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EXHIBIT 10.57
[CONFORMED COPY]
COOPERATION, NON-COMPETITION
AND CONFIDENTIALITY AGREEMENT
THIS COOPERATION, NON-COMPETITION AND CONFIDENTIALITY AGREEMENT
(the "Agreement") is made and entered into this 9th day of March, 1998, by and
between USA Networks, Inc., a Delaware corporation ("USAi"), and Xxxxxxx X.
Xxxxx ("Executive"), with reference to the following facts;
A. USAi has offered to acquire all of the issued and outstanding capital
stock (the "Stock") of Ticketmaster Group, Inc., an Illinois corporation (the
"Company"), specifically including all of the issued and outstanding shares of
Stock owned directly or indirectly by Executive.
B. Executive is the chief executive officer of the Company.
C. It is a condition to USAi's willingness to agree to proceed with the
acquisition of the Stock and the related goodwill of the Company that USAi and
Executive enter into this Agreement.
D. Executive acknowledges and agrees that this Agreement is supported by
adequate independent consideration and does not replace or supercede the terms
and conditions of that certain Employment Agreement between Executive and the
Company dated December 15, 1993 (the "Employment Agreement") (and the parties'
compliance therewith), except as specifically provided herein.
NOW, THEREFORE, in consideration of the premises, mutual
covenants, and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties agree as follows:
1. COOPERATION: Executive agrees to cooperate with the Company
and USAi to provide for an orderly transition in the leadership of the Company,
including but not limited to working with a designated successor to Executive as
Chief Executive Officer of the Company ("Successor") should such Successor be
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selected during the term of Executive's Employment Agreement. Executive
acknowledges and agrees that such an action by USAi (and by the Company) would
not constitute a breach of the Employment Agreement, and would not constitute
Good Reason for Executive to terminate his employment pursuant to said
Agreement, and Executive hereby waives any such claim; provided, however, that
any partial or complete assumption of Executive's duties and responsibilities by
Successor (as determined by Executive in his sole good faith discretion) shall
not be deemed to be, or constitute, a breach of the Employment Agreement by
Executive; and provided, further, that any compensation payable to Successor,
whether in cash, securities (including options) or otherwise, shall be excluded
in computing Executive's Performance Bonus under the Employment Agreement.
Except as expressly provided in this paragraph, the Company's and Executive's
respective rights, duties and obligations under the Employment Agreement, which
are separate and apart herefrom, shall not otherwise be affected hereby,
including, without limitation, the Company's obligation upon request by
Executive to repurchase Stock (including USAi securities issued in exchange
therefor or replacement thereof) from Executive, the Xxxxx Family Foundation and
their respective transferees, to the extent applicable; provided, however, that
Executive must provide a 30-day notice to the Company for such repurchase and
such repurchase obligation of the Company may be satisfied by USAi causing the
Company to arrange to place Executive's Stock (including USAi securities issued
in exchange therefor or replacement thereof) with a third party; provided,
further, that USAi will cause the Company to pay Executive the excess, if any,
of the amount of cash Executive would have received with respect to such
repurchase obligation, over the amount received by Executive in such placement.
The parties agree that prior to the effective time of the merger involving the
Company and USAi, Executive may elect with respect to his outstanding stock
options (i) to have such options assumed by USAi at the effective time pursuant
to the terms of the merger agreement and/or (ii) to the extent such assumption
is not elected, have USAi cause the Company to provide Executive at the
effective time of the merger with an amount (the "spread") equal to the product
of (A) the excess of the "merger consideration" per share in such merger over
the exercise price per share of the option, times (B) the number of shares
subject to such option with respect to which Executive elects this clause (ii).
To the extent Executive elects to receive the spread for all or a
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portion of his option, the Company may elect to provide the spread in cash
and/or shares of USAi stock; provided, that, if requested by Executive at the
effective time of the merger, USAi shall cause the Company to arrange to place
any such shares with a third party and USAi shall cause the Company to pay
Executive the excess, if any, of the amount of cash Executive would have
received for such portion of the spread, over the amount received by Executive
in such placement. Executive hereby agrees not to exercise any election under
Section 9 of his December 15, 1993 option agreement with the Company, and waives
the application of such section.
2. COVENANT NOT TO COMPETE: For the period extending from the
date hereof through and including January 31, 2001, Executive will not, without
the prior written consent of USAi, 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) 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), guarantor, consultant, advisor, agent, sales
representative or other participant, in any of the following geographic areas in
which the Company does business: the United States, Canada, Mexico, England,
Ireland, Scotland, Australia, Japan, Argentina, Brazil, Chile, New Zealand,
China, Singapore, France, Germany and the rest of Europe. 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, sports 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. 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
defined in Rule 405 of Regulation C promulgated under the Securities Act of
1933, as amended).
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3. SOLICITATION OF EMPLOYEES: For the period extending from the
date hereof through and including January 31, 2001, Executive shall not (i)
directly or indirectly induce or attempt to induce any person then employed
(whether part-time or full-time) by the Company or any of its subsidiaries or
affiliates (other than Xxxx Xxxxxxx) 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 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 Ticketmaster Businesses.
4. NON-SOLICITATION OF CUSTOMERS: For the period extending from
the date hereof through and including January 31, 2001, Executive shall not
solicit any customers of the Company or any of its subsidiaries or affiliates or
encourage 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 an agent, tickets to the public.
5. PROPRIETARY INFORMATION: Executive will not at any time,
during the period extending from the date hereof through and including January
31, 2004, disclose 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 or other Ticketmaster Entity. "Proprietary information of the Company or
other Ticketmaster Entity" means all information known or intended to be known
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 business of the
Company or any of its subsidiaries or affiliates. 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
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documents, records and other information are the exclusive property of the
Company or its subsidiaries or affiliates.
6. EQUITABLE RELIEF: Executive acknowledges that the covenants
contained in Paragraphs 1 through 5 hereof are reasonable and necessary to
protect the legitimate interests of USAi and the Company, that in the absence of
such covenants USAi would not agree to proceed with the acquisition of the
Stock, that any breach or threatened breach of such covenants will result in
irreparable injury to USAi, and that the remedy at law for such breach or
threatened breach would be inadequate. Accordingly, the Executive agrees that
USAi, 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.
7. COMPLETE AGREEMENT; MODIFICATIONS: Except as specifically
provided herein, this Agreement and any documents referred to herein constitute
the parties' entire agreement with respect to the subject matter hereof and
supersede all agreements, representations, warranties, statements, promises, and
understandings, whether oral or written, with respect to the subject matter
hereof. This Agreement may be executed in counterparts and may not be amended,
altered, or modified except by a writing signed by the parties.
8. GOVERNING LAW; JURISDICTION: All questions with respect to
this Agreement and the rights and liabilities of the parties will be governed by
the laws of the State of Illinois. Any and all disputes between the parties
which may arise pursuant to this Agreement will be heard and determined before
an appropriate federal court in the Northern District of Illinois, or, if not
maintainable therein, then in an appropriate Illinois State Court in Xxxx
County, Illinois, other than any dispute which may arise pursuant to this
Agreement with respect to payments due to Executive under Section 1 which shall
be heard and determined in the Superior Court of Los Angeles, California or an
appropriate federal court in the Southern District of California. The parties
hereto acknowledge that such courts, as applicable, have jurisdiction to
interpret and enforce the provisions of this Agreement, and the parties consent
to, and waive
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any and all objections that they may have as to, personal jurisdiction and/or
venue in any such court.
9. SEVERABILITY: The validity, legality or enforceability of the
remainder of this Agreement will not be affected even if one or more of the
provisions of this Agreement is held invalid, illegal, or unenforceable in any
respect. Further, if the period of time, the extent of the geographic area, or
the scope of the proscribed activities covered by this Agreement should be
deemed unenforceable, then this Agreement shall be construed to cover the
maximum period of time, geographic area or scope of prescribed activities (not
to exceed the maximum time, geographic area or scope set forth herein) as may be
valid under the applicable law, and each of the parties hereto shall request any
court considering the enforceability of this Agreement to construe and/or reform
it so as to render it enforceable to the maximum extent as provided above.
10. TERMINATION: In the event that the Company and USAi terminate
negotiations without execution of a definitive acquisition or merger agreement
relating to the Stock or such agreement is terminated without consummation of
the contemplated transaction, this Agreement shall promptly terminate.
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IN WITNESS WHEREOF, USAi and Executive have executed this
Agreement as of the date and year first written above.
USA NETWORKS, INC.
By: /s/ Xxxxxx X. Xxxx
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Title: Senior Vice President and
General Counsel
/s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
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