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EXHIBIT 10.40
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of January 1, 1997 between Ticketmaster
Corporation, an Illinois Corporation (the "Company"), and Xxxxxxx Xxxxxxxx
("Executive").
W I T N E S S E T H:
WHEREAS, the Company is desirous of employing Executive, and Executive
is desirous of being employed by the Company, on the terms and subject to the
conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the premises, the mutual covenants
and agreements contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby mutually acknowledged, the parties
hereto agree as follows:
1. DEFINITIONS. The following terms shall have the indicated
meanings when used in this Agreement, unless the context requires otherwise:
(a) "BASE SALARY AMOUNT" shall mean $310,000 during the
first Contract Year (provided that such amount shall be reduced on a
pro rata basis if Executive's employment commences after January 20,
1997) and $320,000 during the second Contract Year.
(b) "BENEFIT PLAN" shall mean each vacation pay, sick
pay, retirement, welfare, medical, dental, disability, life insurance,
deferred compensation, incentive compensation, stock option or other
employee benefit plan, program or arrangement, if any.
(c) "BOARD OF DIRECTORS" shall mean the Board of
Directors of the Company.
(d) "CAUSE" shall have the meaning ascribed to that term
in Section 7.
(e) "COMMON STOCK" shall mean the Common Stock, no par value,
of Ticketmaster Group, Inc., the parent of the Company.
(f) "CONSULTING PERIOD" shall have the meaning ascribed
to that term in Section 9(a).
(g) "CONTRACT YEAR" shall mean each year during the term
hereof commencing February 1 and ending on the immediately following
January 31, except that the first Contract Year shall commence on
January 1, 1997 (or any other date on or before January 20, 1997 which
is mutually agreeable to the parties) and end on January 31, 1998.
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(h) "CUSTOMER" shall have the meaning ascribed to that
term in Section 9(d).
(i) "DISABILITY" shall have the meaning ascribed to that
term in Section 6(a).
(j) "DISABILITY PERIOD" shall have the meaning ascribed
to that term in Section 6(a).
(k) "PROPRIETARY INFORMATION OF THE COMPANY" shall have
the meaning ascribed to that term in Section 10(a).
(l) "TICKETMASTER BUSINESSES" shall have the meaning
ascribed to that term in Section 9(b).
2. EMPLOYMENT. The Company hereby employs Executive, and
Executive hereby accepts employment with the Company, on the terms and subject
to the conditions set forth herein. Executive hereby represents and warrants
to the Company that the execution and performance of this Agreement by him will
not conflict with, violate or breach any other agreement, written or oral, to
which he may be or may have been a party, including, without limitation, any
employment agreement or consulting agreement, and that he is otherwise under no
duty or obligation to any third party that would restrict his ability to fully
perform this Agreement.
3. TERM OF EMPLOYMENT. The term of employment hereunder shall
commence on January 1, 1997 (or any other date on or before January 20, 1997
which is mutually agreeable to the parties) and end on January 31, 1999,
subject to early termination as herein provided.
4. POSITION AND DUTIES. Executive shall serve as the Senior
Vice-President - Marketing of the Company, and will work out of the Company's
offices located in the Los Angeles, California area (subject to such travel as
may be necessitated by his position with the Company). Subject to the
authority of the Board of Directors, the Chief Executive Officer and the Chief
Operating Officer of the Company, the Executive shall have all of the powers
and duties incident to the office of Senior Vice-President - Marketing and such
other powers and duties as may from time to time be prescribed by the Board of
Directors, the Chief Executive Officer or the Chief Operating Officer of the
Company. Executive agrees to serve without further compensation, if elected or
appointed thereto, as an officer or a director of any of the Company's domestic
and foreign subsidiaries and affiliates.
5. EXCLUSIVE DUTIES. During Executive's employment by the
Company, Executive shall devote his entire working time, attention and energies
to the business of the Company and will not take any actions of the kind
described in Sections 9(b), 9(c) and 9(d).
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6. COMPENSATION AND OTHER BENEFITS.
(a) BASE SALARY. During each Contract Year of the term
hereof, the Company shall pay to Executive the Base Salary Amount.
The Base Salary Amount shall be paid to Executive in accordance with
the Company's regular payroll practices with respect to senior
management compensation.
In the event that Executive shall become disabled as a result
of bodily injury or physical or mental illness (whether or not
occupational) to such extent that in the sole opinion of the Board of
Directors, based upon competent medical advice, he can no longer
perform the duties of Senior Vice- President - Marketing of the
Company (a "Disability"), the Company shall only be obligated to
continue to pay the Base Salary Amount to Executive for the 120-day
period immediately following the date of Disability (the "Disability
Period"). The right to receive salary payments during the Disability
Period, if applicable, shall survive any termination of employment by
virtue of Disability pursuant to Section 7.
(b) ANNUAL PERFORMANCE BONUSES. During each Contract
Year, the Company shall pay Executive an annual performance bonus as
determined by the Board of Directors or its Compensation Committee in
its sole discretion, the determination of which shall be based upon
such standards, guidelines and factual circumstances as the Board of
Directors or its Compensation Committee deems relevant, including,
without limitation, the recommendation of the Chief Executive Officer
of the Company, the operating results for the Company during such
Contract Year, the importance of the efforts of Executive in achieving
such operating results and the achievement by the Company and/or
Executive of performance goals previously established by the Board of
Directors or its Compensation Committee for such Contract Year;
provided, however, that in no event shall the bonus for any full
Contract Year of the term hereof be less than $60,000.
(c) EXPENSES. Executive shall be entitled to receive
prompt reimbursement from the Company for all documented business
expenses incurred by him in the performance of his duties hereunder,
provided that Executive properly accounts therefor in accordance with
the Company's reimbursement policy, including, without limitation, the
submission of supporting evidence as reasonably requested by the
Company.
(d) FRINGE BENEFITS. During the term hereof, Executive
shall be entitled (i) to participate in and receive benefits under all
of the Company's Benefit Plans generally available to senior
management of the Company and (ii) to receive an automobile allowance
in the amount of $750 per month.
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(e) VACATIONS. During the term hereof, Executive shall
be entitled to sick leave and paid holidays consistent with the
Company's sick leave and holiday policy for senior management and up
to three weeks paid vacation during each Contract Year (or such other
vacation time as is consistent with the Company's policy for senior
management).
(f) STOCK OPTIONS. Pursuant to the terms and conditions of
the Ticketmaster Stock Plan (the "Stock Plan"), as heretofore amended
and restated, Executive shall be entitled to receive non-statutory
stock options to purchase 40,000 shares of Common Stock at an exercise
price per share equal to the greater of (i) $14.50 or (ii) the "Fair
Market Value" of a share of Common Stock as determined in accordance
with the Stock Plan. The stock options will only be exercisable to
the extent that Executive is then vested in such stock options.
Executive shall vest in 10,000 of the stock options on January 31,
1998 and the remaining 30,000 stock options shall vest monthly pro
rata over the 36-month period immediately following January 31, 1998.
7. TERMINATION. The Company or Executive may terminate the
employment of Executive hereunder upon the occurrence of a Disability (as
defined in Section 6(a)) for a period of no less than 120 days during any
consecutive twelve-month period. The Company may also terminate the employment
of Executive hereunder upon Executive's death or for Cause. For purposes
hereof, "Cause" shall mean (i) fraud, theft, misappropriation of funds or
conviction of a felony, (ii) Executive's engagement in illegal conduct tending
to place Executive or the Company in disrepute, (iii) dereliction or gross
misconduct in Executive's performance of his duties as an employee of the
Company or the failure of Executive to perform his duties in a manner
consistent with the instructions of the Board of Directors, the Chief Executive
Officer or the Chief Operating Officer of the Company or (iv) violation by
Executive of any of his material covenants contained in this Agreement,
including, without limitation, Section 10.
8. DEVELOPMENTAL RIGHTS. Executive agrees that any developments
by way of invention, design, copyright, trademark or other matters which may be
developed or perfected by him during the term hereof, and which relate to the
business of the Company or its subsidiaries or affiliates, shall be the
property of the Company without any interest therein by Executive, and he will,
at the request and expense of the Company, apply for and prosecute letters
patent thereon in the United States or in foreign countries if the Company so
requests, and will assign and transfer the same to the Company together with
any letters patent, copyrights, trademarks and applications therefor; provided,
however, that the foregoing shall not apply to an invention that Executive
develops entirely on his own time without using the Company's equipment,
supplies,
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facilities or trade secret information, except for those inventions that
either:
(a) relate at the time of conception or reduction to
practice of the invention to the Company's business, or actual or
demonstrably anticipated research or development of the Company; or
(b) result from any work performed by Executive for the
Company.
9. CONSULTING.
(a) CONSULTING SERVICES. During the twelve month period
commencing immediately upon the termination of Executive's employment
for any reason (other than Executive's death) (the "Consulting
Period"), Executive shall be available, as an independent consultant,
for consultation with the Company and its subsidiaries and affiliates
concerning their general operations and the industries in which they
engage in business. In addition, during the Consulting Period,
consultant will aid, assist and consult with the Company and its
subsidiaries and affiliates with respect to their dealings with
clients and the enhancement of their recognition and reputation.
During the Consulting Period, Executive shall devote such time and
energies to the affairs of the Company as may be reasonably required
to carry out his duties hereunder without jeopardizing Executive's
then full-time, non-Ticketmaster Business employment opportunities;
provided, however, that Executive shall not be obligated to devote
more than 50 hours to the performance of such duties. In
consideration of Executive's consulting services, and in consideration
of Executive's covenants contained in this Section 9, the Company
shall pay to Executive $15,000 during the Consulting Period, payable
in equal monthly installments. The Company further agrees to
reimburse Executive for all reasonable and necessary business expenses
incurred by Executive in the performance of his consulting services in
accordance with the Company's reimbursement policy, including, without
limitation, the submission of supporting evidence as reasonably
required by the Company.
(b) COVENANT NOT TO COMPETE. During the Consulting
Period, Executive shall not, without the prior written consent of the
Company, directly or indirectly engage in or assist any activity which
is the same as, similar to or competitive with the Ticketmaster
Businesses (other than on behalf of the Company or any of its
subsidiaries or affiliates) including, without limitation, whether
such engagement or assistance is as an officer, director, proprietor,
employee, partner, investor (other than as a holder of less than 5% of
the outstanding capital stock of a publicly traded corporation),
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guarantor, consultant, advisor, agent, sales representative or other
participant, anywhere in the world that the Company or any of its
subsidiaries or affiliates has been engaged, including, without
limitation, the United States, Canada, Mexico, England, Ireland,
Scotland, Europe and Australia. Nothing herein shall limit
Executive's ability to own interests in or manage entities which sell
tickets as an incidental part of their primary businesses (e.g. cable
networks, on-line computer services, sport teams, arenas, hotels,
cruise lines, theatrical and movie productions and the like) and which
do not hold themselves out generally as competitors of the Company and
its subsidiaries and affiliates. The "Ticketmaster Businesses" shall
mean the computerized sale of tickets for sporting, theatrical,
cinematic, live theatrical, musical or any other events on behalf of
various venues and promoters through distribution channels currently
being utilized by the Company or any of its subsidiaries or affiliates
(as such term is defined in Rule 405 of Regulation C promulgated under
the Securities Act of 1933, as amended).
(c) SOLICITATION OF EMPLOYEES. During the Consulting
Period, Executive shall not (i) directly or indirectly induce or
attempt to induce (regardless of who initiates the contact) any person
then employed (whether part-time or full-time) by the Company or any
of its subsidiaries or affiliates, whether as an officer, employee,
consultant, adviser or independent contractor, to leave the employ of
the Company or to cease providing or otherwise alter the services then
provided to the Company or to any of its subsidiaries or affiliates or
(ii) in any other manner seek to engage or employ any such person
(whether or not for compensation) as an officer, employee, consultant,
adviser or independent contractor in connection with the operation of
any business which is the same as or similar to any of the
Ticketmaster Businesses.
(d) NON-SOLICITATION OF CUSTOMERS. During the Consulting
Period, Executive shall not solicit any Customers of the Company or
any of its subsidiaries or affiliates or encourage (regardless of who
initiates the contact) any such Customers to use the facilities or
services of any Competitor of the Company or any of its subsidiaries
or affiliates. "Customer" shall mean any person who engages the
Company or any of its subsidiaries or affiliates to sell, on its
behalf as agent, tickets to the public.
10. CONFIDENTIALITY. Executive shall not at any time during or
after termination of employment disclose (except as may be required by law) or
use, except in the pursuit of the business of the Company or any of its
subsidiaries or affiliates, any Proprietary Information of the Company.
"Proprietary Information of the Company" means all information known or
intended to be known
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only to employees of the Company or any of its subsidiaries or affiliates in a
confidential relationship with the Company or any of its subsidiaries or
affiliates relating to technical matters pertaining to the Ticketmaster
Businesses, but shall not include any information within the public domain.
Executive agrees not to remove any documents, records or other information from
the premises of the Company or any of its subsidiaries or affiliates containing
any such Proprietary Information, except in the pursuit of the business of the
Company or any of its subsidiaries or affiliates, and acknowledges that such
documents, records and other information are the exclusive property of the
Company or its subsidiaries or affiliates. Upon termination of Executive's
employment, Executive shall immediately return all Proprietary Information of
the Company and all copies thereof to the Company.
11. GENERAL PROVISIONS.
(a) EXPENSES. All costs and expenses incurred by either
of the parties in connection with this Agreement and any transactions
contemplated hereby shall be paid by that party.
(b) NOTICES. All notices, demands and other
communications hereunder shall be in writing and shall be given or
made (and shall be deemed to have been duly given or made upon
receipt) by delivery in person, by overnight courier service, by
cable, by telecopy, by telegram, by telex or by registered or
certified mail to the respective parties at the following addresses
(or at such other address for a party as shall be specified in a
notice given in accordance with this Section 11(b)):
(i) If to the Company:
Ticketmaster Corporation
0000 Xxxxxxxx Xxxxxxxxx
0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: President
Telecopy No.: (000) 000-0000
With a copy to:
Xxxx, Xxxxxx & Xxxxxxxxx
Xxx Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx Xxxxx Gerber
Telecopy No.: (000) 000-0000
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(ii) If to Executive:
Xxxxxxx Xxxxxxxx
0000 X. Xxxxxx
Xxx Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
With a copy to:
Xxxxxx Xxxxxxx
0000 Xxxxxxxx Xxxx.
Xxxxx 0000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Telecopy No.: (000) 000-0000
(c) HEADINGS. The descriptive headings contained in this
Agreement are for convenience of reference only and shall not affect
in any way the meaning or interpretation of this Agreement.
(d) SUCCESSORS; BINDING AGREEMENT. This Agreement shall
be binding upon and inure to the benefit of the parties hereto and
their respective heirs, devisees, legatees, executors, administrators,
successors and personal or legal representatives. If Executive is
domiciled in a community property state or a state that has adopted
the Uniform Marital Property Act or equivalent or if Executive is
domiciled in a state that grants to his spouse any other marital
rights in Executive's assets (including, without limitation, dower
rights or a right to elect against Executive's will or to claim a
forced share of Executive's estate), this Agreement shall also inure
to the benefit of, and shall also be binding upon, his spouse. If
Executive should die while any amounts would still be payable to his
hereunder if he had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms
of this Agreement to Executive's designee or, if there be no such
designee, to Executive's heirs, devisees, legatees or executors or
administrators of Executive's estate, as appropriate.
(e) SEVERABILITY. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under existing or future
laws effective during the term of this Agreement, such provisions
shall be fully severable, the Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had
never comprised a part of this Agreement, and the remaining provisions
of this Agreement shall remain in full force and effect and shall not
be affected by the illegal, invalid or unenforceable provision or by
its severance from this Agreement. Furthermore, in lieu of such
illegal, invalid or unenforceable provision, there shall
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be added automatically as part of this Agreement a provision as
similar in terms to such illegal, invalid or unenforceable provision
as may be possible and be legal, valid and enforceable.
(f) ENTIRE AGREEMENT. This Agreement (together with any
applicable option agreements pursuant to Section 6(f)) constitutes the
entire agreement of the parties hereto with respect to the subject
matter hereof and supersedes all prior agreements and understandings,
both written and oral, between the Company and Executive with respect
to the subject matter hereof.
(g) ASSIGNMENT. This Agreement and the rights and duties
hereunder are not assignable by Executive. This Agreement and the
rights and duties hereunder may not be assigned by the Company without
the express written consent of Executive (which consent may be granted
or withheld in the sole discretion of Executive), except that such
consent shall not be required in order for the Company to assign this
Agreement or the rights or duties hereunder to an affiliate (as such
term is defined in Section 9(b)) of the Company or to a third party in
connection with the merger or consolidation of the Company with, or
the sale of all or substantially all of the assets or business of the
Company to, that third party.
(h) AMENDMENT; WAIVER. This Agreement may not be amended
or modified except by an instrument in writing signed by, or on behalf
of, the Company and Executive. Either party to this Agreement may (a)
extend the time for the performance of any of the obligations or other
acts of the other party or (b) waive compliance with any of the
agreements or conditions of the other party contained herein. Any
such extension or waiver shall be valid only if set forth in an
instrument in writing signed by the party to be bound thereby. Any
waiver of any term or condition shall not be construed as a waiver of
any subsequent breach or a subsequent waiver of the same term or
condition, or a waiver of any other term or condition, of this
Agreement. The failure of any party to assert any of its rights
hereunder shall not constitute a waiver of any such rights.
(i) GOVERNING LAW. This Agreement shall be governed by,
and construed in accordance with, the laws of the State of Illinois,
applicable to contracts executed in and to be performed entirely
within that state.
(j) JURISDICTION AND VENUE. The parties hereto agree
that all actions or proceedings initiated by either party hereto and
arising directly or indirectly out of this Agreement which are brought
pursuant to judicial proceedings shall be litigated in a Federal or
state court located in the
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State of California. The parties hereto expressly submit and consent
in advance to such jurisdiction and agree that service of summons and
complaint or other process or papers may be made by registered or
certified mail addressed to the relevant party at the address to which
notices are to be sent pursuant to Section 11(b) of this Agreement.
The parties hereto waive any claim that a Federal or state court
located in the State of California is an inconvenient forum or an
improper forum based on lack of venue.
(k) EQUITABLE RELIEF. Executive acknowledges that the
covenants contained in Sections 9 and 10 are reasonable and necessary
to protect the legitimate interests of the Company, that in the
absence of such covenants the Company would not have entered into this
Agreement, that any breach or threatened breach of such covenants will
result in irreparable injury to the Company and that the remedy at law
for such breach or threatened breach would be inadequate.
Accordingly, the Executive agrees that the Company, in addition to any
other rights or remedies which it may have, shall be entitled to seek
such equitable and injunctive relief as may be available from any
court of competent jurisdiction to restrain the Executive from any
breach or threatened breach of such covenants.
(l) ATTORNEYS' FEES. If any legal action or other
proceeding is brought for the enforcement of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys'
fees and other costs incurred in that action or proceeding, in
addition to any other relief to which it may be entitled.
(m) COUNTERPARTS. This Agreement may be executed in one
or more counterparts, and by the parties hereto in separate
counterparts, each of which when executed shall be deemed to be an
original while all of which taken together shall constitute one and
the same instrument.
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IN WITNESS WHEREOF, the Company and Executive have executed this
Agreement as of the date and year first written above.
TICKETMASTER CORPORATION
By: /s/ XXXXXXX X. XXXXX, PRES.
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Title: President
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/s/ XXXXXXX XXXXXXXX
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Xxxxxxx Xxxxxxxx
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