EXHIBIT 10.3
DATED   January 2010
WITHOUT PREJUDICE AND SUBJECT TO CONTRACT
(1) 19 ENTERTAINMENT LIMITED
(2) SIMON ROBERT FULLER
(3) CKX, INC.
 
COMPROMISE AGREEMENT
 
Paul, Hastings, Janofsky & Walker (Europe) LLP
Solicitors and Registered Foreign Lawyers
Ten Bishops Square
Eighth Floor
London
E1 6EG
Tel: 020 3023 5100
Fax: 020 3023 5109
Ref: CB/09092.00005

 

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Table of Contents

                  Page no.
1.
  BACKGROUND   1  
2.
  REMUNERATION   1  
3.
  COMPENSATION PAYMENT   2  
4.
  BENEFITS AND STOCK   2  
5.
  TAXATION   2  
6.
  RETURN OF PROPERTY   3  
7.
  WARRANTIES AND REPRESENTATIONS   3  
8.
  STATUS, CONFIDENTIALITY AND CONDUCT   4  
9.
  RELEASE FROM RESTRICTIONS   5  
10.
  FULL AND FINAL SETTLEMENT   5  
11.
  COMPLIANCE WITH STATUTORY PROVISIONS   8  
12.
  THIRD PARTY RIGHTS   8  
13.
  GENERAL   8

 

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THIS AGREEMENT is made on      January 2010
BETWEEN:

(1)   19 ENTERTAINMENT LIMITED, (Company number 01886042) whose registered
office is at 100 New Bridge Street, London, EC4V 6JA (“19E”);   (2)   SIMON
ROBERT FULLER of 19 The Mall, East Sheen, London, SW14 7EN (the “Employee”);  
(3)   CKX, Inc., a corporation established under the laws of Delaware, whose
principal place of business is 650 Madison Avenue, New York, NY 10022 (“CKX” and
together with 19E, “the Company”)

1.   BACKGROUND

  1.1   The Employee was employed by 19E from 26 February 1985 until the
termination of his employment by mutual agreement on    January 2010 (the
“Termination Date”).     1.2   The parties have entered into this Agreement (the
“Agreement”) to record and implement the terms relating to the termination of
the Employee’s employment and, among other matters, the waiver of all claims the
Employee has or might have against the Company or any Group Company arising out
of the employment or its termination (the “Terms”).

2.   REMUNERATION

  2.1   The Employee will be paid his normal salary and receive his contractual
benefits from 19E up to and including the Termination Date (subject to any
appropriate deductions for income tax and National Insurance Contributions).    
2.2   Within 14 days of the latest to occur of (i) the Termination Date, and
(ii) receipt by 19E of original copies of the Employee’s acceptance of the Terms
and the letter from his adviser in the attached form set out in Schedule 1 (his
adviser being identified in that letter (the “Adviser”)), to the extent it has
not already done so 19E will make to the Employee a payment reimbursing the
Employee for his final expenses incurred up to the Termination Date, provided
19E has prior to payment received valid receipts or satisfactory evidence of
expenditure in accordance with 19E’s current expenses policy or any terms
relating to expenses agreed between the parties.     2.3   Any sums due from the
Employee to the Company will be deducted from his final salary payment or, in
the event the cut off date for administering salary and benefits has passed, the
Compensation Payment (as defined in clause 3 below).

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3.   COMPENSATION PAYMENT

  3.1   Subject to and conditional upon the terms of this Agreement (including,
without limitation, the conditions in this clause 3.1), and within one business
day of the latest condition to occur of:

  3.1.1   the Termination Date;     3.1.2   issue by 19E to the Employee of a
P45 (which 19E undertakes to do promptly); and     3.1.3   receipt by 19E of a
copy of this Agreement signed by the Employee and a signed letter from his
Adviser in the attached form set out in Schedule 1,

  19E will pay to the Employee:     3.1.4   £480,000 as compensation for loss of
office (the “Compensation Payment”).

4.   BENEFITS, STOCK AND CREDITS

  4.1   Save as specifically referred to in clause 4.2 below, the Employee’s
entitlement to receive any benefits from the Company by virtue of his employment
ceased on the Termination Date.     4.2   The Company agrees and shall procure
that all unvested stock and options held by the Employee in CKX shall be
accelerated and vest on the Termination Date and thereafter the Employee shall
be entitled to such stock and options without restriction as to vesting, in
accordance with the terms of such securities. It is acknowledged that the
Employee has:

  4.2.1   100,000 options for common stock, par value $0.01 per share, of CKX,
(“CKX Stock”) granted on 19 July 2007 of which 60,000 are already vested and
40,000 will vest on the Termination Date;     4.2.2   200,000 shares of CKX
Stock granted on 15 April 2008, all of which have vested; and     4.2.3  
250,000 options for CKX Stock granted on 13 March 2009 all of which will vest on
the Termination Date.

  4.3   The Amended and Restated Lock In Put and Call Agreement dated 8
June 2009 between the Employee and CKX shall remain in full force and effect
notwithstanding anything contained in this Agreement.     4.4   The Company
agrees to use commercially reasonable endeavours to procure that the Employee’s
credit as creator or executive producer of any television format or

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      programme given or contracted for prior to the date hereof will be
maintained for the life of such format or programme. At the Employee’s request
(and at the Employee’s sole cost) the Company shall use commercially reasonable
endeavours to enforce and procure that each relevant Group Company shall enforce
a third party’s obligation to provide such credits for the Employee.

5.   TAXATION

  5.1   The first £30,000 of the Compensation Payment will be paid without
deduction of income tax and employees’ National Insurance Contributions on the
basis that the parties believe it is a payment pursuant to Sections 401 to 405
of the Income Tax (Earnings and Pensions) Act 2003. The balance of the sums
payable to the Employee under clauses 3.1.4 and 8.1 of these Terms (including,
without limitation, the balance of the Compensation Payment) will be subject to
appropriate deductions for income tax and employees’ National Insurance
Contributions.     5.2   In the event that any liability for further income tax
or employees’ National Insurance Contributions (together, the “Tax and
Contributions ”) arises out of or in connection with the Compensation Payment,
and/or the payments made to or value of any benefits provided to the Employee
pursuant to this Agreement, the Employee will be responsible for and indemnify
19E in respect of the payment of any such Tax and Contributions.

6.   RETURN OF PROPERTY

  6.1   The Employee confirms that upon request he shall return to the Company
all property belonging to the Company or the Group or relating to its or their
business, in his possession or control. The Employee will not keep or make any
copy of anything returned pursuant to this clause 6.1.     6.2   By signing the
enclosed copy of this letter the Employee resigns as a director of each Group
Company of which he is a director. The Employee will immediately and as of the
Termination Date do all such things as may be necessary to resign all other
directorships or offices (if any) which he holds by virtue of his employment
with the Company. The Employee irrevocably appoints the Company to be his
attorney in his name and on his behalf to sign, execute or do any such
instrument or thing and generally to use his name in order to give the Company
(or its nominee) the full benefit of the provisions of this clause.

7.   WARRANTIES AND REPRESENTATIONS

  7.1   The Employee warrants and represents to the Company that he:

  7.1.1   is not aware of any matters relating to any acts or omissions by him
or any director, officer, employee or agent of the Company (or any Group
Company) which if not already disclosed to the Company would or might affect its
decision to enter into this Agreement, to the Terms of

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      this Agreement or make any of the payments or provide any of the benefits
referred to in this Agreement; and

  7.1.2   has not presented an originating application or claim form to any
office of the Employment Tribunals or issued a claim form in the High Court or
County Court in connection with this employment or its termination or issued any
equivalent or similar proceedings against any Protected Persons in any other
jurisdiction, nor has anyone acting on his behalf presented nor will he or they
present any such complaint or present or issue an originating application or
claim form or issue any equivalent or similar proceedings.

8.   STATUS, CONFIDENTIALITY AND CONDUCT

  8.1   In consideration of the payment to the Employee by 19E of £500,000 (less
deductions for income tax and employees’ National Insurance Contributions) which
payment will be paid by 19E within 14 days of the conditions listed in clause
3.1 being met, the Employee covenants with the Company and all Group Companies
that he will abide by the provisions of this clause 8.     8.2   The Employee
accepts and agrees that his express and implied duties relating to confidential
information, including but not limited to the duties regarding confidentiality
set forth in clause 13 of his service agreement with 19E dated 17 March 2005
(the “Service Agreement”) and those duties set forth in paragraph 1 of the
Confidentiality, Non-Competition, Non-Solicitation, and Non-Recruitment
Agreement between the Employee and CKX dated 17 March 2005 (the “Non-Compete
Agreement”) continue after the Termination Date.     8.3   The Employee shall
not and the Company shall ensure that its officers and employees shall not:

  8.3.1   make or publish any statement to a third party (including but not
limited to any journalists or other persons connected in any way with the media,
any clients, customers, employees or ex-employees of the Company or any other
Group Company) concerning the Terms of this Agreement or the circumstances
surrounding the termination of the Employee’s employment (other than a joint
press release, in form and substance reasonably satisfactory to the Company and
the Employee, that shall be released promptly following the execution and
delivery of this Agreement); or     8.3.2   make or publish any derogatory or
disparaging statement or do anything in relation to the Employee, the Company,
any Group Company or any members, partners, directors, officers, employees,
ex-employees, clients, customers or agents of the Company or any other Group
Company which is intended to or which might be expected to damage or lower their
respective reputations,

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      provided, that the parties will not be prevented from making a disclosure:

  (i)   for the purposes of seeking legal or other professional advice from an
adviser (including, without limitation, the Adviser) in relation to this
Agreement provided that any such adviser is bound by the same duty of
confidence;     (ii)   to the proper authorities as required by law; or    
(iii)   in the case of the Employee, to an immediate family member, provided
such person agrees to maintain confidentiality on the same terms.

  8.4   The Employee warrants that he has not published any statement or
authorised or permitted anyone else to do so prior to the date of this
Agreement, which would constitute a breach of clauses 8.2 or 8.3 if it had
occurred after the date of this Agreement.

9.   RELEASE FROM RESTRICTIONS   9.1   The Company agrees that with effect from
the Termination Date the Company releases the Employee from and shall procure
that each Group Company shall release the Employee from:

  9.1.1   the covenants and restrictions contained in paragraph 1 and 2 of
Schedule 1 to the Service Agreement;     9.1.2   the covenants and restrictions
contained in paragraph 2 of the Non-Compete Agreement excluding sub-paragraph
2.2(v); and     9.1.3   the covenants and restrictions contained in clause 5.1
of the Share Purchase Agreement dated 17 March 2005 between the Employee, Fuller
Nominees Limited and Ingenious Ventures Limited (1) CKX UK Holdings Limited (2)
and CKX (then known as “Sports Entertainment Enterprises, Inc”) (3).

9.2   The Company (on behalf of itself and all Group Companies) consents to the
use by the Employee of the name “XIX” for the Employee’s new business ventures.
Any use of such name by the Employee or by corporations or other entities owned
(in whole or in part) by the Employee shall not constitute a breach of paragraph
2.2(v) of the Non-Compete Agreement.   10.   FULL AND FINAL SETTLEMENT

  10.1   The Terms under this Agreement are offered without any admission of
liability on the part of: (i) the Company; (ii) any other Group Company; and,
(iii) its or their respective members, partners, directors, officers, employees
and agents ((i)-(iii) together, in their respective capacities as such, the
“Protected Persons”), and are

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      in full and final settlement of all claims in all jurisdictions, whether
known or not under contract, tort, statute or otherwise which the Employee has
at the date of this Agreement or which may arise in future against the Protected
Persons arising out of or in connection with or as a consequence of the
Employee’s employment and/or its termination including, without limitation, any
claim:

  10.1.1   for unfair dismissal, under the Employment Rights Act 1996;    
10.1.2   for wrongful dismissal or breach of contract, including, without
limitation, in relation to any alleged or actual bonus, commission, carried
interest, profit-sharing or incentive payments or other variable forms of
remuneration arising pursuant to the employment;     10.1.3   (save as
specifically referred to in clauses 4.2 and 4.3) in relation to any alleged or
actual entitlement to shares, stocks or membership in any entity, howsoever
granted     10.1.4   for a statutory redundancy payment, under the Employment
Rights Act 1996, or any other type of redundancy payment;     10.1.5   in
relation to unauthorised deductions from wages, under the Employment Rights Act
1996;     10.1.6   for unlawful detriment, under the Employment Rights Act 1996;
    10.1.7   in relation to working time or holiday pay, under the Working Time
Regulations 1998 or contractually;     10.1.8   for equal pay, less favourable
treatment or detriment, direct or indirect discrimination, harassment or
victimisation on any unlawful ground, including, but not limited to, sex,
pregnancy or maternity status, marital or civil partnership status, race,
colour, nationality, ethnic or national origin, disability, part-time or
fixed-term status, sexual orientation, transsexualism, age, religion, religious
or philosophical belief or non-belief, under the applicable Act or Regulations
set out in clause 11.1 of this Agreement;     10.1.9   in relation to protected
disclosures (whistleblowing) under the Employment Rights Act 1996 and the Public
Interest Disclosure Act 1998;     10.1.10   in respect of the infringement of
the statutory employment rights set out in the Trade Union and Labour Relations
(Consolidation) Act 1992;     10.1.11   for failure to comply with obligations
under the Human Rights Act 1998;

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  10.1.12   for failure to comply with obligations under the Data Protection Act
1998;     10.1.13   in relation to personal injuries of which the Employee is
currently aware;     10.1.14   in relation to written reasons for dismissal,
written particulars or itemised payslips, under the Employment Rights Act 1996;
    10.1.15   in relation to the national minimum wage, under the National
Minimum Wage Act 1998;     10.1.16   in relation to the right to be accompanied
at disciplinary and grievance meetings, under the Employment Rights Act 1999;
and     10.1.17   of any type under the federal, state, and local laws,
statutes, regulations, ordinances, and common law of the United States and each
of the states thereof, including but not limited to claims under Title VII of
the Civil Rights Act of 1964, the Americans With Disabilities Act, and the
Employee Retirement Income Security Act of 1974;

      but excluding any claim:

  (i)   for any personal injury of which the Employee is currently unaware;    
(ii)   for the sums and benefits due to the Employee pursuant to this Agreement
or to enforce any other term of this Agreement; and     (iii)   under and
pursuant to the terms and conditions of (x) any D&O insurance policy maintained
by or on behalf of the Company that is applicable to the Employee and (y) any
indemnification provision contained in the Articles or Bylaws of the Company
that are applicable to the Employee.

  10.2   The Employee confirms that the Employee is aware of no other claim or
grounds to make a claim against the Protected Persons in relation to the
employment or its termination howsoever arising. The Employee represents and
warrants that:

  10.2.1   the Employee has instructed the Adviser to advise as to whether the
Employee has or may have any claims, including statutory claims, against the
Protected Persons arising out of or in connection with the Employee’s employment
or its termination;     10.2.2   the Employee has provided the Adviser with all
available information which the Adviser requires or may require in order to
advise whether the Employee has any such claims;

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  10.2.3   the Adviser has advised the Employee that on the basis of the
information available to the Adviser the Employee’s only claims or particular
complaints against the Protected Persons, whether statutory or otherwise,
arising out of or in connection with the Employee’s employment or its
termination are those listed in clause 10.1 of this Agreement and that (save for
those excepted pursuant to clauses 4.2, 4.3 and 10.1 (i), (ii) and (iii)) the
Employee has no other claim against them arising out of or in connection with
the Employee’s employment or its termination; and     10.2.4   the Adviser is a
relevant independent adviser as defined in the Acts and Regulations set out in
clause 11.1 of this Agreement.

11.   COMPLIANCE WITH STATUTORY PROVISIONS

  11.1   This Agreement satisfies the conditions regulating compromise
agreements under the Employment Rights Act 1996, the Disability Discrimination
Act 1995, the Sex Discrimination Act 1975 (in relation to claims under that Act
and the Equal Pay Act 1970), the Race Relations Act 1976, the Trade Union and
Labour Relations (Consolidation) Act 1992, the Working Time Regulations 1998,
the National Minimum Wage Act 1998, the Part-Time Workers (Prevention of Less
Favourable Treatment) Regulations 2000, the Fixed-Term Employees (Prevention of
Less Favourable Treatment) Regulations 2002, the Employment Equality (Sexual
Orientation) Regulations 2003, the Employment Equality (Religion or Belief)
Regulations 2003 and the Employment Equality (Age) Regulations 2006.     11.2  
The Employee confirms that:

  11.2.1   he has received advice from the Adviser as to the Terms and effect of
this Agreement and in particular its effect on his ability to pursue his rights
before an Employment Tribunal; and     11.2.2   he will procure that the Adviser
signs the Certificate in Schedule 1.

12.   THIRD PARTY RIGHTS

  12.1   Each Protected Person (as applicable) shall have the right under the
Contracts (Rights of Third Parties) Act 1999 to enforce the rights referred to
in these Terms. Except as set out in this clause 11, a person who is not a party
to these Terms may not enforce any of its provisions under the Contracts (Rights
of Third Parties) Act 1999.

13.   GENERAL

  13.1   In these Terms, “Group Company” means any one of CKX and 19E, and their
respective subsidiaries, holding companies or any subsidiary of a holding
company (in each case as defined by the Companies Act 2006) and the “Group” has
the corresponding meaning.

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  13.2   In this Agreement, references to statutory provisions shall be
construed as references to those provisions as respectively replaced or amended
or re-enacted from time to time.     13.3   This Agreement is governed by and
construed in accordance with the law of England and Wales. Each party
irrevocably agrees to submit to the exclusive jurisdiction of the courts of
England and Wales over any claim or matter arising under or in connection with
this Agreement.     13.4   These Terms may be executed in one or more
counterparts which, when taken together, shall be deemed to constitute the
entire agreement between the parties.     13.5   Notwithstanding that this
Agreement is marked “without prejudice and subject to contract”, it will, when
dated and signed by all the parties named below and accompanied by the
certificate in Schedule 1 signed by the Adviser become an open and binding
agreement between the parties.     13.6   This Agreement may not be modified
except by an instrument in writing signed by the duly authorised representatives
of the parties.     13.7   Each party on behalf of itself and (in the case of
the Company, as agent for any Group Companies) acknowledges and agrees with the
other party (the Company acting on behalf of itself and as agent for each Group
Company) that:

  13.7.1   this Agreement (together with any documents referred to in it)
constitute(s) the entire agreement and understanding between the Employee and
the Company and any Group Company and supersedes any previous agreement between
them relating to his employment by the Company (which shall be deemed to have
been terminated by mutual consent upon the terms of this Agreement);     13.7.2
  in entering into this Agreement neither the Employee, the Company nor any
Group Company has relied on any Pre-Contractual Statement; and     13.7.3   the
only remedy available to a party for breach of this Agreement shall be for
breach of contract under the terms of this Agreement and it shall have no right
of action against any other party in respect of any Pre-Contractual Statement,

      provided that nothing in this Agreement shall, however, operate to limit
or exclude any liability for fraud. “Pre-Contractual Statement” means any
undertaking, promise, assurance, statement, representation, warranty or
understanding (whether in writing or not) of any person (whether party to this
Agreement or not) relating to the Employee’s employment or its termination other
than as expressly set out in this Agreement or any documents referred to in it.

  13.8   For a period of 3 months after the Termination Date, the Employee
agrees to make himself available to, and to cooperate with, the Company, any
Group

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      Company and its or their advisers in connection with the preparation of
(i) financial statements and results for the year ended December 31, 2009
(including with respect to any related audit of any applicable Group Company)
and (ii) any applicable regulatory filings and/or disclosure documents in
respect of such year. The Company shall reimburse the Employee for any and all
costs, including the reasonable cost of counsel, reasonably incurred in
connection with this clause 13.8.     13.9   Except as otherwise prohibited or
limited by law, CKX shall indemnify the Employee against all losses, claims,
expenses, or other liabilities of any nature arising by reason of the fact that
prior to the date hereof he: was a director, officer, employee, or agent of CKX,
in each case to the fullest extent permitted under the Delaware General
Corporation Law, as the same exists or may hereafter be amended. No repeal or
modification of the provisions of the Delaware General Corporation Law shall
adversely affect any right or protection thereunder in respect of any events,
circumstances, acts or omissions occurring or existing prior to the time of such
repeal or modification, including, without limitation, any right to
indemnification and/or advancement of expenses for any threatened, pending or
completed action, suit or proceeding, as applicable, commenced after such repeal
or modification to enforce this Clause 13.9 with regard to events,
circumstances, acts or omissions occurring or existing prior to such repeal or
modification, to the extent the foregoing is permissible under the Delaware
General Corporation Law as so repealed or modified. Without limiting the
generality of the foregoing, the Employee shall be entitled 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 CKX that
are applicable to the Employee, 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 Employee), to the fullest
extent permitted by applicable law. The indemnification obligations of CKX shall
survive from the date hereof 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 Employee 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 CKX has received
notice on or prior to the end of the Survival Period. The Group Company’s belief
regarding a statute of limitations applicable to a claim, any position taken by
CKX 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 it from its
obligation to indemnify the Employee. Anything in this Agreement to the contrary
notwithstanding, this Clause 13.9 shall survive the termination of this
Agreement for any reason.

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SCHEDULE 1
ADVISER’S CERTIFICATE
I confirm that:

1.   I am a relevant independent adviser as defined in the Acts and Regulations
(as set out in clause 11.1 of the Agreement between 19 Entertainment Limited,
Simon Robert Fuller and CKX, Inc., to which this Certificate is annexed).   2.  
I have advised the Employee of the Terms and the effect of the Agreement and in
particular its effect on his ability to pursue a claim before an Employment
Tribunal.   3.   There is in force a contract of insurance covering the risk of
a claim by the Employee in respect of loss arising in consequence of my advice.

     
Adviser’s signature
  /s/ Andy Stinson
 
   
 
   
Adviser’s name
  Andy Stinson
 
   
Title
  Solicitor
 
   
Adviser’s business address
  33 Ransome’s Dock
35-37 Parkgate Road
London
SW11 4NP  
Date
  13 January 2010

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IN WITNESS whereof this Agreement has been signed on behalf of the Company and
by the Employee the day and year first above written.

           
SIGNED by
  )    
Duly authorised for and on behalf of
  )    
19 ENTERTAINMENT LIMITED
  ) /s/ Robert F.X. Sillerman  
 
     
 
       
SIGNED by SIMON ROBERT FULLER
    /s/ Simon Robert Fuller  
 
     
 
       
SIGNED by CKX, INC.
    /s/ Robert F.X. Sillerman