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
Thomas P. Benson (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 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 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.
8.1 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.
9.1 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 15 th 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
se
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