AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.4
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT AGREEMENT, made as of January 1, 2009 (the “Restatement
Date”), between CKX, Inc., a Delaware corporation (the “Employer”), and Xxxxxx X.
Xxxxxx (the “Executive”).
WHEREAS, the Employer and the Executive entered into that certain Employment Agreement, dated
as of February 8, 2005, between the Employer and the Executive, which was amended and restated as
of January 10, 2008 (as so amended and restated, the “Employment Agreement”);
WHEREAS, the Board of Directors of the Employer (the “Board”) originally determined
that it is in the Employer’s interest to enter into the Employment Agreement with the Executive in
order to secure, and in the future to be assured of, the Executive’s abilities, services, and
judgment as a member of senior management of the Employer, upon the terms and provisions and
subject to the conditions stated in this agreement; and
WHEREAS, the Board and the Executive desire to amend and restate the Employment Agreement as
of the Restatement Date in order to comply with Section 409A of the Internal Revenue Code of 1986
(as amended from time to time, the “Code”) and final regulations issued under Section 409A.
NOW, THEREFORE, the Employer and the Executive agree as follows:
1. Employment. Upon the terms and subject to the conditions of this agreement, the
Employer employs the Executive, and the Executive accepts employment.
2. Term; Dates. The term of the Executive’s employment shall commence on February 8,
2005 and continue until the fifth annual anniversary thereof (the “Employment Agreement
Term”), unless earlier terminated or renewed in accordance with this agreement.
2.1 This agreement refers to the dates defined in this section, as follows: (i) the date of
commencement of employment is the “Effective Date”; (ii) the period of time during which the
Executive is an employee of the Employer pursuant to and in accordance with the terms and
provisions of this agreement is hereinafter referred to as the “Term”; and (iii) the last date of
employment is the “Expiration Date.”
3. Executive’s Position, Duties, and Authority. The Employer shall employ the
Executive, and the Executive shall serve as Executive Vice President and Chief Financial Officer of
the Employer, and in such other positions with the Employer and its subsidiaries that are
reasonably acceptable to the Executive. The Executive shall have executive duties, functions,
authority, and responsibilities commensurate with the office or offices he from time to time holds
with the Employer in a corporation that is public, subject, in accordance with applicable law, to
the supervision and direction of the Board.
3.1 During the Term and prior to the Expiration Date, the Employer shall use its best efforts
to have the Executive nominated to serve on the Board or other governing body of the Employer. If
the Employer, including any successor, forms any Executive Committee of the Board, Office of the
Chairman, or similar senior management committee or group which is approved or otherwise recognized
by the Board during the Term, the Executive shall be a member of such committee or group. The
Executive shall have no obligation to serve or continue to serve: (i) on the Board or any
committee of the Board; or (ii) as an officer or director of any subsidiary or affiliate of the
Employer, in the event that the Employer or any such subsidiary or affiliate of the Employer or any
of their respective successors fails to provide and maintain to and on behalf of the Executive
indemnification rights no less beneficial to the Executive than those provided by Section 10 of
this agreement and, to the extent more beneficial to the Executive now or in the future, every
right to indemnification and defense of an officer or director of any entity formed and existing
under the laws of the State of Delaware. The future occurrence of any event described in the
preceding sentence, or the Employer’s failure within a reasonable time to reimburse the Executive
pursuant to and in accordance with the terms and provisions in Section 8 for all expenses
reasonably incurred in the course of fulfilling his duties and responsibilities as a director
and/or officer of the Employer, any subsidiary or affiliate of the Employer or any of their
respective successors, additionally, and immediately, shall constitute a Constructive Termination
of the Executive without Cause as such term is defined in this agreement.
3.2 The Executive agrees to tailor his conduct with the written employment policies which the
Employer generally applies to all of its employees, and additionally agrees that the Employer may
make necessary and reasonable amendments to its policies from time to time during the Term, to the
extent not inconsistent with the terms of this agreement. The Executive and the Employer agree
that these policies supplement, but do not amend or otherwise modify, the express terms of this
agreement in the manner authorized by Section 17.5 of this agreement.
3.3 The Executive acknowledges that during the Term, the Employer may, without the necessity
of obtaining the Executive’s consent, implement one or more corporate reorganizations for
financial, tax, or related business reasons which do not constitute a Change in Control as such
event is defined in Section 12.2 of this agreement. The Executive agrees that, so long as any such
reorganization does not constitute a Change in Control, the reorganized Employer shall be deemed
the Employer for all purposes in connection with this agreement, and without a requirement that
additional consideration be delivered to the Executive in connection with the reorganization.
4. Principal Occupation. The Executive shall devote his working time to the business
and affairs of the Employer and to the fulfillment of his duties under this agreement in a diligent
and competent fashion, consistent with industry standards.
4.1 The Employer acknowledges and agrees that during the Term:
(a) the Executive may wish to continue, or commence, service as a director and officer (or in
a similar capacity) on the governing body of other business entities whose business is not
competitive with that of the Employer or any of its subsidiaries; and
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(b) the Executive agrees that his service as described in Section 4.1(a) shall be subject to
the approval of the Employer’s Board, so long as the Board’s discretion is not applied
unreasonably.
Where the Board declines to approve the commencement of the Executive’s service or his
continued service, or the Board withdraws its approval for the continuation of the Executive’s
service as described in Section 4.1(a), the Executive agrees that he will resign from such
position, or withdraw himself from consideration. The Executive and Employer agree that nothing in
this Section 4.1 applies to the Executive’s membership or contribution of his non-working time or
services, in a non-remunerative capacity, to any: charitable or educational organization,
foundation, or association; political organization or campaign; religious group, foundation, or
organization; or non-profit trade, professional, community, or recreational organization or club,
so long as the purpose or aim of any such organization presents no conflict with the business of
the Employer, as determined by the Board.
4.2 The Employer acknowledges and agrees that during the Term, the Executive may devote a
portion of his business time to personal investments and outside business commitments, provided,
however that: (a) such activities do not conflict with the business of Employer, (b) such
activities do not interfere, directly or indirectly, with the performance by the Executive of his
obligations under this Agreement, and (c) such activities do not result in a breach by the Employer
of any non-competition or any other similar type of agreement to which the Employer, or its
officers or directors, may be a party.
4.3 No provision of this agreement shall be construed to prohibit the Executive’s: (a)
acquisition, ownership, or trading, including without limitation the Executive’s indirect
ownership, of less than five percent (5%) of the issued and outstanding stock (or comparable bonds,
options, derivatives, or negotiable instruments) of a business entity having securities publicly
traded anywhere in the world; or (b) passive ownership of stock, partnership interests, or
comparable ownership interests or securities in any for-profit private business entity that is not
directly competitive with the business of the Employer or any of its subsidiaries. The Employer
additionally agrees that nothing in this agreement shall operate to prohibit the Executive’s
acceptance of a testamentary gift, bequest, or its equivalent, nor the Executive’s retention of any
such gift, bequest, or its equivalent following its delivery, so long as the Executive retains the
interest(s) solely for investment purposes.
4.4 In addition to the foregoing, the Executive may spend a portion of his time providing
services for Xx. Xxxxxxxxx, the Chief Executive Officer of Employer, and/or MJX Asset Management
LLC (collectively the “MJX Services”). The compensation committee of the Board (the
“Compensation Committee”) will review the amount of time the Executive spends providing MJX
Services on a quarterly basis. If the Compensation Committee determines that the Executive is
engaging in MJX Services at a level whereby he is being compensated by the Employer for time spent
on such services, then the Compensation Committee will require that Executive reduce the level of
MJX Services being performed. The Compensation Committee will also require the recipient of such
MJX Services to reimburse Employer for the compensation attributable to the time spent thereon
during the previous year.
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4.5 Notwithstanding anything contained in this Section 4, Executive shall, and shall be
entitled to, accept the positions of Chief Financial Officer and Director of FX Real Estate and
Entertainment Inc. (“FXREE”) and to take all actions and provide all services for and on
behalf of FXREE as shall be necessary and appropriate thereto. Executive acknowledges that
Employer is both consenting to and requiring such appointment in furtherance of Employer’s
obligations under that certain Shared Services Agreement dated as of December 31, 2007 (the
“Shared Services Agreement”) by and between the Employer and FXREE. In connection
therewith, Executive agrees to provide, when requested by Employer, a reasonable estimate of the
allocation of his time spent in furtherance of his duties for FXREE to allow for an accurate
accounting of costs under Section 3.1(a) of the Shared Services Agreement.
5. Location of Employment. Unless the Executive otherwise consents in writing, the
usual place for the performance of his services shall be the Employer’s principal office located in
the Borough of Manhattan, New York, New York, or such other location within Manhattan or Nassau
County, New York, as established by the Employer.
6. Base Salary. During the Term, the Employer shall pay or cause to be paid to the
Executive an initial annualized base salary, payable in equal installments during each year of the
Term (the “Base Salary”) equal to (x) Four Hundred Fifty Thousand Dollars ($450,000) (the
“Base Amount.”) less (y) the value of all fringe benefits, perquisites or other amounts
(“Perquisites”) that the Employer and the Executive agree at the beginning of each year
will be provided to Executive for such year (whether or not paid in cash) and that the Employer is
required to report as compensation to the Executive on Form W-2. If the total of the Base Salary
plus the Perquisites received by the Executive in any year of the Term exceed the Base Amount, an
amount equal to the excess compensation received by the Executive for such year shall be deducted
on a pro-rata basis from the Executive’s Base Salary during the first two and one-half months of
the following year. The Base Amount shall be increased upon each anniversary of the date of this
agreement by an amount equal to the greater of: (a) five percent (5%) of the Base Amount then in
effect; or (b) the product derived by multiplying: (i) the Base Amount then in effect; by (ii) the
percentage increase in the Consumer Price Index published by the federal Bureau of Labor Statistics
for the New York, New York metropolitan area during the previous twelve (12) full calendar months.
The Board additionally shall review the Executive’s Base Amount at least annually and the Board may
increase, but not decrease, the Base Amount in an amount greater than the increase required by the
preceding sentence.
6.1 The Executive authorizes the Employer to deduct from the Base Salary and any other
consideration payable in cash to the Executive pursuant to this agreement all tax withholdings, tax
related deductions, or other governmentally imposed charges against income as may be required by
law.
6.2 The Executive acknowledges that his attendance and participation in executive retreats,
seminars, motivational or instructional programs, and business, corporate, and employee relations
training may be requested by the Employer during the Employment Agreement Term. In such event, the
Executive agrees that he in good faith will make reasonable efforts to attend and participate in
such events, provided that the Executive will not be required to attend or participate in more than
two such events in any calendar year.
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6.3 The Executive shall be eligible to accrue the equivalent of six (6) weeks vacation during
each full year of the Term, in accordance with the accrual methodology and vacation day accrual
limitations in the vacation leave policy applied by the Employer to its employees, except
that the Employer will credit the Executive for his full annual accrual at the commencement
of each full year of the Term, i.e., not on a proportional basis during the course of each
year of the Term. The Executive additionally shall be entitled to remain away from work for as
many or as few days as required by the Executive due to the Executive’s bona fide illness, subject
to the provisions of Section 13 of this agreement. The Executive may observe any legal holidays,
other holidays recognized by the Employer, and religious holidays that the Executive deems
appropriate, in the sound exercise of his business judgment.
7. Bonus and Option Grants.
7.1 The Executive shall be eligible to receive an annual discretionary bonus payable in any
combination of cash, stock or restricted stock, stock options, and/or other consideration
beneficial to the Executive during the continuance of the Executive’s employment hereunder (the
“Bonus”), after and pursuant to the affirmative recommendation of the Compensation
Committee of the Board. The Employer’s decision to make or to not make a discretionary bonus
payment to the Executive in any year (including, without limitation, the consideration to be
received or methodology applied by the Employer to a discretionary bonus eligibility determination
in any year) shall have no bearing on the Executive’s eligibility to earn a bonus in any succeeding
year, nor shall the amount, form, or payment timing of any such discretionary bonus in any year
have any bearing on any aspect of a discretionary bonus determination in any subsequent year.
8. Expenses.
8.1 The Employer shall reimburse the Executive for all reasonable expenses actually incurred
or paid by the Executive during the Term in the performance of the Executive’s services. The
Employer shall make reimbursement within a reasonable time following the Executive’s presentation
of expense statements, vouchers, receipts, or such other supporting information as the Employer
reasonably may require from the Executive. The Executive acknowledges that the Employer’s policies
regarding the documentation of expenses for which reimbursement is sought may change from time to
time, and the Executive agrees that he will comply with the Employer’s reasonable documentation
requirements; provided that each and every reimbursement due hereunder shall be requested
and paid not later than two years after being incurred.
8.2 The Executive at all times shall be entitled to: travel in first class seating (or its
equivalent) on a reputable airline when the Executive travels by air in connection with the
Employer’s business; to hotel accommodations while outside New York on business at a full-service
hotel offering a hotel room with sufficient space, furnishings, and technological facilities and
appointments for the Executive’s comfortable and productive work in the room; and private car
service when required to travel in connection with the Employer’s business, attend business
meetings, or work or attend functions outside of normal business hours or on weekends or holidays.
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8.3 In the event that the Employer’s business requirements cause or require the Executive to
cancel personal vacation or travel plans for which the Executive or any member of his family is
unable to obtain a full refund of any deposit or comparable amount expended by the Executive in
advance, the Employer agrees that it will reimburse to the Executive, in accordance with the
process described in Section 8.1, the full amount not refunded or refundable to the Executive or
any such family member.
9. Benefits.
9.1 During the Term, the Executive shall be eligible to participate in any pension, profit
sharing, incentive stock option, stock purchase, stock grant program or plan, and retirement
savings program or plan established by the Employer or any of its subsidiaries for which the
Executive provides services hereunder (“Participating Subsidiaries”), including, without
limitation, any such program or plan offered by the Employer or Participating Subsidiaries to its
executive or non-executive employees. The Executive additionally shall be eligible to participate
in any group life insurance, hospitalization, medical, health and accident, dental, disability, or
similar plan or program made available by the Employer or Participating Subsidiaries to its
executive or non-executive employees. The Executive acknowledges that his participation in any
benefit plan described in this Section 9.1 may require, where required from other senior executives
of the Employer or Participating Subsidiaries, the Executive’s co-payment of a periodic premium as
a deduction from the Base Salary payable to him. The Executive additionally acknowledges that the
Executive’s actual ability to participate in any program, plan, or other benefit opportunity in
which the Executive otherwise is eligible to participate ultimately may be determined and governed
by the terms and conditions of a third-party provider’s plan or program, and the Executive affirms
that any third-party’s decision denying the Executive’s participation in a particular program or
plan, the provision of coverage or a benefit in respect of a particular circumstance or expense, or
a comparable decision adversely affecting the Executive shall not constitute a breach of this
agreement by the Employer, so long as the Employer does not offer, designate, or select a program
or plan with the actual intention of excluding the Executive’s eligibility or participation in the
opportunity.
9.2 The Executive acknowledges that the Employer may, as it deems appropriate, seek, obtain,
and maintain during all or part of the Term insurance connected with the life of the Executive, and
for the benefit of the Employer. In the event that the Employer elects to do so, the Executive
agrees: to provide any medical information required by the insurer issuing such coverage; to submit
no more frequently than semi-annually to any medical examination required by the insurer in
connection with the granting or renewal of such coverage; and to otherwise cooperate reasonably
with the Employer’s attempts to obtain such coverage. Any insurer’s rejection of an application
submitted by the Employer connected with this Section 9.2 in no event shall constitute a breach of
this agreement by the Executive, and the Employer shall not request nor in another manner seek any
information from the Executive, the insurer, or any other person(s) connected with the rejection.
9.3 The Employer agrees that in the event of the Executive’s death during the Term, the
Employer will pay to the Executive’s estate the following, which shall be distributed in accordance
with the Executive’s will or testamentary plan, as directed by any court having
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jurisdiction over such estate, or as directed by any duly appointed administrator or executor
of the Executive’s estate:
(a) all earned but unpaid Base Salary at the time of the Executive’s death, plus an
amount equal to three (3) times the Base Salary in effect at the time of the Executive’s death,
with the Employer making both of such payments as soon as practicable but not later than the March
15th immediately after the end of the calendar year in which Executive’s death occurs;
(b) the full costs relating to the continuation of any group health, dental, and life
insurance program or plan provided through the Employer in which the Executive participated at the
time of his death, and through which coverage was provided to any dependent(s) of the Executive at
the time of the Executive’s death, for a period of three (3) years following his death, without
regard to the availability or expiration of any continuation option or feature provided by the
program(s) or plan(s), or as otherwise provided to a lesser extent by applicable law at the time of
the Executive’s death; and
(c) the Employer additionally shall cause any stock options, restricted stock or other
equity-based instruments that previously were issued to the Executive to vest fully and shall take
all action necessary to cause the assignment or transfer of such options, securities or other
instruments as directed by the Executive’s will or testamentary plan, or as directed by any duly
appointed administrator or executor of the Executive’s estate.
The Executive acknowledges that the Employer at its option may, in the sole exercise of its
discretion, acquire and maintain a current whole life insurance policy (“Policy”) on the
life of the Executive from a reputable carrier which provides substantially equivalent benefits on
behalf of the Executive in respect of the amounts provided in Sections 9.3(a) and (b). Such
Policy, if acquired and maintained, is intended to meet the Employer’s obligations to the Executive
pursuant to Sections 9.3(a) and (b). The Executive shall have no preferred claim on, or any
beneficial ownership interest in, the Policy which will be subject to the claims of the Executive’s
general creditors under federal and state law in the event of insolvency. While the Executive is
an employee of the Employer, the Employer shall be the named beneficiary of the Policy and the
Policy shall not be assignable. However, upon termination without Cause, Constructive Termination
without Cause or termination following a Change in Control (all as defined in Section 12 below),
the Employer shall assign the Policy to the Executive and, upon the assignment, the Executive shall
have all rights with respect to the Policy. Where the Employer elects to seek such insurance
coverage, the Executive agrees to provide any medical information required by the insurer issuing
such coverage; to submit to any medical examination required by the insurer in connection with the
granting or renewal of such coverage; and to otherwise cooperate reasonably with the Employer’s
attempts to obtain such coverage. Any insurer’s rejection of an application submitted by the
Employer in connection with this Section 9.3 in no event shall relieve the Employer of any of its
obligations hereunder.
10. Indemnification. The Employer shall indemnify the Executive against all losses,
claims, expenses, or other liabilities of any nature arising by reason of the fact that he: (a) is
or was a director, officer, employee, or agent of the Employer or any of its subsidiaries or
affiliates; or (b) while a director, officer, employee or agent of the Employer or any of its
subsidiaries or affiliates, is or was serving at the request of the Employer as a director,
officer, partner, venturer,
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proprietor, trustee, employee, agent or similar functionary of another corporation,
partnership, joint venture, trust, employee benefit plan or other entity, in each case to the
fullest extent permitted under the Delaware General Corporation Law, as the same exists or may
hereafter be amended. Without limiting the generality of the foregoing, the Executive shall be
entitled in connection with his employment and in connection with his services as an officer and
director of the Employer to the benefit of the provisions relating to indemnification and
advancement of defense costs and expenses contained in the bylaws and certificate of incorporation
of the Employer, as the same in the future may be amended (not including any amendments or
additions that limit or narrow, but including any that add to or broaden, the protection afforded
to the Executive), to the fullest extent permitted by applicable law. The Employer shall advance
to the Executive all costs of investigation or defense incurred by the Executive in connection with
any pending or threatened claim for which the Executive may be entitled to indemnification
hereunder, provided that the Executive shall agree to return to the Employer any such reimbursed
amounts, without interest, if it is determined in a final, non-appealable judgment by a Court of
competent jurisdiction that the Executive is not entitled to indemnification by the Employer for
losses incurred in connection with such claim. The indemnification obligations of the Employer
shall survive from the Effective Date of this agreement and continue until three (3) months after
the expiration of any applicable statute of limitations with respect to any claim made against the
Executive for which the Executive is or may be entitled to indemnification (the “Survival
Period”), and shall survive after the Survival Period with respect to any indemnification claim
as to which the Employer has received notice on or prior to the end of the Survival Period. The
Employer’s belief regarding a statute of limitations applicable to a claim, any position taken by
the Employer in response to a claim, or the determination of any judicial, quasi-judicial, or
arbitral body in connection with a claim and any statute of limitations applicable to a claim(s)
shall in no event relieve the Employer from its obligation to indemnify the Executive. The
Employer shall prepay in full, and maintain fully during the Survival Period for the benefit of the
Executive, on an “occurrence” basis, a directors and officers errors and omissions insurance
policy, or a similar insurance policy(ies), providing coverage from a financially reputable
carrier, in form and substance reasonably acceptable to the Executive. Anything in this agreement
to the contrary notwithstanding, this Section 10 shall survive the termination of this agreement
for any reason.
11. Confidential Information. The Executive acknowledges that his employment will
fully familiarize the Executive with the trade secrets and confidential and proprietary information
of the Employer (the “Confidential Information”). Examples of the Employer’s Confidential
Information include, without limitation, information regarding the Employer’s costs, profits,
markets, sales, products, key personnel, operational methods, technical processes, business
strategies, and other information which the Employer engages in efforts to protect from disclosure
or discovery by its competitors, actual and prospective clients, and other third parties. The
Executive further acknowledges that the unintentional or intentional disclosure of the Employer’s
Confidential Information would have a material adverse effect on the operations and development of
the Employer’s business. The Executive therefore covenants and agrees as set forth below:
11.1 The Executive will during the Term and for one (1) year thereafter, keep secret all
Confidential Information, and will not intentionally disclose Confidential Information to anyone
outside of the Employer and its subsidiaries and affiliates and their respective advisors,
directors,
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officers, employees, agents, consultants, financing sources and other representatives, other
than in connection with the Executive’s performance of his duties under this agreement except with
the Employer’s consent, provided that: (i) the Executive shall have no such obligation to the
extent Confidential Information is or becomes publicly known, other than as a result of the
Executive’s breach of his obligations hereunder; and (ii) the Executive may, after giving prior
notice to the Employer to the extent practicable under the circumstances, disclose such matters to
the extent required by applicable laws or governmental regulations or judicial or regulatory
process; provided, however, that if the Executive is required (by oral questions, interrogatories,
requests for information or documents, subpoena, civil investigative demand or similar process) to
disclose any Confidential Information pursuant to the foregoing clause (ii), he agrees to use
reasonable efforts to provide the Employer with prompt notice of each such request so that the
Employer may seek an appropriate protective order or waive compliance by the Executive with the
provisions of this agreement or both; provided, further, that if, absent the entry
of a protective order or the receipt of a waiver under this agreement, the Executive is, in the
opinion of his counsel, legally compelled to disclose such Confidential Information under pain of
liability for contempt or other censure or penalty (civil or criminal), the Executive may disclose
such information to the persons and to the extent required without liability under this agreement.
In such event, the Executive shall give the Employer written notice of such disclosure, in
reasonable detail, as soon as possible, but in any event not later than concurrently with making
such disclosure, and the Executive shall exercise his reasonable commercial efforts to obtain
reliable assurances that confidential treatment will be accorded any such Confidential Information
so disclosed.
11.2 The Executive will, at his option: (i) deliver promptly to the Employer at the
termination of his employment by the Employer, or at any other time the Employer may so request,
all memoranda, notes, records, reports, and other documents (including, without limitation, drafts,
whole or partial copies, and information stored or maintained electronically, magnetically, in a
computer, or through any other medium invented in the future) relating to the Employer’s business,
which he obtained while employed by, or otherwise serving or acting on behalf of, the Employer and
which he may then possess or have under his control (the “Records”); or (ii) in lieu of
subclause (i) above, the Executive shall destroy all of the Records, return all tangible property
of the Employer containing any Records which is possessed by the Executive, and shall deliver to
the Employer a signed affirmation to that effect.
11.3 The Executive’s duties may require that he enter into confidentiality agreements,
nondisclosure agreements, or comparable agreements with third parties, and a third party may
require the Executive’s entry into such an agreement(s) personally and on behalf of the Employer.
In any such event, the Executive agrees to engage in reasonable efforts to perform any such
agreement.
11.4 During the Term, the Employer may adopt or implement additional Confidential Information
policies, procedures, or requirements in connection with the Employer’s business, and any such
policies, procedures, or requirements will supplement this Section 11, without additional
consideration from the Employer to the Executive, except to the extent, if any, that they conflict
with this agreement, in which event this agreement shall control and govern.
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12. Termination. The following definitions shall apply to the use of such terms in
this agreement:
12.1 “Cause” means:
(a) the Executive is convicted of, or enters a no contest plea to (i) a felony involving moral
turpitude, or (ii) a misdemeanor involving moral turpitude which would render the Executive unable
to perform his duties set forth in this agreement;
(b) the Executive engages in conduct that constitutes willful gross neglect or willful gross
misconduct in carrying out his duties under this agreement, resulting in material economic harm to
the Employer; or
(c) the Executive’s disloyalty, willful non-performance or willful misconduct or neglect
(whether the neglect arises from an act(s) or failure(s) to act) of his duties under this agreement
after: (i) written notice to the Executive from either the Board or the Chairman of the Board,
with reasonable specification of the matter(s) giving rise to the notice, including notice of the
Employer’s intent to terminate the Executive’s employment due to the matter(s) described in such
notice, and further stating the Board’s or the Chairman of the Board’s reasoned conclusion that it
is impossible for the Executive to cure the matter(s) giving rise to the notice within thirty (30)
days from the notice; (ii) the opportunity for the Executive to respond in writing to the written
notice, with the assistance of any counsel deemed appropriate by the Executive (but at the
Executive’s expense) not sooner than ten (10) regular business days after delivery of the written
notice; (iii) the opportunity for the Executive to be heard and to orally present his position
during a confidential meeting of the entire Board within ten (10) business days after the
Executive’s delivery to the Employer of the Executive’s written response to the written notice; and
(iv) a vote of not less than 662/3% of all members of the Board (not including the Executive’s
vote), finding that the matter(s) specified in the written notice constitute “Cause” for purposes
of this agreement; or
(d) any finding by the Securities and Exchange Commission pertaining to the Executive which,
in the opinion of independent counsel selected by the Employer, could reasonably be expected to
impair or impede the Employer’s ability to register, list, or otherwise offer its stock to the
public, or following any Initial Public Offering, to maintain itself as a publicly-traded company.
For purposes of this Section 12.1, no act, or failure to act, by the Executive shall be “willful”
unless committed without a reasonable belief that the act or omission was in the best interest of
the Employer.
12.2 A “Change in Control” shall mean the occurrence of any of the following, as
supplemented by the defined terms in Section 12.2(g) of this agreement:
(a) any “person,” or “group” of related persons for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) (other than the Principal
or a Related Party of the Principal), shall become, directly or indirectly, a “beneficial owner,”
as such term is used in Rule 13d-3 promulgated under the Exchange Act, of Voting Stock representing
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more than thirty-five percent (35%) of the total voting power of all Voting Stock of the
Employer on a fully-diluted basis;
(b) all or substantially all of the assets or business of the Employer are disposed of through
the consummation of a merger, consolidation, sale of assets or other transaction (unless the
shareholders of the Employer immediately prior to such merger, consolidation or other transaction
beneficially own, directly or indirectly, Voting Stock representing fifty percent (50%) or more of
the voting power of the outstanding Voting Stock of the entity or entities, if any, that succeed to
the business of the Employer, determined on a fully-diluted basis);
(c) the Employer combines with another entity and is the surviving corporation but,
immediately after the combination, the shareholders of the Employer immediately prior to the
combination beneficially own, directly or indirectly, less than fifty percent (50%) of the voting
power of the outstanding Voting Stock of the combined company, determined on a fully-diluted basis;
(d) the majority of the Board consists of individuals other than “Incumbent Directors,” which
term means members of the Board as of the date of this Agreement, except that any person who
becomes a director subsequent to such date whose election or nomination was supported by two-thirds
of the directors who then comprise the Incumbent Directors shall be considered an Incumbent
Director;
(e) there shall be consummated any consolidation or merger of the Employer in which the
Employer is not the continuing or surviving entity or pursuant to which the common stock of the
Employer would be converted into cash, securities, or other property, other than a merger or
consolidation of the Employer in which the shareholders of the Employer immediately prior to the
merger or consolidation beneficially own, directly or indirectly, fifty percent (50%) or more of
the voting power of the outstanding Voting Stock of the combined company, determined on a
fully-diluted basis; or
(f) the approval of the shareholders or the Board of Directors of the Employer of any plan or
proposal for the liquidation or dissolution of the Employer.
(g) For purposes of this Section 12.2, (i) “Voting Stock” means, with respect to any person,
securities of any class or classes of capital stock in such person, entitling the holders thereof
to vote under ordinary circumstances in the election of members of the board of directors or other
governing body of such person; (ii) “Principal” means Xxxxxx F.X. Sillerman; and (iii) “Related
Party” means, with respect to the Principal, (x) any spouse or immediate family member of the
Principal, (y) any trust, corporation, partnership or other entity, the beneficiaries,
stockholders, partners, owners or persons beneficially holding a fifty-one percent (51%) or more
controlling interest of which consist of the Principal and/or such other persons referred to in the
immediately preceding clause (x) or (z) the trustees of any trust referred to in the immediately
preceding clause (y).
12.3 “Constructive Termination without Cause” means the termination of the Executive’s
employment at his initiative after, without the Executive’s prior written consent, one or more of
the following events:
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(a) a reduction in the Base Salary, or the uncured failure by the Employer to fulfill its
obligations under this agreement within thirty (30) days after written notice thereof from the
Executive to the Employer;
(b) the failure to elect the Executive to any of the positions described in Section 3; any
material diminution or adverse change in the duties, authority, responsibilities, or positions of
the Executive; or any attempt to remove the Executive from any executive management position in a
manner contrary to this agreement or the Employer’s then effective certificate of incorporation or
by-laws;
(c) the assignment to the Executive of duties or responsibilities which are materially
inconsistent or different from those customarily performed by a person holding the executive
management positions to be held by the Executive pursuant to Section 3;
(d) the failure of the Employer to obtain the assumption in writing of its obligation to
perform this agreement by any successor to all or substantially all of the assets or business of
the Employer after a merger, consolidation, sale, or similar transaction; or
(e) the commencement by or against the Employer or any of its material subsidiaries of a
voluntary or involuntary proceeding seeking liquidation, reorganization or other relief under any
bankruptcy, insolvency or other similar law now or hereafter in effect; or seeking the appointment
of a trustee, receiver, liquidator, or custodian of it or any substantial part of its property,
and consent by the Employer or any such material subsidiary to any such relief; or the
making of a general assignment for the benefit of creditors, or failure generally to pay its debts
as they become due; or taking any corporate action to authorize any of the foregoing.
(f) The Executive agrees that each of the following must occur before the Executive may assert
the existence of a Constructive Termination without Cause (other than with respect to Section
12.3(e)): (i) the Executive must provide written notice to the Board or the Chairman of the Board,
within a period not to exceed ninety (90) days, with reasonable specification of the matter(s)
giving rise to the notice; (ii) the Employer must have the opportunity, through the Chairman or a
Board member designated by him, to respond in writing to the written notice, with the assistance of
any counsel deemed appropriate by the Employer (at its expense) not sooner than ten (10) business
days after delivery of the written notice; (iii) upon delivery of the written notice referred to in
clause (i) of this paragraph, the Employer shall have a period of thirty (30) days within which to
cure any deficiency that would result in Constructive Termination without Cause; and (iv) if the
Employer fails to cure a deficiency within such thirty (30) day period, the Executive must actually
terminate employment within sixty (60) days of the Employer’s failure to cure such deficiency. The
Board must have the opportunity, acting collectively or through a designee, to investigate,
inquire, and otherwise inform itself of the assertion, followed by a hearing before the Board
during which the Executive is allowed the opportunity to orally present his position during a
confidential meeting of the entire Board, and the Employer is allowed to respond, within ten (10)
business days after the Employer delivers to the Executive its written response to the Executive’s
written notice.
12.4 Termination by the Employer for Cause. If the Employer terminates this agreement
for Cause, the Executive shall be paid, as soon as practicable but no later than two and
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one-half months following such termination, all earned but unpaid Base Salary through the date
of termination.
In the event the Employer terminates the Executive’s employment for Cause, the Executive shall
have no further obligation or liability to the Employer in connection with his performance of this
agreement (except the continuing obligations specified in Section 11).
12.5 Termination without Cause or Constructive Termination without Cause. In the event
the Executive’s employment is terminated without Cause, other than due to disability or death, or
in the event there is a Constructive Termination without Cause, the Executive shall be entitled to
be paid by the Employer:
(a) the Base Salary through the date of termination, with payment made as soon as practicable
but no later than two and one-half months following such termination date;
(b) a lump sum, paid as soon as practicable but not later than two and one-half months
following such termination date, equal to the present value (calculated using as the discount rate
seventy-five percent of the prime rate (as published by The Wall Street Journal) on the first
business day of the month in which such termination occurs) of the cash equivalent of the Base
Salary, at the rate in effect on the date of termination (or in the event a Base Salary reduction
is the basis for a Constructive Termination without Cause, the Base Salary in effect immediately
prior to such a reduction) for three (3) years following such termination (the “Salary
Payment”);
(c) a lump sum, paid as soon as practicable but not later than two and one-half months
following such termination date, equal to the present value (using as the discount rate of
seventy-five percent of the prime rate (as published by The Wall Street Journal) for the first
business day of the month in which such termination occurs), for each partial or full year
remaining in the then unexpired Employment Agreement Term, cash bonus in full and complete
satisfaction of any form of cash bonus or cash incentive compensation amounts equal to the average
of all Bonuses paid by the Employer to the Executive during the Term prior to termination,
provided, however, that if no Bonus has been paid prior to termination, the amount shall be
$100,000 (the “Base Bonus Amount”);
(d) all benefits provided in Sections 8 and 9 (except that if providing any such benefit under
the terms of a plan would cause an adverse tax effect, the Employer may provide the Executive with
equivalent cash payments outside of the plan at the same time the benefits would otherwise have
been taxable to the Executive) until the end of the Employment Agreement Term, with no additional
cost or charge payable by the Executive; and
(e) Intentionally Omitted.
(f) Notwithstanding the foregoing, if at the time of Executive’s Separation from Service (as
defined in Treasury Regulation 1.409A-1(h)) the Executive is a “specified employee” within the
meaning of Code Section 409A(a)(2)(B)(i), any amount or benefits that constitutes “nonqualified
deferred compensation” within the meaning of Code Section 409A that becomes payable to Executive on
account of the Executive’s Separation from Service will not be paid until after the earlier of (i)
first business day of the seventh month following Executive’s
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Separation from Service, or (ii) the date of the Executive’s death (the “409A Suspension
Period”). Within fourteen (14) calendar days after the end of the 409A Suspension Period, the
Executive shall be paid a cash lump sum payment equal to any payments (including interest on any
such payments), and benefits that the Employer would otherwise have been required to provide under
this Section 12.5 or Section 12.6 but for the imposition of the 409A Suspension Period delayed
because of the preceding sentence. Thereafter, the Executive shall receive any remaining payments
and benefits due under this agreement in accordance with the terms of this Section (as if there had
not been any Suspension Period beforehand).
12.6 Additional Rights Following a Change in Control. In the event of a Change in
Control, the Executive shall be entitled: (a) at the Executive’s option, to accelerate this
agreement’s Expiration Date to the date of the actual closing of any transaction which constitutes
a Change in Control (the “Change in Control Closing Date”); and (b) to all payments and
benefits provided in Section 12.5 in respect of a Constructive Termination without Cause. The
payments and benefits provided under Section 12.5, together with a bona fide, good faith estimate
of any amounts that may be payable pursuant to Section 12.7, (i) shall be paid to the Executive,
subject to Section 12.5(f), in a lump sum on or prior to the Change in Control Closing Date,
without any discount or reduction for the present value of any monetary amount(s) payable; and (ii)
in the case of non-monetary consideration or stock options or comparable consideration, subject to
Section 12.5(f), delivered to the Executive on or prior to the Change in Control Closing Date.
Upon a Change in Control, all granted but unvested shares of restricted stock and all options to
purchase the Employer’s capital stock or similar instruments granted to or held, directly or
indirectly, by the Executive shall vest fully and immediately in the Executive and all options and
similar securities held, directly or indirectly, by the Executive shall remain exercisable for the
full maximum term of the original option grant or ten (10) years from the Change in Control Closing
Date, whichever is greater. In addition, Section 14 of this agreement immediately, and without
additional action, shall be deemed and rendered null, void, and without any effect as against the
Executive upon the actual closing of any transaction which constitutes a Change in Control. The
Executive shall forfeit any rights granted pursuant to this Section 12.6 if the Executive, in his
sole and absolute discretion and without any obligation whatsoever to do so, accepts in writing a
written offer to remain with the surviving company in an executive position with equivalent duties,
authority, and responsibilities as the Executive held immediately prior to the transaction
resulting in the Change in Control.
12.7 Payment Following a Change in Control. In the event that the aggregate of all
payments or benefits made or provided to the Executive under this agreement and under all other
plans and programs of the Employer (the “Aggregate Payment”) is determined to constitute a
Parachute Payment, as such term is defined in Section 280G(b)(2) of the Code, the Employer shall
pay to the Executive, prior to (but, subject to Section 12.5(f) above, not later than two and
one-half months after the Change in Control) the time any excise tax imposed by Section 4999 of the
Code (“Excise Tax”) is payable with respect to such Aggregate Payment, an amount (the
“Gross-Up Payment”) which, after the imposition of all excise, federal, state and local
income taxes on the Aggregate Payment and the Gross-Up Payment, enables the Executive to retain a
total amount equal to the Aggregate Payment. The determination of whether the Aggregate Payment
constitutes a Parachute Payment and, if so, the amount to be paid to the Executive and the time of
payment pursuant to this subsection shall be made not later than sixty (60) days following each
Change in Control by an independent auditor (the “Auditor”) jointly selected by
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the Employer and the Executive and paid by the Employer. The Auditor shall be a nationally
recognized United States public accounting firm which has not, during the two years preceding the
date of its selection, acted in any way on behalf of the Employer or any affiliate thereof. If the
Executive and the Employer cannot agree on the firm to serve as the Auditor, then the Executive and
the Employer shall each select one accounting firm and those two firms shall jointly select the
accounting firm to serve as the Auditor.
12.8 Voluntary Termination. (a) In the event of the termination of this agreement at
the conclusion of the Employment Agreement Term, or by the Executive on his own initiative
other than: (a) a termination due to death or disability; (b) a Constructive
Termination without Cause; or (c) a Change in Control, the Executive shall have the same
entitlements as provided in Section 12.4 for a termination for Cause. A voluntary termination of
employment by the Executive shall be effective upon reasonable written notice to the Employer.
Written notice need not be provided in the event of a termination due to death or disability or the
consummation of a Change in Control.
12.9 Stock Options and Restricted Stock. (a) Upon termination of the Executive’s
employment with the Employer without Cause or as a result of a Constructive Termination without
Cause, all restrictions on any restricted stock, stock options or other equity-based instruments,
including any transferability or vesting restrictions, immediately shall lapse. The Executive
additionally shall have the immediate right to exercise any Employer stock options in full (without
regard to any restriction on the underlying stock, and whether granted under this agreement or
otherwise), whether or not any such option is fully exercisable on the date of termination, for the
remainder of the original full maximum term of each such stock option. In addition, in the event
that the Executive’s employment is terminated for any reason within one (1) year preceding or
following the consummation of a Change in Control (including, without limitation, the date of the
consummation) then the Executive shall be entitled, at the Executive’s option and without the
preclusion or reduction of any benefit otherwise available to him under this agreement (pursuant to
Section 12.6 or otherwise), to exercise all options granted previously to the Executive during the
longest period permissible under the terms of the plan under which such options were issued from
the Change in Control Closing Date, and additionally to freely transfer any options held, directly
or indirectly, by the Executive as of the Change in Control Closing Date.
(b) Option Grant Terms. The Employer agrees that it will cause the terms and
conditions of any options to purchase the Employer’s shares of capital stock or any other
equity-based instruments granted to the Executive during the Employment Agreement Term to conform
with the provisions of this agreement. Where the terms of any grant agreement with the Executive
or any stock incentive plan or stock option plan adopted by the Employer conflict with this
agreement, the Employer agrees that the terms of this agreement shall control, apply to and
determine the terms of the grant to the fullest extent permitted by applicable law.
12.10 No Mitigation or Offset. At any termination of the Executive’s employment, the
Executive shall have no obligation to seek other employment. There shall be no offset against
amounts due the Executive under this agreement on account of any remuneration attributable to any
later employment, consultancy, partnership, or other remunerative activity connected with the
Executive. However, the Employer may offset (at any time before the date that is two and
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one-half months after the end of the calendar year in which the Executive’s employment
terminates) any amounts owed by the Executive to the Employer or any of its subsidiaries or
affiliates against amounts due to the Executive under this agreement.
13. Disability.
13.1 If during the Executive’s active employment the Executive becomes physically or mentally
disabled, whether totally or partially, so that he is prevented from performing his duties for a
period of six consecutive months, the Employer shall pay to the Executive his full Base Salary and
Bonus in respect of the period ending on the last day of the sixth consecutive month of disability
(the “Disability Date”), and the additional provisions set forth below shall apply:
13.2 If the Executive has not resumed his usual duties on or prior to the Disability Date, the
Expiration Date of this agreement automatically shall accelerate to the Disability Date, and the
Employer shall pay to the Executive, or as directed by any properly appointed guardian of the
Executive, seventy-five percent (75%) of his Base Salary from the Disability Date through the end
of the Employment Agreement Term (without giving effect to any early termination provisions
contained in this agreement) and, the Employer shall have no obligation to pay any Bonus,
discretionary bonus, or other form of compensation or consideration to the Executive in respect of
periods after the Disability Date, unless applicable law requires the Employer to do so. Any Base
Salary payable pursuant to this section shall be reduced by the amount of any benefits payable to
the Executive under any group or individual disability insurance plan or policy, where the premiums
for such plan or policy are paid primarily by the Employer;
13.3 Unless the Employer voluntarily exercises its option under Section 13.4 to restore the
Executive to his full compensation, duties, functions, authority and responsibilities, the
Executive shall have no obligations to the Employer from and after the Disability Date (except for
his obligations under Section 11, which shall survive); and
13.4 If during the Employment Agreement Term and after a Disability Date, the Executive shall
recover fully from a disability, the Employer, by action of the Board, shall have the right
(exercisable within sixty (60) days after notice from the Executive of such recovery), but not the
obligation, to restore the Executive to employment, full compensation, and his full level of
duties, functions, authority and responsibilities hereunder.
14. Non-competition.
Except as set forth in this agreement, during the Employment Agreement Term the Executive will
not, without the prior written approval of the Board, (a) become employed by, or become an officer,
director, or general partner of, any partnership, corporation or other entity in the media or
entertainment sectors (each a “Prohibited Business”) or (b) directly or indirectly,
purchase, invest or otherwise participate in any significant manner, in investments, businesses or
commercial operations in a Prohibited Business, unless such purchase, investment or participation
is conducted by and through Employer or its subsidiaries. Nothing in this Section 14 shall
prohibit the Executive from continuing to fulfill his obligations as an officer, director or
partner of companies or entities identified in Section 4.
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15. Notices. All notices, requests, consents and other communications, required or
permitted to be given hereunder, shall be in writing and shall be deemed to have been duly given if
delivered personally or sent by prepaid telegram, or mailed first class, postage prepaid, by
registered or certified mail, as follows (or to such other or additional address as either party
shall designate by notice in writing to the other in accordance herewith):
If to the Employer:
Attention: Board of Directors
If to the Executive:
Xxxxxx X. Xxxxxx
00 Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxxx Xxxxxx, Xxx Xxxx 00000
00 Xxxxxxxx Xxxx Xxxx
Xxxx Xxxxxx Xxxxxx, Xxx Xxxx 00000
Copies of all communications given hereunder to the Employer shall also be delivered or sent, in
like fashion, to: Xxxx Annex, Esq., Xxxxxxxxx Xxxxxxx, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000;
telephone: (000) 000-0000; facsimile: (000) 000-0000.
16. Disputes.
16.1 Arbitration of Monetary Disputes. Any action or claim seeking monetary damages
arising between the parties to this agreement (including, without limitation, the Executive’s
representative following his death and any successor to the Employer), whether based on contract,
negligence, intentional tort, fraud or misrepresentation, statutorily prohibited discrimination,
including employment discrimination, or breach of other legal duty arising from or connected in any
manner with this agreement or its performance shall be resolved exclusively through final and
binding arbitration, as follows:
(a) The arbitration shall proceed in accordance with the National Rules for the Resolution of
Employment Disputes (the “Rules”) of the American Arbitration Association (the
“AAA”) in effect when the claim or dispute arose between the parties, or in the event that
the AAA no longer follows the National Rules for the Resolution of Employment Disputes, then the
AAA’s Commercial Arbitration Rules (if applicable, the “Rules”) in effect on the date of this
agreement. Either party may, but neither party must, file or docket the dispute for administration
by the AAA, so long as the dispute proceeds in accordance with this Section 16.1 and the applicable
Rules.
(b) The arbitrator(s) shall be selected as follows: Each party shall by written notice to the
other have the right to appoint one arbitrator. If, within thirty (30) days following the giving
of such notice by one party, the other shall not, by written notice, appoint another arbitrator,
the first arbitrator shall be the sole arbitrator. If two arbitrators are so appointed, they shall
appoint a third arbitrator. If thirty (30) days elapse after the appointment of the second
arbitrator and the
17
two arbitrators are unable to agree upon the third arbitrator, then either party may, in
writing, request that the AAA appoint the third arbitrator.
(c) Each party exclusively shall bear all costs, fees, and other expenses charged by or
associated with the arbitrator appointed by him or it, and the parties equally shall pay the costs
and expenses of any third appointed arbitrator. All proceedings connected with the arbitration,
including hearings, shall be held in New York, New York, and where a party appoints an arbitrator
who principally conducts his or her business outside of New York, New York, the appointing party
exclusively shall bear that arbitrator’s travel, temporary lodging, and related costs and expenses.
The general counsel of the AAA or his or her designee, after the filing of the dispute with the
AAA, exclusively shall have the jurisdiction and the authority, after written application filed by
a party with the AAA and the opportunity for the other party to respond in writing, to inequitably
allocate between the parties the AAA’s pre-hearing filing and administrative fees and the fees and
expenses of any appointed arbitrator(s), subject to reallocation among the parties by the
arbitrator(s) in any final award (or decision).
(d) All proceedings, hearings, testimony, documents, or writings related to the arbitration
shall be confidential, i.e., not disclosed by a party, a party’s representative(s), or any
testifying witnesses to a person or entity not a party to, or interested in, the arbitration. The
parties further agree, without regard to any AAA rule to the contrary, that where a written
reasoned award(s) is made by the arbitrator(s), the arbitrator(s) also shall issue a one-page award
(or decision) in a form which permits a future need by any party to judicially enforce the award,
but that the written reasoned award shall not be disclosed by the parties to any person or body not
connected directly with the arbitration.
(e) The arbitrator(s) appointed exclusively shall have jurisdiction to determine any claim,
including the arbitrability of any claim, submitted to him, her, or them. Each party shall bear
its or his own arbitration costs and expenses, including, without limitation, the costs and
expenses associated with any attorney or other expert or representative retained by the party in
connection with a claim, without regard to any pre-award application by the AAA of the last
sentence of Section 16.1(c). The interpretation and enforceability of the arbitration agreement
memorialized in this section shall be determined in accordance with the United States Federal
Arbitration Act (9 U.S.C. §1, et seq.) (the “FAA”), unless the New York
State Arbitration Act (the “New York Act”) (CPLR §7501, et seq.) would make
enforceable this agreement after an appointed arbitrator(s) finds it unenforceable under the FAA,
in which case the New York Act shall be applied. Any process required or desirable in connection
with any arbitration under this Section 16.1 shall be issued and served as authorized by the FAA,
the New York Act, or any treaty to which the United States is a signatory, and upon a party by
personal or permitted substitute service anywhere in the world. The substantive law applied by the
arbitrator(s) to the determination of any claim or defense not connected with the enforceability of
this arbitration agreement shall be the internal laws of the State of New York, without reference
to conflicts of law principles.
(f) The parties agree that the appointed arbitrator(s) shall have no power or authority to
make awards or issue orders of any kind, except as authorized by the FAA and the internal laws of
the State of New York. Any monetary award made shall be payable promptly in United States dollars,
free of any tax, offset, or deduction (unless required by law), and any costs, fees,
18
or taxes incident to enforcing the award shall, to the maximum extent permitted by law, be
charged against the party resisting enforcement.
16.2 Claims for Equitable Relief. Any action or proceeding initiated by any party to
this agreement seeking any form of temporary or preliminary injunctive relief, including, without
limitation, specific performance, connected with this agreement or its performance may be brought
against any other party in the courts of the State of New York or, if the party has or can acquire
jurisdiction, in the United States District Court for the Southern District of New York, and each
of the parties consents to the jurisdiction of such courts in any such action or proceeding, and
each party waives any objection to venue laid therein. Process in any action or proceeding
referred to in the preceding sentence may be served on any party anywhere in the world. The
parties agree that the pursuit of any relief described in this Section 16.2 in no way may or shall
diminish, defeat, or otherwise impair the agreement expressed in Section 16.1.
17. General.
17.1 Governing Law. This agreement shall be interpreted, construed, and enforced in
accordance with the internal laws of the State of New York, without regard to conflicts of law
principles.
17.2 Captions. This agreement contains section headings for reference only. The
headings in no way affect the meaning or interpretation of this agreement.
17.3 Entire Agreement. This agreement fully memorializes the agreement and
understanding of its parties relating to its subject matter, and supersedes all prior or
contemporaneous agreements, arrangements and understandings, written or oral, between the parties
with respect to such subject matter
17.4 Successors and Assigns. This agreement, and the Executive’s rights and
obligations hereunder, may not be assigned by the Executive, except as set forth in Section 9.3,
and any prohibited assignment attempted by the Executive is void. This agreement shall be binding
on any successor to the Employer, whether by merger, acquisition of substantially all of the
Employer’s assets, or otherwise, as fully as if such successor were a signatory hereto and the
Employer shall cause such successor to, and such successor shall, expressly assume the Employer’s
obligations hereunder. Notwithstanding anything else herein contained, the term “Employer” as used
in this agreement, shall include all such successors.
17.5 Amendments; Waivers. This agreement cannot be changed, modified or amended, and
no provision or requirement hereof may be waived, without an affirmative vote of the Board or its
Compensation Committee and the consent in writing of the Executive and the Employer. The failure
of a party at any time or times to require performance of any provision hereof shall in no manner
affect the right of such party at a later time to enforce the same. No waiver by a party of the
breach of any term or covenant contained in this agreement, whether by conduct or otherwise, in any
one or more instances, shall be deemed to be, or construed as, a further or continuing waiver of
any such breach, or a waiver of the breach of any other term or covenant contained in this
agreement.
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17.6 Beneficiaries. Whenever this agreement provides for any payment to the
Executive’s estate, such payment may be made instead to such beneficiary or beneficiaries as the
Executive may have designated in a writing filed with the Employer. The Executive shall have the
right to revoke any such designation and to redesignate a beneficiary or beneficiaries by written
notice to the Employer (and to any applicable insurance company) to such effect.
17.7 Reformation. The Executive and the Employer agree that any provision of this
agreement deemed unenforceable or invalid may be reformed to permit enforcement of the
objectionable provision to the fullest permissible extent. Any provision of this agreement deemed
unenforceable after modification shall be deemed stricken from this agreement, with the remainder
of the agreement being given its full force and effect.
17.8 Full Negotiation. The Executive and the Employer each independently have made
all inquiries regarding the qualifications of the other which he or it deems necessary. The
Executive and the Employer affirm that he or it fully understands this agreement’s meaning and
effect. Each party has participated fully and equally in the negotiation and drafting of this
agreement. Each party assumes the risk of any misrepresentation or mistaken understanding or
belief relied upon by him or it in entering into this agreement.
17.9 Currency. Each and every reference to a monetary amount in this agreement means
United States dollars.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties have duly executed this Employment Agreement as of the date
first above written.
| CKX, INC. | ||||||
| By: | /s/ Xxxxxx X. Xxxxx | |||||
| Name: Xxxxxx X. Xxxxx | ||||||
| Title: Senior Executive Vice President | ||||||
| Director of Legal and Governmental Affairs | ||||||
| /s/ Xxxxxx X. Xxxxxx | ||||||
| Xxxxxx X. Xxxxxx | ||||||
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