal jurisdiction of the state and federal courts located in
Los Angeles County, in the State of California for any lawsuit arising from or relating to this
Agreement.
11. DEFINITION OF COMPANY.
As used in this Agreement, the term “Company” shall include SFX Entertainment, Inc., and any
entity succeeding to all or substantially all of the business unit for which Employee renders
services.
12. LITIGATION AND REGULATORY COOPERATION.
During and after the Employee’s employment, the Employee shall reasonably cooperate with the
Company in the 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 Employee was employed by the Company; provided, however, that such
cooperation shall not materially and adversely affect the Employee or expose the Employee to an
increased probability of civil or criminal litigation. The Employee’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 Employee’s employment, the Employee also shall
cooperate fully 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 Employee was employed by the Company. The Company will pay
the Employee on an hourly basis (to be derived from his base salary) for requested litigation and
regulatory cooperation that occurs after his termination of employment, and reimburse the Employee
for all costs and expenses incurred in connection with
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his performance under this paragraph, including, but not limited to, reasonable attorneys’
fees and costs.
13. INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES.
The Company shall indemnify the Employee to the fullest extent permitted by law, in effect at
the time of the subject act or omission, and shall advance to the Employee reasonable attorneys’
fees and expenses as such fees and expenses are incurred (subject to an undertaking from the
Employee to repay such advances if it shall be finally determined by a judicial decision which is
not subject to further appeal that the Employee was not entitled to the reimbursement of such fees
and expenses), and the Employee will be entitled to the protection of any insurance policies that
the Company may elect to maintain generally for the benefit of its directors and officers against
all costs, charges and expenses incurred or sustained by him in connection with any action, suit or
proceeding to which he may be made a party by reason of his being or having been a director,
officer or employee of the Company or any of its subsidiaries, or his serving or having served any
other enterprise as a director, officer or employee at the request of the Company (other than any
dispute, claim or controversy arising under or relating to this Agreement). The Company covenants
to maintain during the Employee’s employment for the benefit of the Employee (in his capacity as an
officer and director of the Company) Directors and Officers Insurance providing benefits to the
Employee no less favorable, taken as a whole, than the benefits provided to the other similarly
situated employees of the Company by the Directors and Officers Insurance maintained by the Company
on the date hereof; provided, however, that the Board may elect to terminate Directors and Officers
Insurance for all officers and directors, including the Employee, if the Board determines in good
faith that such insurance is not available or is available only at unreasonable expense.
14. ARBITRATION.
The parties agree that any dispute, controversy or claim, whether based on contract, tort,
statute, discrimination, retaliation, or otherwise, relating to, arising from or connected in any
manner to this Agreement, or to the alleged breach of this Agreement, or arising out of or relating
to Employee’s employment or termination of employment, shall, upon timely written request of either
party be submitted to and resolved by binding arbitration. The arbitration shall be conducted in
Los Angeles, California. The arbitration shall proceed in accordance with the National Rules for
Resolution of Employment Disputes of the American Arbitration Association (“AAA”) in effect at the
time the claim or dispute arose, unless other rules are agreed upon by the parties. Unless
otherwise agreed to by the parties in writing, the arbitration shall be conducted by one arbitrator
who is a member of the AAA and who is selected pursuant to the methods set out in the National
Rules for Resolution of Employment Disputes of the AAA. Any claims received after the
applicable/relevant statute of limitations period has passed shall be deemed null and void. The
award of the arbitrator shall be a reasoned award with findings of fact and conclusions of law.
Either party may bring an action in any court of competent jurisdiction to compel arbitration under
this Agreement, to enforce an arbitration award, and to vacate an arbitration award. However, in
actions seeking to vacate an award, the standard of review to be applied by said court to the
arbitrator’s findings of fact and conclusions of law will be the same as that applied by an
appellate court reviewing a decision of a trial court sitting without a jury. The Company will pay
the actual costs of arbitration excluding attorney’s fees. Each party will pay its own attorneys
fees and other costs incurred by their respective attorneys.
15. REPRESENTATIONS AND WARRANTIES OF THE EMPLOYEE.
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The Employee 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.
16. 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. 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.
IN WITNESS WHEREOF, the parties have duly executed and delivered this Agreement as of the date
first written above.
| EMPLOYEE: | ||
DATE: May 1, 2006 |
/s/ XXXXXXX XXXXXX | |
| XXXXXXX XXXXXX | ||
| SFX ENTERTAINMENT, INC., | ||
| d/b/a LIVE NATION |
DATE: May 1, 2006
|
BY: | /s/ XXXXXXX XXXXXX | ||
| NAME: Xxxxxxx Xxxxxx | ||||
| TITLE: Chief Executive Officer | ||||
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Xxxxxxx Xxxxxx — Performance Bonus Calculation
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EXHIBIT A
PERFORMANCE BONUS CALCULATION
PERFORMANCE BONUS CALCULATION
Employee will be eligible for an annual Performance Bonus (“Performance Bonus”). The
Performance Bonus is based upon year-over-year combined EBITDA growth in 1% increments for NA Music
Live, (including Motorsports) and NA Venues (together referred to as the “Applicable Division”).
The calculation of the Performance Bonus is set forth below.
1. Annual Performance Bonus — Positive Growth in Prior Year:
(a) If the Applicable Division experienced a year-over-year increase in EBITDA in the year
preceding the calendar year to which the Performance Bonus relates, then the amount of the
Performance Bonus attributable to the Applicable Division will be determined utilizing the schedule
set forth in Section 1(b).
(b) The Performance Bonus attributable to the Applicable Division to which this Section 1(b)
applies shall be equal to the Target Bonus (as defined in the Employment Agreement) multiplied by
the Percentage Bonus Amount for that Applicable Division in the table below that corresponds to the
Applicable Division’s year-over-year EBITDA growth in the year to which the Performance Bonus
relates.
| Growth | ||||||||
| Positive Growth Model | Percentage | Bonus Amount | ||||||
| 1 | % | $ | 5,000 | |||||
| 2 | % | $ | 10,000 | |||||
Target Bonus |
3 | % | $ | 15,000 | ||||
$200,000.00 |
4 | % | $ | 20,000 | ||||
| 5 | % | $ | 25,000 | |||||
| 6 | % | $ | 40,000 | |||||
| 7 | % | $ | 55,000 | |||||
| 8 | % | $ | 70,000 | |||||
| 9 | % | $ | 85,000 | |||||
| 10 | % | $ | 100,000 | |||||
| 11 | % | $ | 120,000 | |||||
| 12 | % | $ | 140,000 | |||||
| 13 | % | $ | 160,000 | |||||
| 14 | % | $ | 180,000 | |||||
Target 15% Growth |
15 | % | $ | 200,000 | ||||
| 16 | % | $ | 220,000 | |||||
| 17 | % | $ | 240,000 | |||||
| 18 | % | $ | 260,000 | |||||
| 19 | % | $ | 280,000 | |||||
| 20 | % | $ | 300,000 | |||||
| 21 | % | $ | 320,000 | |||||
| 22 | % | $ | 340,000 | |||||
| 23 | % | $ | 360,000 | |||||
| 24 | % | $ | 380,000 | |||||
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Xxxxxxx Xxxxxx — Performance Bonus Calculation
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| Growth | ||||||||
| Positive Growth Model | Percentage | Bonus Amount | ||||||
| 25 | % | $ | 400,000 | |||||
| 26 | % | $ | 410,000 | |||||
| 27 | % | $ | 420,000 | |||||
| 28 | % | $ | 430,000 | |||||
| 28 | % | $ | 440,000 | |||||
| 29 | % | $ | 450,000 | |||||
| 30 | % | $ | 460,000 | |||||
| 31 | % | $ | 470,000 | |||||
| 32 | % | $ | 480,000 | |||||
| 33 | % | $ | 490,000 | |||||
| 34 | % | $ | 500,000 | |||||
| 35 | % | $ | 510,000 | |||||
| 36 | % | $ | 520,000 | |||||
| 37 | % | $ | 530,000 | |||||
| 38 | % | $ | 540,000 | |||||
| 39 | % | $ | 550,000 | |||||
| 40 | % | $ | 560,000 | |||||
| 41 | % | $ | 570,000 | |||||
| 42 | % | $ | 580,000 | |||||
| 43 | % | $ | 590,000 | |||||
| 44 | % | $ | 600,000 | |||||
(c) The following is an example of a positive growth Performance Bonus provided for
illustrative purposes only.
Assume that in 2004, the Applicable Division achieved positive year-over-year EBITDA
growth when compared to 2003. Assume also that in 2005 the year-over-year EBITDA growth is
16%. On this example the Percentage Bonus Amount for calendar year 2005 would be
110% (per table in Paragraph 2(b) above), resulting in a total Performance Bonus
for calendar year 2005 of 110% of the Target Bonus, or $220,000.00.
2. Annual Performance Bonus — EBITDA Decrease
(a) If the Applicable Division experienced a year-over-year decrease in EBITDA in the year
preceding the calendar year to which the Performance Bonus relates, then the amount of the
Performance Bonus attributable to the Applicable Division will be determined utilizing the schedule
set forth in Section 2(b).
(b) The Performance Bonus attributable to the Applicable Division to which this Section 2(b)
applies shall be equal to the Target Bonus (as defined in the Employment Agreement) multiplied by
the Percentage Bonus Amount for the Applicable Division in the table below that corresponds to the
Applicable Division’s year-over-year EBITDA growth in the year to which the Performance Bonus
relates.
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Xxxxxxx Xxxxxx — Performance Bonus Calculation
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| Prior Year — | Growth | |||||||
| EBITDA Decrease Growth Model | Percentage | Bonus Amount | ||||||
| 1 | % | 0 | ||||||
| 2 | % | 0 | ||||||
Target Bonus |
3 | % | 0 | |||||
$200,000.00 |
4 | % | 0 | |||||
| 5 | % | $ | 5,000 | |||||
| 6 | % | $ | 10,000 | |||||
| 7 | % | $ | 15,000 | |||||
| 8 | % | $ | 20,000 | |||||
| 9 | % | $ | 25,000 | |||||
| 10 | % | $ | 30,000 | |||||
| 11 | % | $ | 40,000 | |||||
| 12 | % | $ | 50,000 | |||||
| 13 | % | $ | 60,000 | |||||
| 14 | % | $ | 80,000 | |||||
| 15 | % | $ | 100,000 | |||||
| 16 | % | $ | 120,000 | |||||
| 17 | % | $ | 140,000 | |||||
| 18 | % | $ | 160,000 | |||||
| 19 | % | $ | 180,000 | |||||
Target 20% Growth |
20 | % | $ | 200,000 | ||||
| 21 | % | $ | 220,000 | |||||
| 22 | % | $ | 240,000 | |||||
| 23 | % | $ | 260,000 | |||||
| 24 | % | $ | 280,000 | |||||
| 25 | % | $ | 290,000 | |||||
| 26 | % | $ | 300,000 | |||||
| 27 | % | $ | 310,000 | |||||
| 28 | % | $ | 320,000 | |||||
| 29 | % | $ | 330,000 | |||||
| 30 | % | $ | 340,000 | |||||
| 31 | % | $ | 350,000 | |||||
| 32 | % | $ | 360,000 | |||||
| 33 | % | $ | 370,000 | |||||
| 34 | % | $ | 380,000 | |||||
| 35 | % | $ | 390,000 | |||||
| 36 | % | $ | 400,000 | |||||
| 37 | % | $ | 410,000 | |||||
| 38 | % | $ | 420,000 | |||||
| 39 | % | $ | 430,000 | |||||
| 40 | % | $ | 440,000 | |||||
(c) The following is an example of a prior year EBITDA decrease Performance Bonus provided for
illustrative purposes only:
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Xxxxxxx Xxxxxx — Performance Bonus Calculation
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Assume that in 2004, Applicable Division experienced a decrease in year-over-year
EBITDA growth when compared to 2003. Assume also that in 2005, the year-over-
year EBITDA growth of the Applicable Division was 13%. On this example the Performance Bonus
payable for calendar year 2005 would be equal to $60,000.00.
3. Procedural Provisions.
If the Performance Bonus is paid for any calendar year, it is calculated through the last day
of the calendar year and generally will be payable to Employee within 90 days after the end of such
calendar year or, as soon as reasonably practicable after such time as the Company has completed
its internal accounting and audit processes for purposes of determining the relevant EBITDA
identified above (the “Bonus Pay Date”). Following the end of each calendar year, Employee shall
provide information and assistance as appropriate and necessary for purposes of completing the
relevant EBITDA. If the Company terminates employment without cause, Employee shall be eligible for
a pro-rata bonus as follows: If Employee’s termination date is on or between January 1 and May 31,
then Employee shall receive an amount equal to the prorated portion of the bonus earned in the
previous year. If Employee’s termination date is on or after June 1, he will receive payment of
the prorated portion of the bonus for the year in which is he is terminated, to be payable by March
31 of the following year.
The Company reserves the right to modify the Performance Bonus Plan due to specific business
circumstances such as business acquisition, business sale, or non-divestitures.
4. Definitions.
(a) “EBITDA.” As used herein, the term “EBITDA” shall mean, for any calendar year, the
earnings of the Applicable Divisions (excluding extraordinary non-recurring items) for such
calendar year (as determined by the Company’s chief financial officer in accordance with generally
accepted accounting principles) before deduction of interest, taxes, depreciation and amortization.
The parties expressly acknowledge and agree that due to circumstances such as business
acquisitions, business divestitures, accounting changes or non-operational circumstances,
additional modifications may be needed and appropriate for the definition of EBITDA as Company
determines in its good faith discretion, including, without limitation, conversion of EBITDA to
EBIT, with concomitant changes to the required percentage growth thresholds, in order to take
account of the depreciation associated with major acquisition or capital investments. By way of
example and without limiting the generality of the foregoing provisions, the parties acknowledge
that the application of the foregoing provisions might include pro forma accounting adjustments for
newly developed amphitheaters. The computation of the prior year increase in EBITDA must include
payment of employee bonuses.
(b) “Applicable Division.” As used herein, the term “Applicable Division” shall mean the NA
Music Live (including Motorsports) and NA Venues
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