Exhibit 10.1
 
As of May 1, 2014
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Mr. Robert F.X. Sillerman
157 East 70th Street
New York, NY 10021
 
Dear Mr. Sillerman,
 
Reference is made to that certain Employment Agreement dated as of February 16,
2011 by and between you and Function (X) Inc. (now known as Viggle Inc.) (the
“Company” or the “Employer”), pursuant to which you are employed as Executive
Chairman of the Company, as amended by that certain letter agreement dated April
1, 2013 (collectively known as the “Original Agreement”).
 
The purpose of this letter agreement (the “Letter Agreement”) is to amend the
Original Agreement effective immediately and redefine some of the terms and
conditions of your continued employment with the Company.  Accordingly, in
consideration of the terms and provisions hereof, the Original Agreement is
hereby amended, effective immediately, as follows:
 
1.           This Letter Agreement shall be deemed to amend the Original
Agreement and become effective (the “Effective Date”) as of the later of May 1,
2014 or the date the Offering (as hereinafter defined) is consummated.  This
Letter Agreement is conditioned on the completion of the Company’s primary share
offering currently contemplated to be underwritten by Ladenburg Thalmann (the
“Offering”)
 
2.           Section 2.1 of the Original Agreement shall be deleted in its
entirety and the following shall be placed in its stead:
 
“This Agreement is conditioned on the completion of the Company’s primary share
offering currently contemplated to be underwritten by Ladenburg Thalmann (the
“Offering”) and will be effective on the later of May 1, 2014 or the date the
Offering is consummated.  This Agreement will continue in effect for five (5)
years (the “Term”) until April 30, 2019, unless sooner terminated pursuant to
the provisions contained herein.  For the purposes of this Agreement, each
employment year will begin on May 1 and end on April 30.
 
This Agreement will continue in effect for five (5) years (the “Term”) until
April 30, 2019, unless sooner terminated pursuant to the provisions contained
herein.  For the purposes of this Agreement, each employment year will begin on
May 1 and end on April 30.”
 
2.           Section 3.1 is hereby amended to insert the words “and Chief
Executive Officer” after “Executive Chairman of the Board” in the second and
fourth lines.
 
3.           Schedule 4.4, as referred to in Section 4.4, is hereby amended to:
 
(a) change the title of the schedule to Schedule 4.4 from Schedule 4.5;
 
(b)           add “SFX Entertainment, Inc. and its affiliates; any successor to
Circle Entertainment Inc. (and/or affiliates); and any other businesses as are
not competitive
 
with the Company, so long as such activities do not impair the performance of
Executive’s duties for the Company”.
 
 
 
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4.           Section 6.1 is hereby deleted in its entirety and the following
shall be placed in its stead:
 
“Base Salary . Executive shall be paid a base salary at the annual rate of One
Dollar ($1.00) (“Base Salary”) for each year of the Term, payable on May 1.  As
an exempt employee, Executive will not be eligible for overtime pay.”
 
5.           Section 6.2 is hereby deleted in its entirety and the following
shall be placed in its stead:
 
“Guaranteed Amount.  Executive shall also receive a guaranteed annual payment
(the “Guaranteed Amount”) in the amount of (x) Two Hundred Fifty Thousand
Dollars ($250,000.00), which will be paid in one payment on or before March 15
each year of the Term, less (y) the total 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 the 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
Guaranteed Amount plus the Perquisites received by the Executive in any year of
the Term exceeds the Guaranteed 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 Guaranteed Amount during the following year.
The Guaranteed Amount shall be paid in cash, provided that if either the Company
or Executive so elect, the Guaranteed Amount may be paid in shares of the
Company’s common stock, provided that the Compensation Committee (the
“Compensation Committee”) of the Company’s Board of Directors (the “Board”)
approves the equity grant.  The value of each share shall be determined by
compiling the weighted average daily closing price of the Employer’s common
stock for the twelve (12) month period ending on the last day of the month
preceding the date the Guaranteed Amount is to be paid.”
 
6.           Sections 7.1 and 7.2 are hereby deleted in their entirety and the
following shall be placed in their stead:
 
“7.1           Additional Bonus. At the discretion of the Board and/or the
Compensation Committee, Executive may be awarded an additional bonus besides the
Annual Bonus (the “Additional Bonus”).  The form and amount of the Additional
Bonus shall be at the sole and absolute discretion of the Board.  The Board’s
decision to cause the Employer to make or to not make an Additional Bonus
payment to Executive in any year (including, without limitation, the
consideration to be received or methodology applied by the Board to an
Additional Bonus eligibility determination in any year) shall have no bearing on
Executive’s eligibility to earn an Additional Bonus in any succeeding year, nor
shall the amount, form, or payment timing of any such Additional Bonus in any
year have any bearing on any aspect of an Additional Bonus determination in any
subsequent year.  Executive acknowledges and agrees that Executive’s eligibility
to participate in the Company’s 2011 Executive Incentive Plan (as amended) (the
“Plan”), other than with respect to the Annual Bonus, may be based on the
attainment of performance goals, subject to stockholder approval and that shall
otherwise comply with the requirements of Section 162(m) of the Code and that
the Board may, in its sole and absolute discretion, establish from time to time
one or more other annual or long-term bonus plans under which the Executive may
be an eligible participant and that also are based on the attainment of
performance goals, subject to stockholder approval and that shall otherwise
comply with the requirements of Section 162(m) of the Code.
 
7.2           Equity Grant:  Subject to approval by the Compensation Committee
and the terms of the Company’s standard form of grant agreement, as determined
in its sole discretion, Executive shall receive a grant of restricted shares
(the “RSUs”) of the Employer’s common stock equal to one and one-quarter percent
(1.25%) of Employer’s (i) issued and outstanding common stock and (ii) common
shares underlying in- or at-the-money options and warrants and (iii) preferred
shares convertible into common shares as part of the exchange.  The total of
(i), (ii), and (iii) shall be measured immediately prior to the consummation of
the Offering at the price at which the Employer’s common stock is priced to the
public in such offering.  The grant shall vest ratably in annual installments at
the last day of the month preceding the date the Offering was consummated over a
period of five (5) years from the date of grant.”
 
 
 
 
 
7.           Section 9.3 is hereby amended to substitute “termination for Good
Reason” for “Constructive Termination without Cause”.
 
8.           Section 9.5(b) is hereby deleted in its entirety and the following
shall be placed in its stead:
 
“all previously awarded and unpaid Guaranteed Amount at the date of the
Executive’s death;”
 
9.           Section 12 is hereby deleted in its entirety and the following
shall be placed in its stead:
 
(a)           Either Executive or the Employer may terminate this Agreement at
any time for any reason.
 
(b)           If Executive is terminated for Cause (as hereinafter defined in
Section 12(e)) or if Executive terminates this Agreement without Good Reason (as
hereinafter defined in Section 5(g)), then Employer will have no further
obligations to Executive other than to pay Base Salary through the date of
termination and reimburse him for any unreimbursed expenses he has incurred
(such obligations, the “Accrued Obligations”).
 
(c)           If Employer terminates Executive without Cause, if Executive
terminates this Agreement with Good Reason, or if Executive dies or becomes
permanently disabled during the term of this Agreement:
 
(i)           Executive will be entitled to receive a lump sum payment within
sixty (60) days of the termination date equal to one (1) year’s Guaranteed
Amount (which payment may be made in cash, or, if either the Employer or
Executive so elects, in shares of the Company’s common stock, provided the
Compensation Committee approves such grant.  The value of each share of which
shall be determined by compiling the weighted average daily closing price of the
Employer’s common stock for the twelve (12) month period ending on the last day
of the month preceding the date such payment is to be made), provided, however,
that this Section 12(c)(i) shall not apply in the event of a Good Reason
termination triggered by Section 12(g)(vi).
 
(ii)           All options to purchase Employer stock or any RSUs granted under
this Agreement or any other agreement that have not previously vested shall
vest.
 
(d)           Executive’s entitlement to the payments described in this Section
12 (other than the Accrued Obligations) is expressly contingent upon his first
providing the Employer with a signed general release of claims in favor of the
Employer substantially in the form attached as Exhibit A hereto (the “Release”)
and not revoking such Release for a period of seven (7) days after its execution
or thereafter.  In order to be effective, the Release must be delivered by
Executive to the Employer no later than forty-five (45) days following the
Termination Date.  In the event that the 45 day period following the Termination
Date begins in one calendar year and ends in another calendar year, the cash
payments to be made under this Section 12 (other than the Accrued Obligations),
shall be paid in the later calendar year.
 
(e)           For the purposes of this Agreement, “Cause” shall mean that
Executive has:
 
 
 

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(i)           committed an act which, as set forth in any employment handbook
promulgated by the Employer, may lead to termination of employment, unless
curable, in which case such cure shall not have been completed within thirty
(30) days following the Employer’s notice to Executive;
 
(ii)           engaged in any intentional act of fraud against the Employer;
 
(iii)           engaged in willful malfeasance or gross negligence in the
performance of this Agreement or capacity as an employee of the Employer;
 
(iv)           refused to perform the duties required or requested consistent
with Executive’s obligations under this Agreement and under law, which refusal
continues for more than five (5) days following the Employer’s written notice of
such refusal;
 
(v)           been convicted of a felony or entering a plea of nolo contendre to
a felony charge;
 
(vi)           materially breached this Agreement, subject to a fifteen (15) day
cure period following the Employer’s written notice of such breach to the extent
such breach is curable; or
 
(vii)           engaged in an act which leads to a finding by the Securities and
Exchange Commission, which, in the opinion of independent counsel selected by
the Company, could reasonably be expected to impair or impede the Employer’s
ability to register, list, or otherwise offer its stock to the public, or to
maintain itself as a publicly-traded company in good standing with the
Securities and Exchange Commission.
 
(f)           For the purposes of this Agreement, “Change of Control” shall mean
the occurrence, in a single transaction or in a series of related transactions,
of any one or more of the following events:
 
(i) any “person” (as such term is used in Sections 13(d) and 14(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (an “Exchange
Act Person”) becomes the “beneficial owner” (as defined in Rule 13d-3 of the
Exchange Act), directly or indirectly, of securities of the Employer
representing more than thirty-five percent (35%) of the combined voting power of
the Employer, then outstanding securities other than by virtue of a merger,
consolidation or similar transaction, provided that, notwithstanding the
foregoing, a Change in Control shall not be deemed to occur (i) if Robert F.X.
Sillerman or affiliates of his (a “Sillerman Controlled Entity”) beneficially
own more than such thirty-five percent (35%) at any time; or (ii) solely because
the level of ownership held by any Exchange Act Person (the “Subject Person”)
exceeds the designated percentage threshold of the outstanding voting securities
as a result of a repurchase or other acquisition of voting securities by the
Employer reducing the number of shares outstanding, provided further that if a
Change in Control would occur (but for the operation of this proviso) as a
result of the acquisition of voting securities by the Employer, and after such
share acquisition, any such Subject Person (so long as not a Sillerman
Controlled Entity) becomes the owner of any additional voting securities that,
assuming the repurchase or other acquisition had not occurred, increases the
percentage of the then outstanding voting securities owned by such Subject
Person over the designated percentage threshold, then a Change in Control shall
be deemed to occur;
 
(ii) there is consummated a merger, consolidation or similar transaction
involving (directly or indirectly) the Company if, immediately after the
consummation of such merger, consolidation or similar transaction, the
stockholders of the Employer immediately prior thereto do not own, directly or
indirectly, either (A) outstanding voting securities representing more than
fifty percent (50%) of the combined outstanding voting power of the surviving
entity in such merger, consolidation or similar transaction or (B) more than
fifty percent (50%) of the combined outstanding voting power of the parent of
the surviving entity in such merger, consolidation or similar
transaction.  Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred if as a result of a merger, consolidation or similar
transaction, a Sillerman controlled entity beneficially owns more than 35% of
the successor company.
 
(iii) there is consummated a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Employer and its
subsidiaries, other than a sale, lease, license or other disposition of all or
substantially all of the consolidated assets of the Employer and its
subsidiaries to an entity, more than fifty percent (50%) of the combined voting
power of the voting securities of which are owned by stockholders of the
Employer in substantially the same proportion as their ownership of the Employer
immediately prior to such sale, lease, license or other
disposition.  Notwithstanding the foregoing, a Change of Control shall not be
deemed to have occurred if as a result of the foregoing transactions, a
Sillerman controlled entity beneficially owns more than 35% of the successor
company.
 
 
 

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(iv) during any period of 12 consecutive months, individuals who at the
beginning of such period constitute the Board cease for any reason to constitute
at least a majority thereof unless the election, or the nomination for election
by stockholders, of each new director was approved by a vote of at least a
majority of the directors then still in office who were directors at the
beginning of the period.
 
(g)           For purposes of this Agreement, “Good Reason” shall mean if,
before the end of the Term, one or more of the following events shall occur
(unless such event(s) applies generally to all similarly situated senior
executives of the Company):
 
(i) the assignment of any duties to Executive or the reduction of Executive’s
duties, without his express written consent, either of which results in a
significant diminution in Executive’s position or responsibilities with the
Employer in effect immediately prior to such assignment, or the removal from
such position and responsibilities;
 
(ii) without Executive’s express written consent, a substantial reduction or
change with respect to the facilities, support staff, or perquisites (including
office space and location) available to him immediately prior to such reduction
or change;
 
(iii) a material reduction by the Employer in the kind or level of employee
benefits to which Executive is entitled immediately prior to such reduction with
the result that his overall benefits package is significantly reduced;
 
(iv) the failure of the Employer to obtain the assumption of this Agreement by
any successor;
 
(v) any material breach by the Employer of any material provision of this
Agreement; or
 
(vi) there is a Change of Control (as defined in 5(f) above) and Executive
voluntarily terminates his employment more than one (1) year thereafter.  In
such case, that the provisions of Section 12(c)(i) shall not apply.
 
(h)           (i)           In the event it shall be determined that any
payment, right or distribution by the Company or any other person or entity to
or for the benefit of Executive pursuant to the terms of this Agreement or
otherwise, which is made in connection with, or arising out of, his employment
with the Employer or a Change of Control of the Employer or a substantial
portion of its assets (a "Payment") is a "parachute payment" within the meaning
of Section 280G of the Code on account of the aggregate value of the Payments
due to Executive being equal to or greater than three times the "base amount,"
as defined in Section 280G(b)(3) of the Code, (the "Parachute Threshold") so
that Executive would be subject to the excise tax imposed by Section 4999 of the
Code (the "Excise Tax") and the net after-tax benefit that Executive would
receive by reducing the Payments to the Parachute Threshold is greater than the
net after-tax benefit Executive would receive if the full amount of the Payments
were paid to Executive, then the Payments payable to Executive shall be reduced
(but not below zero) so that the Payments due to Executive do not exceed the
amount of the Parachute Threshold, reducing first any cash Payments under
Section 5 hereof.
 
(ii)           All determinations required to be made under this Section 5,
including whether any Payment is a "parachute payment" and the assumptions to be
utilized in arriving at such determination, shall be made by a nationally
recognized law or accounting firm designated by Employer (the "Firm") and shall
be based upon "substantial authority" (within the meaning of Section 6662 of the
Code). The Firm shall provide detailed supporting calculations both to the
Employer and Executive within fifteen (15) business days of the receipt of
notice from the Employer or Executive that there has been a Payment, or such
earlier time as is requested by Employer. All fees and expenses of the Firm
shall be borne by the Employer. Any determination by the Firm shall be binding
upon the Employer and Executive.
 
(i)           (i)           Notwithstanding anything herein to the contrary,
this Agreement is intended to be interpreted and applied so that the payment of
the benefits set forth herein either shall either be exempt from the
requirements of Section 409A of the Code ("Section 409A") or shall comply with
the requirements of such provision. Notwithstanding any provision of this
Agreement to the contrary, if Executive is a "specified employee" within the
meaning of Section 409A, any payments or arrangements due upon a termination of
Executive's employment under any arrangement that constitute a "nonqualified
deferral of compensation" within the meaning of Section 409A and which do not
otherwise qualify under the exemptions under Treas. Regs. Section 1.409A-1
(including without limitation, the short-term deferral exemption or the
permitted payments under Treas. Regs. Section 1.409A-l(b)(9)(iii)(A)), shall be
delayed and paid or provided on the earlier of (i) the date which is six months
after Executive's "separation from service" (as such term is defined in Section
409A and the regulations and other published guidance thereunder) for any reason
other than death, and (ii) the date of Executive's death.
 
 
 

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(ii)           After any Termination Date, Executive shall have no duties or
responsibilities that are inconsistent with having a "separation from service"
within the meaning of Section 409A as of the Termination Date and,
notwithstanding anything in the Agreement to the contrary, distributions upon
termination of employment of nonqualified deferred compensation may only be made
upon a "separation from service" as determined under Section 409A and such date
shall be the Termination Date for purposes of this Agreement. Each payment under
this Agreement or otherwise shall be treated as a separate payment for purposes
of Section 409A. In no event may Executive, directly or indirectly, designate
the calendar year of any payment to be made under this Agreement which
constitutes a "nonqualified deferral of compensation" within the meaning of
Section 409A and to the extent an amount is payable within a time period, the
time during which such amount is paid shall be in the discretion of the
Employer.
 
(iii)           To the extent that any reimbursements pursuant to this agreement
or otherwise are taxable to Executive, any reimbursement payment due to
Executive pursuant to such Section shall be paid to Executive on or before the
last day of Executive's taxable year following the taxable year in which the
related expense was incurred. Such reimbursements are not subject to liquidation
or exchange for another benefit and the amount of such reimbursements that
Executive receives in one taxable year shall not affect the amount of such
reimbursements that Executive receives in any other taxable year.”
 
10.           Section 13.1 is hereby amended to substitute “Guaranteed Amount”
for “Annual Cash Bonus”.
 
11.           Section 13.2 is hereby amended to substitute “Guaranteed Amount”
for “Base Salary”.
 
All other terms and conditions of the Employment Agreement shall remain in full
force and effect.
 
This Letter Agreement shall be governed by and construed under the laws of the
State of New York (without regard to conflict of law provisions thereof).  No
party hereto may assign its rights in whole or in part or delegate its
obligations in whole or in part under this Letter Agreement without the written
consent of the other party hereto.  Except as provided herein, the Employment
Agreement shall remain in full force and effect.  The Employment Agreement, as
amended by this Letter Agreement, constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof and supersedes all
prior or contemporaneous oral or written understandings and agreements between
the parties hereto with respect to the subject matter hereof. This Letter
Agreement shall be binding upon and inure to the benefit of the respective
parties hereto, their successors and permitted assigns (as well as their heirs
and estates, if applicable).
 
If the foregoing correctly sets forth our understanding, please execute this
Letter Agreement in the space provided below.
 

 
Sincerely,
         
VIGGLE INC.
          By:           Name:             Title:         Accepted and agreed to
as of this 1st day of May 2014:                 Robert F.X. Sillerman