Exhibit 10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND RESTATED EMPLOYMENT
AGREEMENT, dated as of October 21, 2009 (this “
Agreement ”), by and between Front Line
Management Group, Inc. (the “ Company
”) and Irving Azoff (“ Executive
”).
WHEREAS, Executive and the Company
previously entered into an employment agreement (the “
Original Employment Agreement ”), dated
May 11, 2007; and
WHEREAS, Executive and the Company
desire to amend and restate the Original Employment Agreement as
set forth herein; and
WHEREAS, the Company entered into
that certain Stock Purchase Agreement, dated as of May 11,
2007 (“ Stock Purchase Agreement ”),
pursuant to which, among other matters, Ticketmaster
Entertainment, Inc. (“ Ticketmaster
”) (as successor to IAC/InterActiveCorp) acquired a majority
of the issued and outstanding shares of capital stock of the
Company, including a portion of the shares held by Executive (the
“ Transaction ”), which purchase became
effective as of the Closing (as such term is defined in the Stock
Purchase Agreement); and
WHEREAS, as a condition to the
parties’ willingness to enter into the Transaction, the
Company requested, and Executive agreed, that the Stock Purchase
Agreement would incorporate by reference and extend the term of the
non-competition and non-solicitation provisions with respect to
Executive and the Company set forth in the “2004
Agreement” (as such term is defined in the Stock Purchase
Agreement) (the “ 2004 Agreement ”);
and
WHEREAS, Executive, Ticketmaster,
and The Azoff Family Trust of 1997, dated May 27, 1997 (the
“ Azoff Trust ”) are contemporaneously
herewith entering into an employment agreement (the “
LN Employment Agreement ”), dated
October 21, 2009, pursuant to which, among other matters, the
parties agreed that Live Nation, Inc. (“ Live
Nation ”) would, under specified circumstances,
purchase shares of common stock, $0.01 par value, of the Company
(“ Company Common Stock ”), held by
Executive and his affiliates;
WHEREAS, as a condition to the
parties’ willingness to enter into the LN Employment
Agreement and to commit to the share purchase provisions set forth
in Section 13 of the LN Employment Agreement, Executive has
agreed, subject to the occurrence of the LN Effective Date (as
defined in the LN Employment Agreement) (the “ LN
Effective Date ”), to extend the term of the
non-competition and non-solicitation provisions set forth in
Section 8 of this Agreement; and
WHEREAS, Executive desires to
continue employment with the Company and enter into this Agreement
on the terms and conditions contained herein.
NOW, THEREFORE, in consideration of
the premises and mutual covenants herein and for other good and
valuable consideration, the parties agree as follows:
1.
Effectiveness; Term of Employment .
a.
Effectiveness . For purposes of this Agreement,
“ Effective Date ” means June 8,
2007. On the Effective Date, the employment agreement, dated
December 31, 2004, between Executive and the Company (the
“ 2004 Employment Agreement ”),
terminated and ceased to have any further force or effect and was
superseded by this Agreement in its entirety.
b.
Subject to the provisions of Section 7 of this Agreement,
Executive shall be employed by the Company for the period
commencing on the Effective Date and ending on the seventh
anniversary of the Effective Date, subject to any applicable
extension or early termination of this Agreement by Executive or
the Company (“ Employment Term ”), on the
terms and subject to the conditions set forth in this
Agreement.
2.
Position .
a.
During the Employment Term, Executive shall serve as the Chief
Executive Officer (“ CEO ”) of the
Company. In such position, Executive shall have such duties
and authority as are customary for a chief executive officer and as
shall be determined from time to time by the Board of Directors of
the Company (the “ Board ”), and shall
report to the Board.
b.
Subject to Executive’s obligations under the LN Employment
Agreement during the LN Employment Term (as such term is defined in
the LN Employment Agreement), during the Employment Term, Executive
will devote substantially all of Executive’s business time
and best efforts to the performance of Executive’s duties
hereunder and will not engage in any other business, profession or
occupation, for compensation or otherwise, except as specifically
provided in Section 8 hereof, which would conflict or
interfere with the rendition of such services either directly or
indirectly, without the prior written consent of the Board;
provided , that nothing herein shall preclude Executive from
accepting appointment to, subject to the prior approval of the
Board, or continuing to serve on any board of directors or trustees
of any business corporation or any charitable organization;
provided , in each case, and in the aggregate, that such
activities do not conflict or interfere with the performance of
Executive’s duties hereunder or conflict with Section 8
of this Agreement.
3.
Base Salary . During the Employment Term, the Company
shall pay Executive a base salary at the annual rate of Two Million
Dollars ($2,000,000), payable in regular installments in accordance
with the Company’s usual payment practices. Executive
shall be entitled to such increases in Executive’s base
salary, if any, as may be determined from time to time in the sole
discretion of the Board. Executive’s annual base
salary, as in effect from time to time, is hereinafter referred to
as the “ Base Salary .”
4.
Annual Bonus . With respect to each full fiscal year
during the Employment Term, the Company shall pay Executive a bonus
award at the annual rate of Two Million Dollars ($2,000,000) (the
“ Annual Bonus ”), which shall be payable
in full within ten (10) business days after the end of each
such full fiscal year. The Company shall pay a pro rated
bonus if required pursuant to
Section 7(d) hereof.
5.
Employee Benefits . During the Employment Term,
Executive shall be entitled to participate in the Company’s
employee benefit plans (other than annual bonus and incentive
plans) and receive perquisites as in effect from time to time
(collectively “ Employee
2
Benefits
”), on the same basis as those
benefits are generally made available to other senior executives of
the Company, including a vacation policy substantially similar to
that provided chief executive officers of similar businesses (as
reasonably determined by the Board).
6.
Business Expenses . During the Employment Term, any
and all business expenses incurred by Executive in the performance
of Executive’s duties hereunder shall be reimbursed by the
Company consistent with Company practices under the 2004 Employment
Agreement, so long as such expenses do not constitute compensation
to Executive under IRS or other applicable standards or
regulations.
7.
Termination . The Employment Term and
Executive’s employment hereunder may be terminated by either
party only pursuant to the terms of this Agreement; provided
that except as otherwise specified in this Section 7,
Executive will be required to give the Company at least 60 days
advance written notice of any resignation of Executive’s
employment. Executive’s employment with the Company may
be terminated by the Company for Cause (as defined below), by
Executive for Good Reason (as defined below) or due to death or
Disability (as defined below), in each case in accordance with the
terms of this Agreement, whether prior to, on or after the LN
Effective Date. Following the LN Effective Date,
Executive’s employment with the Company also may be
terminated by the Company without Cause or voluntarily by Executive
without Good Reason, in each case in accordance with the terms of
this Agreement. Notwithstanding any other provision of this
Agreement, the provisions of this Section 7 exclusively shall
govern Executive’s rights upon termination of employment with
the Company.
a.
By the Company For Cause; by Executive without Good Reason
.
(i)
This clause (i) shall apply solely with respect to the period
prior to the LN Effective Date. For purposes of this Agreement,
“ Cause ” means (A) the willful and
continued failure of Executive to perform substantially his
material duties with the Company (other than any such failure
resulting from Executive’s incapacity due to physical or
mental illness and shall not include a failure to achieve
particular results or to perform at any particular level) after a
written demand for performance is delivered to Executive by the
Board which identifies the manner in which the Board believes that
Executive has not performed Executive’s duties and Executive,
after a period established by the Board and communicated in writing
to Executive (which period may be no less than twenty (20) days),
has failed to cure such failure, (B) the willful engaging by
Executive in gross misconduct which is demonstrably and materially
injurious to the Company or any material breach by Executive of his
Non-Solicitation or Non-Competition obligations either under
Section 8 of this Agreement or under the 2004 Agreement (the
duration of which has been extended as provided in the Stock
Purchase Agreement) (if such breach continues beyond a five
(5) day cure period), (C) Executive’s conviction
of, or pleading guilty to, a felony involving moral turpitude or
dishonesty or (D) a material breach by Executive of a
fiduciary duty. A termination of Executive’s employment
with the Company by the Company for Cause shall not be effective
unless and until the Company has delivered to Executive, along with
a Notice of Termination (as defined in Section 7(e)), a copy
of a resolution duly adopted by a majority of the Board (excluding
Executive, if he is a member of the Board) stating that the Board
has determined to terminate Executive’s employment with the
Company for Cause; provided , however , that no such
resolution shall be permitted to be adopted without
3
the Company having afforded
Executive the opportunity to make a presentation to the Board and
to answer any questions its members may ask him.
(ii)
For purposes of this Agreement, (A) “
Affiliate ” means any individual, corporation,
partnership, limited liability company, association, trust or other
entity or organization that directly or indirectly, through one or
more intermediaries, controls, is controlled by, or is under common
control with such person, where “control” means the
possession, directly or indirectly, of the power to direct or cause
the direction of the management policies of the Company, whether
through the ownership of voting securities, by contract, as trustee
or executor, or otherwise, and, with respect to any individual, any
relative or spouse of such person, or any relative of such spouse,
who has the same home as such person; and (B) “
Subsidiary ” means (x) any corporation
more than fifty percent (50%) of whose stock of any class or
classes having by the terms thereof ordinary voting power to elect
a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such
corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by the Company
and/or one or more Subsidiaries of the Company and (y) any
partnership, limited liability company, association, joint venture
or other entity in which the Company and/or one or more
Subsidiaries of the Company has more than a fifty percent (50%)
equity interest or the right to control the management of such
entity.
(iii)
If Executive’s employment is terminated (x) by the
Company for Cause or (y) solely with respect to periods on and
after the LN Effective Date, voluntarily by Executive without Good
Reason, Executive shall be entitled to receive:
(A)
the Base Salary through the date of termination;
(B)
any Annual Bonus earned but unpaid as of the date of termination
for any previously completed fiscal year;
(C)
reimbursement for any unreimbursed business expenses properly
incurred by Executive in accordance with Company policy prior to
the date of Executive’s termination; and
(D)
such Employee Benefits, if any, as to which Executive may be
entitled under the employee benefit plans of the Company (the
amounts described in clauses (A) through (D) hereof being
referred to as the “ Accrued Rights
”).
The Accrued Rights shall be paid to
Executive in a lump sum in cash within 30 days of the date of
termination of Executive’s employment, provided that
any amounts paid in respect of Accrued Rights pursuant to clause
(D) above shall be paid in accordance with the terms of the
applicable employee benefit plan. Following a termination of
Executive’s employment (x) by the Company for Cause or
(y) solely with respect to periods on and after the LN
Effective Date, voluntarily by Executive without Good Reason,
except as set forth in this Section 7(a)(iii), Executive shall
have no further rights to any compensation or any other benefits
under this Agreement.
4
b.
Disability or Death .
(i)
The Employment Term and Executive’s employment hereunder
shall terminate upon Executive’s death and may be terminated
by the Company if Executive suffers a Disability.
(ii)
This clause (ii) shall apply solely with respect to the period
prior to the LN Effective Date. For purposes of this
Agreement, “ Disability ” means personal
injury, illness or other cause which has rendered Executive unable
to perform substantially his material duties and responsibilities
hereunder for a period of one hundred twenty (120) consecutive
days, or one hundred twenty (120) out of one hundred eighty (180)
consecutive days, as determined jointly by a physician selected by
the Company reasonably acceptable to Executive (or, if he is
incapacitated, his legal representative) and a physician selected
by Executive (or, if he is incapacitated, his legal representative)
and reasonably acceptable to the Company. If such physicians
cannot agree as to whether Executive has suffered a Disability,
they shall jointly select a third physician who shall make such
determination. The determination of Disability made in
writing to the Company and Executive shall be final and conclusive
for all purposes of the Agreement.
(iii)
Upon termination of Executive’s employment hereunder for
either Disability or death, Executive or Executive’s estate
(as the case may be) shall be entitled to receive:
(A)
the Accrued Rights (paid as set forth in
Section 7(a)(iii) above);
(B)
a pro rata portion of the Annual Bonus that Executive would have
been entitled to receive pursuant to Section 4 hereof in such
year based upon the percentage of the fiscal year that shall have
elapsed through the date of Executive’s termination of
employment, payable when such Annual Bonus would have otherwise
been payable had Executive’s employment not terminated;
and
(C)
(I) in the event of termination on account of death, a lump
sum payment equal to one year’s Base Salary, payable within
30 days of the date of termination of Executive’s employment;
and
(II) in the event of
termination on account of Disability, subject to Executive’s
continued compliance with the provisions of Sections 8 and 9 of
this Agreement, (x) continued payment of the Base Salary on
the same basis as provided prior to such termination for twelve
months after the date of such termination, (y) a lump sum
payment of $20,000, payable within 30 days of the date of
termination of Executive’s employment and (z) access to
the Company’s medical insurance for one year following the
date of termination of employment; provided that Executive
will be responsible for all applicable premiums.
Following Executive’s
termination of employment due to death or Disability, except as set
forth in this Section 7(b)(iii), Executive shall have no
further rights to any compensation or any other benefits under this
Agreement.
5
c.
Termination by Company without Cause; Resignation by Executive
for Good Reason .
(i)
This clause (i) shall apply solely with respect to the period
prior to the LN Effective Date. For purposes of this
Agreement, “ Good Reason ” means, without
Executive’s express written consent:
(A)
(x) a material and adverse change in the position(s),
authority, duties or responsibilities (including reporting
responsibilities) of Executive with the Company and its
Subsidiaries, or (y) Executive no longer serving as Chief
Executive Officer of the Company during the Employment
Term;
(B)
any material reduction in salary not agreed to by
Executive;
(C)
any willful breach by the Company of any other material obligation
of the Company under this Agreement; or
(D)
the Company requiring Executive to be based somewhere other than
Beverly Hills, California or West Los Angeles,
California.
A termination by Executive for Good
Reason shall be effective only if Executive delivers to the Company
a Notice of Termination for Good Reason within 60 days after
learning of the circumstances constituting Good Reason.
Executive will be required to give the Company at least 30 days
advance written notice of any resignation of Executive’s
employment with Good Reason. Notwithstanding the foregoing,
if within 30 days following Executive’s delivery of such
Notice of Termination (the “ Cure Period
”), the Company has cured the circumstances giving rise to
the Good Reason claim, then such Notice of Termination shall be
ineffective and no Good Reason shall be deemed to exist. In the
event that the Company fails to remedy the condition constituting
Good Reason during the Cure Period, Executive must terminate
employment with the Company, if at all, within 90 days following
the Cure Period in order for such termination of Executive’s
employment to constitute a termination of Executive’s
employment for Good Reason.
(ii)
If (x) Executive resigns for Good Reason or (y) solely
with respect to periods on and after the LN Effective Date, the
Company terminates Executive’s employment without Cause
(other than due to death or Disability), Executive shall be
entitled to receive:
(A)
the Accrued Rights (paid as set forth in
Section 7(a)(iii) above);
(B)
subject to Executive’s continued compliance with
(x) prior to the LN Effective Date, the 2004 Agreement (the
duration of which has been extended as provided in the Stock
Purchase Agreement), and (y) on and after the LN Effective
Date, the provisions of Sections 8 and 9 of this Agreement
(including Executive’s obligations under the 2004 Agreement
(the duration of which has been extended as provided in the Stock
Purchase Agreement and, subject to the occurrence of the LN
Effective Date, the duration of which shall be further extended
pursuant to the LN Employment Agreement)), continued payment of the
Base Salary and Annual Bonus on the same basis
6
as provided prior to such
termination until the expiration of the Employment Term as if such
termination had not occurred;
(C)
a lump sum payment equal to the product of (x) the number of
years (including partial years) from and after the date of
termina
