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
Howard J. Tytel (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 (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 Director of Legal and Governmental
Affairs 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 Mr. Sillerman, 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
MIX 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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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) Six
Hundred Fifty Thousand Dollars ($650,000) (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.
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.
4
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.
8.1
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.
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.
9.1
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
5
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 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
6
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, 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
7
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
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