EX-10.1






EXHIBIT 10.1




EMPLOYMENT AGREEMENT




This Employment Agreement (this “Agreement”) is entered into as of October 21, 2009 by and
between Live Nation, Inc., a Delaware corporation (the “Company”), Live Nation Worldwide, Inc., a
Delaware corporation (“Worldwide”), and Michael Rapino (the “Executive”).



WHEREAS, Ticketmaster Entertainment, Inc. (“Ticketmaster”), the Company and Merger Sub (as
defined in the Merger Agreement) have entered into that certain Agreement and Plan of Merger dated
as of February 10, 2009 (the “Merger Agreement”) pursuant to which Ticketmaster will be merged with
and into Merger Sub and the Company shall change its name to “Live Nation Entertainment, Inc.”
(together with the other transactions contemplated by the Merger Agreement, the “Merger”).



WHEREAS, the Company and the Executive are parties to that certain Amended and Restated
Employment Agreement dated January 1, 2007, as amended by that certain Amendment to Amended and
Restated Employment Agreement effective as of December 31, 2008, and as further amended by that
certain Second Amendment to Amended and Restated Employment Agreement dated April 24, 2009 and
effective as of January 1, 2009 (collectively, and as may be further amended, the “2007
Agreement”).



WHEREAS, subject to and conditioned upon the closing of the Merger (the “Closing”), the
Company and the Executive desire to terminate and forever extinguish the 2007 Agreement and,
subject to Sections 5(c) and (d) below, to have this Agreement supersede and replace in its
entirety the 2007 Agreement, effective as of the Closing (the date on which the Closing occurs, the
“Effective Date”).



WHEREAS, this Agreement will become effective only if the Closing occurs and will terminate
and be null and void and of no force or effect if the Merger Agreement is terminated or the Closing
does not occur for any reason.



NOW, THEREFORE, in consideration of the premises and the mutual covenants set forth below and
other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive, intending to be legally bound, agree, subject to and
conditioned upon the occurrence of the Closing, to terminate and forever extinguish the 2007
Agreement as of the Closing, subject to Sections 5(c) and (d) below, and to supersede and replace
the 2007 Agreement in its entirety with this Agreement, on the following terms and conditions:



1. Employment. The Company hereby agrees to employ the Executive as its President and
Chief Executive Officer, and the Executive hereby accepts such employment, on the terms and
conditions hereinafter set forth.



2. Term. The period of employment of the Executive by the Company under this
Agreement (the “Employment Period”) shall commence on the Effective Date and shall have a term
expiring on May 31, 2014. The Employment Period may be sooner terminated by either party in
accordance with Section 6 of this Agreement.



3. Position and Duties. During the Employment Period, the Executive shall serve as
President and Chief Executive Officer of the Company, and shall report solely and directly to the
Board of Directors of the Company (the “Board”). Subject to the following two sentences, the
Executive shall have those powers and duties normally associated with the positions of President
and Chief Executive Officer of entities comparable to the Company, including, without limitation,
oversight and management of the Company’s (i) corporate and investor relations functions, (ii) live
entertainment promotions and venue operations businesses, (iii) ticketing and digital/online
businesses and (iv) all other businesses and operating units of the Company other than those
specifically identified in the following sentence. The Executive acknowledges that the Executive
Chairman of the Company (the “Executive Chairman”) shall have primary responsibility for the
Company’s (i) artist services businesses (including merchandising, websites, fan sites, VIP
ticketing, e-commerce, sponsorships and related businesses) and (ii) artist management business
(including serving in the capacity as Chief Executive Officer of Front Line Management Group,
Inc.). The Executive and the Executive Chairman shall have shared responsibility for the Company’s
business development, strategic decisions and overall policies. The Executive shall devote as much
of his working time, attention and energies during normal business hours (other than absences due
to illness or vacation) to satisfactorily perform his duties for the Company. Notwithstanding the
above, the Executive shall be permitted, to the extent such activities do not substantially
interfere with the performance by the Executive of his duties and responsibilities hereunder or
violate Section 11 hereof, to (i) manage the Executive’s personal, financial and legal affairs,
(ii) serve on civic or charitable boards or committees (it being expressly understood and agreed
that the Executive’s continuing to serve on any such boards and/or committees on which the
Executive is serving, or with which the Executive is otherwise associated, as of the Effective Date
shall be deemed not to interfere with the performance by the Executive of his duties and
responsibilities under this Agreement) and (iii) deliver lectures or fulfill speaking engagements.
During the Employment Period, for so long as the Executive remains an officer of the Company, the
Board shall also nominate the Executive to serve as a member of the Board.



4. Place of Performance. The principal place of employment of the Executive shall be
at the Company’s principal executive offices in Los Angeles, California.



5. Compensation and Related Matters.




(a) Base Salary. During the Employment Period, the Company shall pay the
Executive a base salary at the rate of not less than $2,000,000 per year (“Base Salary”),
less appropriate payroll deductions and all required withholdings. The Executive’s Base
Salary shall be paid in approximately equal installments in accordance with the Company’s
customary payroll practices as they may be amended from time to time and prorated for any
partial pay periods (but no less frequently than monthly). The Compensation Committee of
the Board (the “Compensation Committee”) shall review the Executive’s Base Salary for
increase (but not decrease) no less frequently than annually and otherwise consistent with
the executive compensation practices and guidelines of the Company. If the Executive’s Base
Salary is increased by the Company, such increased Base Salary shall then constitute the
Base Salary for all purposes of this Agreement. The Base Salary will be increased by a
minimum of $100,000 per year on each anniversary of the Effective Date prior to the
expiration of the Employment Period.




(b) Signing Bonus. In addition to Base Salary, provided that the Executive
remains employed by the Company until the Effective Date, the Executive shall be paid a
one-time signing bonus in the amount of $3,000,000, less appropriate payroll deductions and
all required withholdings, which shall be payable within 10 days after the Effective Date.




(c) Performance Bonus. In addition to Base Salary, the Executive shall be
eligible to receive an annual cash bonus (the “Performance Bonus”), with a target amount
equal to 100% of the Executive’s highest annual Base Salary rate during the calendar year
for which the Performance Bonus is being paid (the “Target Bonus”), less appropriate payroll
deductions and all required withholdings. The Compensation Committee will establish
financial performance targets of the Company as measured in the achievement of Earnings
Before Interest, Taxes, Depreciation and Amortization as defined by the Company and as
adjusted for acquisitions and dispositions (“Target EBITDA”) and will promptly inform the
Executive of such Target EBITDA upon its establishment for each relevant year. With respect
to each fiscal year during the Employment Period:




(i) if the Company achieves the Target EBITDA for such year, then the Executive
will receive the full Target Bonus;




(ii) if the Company exceeds the Target EBITDA for such year, then the Executive
will receive a Performance Bonus in excess of the Target Bonus, based on a range of
Performance Bonuses in excess of the Target Bonus and based on a range of EBITDA in
excess of the Target EBITDA, as such ranges are established by the Compensation
Committee in its discretion no later than the ninetieth day of each such year; and




(iii) if the Company achieves less than the Target EBITDA for such year, then
the Executive will receive a Performance Bonus which is less than the Target Bonus,
based on a range of Performance Bonuses which are less than the Target Bonus and
based on a range of EBITDA which is less than the Target EBITDA, as such ranges are
established by the Compensation Committee in its discretion no later than the
ninetieth day of each such year.




The Target EBITDA will be subject to equitable adjustment by the Compensation Committee to
take into account material acquisitions, dispositions and other material extraordinary
events; provided, that the parties hereto will use their reasonable best efforts to
facilitate the payment of the bonuses hereunder on a basis that is consistent with such
payments qualifying for the performance-based compensation exception under Section 162(m) of
the Internal Revenue Code of 1986, as amended and the regulations thereunder (the “Code”).
The Performance Bonus, if earned, shall be paid in a lump sum by March 15 of the calendar
year following the calendar year in which it is earned. As provided in Section 8(a)(i)
below, the Executive will receive the Performance Bonus to which he is entitled for each
full fiscal year in which he was employed by the Company, even if the Executive is not
employed on the actual date on which the Performance Bonus is paid or payable for such
fiscal year. In addition, for the calendar year ending 2014, if this Agreement is not
renewed or replaced to the mutual satisfaction of the parties, the Executive will be
entitled to a pro rated Performance Bonus calculated by multiplying the Performance Bonus
paid to the Executive for the 2013 calendar year by 5/12, which Performance Bonus will be
paid in a lump sum no later than June 15, 2014. If the Effective Date occurs in 2009, the
Executive will receive no Performance Bonus for 2009 under this Agreement, but rather will
be entitled to any bonus payable under the 2007 Agreement, as if the 2007 Agreement had
remained in effect for the full calendar year. If the Effective Date occurs in any calendar
year after 2009, (i) unless otherwise mutually agreed between the Compensation Committee and
the Executive, any performance bonus payable to the Executive for the year in which the
Effective Date occurs shall be payable pro rata such that the portion of such year occurring
through the Effective Date will be based on target payment amounts under the 2007 Agreement
and the portion of such year occurring following the Effective Date will be based on target
payment amounts under this Agreement, and (ii) the Compensation Committee will, in
consultation with the Executive, reasonably determine whether new performance targets shall
be set following the Effective Date that relate to the combined company post-Merger, rather
for the Company on a stand-alone basis. Upon termination of employment, unpaid Performance
Bonuses will be paid (to the extent payable) as described in Section 8 below. The financial
performance targets established by the Compensation Committee for purposes of this Section
5(c) and Section 5(i) below in each year during the Employment Period will be based on a
stated level of EBITDA unless the Company and the Executive agree on a different measure of
financial performance. If in any year the Compensation Committee establishes financial
performance criteria applicable to other executives, whether in connection with cash
performance bonuses, performance-based equity compensation or otherwise, the Compensation
Committee will not make the Executive subject to a higher financial performance goal in
connection with Sections 5(c) or 5(i) of this Agreement than the highest performance goal
established for any such other executive that is based on the same financial measure as that
selected for the Executive.




(d) Exceptional Performance Bonus. In addition to Base Salary and the
Performance Bonus, the Executive shall be eligible to receive an additional annual cash
bonus (the “Exceptional Performance Bonus”) with a target amount equal to 100% of the
Executive’s highest annual Base Salary rate during the calendar year for which the
Exceptional Performance Bonus is being paid, less appropriate payroll deductions and all
required withholdings. The Exceptional Performance Bonus shall be based upon the
Executive’s achievement of superior performance in a given calendar year, and shall be based
on targets and objectives established by the Compensation Committee in its discretion in
each calendar year no later than the ninetieth day of each such year (and shall promptly
inform Executive of such targets and objectives) and, if earned (as determined by the
Compensation Committee), shall be paid in a lump sum by March 15 of the calendar year
following the calendar year in which it is earned. As provided in Section 8(a)(i) below,
the Executive will receive the Exceptional Performance Bonus to which he is entitled for
each full fiscal year in which he was employed by the Company, even if the Executive is not
employed on the actual date on which the Exceptional Performance Bonus is paid or payable
for such fiscal year. In addition, for the calendar year ending 2014, if this Agreement is
not renewed or replaced to the mutual satisfaction of the parties, the Executive will be
entitled to a pro rated Exceptional Performance Bonus calculated by multiplying the
Exceptional Performance Bonus paid to the Executive for the 2013 calendar year by 5/12,
which Exceptional Performance Bonus will be paid in a lump sum no later than June 15, 2014.
If the Effective Date occurs in 2009, the Executive will receive no Exceptional Performance
Bonus for 2009 under this Agreement, but rather will be entitled to any bonus payable under
the 2007 Agreement, as if the 2007 Agreement had remained in effect for the full calendar
year. If the Effective Date occurs in any calendar year after 2009, (i) unless otherwise
mutually agreed between the Compensation Committee and the Executive, any exceptional
performance bonus payable to the Executive for the year in which the Effective Date occurs
shall be payable pro rata such that the portion of such year occurring through the Effective
Date will be based on target payment amounts under the 2007 Agreement and the portion of
such year occurring following the Effective Date will be based on target payment amounts
under this Agreement, and (ii) the Compensation Committee will, in consultation with the
Executive, reasonably determine whether new performance targets shall be set following the
Effective Date that relate to the combined company post-Merger, rather for the Company on a
stand-alone basis. Upon termination of employment, Exceptional Performance Bonuses will be
paid (to the extent payable) as described in Section 8 below.




(e) Expenses and Perquisites. The Company shall promptly reimburse the
Executive for all reasonable business expenses upon the presentation of reasonably itemized
statements of such expenses, in accordance with the Company’s policies and procedures now in
force or as such policies and procedures may be modified generally with respect to senior
executive officers of the Company. In addition, during the Employment Period, the
Executive shall be entitled to, at the sole expense of the Company, the use of an automobile
appropriate to his position and no less qualitative than the Executive’s current automobile,
payment by the Company of any lease payments in connection therewith and the cost of
insurance and other reasonable costs related thereto. To the extent that any payments or
reimbursements provided to the Executive related to the automobile expense or any other
payments or reimbursements hereunder are determined to constitute taxable compensation to
the Executive to which Treasury Regulation Section 1.409A-3(i)(1)(iv) would apply, such
amounts shall be paid or reimbursed to the Executive promptly, but in no event later than
December 31 of the year following the year in which the expense is incurred. The amount of
any such expenses paid for or reimbursed in one year shall not affect the amount eligible
for payment or reimbursement in any subsequent year, and the Executive’s right to such
payment or reimbursement shall not be subject to liquidation or exchange for any other
benefit.




(f) Vacation. The Executive shall be entitled to the number of weeks of paid
vacation per year for which he was eligible with the Company immediately prior to the
Effective Date, but in no event less than four weeks annually. Unused vacation may be
carried forward from year to year. Vacation shall otherwise be governed by the policies of
the Company, as in effect from time to time. In addition to vacation, the Executive shall
be entitled to the number of sick days and personal days per year that other senior
executive officers of the Company with similar tenure are entitled to under the Company’s
policies.




(g) Services Furnished. During the Employment Period, the Company shall
furnish the Executive with office space, stenographic and secretarial assistance and such
other facilities and services no less favorable than what he was receiving with the Company
immediately prior to the Effective Date or, if better, as provided to other senior executive
officers of the Company.




(h) Welfare, Pension and Incentive Benefit Plans. During the Employment
Period, subject to the terms of the applicable plan documents and generally applicable
Company policies, the Executive (and his spouse and dependents to the extent provided
therein) shall be entitled to participate in and be covered under all the welfare benefit
plans or programs maintained by the Company from time to time for the benefit of its senior
executives, including, without limitation, all medical, hospitalization, dental, disability,
accidental death and dismemberment and travel accident insurance plans and programs. During
the Employment Period, the Company shall provide to the Executive (and his spouse and
dependents to the extent provided under the applicable plans or programs) the same type and
substantially equivalent levels of participation and employee benefits (other than severance
pay plans and, except with the express consent of the Board, incentive bonus programs other
than as explicitly set forth in Section 5(b), 5(c), 5(d) and 5(i) hereof) as are being
provided to other senior executives (and their spouses and dependents to the extent provided
under the applicable plans or programs) on the Effective Date, subject to modifications
affecting all senior executive officers. Nothing herein shall, or shall be construed so as
to, obligate the Company to adopt, maintain or continue any particular benefit plan, program
or policy at any time.




(i) Equity Incentive Awards. To the extent that an insufficient number of
            shares remain available under the Live Nation, Inc. 2005 Stock Incentive Plan (as amended
from time to time, the “Plan”) to cover grants of each of the Financial Performance Shares,
the Management Performance Shares and the Growth Shares (each as defined below), such grants
shall be subject to and conditioned upon the adoption and approval by the stockholders of
the Company of an amendment to the Plan or the adoption and Company stockholder approval of
a new equity incentive plan, in either case, authorizing awards covering a number of shares
sufficient to permit such grants (in either case, a “Share Increase”). If a Share Increase
is not adopted and approved by the stockholders of the Company for any reason prior to the
applicable grant date with respect to any such award, then the Company shall have no
obligation to grant such award (or pay any compensation in lieu thereof) unless and until a
Share Increase is adopted and approved by the stockholders of the Company. Within 30 days
after such approval and adoption of a Share Increase, subject to the Executive’s continued
employment through such dates, the Executive shall be granted the Financial Performance
Shares, Management Performance Shares and Growth Shares that were delayed as a result of
this paragraph, which grants shall vest in accordance with the vesting schedules set forth
below (including any vesting that may occur prior to grant as a result of the delay).




(i) Restricted Shares Associated with Corporate Financial Performance.
In addition to the Performance Bonus and Exceptional Performance Bonus provided by
Sections 5(c) and 5(d), provided that the Executive is employed by the Company on
the applicable grant date, prior to the ninetieth day of each full calendar year of
the Employment Period in which the Executive has not previously been awarded a
comparable grant under the 2007 Agreement, the Executive will receive an annual
grant of 100,000 shares of Company restricted stock (the “Financial Performance
Shares”). Each annual award of 100,000 Financial Performance Shares will vest and
the restrictions thereon will lapse in equal installments of 50,000 shares on March
31 of each of the first two calendar years following the applicable grant date,
subject to and conditioned upon (A) the achievement of the Target EBITDA (or such
other target performance objective as is established by the Compensation Committee
for purposes of determining the Performance Bonus under Section 5(c) for the year of
the grant) and (B) the Executive’s continued employment through each such vesting
date. If the applicable Target EBITDA (or other target performance objective) is
not attained during the year of the grant and/or the Executive’s employment
terminates prior to an applicable vesting date (except as otherwise provided in
Section 8(a) below), then the Financial Performance Shares granted for such year
will not vest and, upon such determination by the Compensation Committee, will be
forfeited and terminated (to the extent not yet vested).




(ii) Restricted Shares Associated with Management Objectives. In
addition to the Performance Bonus and Exceptional Performance Bonus provided by
Sections 5(c) and 5(d) and in addition to the Financial Performance Shares provided
by Section 5(i)(i), provided that the Executive is employed by the Company on the
applicable grant date, prior to the ninetieth day of each full calendar year of the
Employment Period in which the Executive has not previously been awarded a
comparable grant under the 2007 Agreement, the Executive will receive an additional
annual grant of 50,000 shares of Company restricted stock (the “Management
Performance Shares”). Each annual award of 50,000 Management Performance Shares
will vest and the restrictions thereon will lapse in equal installments of 25,000
shares on March 31 of each of the first two calendar years following the applicable
grant date, subject to and conditioned upon (A) the satisfaction of individual
performance objectives specified in writing by the Compensation Committee on or
before March 31 of the year of grant and (B) the Executive’s continued employment
through each such vesting date. If the performance objectives applicable to a grant
of Management Performance Shares are not attained during the year of the grant
and/or the Executive’s employment terminates prior to an applicable vesting date
(except as otherwise provided in Section 8(a) below), the Management Performance
Shares granted for such year will not vest and, upon such determination by the
Compensation Committee, will be forfeited and terminated (to the extent not yet
vested).




(iii) Restricted Shares Associated with Closing of Merger. In addition
to the Financial Performance Shares and the Management Performance Shares described
in Section 5(i)(i) and 5(i)(ii) above, provided that the Executive is employed by
the Company on the Effective Date, on the Effective Date, the Executive will receive
an additional one-time grant of 350,000 shares of Company restricted stock (the
“Growth Shares”). The Growth Shares will vest and the restrictions thereon will
lapse in equal installments of 25% (87,500 shares) on each of the first, second,
third and fourth anniversaries of the Effective Date (provided that the final
installment of 25% (87,500 shares) will vest on the earlier of the fourth
anniversary of the Effective Date of this Agreement or May 31, 2014), subject to the
Executive’s continued employment with the Company through each such vesting date,
provided, however, that notwithstanding the foregoing, no Growth Shares shall vest
or the restrictions thereon lapse prior to the date on which the average closing per
share trading price of a share of common stock of the Company over any consecutive
12-month period exceeds $20.00 (any date on which such threshold is attained, the
“Growth Share Performance Date”), and any Growth Shares which would otherwise have
vested prior to the Growth Share Performance Date in accordance with the incremental
vesting schedule above shall instead vest on the Growth Share Performance Date,
subject to the Executive’s continued employment through the Growth Share Performance
Date. If the Executive’s employment terminates prior to the vesting of any of the
Growth Shares (except as otherwise provided in Section 8(a)(i) below), such unvested
Growth Shares will not vest and will be forfeited and terminated upon such
termination.




The restricted shares granted to the Executive pursuant to Sections
5(i)(i)-(iii) will be subject to the terms and conditions of restricted stock
agreements approved by the Compensation Committee. Upon the occurrence of a Change
in Ownership or Control (as defined in 26 C.F.R. § 1.280G-1 (Q/A 27, 28 & 29)), of
the Company (a “Change of Control”) (excluding, for the avoidance of doubt, the
Merger), the restricted shares granted to the Executive pursuant to Sections
5(i)(i)-(iii), will vest and the restrictions will lapse, and any unvested stock
options and shares of restricted stock previously granted to the Executive will
vest, and restrictions thereon will lapse, as the case may be, and become
immediately exercisable or transferable.




(iv) Acceleration. Immediately upon the Effective Date, the vesting
and lapsing of restrictions on any and all unvested equity awards then held by the
Executive prior to the Effective Date (including, without limitation, all restricted
stock granted to the Executive prior to the Merger), other than the Continuation
Option Grant described in Section 5(i)(v) below and any equity awards to be granted
pursuant to this Section 5(i), shall accelerate and such equity awards shall become
immediately exercisable and free of restrictions.




(v) Continuation Option Grant. On March 17, 2009, the Compensation
Committee granted to the Executive options to purchase 2,000,000 shares of Company
common stock (the “Continuation Option Grant”). The Continuation Option Grant,
which survives the extinguishment of the 2007 Agreement: (A) was made in accordance
with the terms and conditions set forth in the Plan; (B) has a strike price equal to
the closing price of the Company’s common stock listed on the New York Stock
Exchange on the date of the grant; (C) vests in equal tranches of 20% on the first
through fifth anniversaries of the date of the grant, subject to the Executive’s
continued employment with the Company; provided, however, that in the event the
Company has not, at least six months prior to the expiration of the Employment
Period, offered to renew the Executive’s employment on terms and conditions no less
favorable than provided for herein (including, without limitation, with respect to
salary, bonus, employment period and annual equity grants) and the Executive’s
employment terminates at the end of the Employment Period, the final tranche of 20%
shall vest upon the expiration of the Employment Period, subject to the Executive’s
continued employment through the end of the Employment Period; (D) shall vest in
full upon the Executive’s termination of employment as described in Section 8(a)
below; and (E) shall vest in full upon a Change of Control occurring subsequent to
the Merger, but will not vest as a result of the Merger.



6. Termination. The Executive’s employment hereunder may be terminated during the
Employment Period under the following circumstances:




(a) Death. The Executive’s employment hereunder shall terminate upon his
death.




(b) Disability. If, as a result of the Executive’s incapacity due to physical
or mental illness, the Executive shall have been substantially unable to perform his duties
hereunder notwithstanding the provision of reasonable accommodation for a period of six
consecutive months, and within 30 days after written Notice of Termination is given after
such six-month period the Executive shall not have returned to the substantial performance
of his duties on a full-time basis, the Company shall have the right to terminate the
Executive’s employment hereunder for “Disability,” and such termination in and of itself
shall not be, nor shall it be deemed to be, a breach of this Agreement.




(c) Cause. The Company shall have the right to terminate the Executive’s
employment for Cause by providing the Executive with a written Notice of Termination, and
such termination in and of itself shall not be, nor shall it be deemed to be, a breach of
this Agreement. For purposes of this Agreement, “Cause” shall mean:




(i) the Executive’s willful and continued failure to perform his material
duties with respect to the Company or its Affiliates which, if curable, continues
beyond ten business days after a written demand for substantial performance is
delivered to the Executive by the Company; or




(ii) willful or intentional engaging by the Executive in material misconduct
that causes material and demonstrable injury, monetarily or otherwise, to the
Company, or any of its Affiliates; or




(iii) the Executive’s conviction of, or a plea of nolo contendre to, a crime
constituting (A) a felony under the laws of the United States or any state thereof
or (B) a misdemeanor involving moral turpitude that causes material and demonstrable
injury, monetarily or otherwise, to the Company or any of its Affiliates; or




(iv) the Executive’s committing or engaging in any act of fraud, embezzlement,
theft or other act of dishonesty against the Company or its Affiliates that causes
material and demonstrable injury, monetarily or otherwise, to the Company or its
Affiliates; or




(v) the Executive’s breach of any provision of Section 11 hereof that causes
material and demonstrable injury, monetarily or otherwise, to the Company or its
Affiliates.



The decision to terminate the Executive for Cause shall be determined by at least a majority of the
members of the full Board at a meeting of the Board. This Section 6(c) shall not prevent the
Executive from challenging in any arbitration or court of competent jurisdiction the Board’s
determination that Cause exists or that the Executive has failed to cure any act (or failure to
act) that purportedly formed the basis for the Board’s determination.




(d) Good Reason. The Executive may terminate his employment for “Good Reason”
by providing the Company with a written Notice of Termination at any time following the
occurrence of the following events; except that a written Notice of Termination with respect
to a Change of Control pursuant to clause (vii) below may not be provided by the Executive
until the 180th day following the consummation of the Change of Control. The following
events, without the written consent of the Executive, shall constitute Good Reason:




(i) reduction in the Executive’s Base Salary or annual incentive compensation
opportunity, or the failure by the Company to grant the Restricted Shares in
accordance with Section 5(i) above, other than any isolated, insubstantial and
inadvertent failure by the Company that is not in bad faith and is cured within ten
business days after the Executive gives the Company notice of such event; or




(ii) a breach by the Company of a material provision of this Agreement; or




(iii) failure to re-nominate the Executive for election to the Board; or




(iv) the Company requiring the Executive to report to anyone other than as set
forth in Section 3 above; or




(v) substantial diminution in the Executive’s duties or responsibilities, or
the Executive’s removal as or a change in the Executive’s title from President and
Chief Executive Officer of the Company, other than any isolated, insubstantial and
inadvertent failure by the Company that is not in bad faith and is cured within ten
business days after the Executive gives the Company notice of such event; or




(vi) a transfer of the Executive’s primary workplace away from Los Angeles,
California; or




(vii) a Change of Control, provided, however, that the Merger shall not
constitute a Change of Control for purposes of this provision and the Executive
shall not have any right to terminate his employment for Good Reason under this
Agreement, the 2007 Agreement or otherwise, solely due to the consummation of the
Merger.




The Executive expressly acknowledges and agrees that the Company’s provision of notice of
non-renewal of the Agreement pursuant to Section 2 hereof, alone or in combination with the
transition of the Executive’s duties to another employee during the notice period, shall not
constitute Good Reason and shall not constitute a termination without Cause (as described
below).




(e) Without Cause. The Company shall have the right to terminate the
Executive’s employment hereunder without Cause; provided, however, that any decision to so
terminate shall be determined by at least a majority of the members of the full Board and by
providing the Executive with a Notice of Termination at least 30 days prior to such
termination, and such termination shall not in and of itself be, nor shall it be deemed to
be, a breach of this Agreement. In the event of termination pursuant to this Section 6(e),
the Board may elect to waive the period of notice, or any portion thereof, and, if the Board
so elects, the Company will pay the Executive his Base Salary for the initial 30 days of the
notice period or for any lesser remaining portion of such period, payable in accordance with
the regular payroll practices of the Company.




(f) Without Good Reason. The Executive shall have the right to terminate his
employment hereunder without Good Reason by providing the Company with a Notice of
Termination at least 30 days prior to such termination, and such termination shall not in
and of itself be, nor shall it be deemed to be, a breach of this Agreement. In the event of
termination pursuant to this Section 6(f), the Board may elect to waive the period of
notice, or any portion thereof, and, if the Board so elects, the Company will pay the
Executive his Base Salary for the initial 30 days of the notice period or for any lesser
remaining portion of such period, payable in accordance with the regular payroll practices
of the Company.



7. Termination Procedure.




(a) Notice of Termination. Any termination of the Executive’s employment by
the Company or by the Executive during the Employment Period (other than termination
pursuant to Section 6(a)) shall be communicated by written Notice of Termination to the
other party hereto in accordance with Section 16. For purposes of this Agreement, a “Notice
of Termination” shall mean a notice which indicates the specific termination provision in
this Agreement relied upon, and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive’s employment under the provision
so indicated.




(b) Date of Termination. Subject to Section 8(e)(ii) below, “Date of
Termination” shall mean (i) if the Executive’s employment is terminated by his death, the
date of death, (ii) if the Executive’s employment is terminated pursuant to Section 6(b), 30
days after a Notice of Termination (provided that the Executive shall not have returned to
the substantial performance of his duties on a full-time basis during such 30 day period)
and (iii) if the Executive’s employment is terminated for any other reason, the date on
which a Notice of Termination is given or any later date set forth in such Notice of
Termination; provided, that such termination constitutes a “separation from service” from
the Company within the meaning of Section 409A (as defined below).



8. Compensation Upon Termination or During Disability. In the event the Executive is
disabled or his employment terminates during the Employment Period, the Company shall provide the
Executive with the payments and benefits set forth below; provided, however, that any obligation of
the Company to the Executive under Section 8(a), other than for Final Compensation, is expressly
conditioned upon the Executive signing, returning to the Company, within 30 days after the
Company’s delivery of the Separation Schedule (as defined below) (or, only to the extent required
by applicable law, 45 days following the Date of Termination), and not revoking, a release of
claims substantially in the form attached hereto as Exhibit A (the “Executive Release of
Claims”). Following the Company’s receipt of the Executive Release of Claims and the expiration of
any applicable revocation period, the Company shall execute a release of claims in favor of the
Executive substantially in the form attached hereto as Exhibit B and the Executive Release
of Claims shall not be effective unless and until the Company executes this Release (though, for
avoidance of doubt, the Executive shall be entitled to the payments set forth in Section 8(a) below
as long as the Executive has delivered and not revoked the Executive Release of Claims). The
Executive Release of Claims required for separation benefits in accordance with Section 8(a)
creates legally binding obligations on the part of the Executive, and the Company and its
Affiliates therefore advise the Executive and his beneficiary or legal representative, as
applicable, to seek the advice of an attorney before signing it.



Promptly, but not later than 10 days, after the Executive’s voluntary termination of
employment hereunder for Good Reason or the termination of the Executive’s employment hereunder by
the Company without Cause, the Company shall provide the Executive with a written statement of the
amounts due pursuant to Sections 8(a)(i) and (ii) below (the “Separation Schedule”). The Company
expressly acknowledges and agrees that the Executive Release of Claims excludes from its scope any
claims by the Executive to enforce the Executive’s rights under this Section 8, and further
acknowledges and agrees that the Executive’s execution and non-revocation of the Executive Release
of Claims shall not in any way preclude, or be deemed to preclude, the Executive’s ability to
enforce, in accordance with Section 13 below, his rights under this Section 8.  Notwithstanding the
foregoing, the Executive expressly acknowledges and agrees that the Executive’s timely execution
and non-revocation of the Executive Release of Claims is a condition to the Executive’s rights
under Section 8(a)(ii), (iii) and (iv) below.




(a) Termination by Company Without Cause or by Executive for Good Reason. If
the Executive’s employment is terminated by the Company without Cause or by the Executive
for Good Reason:




(i) the Company shall pay to the Executive his Base Salary, unused vacation pay
accrued or prorated through the Date of Termination, any Performance Bonus and/or
Exceptional Performance Bonus earned for the year prior to the year of termination
but not yet paid, and a pro-rated Performance Bonus and pro-rated Exceptional
Performance Bonus for the year of termination (as calculated below), and shall
reimburse the Executive pursuant to Section 5(e) for reasonable business expenses
incurred but not paid prior to such termination of employment (together, “Final
Compensation”). The Base Salary and vacation components of Final Compensation shall
be paid in a lump sum on or about the Date of Termination, within the time periods
required by the laws of the state of California. Any unpaid prior-year Performance
Bonus and/or Exceptional Performance Bonus components of Final Compensation, if any,
shall be paid at such time or times as annual bonuses are paid generally to the
Company’s senior executives (but in no event later than March 15th of the
year following that in which such bonus was earned). The pro-rated Performance
Bonus and pro-rated Exceptional Performance Bonus components of Final Compensation,
if any, shall be calculated by multiplying the Performance and Exceptional
Performance Bonuses (if any) paid to the Executive (or still owed to the Executive)
for the first full calendar year prior to the year in which such termination occurs
(or if such termination occurs in a year, the full year prior to which the
Executive’s Performance and Exceptional Performance Bonuses were not determined
entirely by reference to this Agreement (in accordance with Sections 5(c) and (d)
above, respectively), then the greater of (A) the actual performance bonus and
exceptional performance bonus earned by the Executive for such prior year and (B)
$4,000,000) by a fraction, the numerator of which is the number of days during such
year that the Executive was employed and the denominator of which is 365, and,
subject to Section 8(e), including without limitation, Sections 8(e)(iii) and (iv),
shall be paid as soon as practicable following the Date of Termination, but in no
event later than 60 days after the Date of Termination;




(ii) provided the Executive signs, returns and does not revoke the Executive
Release of Claims as set forth above, the Company shall pay to the Executive a
lump-sum cash payment equal to the sum of the Executive’s then-current Base Salary
plus the total Performance Bonus and Exceptional Performance Bonus amounts paid to
the Executive (or still owed to the Executive) for the first full calendar year
prior to the year in which such termination occurs (or if such termination occurs in
a year, the full year prior to which the Executive’s Performance and Exceptional
Performance Bonuses were not determined entirely by reference to this Agreement (in
accordance with Sections 5(c) and (d) above, respectively), then the greater of (A)
the actual performance bonus and exceptional performance bonus earned by the
Executive for such prior year and (B) $4,000,000), multiplied by the greater of (i)
the number of full months remaining in the Employment Period as of the Date of
Termination, divided by 12, or (ii) three, subject to Section 8(e), including,
without limitation, Sections 8(e)(iii) and (iv), such payment shall be made on the
60th day after the Date of Termination;




(iii) provided the Executive signs, returns and does not revoke the Executive
Release of Claims as set forth above, the Company shall maintain in full force and
effect, for the continued benefit of the Executive and his eligible dependents, for
a period of three years (the “Coverage Period”) following the Date of Termination
the medical and hospitalization insurance programs in which the Executive and his
dependents were participating immediately prior to the Date of Termination, at the
level in effect and upon substantially the same terms and conditions (including,
without limitation, contributions required by the Executive for such benefits) as
existed immediately prior to the Date of Termination; provided, that if the
Executive or his dependents cannot continue to participate in the Company plans and
programs providing these benefits and/or if the plans providing these benefits cease
to be provided through third-party insurance maintained by the Company or its
Affiliates under applicable benefit plans in a manner that causes such healthcare
benefits to be exempt from the application of Section 409A under Treasury Regulation
Section 1.409A-1(a)(5), the Company shall reimburse the Executive for the cost
actually incurred by the Executive of acquiring equivalent medical and
hospitalization coverage outside of the Company’s plans and programs, but only to
the extent that such costs are substantiated by the Executive and verified by the
Company (the “Continued Benefits”), provided, that such Continued Benefits shall
terminate on the date or dates the Executive receives equivalent coverage and
benefits, without waiting period or pre-existing condition limitations, under the
plans and programs of a subsequent employer. Subject to Section 8(e), including,
without limitation, Section 8(e)(iii), any reimbursement payments made to the
Executive to cover the cost of equivalent medical and hospitalization coverage
outside of the Company’s plans and programs in accordance with the preceding
sentence shall be made no later than the last day of the month following the month
in which such cost was properly substantiated by the Executive in accordance with
applicable Company policy, but in no event later than the last day of the calendar
year following that in which such cost was incurred. Notwithstanding anything to
the contrary in this Section 8(a)(iii), the annual value (as the same would be
determined under Section 280G of the Code) of the Continued Benefits shall in no
event exceed $16,666.67 per year (the “Annual Cap”); accordingly, the Company’s
obligation to provide the Continued Benefits for any given year of the Coverage
Period shall cease once such value of the Continued Benefits that have been provided
to the Executive and/or his dependents for such year reaches the Annual Cap, after
which time the Executive shall be responsible for the full cost of the Continued
Benefits for the remainder of such year; and




(iv) provided the Executive signs and returns the Executive Release of Claims
as set forth above, the Company shall accelerate the vesting and lapsing of
restrictions on all unvested or restricted equity awards awarded to the Executive
prior to the Date of Termination, and all such awards shall remain exercisable for
the full life of such awards (determined without regard to the Executive’s
termination of employment).




(b) Termination by Company for Cause or by Executive Without Good Reason. If
the Executive’s employment is terminated by the Company for Cause or by the Executive other
than for Good Reason, the Company shall pay the Executive the Final Compensation at the time
and in the manner set forth in Section 8(a)(i) hereof. The Company shall have no further
obligation to the Executive upon such termination of employment.




(c) Disability. During any period that the Executive fails to perform his
duties hereunder as a result of incapacity due to physical or mental illness (“Disability
Period”), the Executive shall continue to receive his full Base Salary set forth in Section
5(a) until his employment is terminated pursuant to Section 6(b), and the Company may, in
its discretion, designate another individual to act in the Executive’s place, and such
designation shall not constitute Good Reason. In the event the Executive’s employment is
terminated for Disability pursuant to Section 6(b), the Company shall pay to the Executive
the Final Compensation at the time and in the manner set forth in Section 8(a)(i) hereof.
The Company shall have no further obligation to the Executive upon such termination of
employment.




(d) Death. If the Executive’s employment is terminated by his death, the
Company shall pay the Final Compensation to the Executive’s beneficiary, legal
representatives or estate, as the case may be, at the time and in the manner set forth in
Section 8(a)(i) hereof. The Company shall have no further obligation to the Executive upon
such termination of employment.




(e) Code Section 409A Compliance.




(i) To the fullest extent applicable, amounts and other benefits payable under
this Agreement are intended to be exempt from the definition of “nonqualified
deferred compensation” under Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”), in accordance with one or more of the exemptions available
under the final Treasury Regulations promulgated under Section 409A and, to the
extent that any such amount or benefit is or becomes subject to Section 409A due to
a failure to qualify for an exemption from the definition of nonqualified deferred
compensation in accordance with such final Treasury regulations, this Agreement is
intended to comply with the applicable requirements of Section 409A with respect to
such amounts or benefits. This Agreement shall be interpreted and administered to
the extent possible in a manner consistent with the foregoing statement of intent.
For purposes of this Agreement, all rights to payments and benefits hereunder shall
be treated as rights to receive a series of separate payments and benefits to the
fullest extent allowed by Section 409A of the Code.




(ii) Notwithstanding anything in this Agreement or elsewhere to the contrary,
for purposes of determining the payment date of any amounts that are treated as
nonqualified deferred compensation under Section 409A that become payable under this
Agreement in connection with a termination of employment, the date that the
Executive is deemed to have incurred a termination of employment shall be the date
on which the Executive has incurred a “separation from service” within the meaning
of Treasury Regulation section 1.409A-1(h), or in subsequent Internal Revenue
Service guidance under Section 409A.




(iii) Notwithstanding anything in this Agreement or elsewhere to the contrary,
if the Company reasonably determines that (A) the Executive is a “specified
employee” (within the meaning of Treasury Regulation Section 1.409A-1(i)) on the
date of the Executive’s “separation from service” (within the meaning of Treasury
Regulation Section 1.409A-1(h)) and (B) commencement of any payments or other
benefits payable under this Agreement in connection with the Executive’s separation
from service on the scheduled payment dates specified in Section 8(a) through (c),
will subject the Executive to an “additional tax” under Section 409A(a)(1)(B)
(together with any interest or penalties imposed with respect to, or in connection
with, such tax, a “Section 409A Tax”), then the Company shall withhold payment of
any such payments or benefits until the first business day of the seventh month
following the date of the Executive’s separation from service or, if earlier, the
date of the Executive’s death (the “Delayed Payment Date”). In the event that this
Section 8(e)(iii) requires any payments to be withheld, such withheld payments shall
be accumulated and paid in a single lump sum, with interest equal to the “short-term
applicable Federal rate” (within the meaning of Section 1274(d) of the Code),
compounded annually, in effect on the date of such termination, on the Delayed
Payment Date and the balance of the payments shall be made as otherwise scheduled.




(iv) In each case where this Agreement provides for the payment of an amount
that constitutes nonqualified deferred compensation under Section 409A to be made to
the Executive within a designated period (e.g., within 30 days after the date of
termination) and such period begins and ends in different calendar years, the exact
payment date within such range shall, subject to Section 8(e)(iii) above, be
determined by the Company, in its sole discretion, and the Executive shall have no
right to designate the year in which the payment shall be made.




(v) The Company and the Executive may agree to take other actions to avoid the
imposition of a Section 409A Tax at such time and in such manner as permitted under
Section 409A. To the extent applicable, each of the exceptions to Section 409A’s
prohibition on acceleration of payments of deferred compensation provided under
Treasury Regulation 1.409A-3(j)(4) shall be permitted under this Agreement.




(vi) Each of the Company and the Executive acknowledge and agree that (A) they
have had their own independent legal counsel review this Agreement for purposes of
compliance with the requirements of Section 409A or an exemption therefrom, and (B)
each party is relying solely on the advice of its independent legal counsel for such
purposes.



9. Gross-Up Payment.




(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall
be determined that any payment, award, benefit or distribution (or any acceleration of any
payment, award, benefit or distribution) to or for the benefit of the Executive (the
“Payments”) would be subject to the excise tax imposed by Section 4999 of the Code, or any
interest or penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter collectively
referred to as the “Excise Tax”), then the Company shall pay to the Executive an additional
payment (a “Gross-Up Payment”) in an amount such that after payment by the Executive of all
taxes (including any Excise Tax) imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the sum of (x) the Excise Tax imposed upon the
Payments and (y) the product of any deductions disallowed because of the inclusion of the
Gross-Up Payment in the Executive’s adjusted gross income and the highest applicable
marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment
is to be made. For purposes of determining the amount of the Gross-Up Payment, the
Executive shall be deemed to (A) pay federal income taxes at the highest marginal rates of
federal income taxes at the highest marginal rate of taxation for the calendar year in which
the Gross-Up Payment is to be made, (B) pay applicable state and local income taxes at the
highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to
be made, net of the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes and (C) have otherwise allowable deductions for
federal income tax purposes at least equal to those which could be disallowed because of the
inclusion of the Gross-Up Payment in the Executive’s adjusted gross income.




(b) Subject to the provisions of Section 9(a), all determinations required to be made
under this Section 9, including whether and when a Gross-Up Payment is required, the amount
of such Gross-Up Payment and the assumptions to be utilized in arriving at such
determinations, shall be made by a nationally recognized public accounting firm that is
selected by the Company (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of the receipt of
notice from the Company or the Executive that there has been a Payment, or such earlier time
as is requested by the Company or the Executive (collectively, the “Determination”). All
fees and expenses of the Accounting Firm shall be borne solely by the Company, and the
Company shall enter into any reasonable agreement requested by the Accounting Firm in
connection with the performance of the services hereunder. The Gross-Up Payment under this
Section 9 with respect to any Payments made to the Executive shall be made to the relevant
tax authorities no later than the date on which the Excise Tax on such Payments is due to
the relevant tax authorities, provided, however, that notwithstanding anything herein to the
contrary, in no event shall any Gross-Up Payment or any payment of any income or other taxes
to be paid by the Company under this Section 9 be made later than the end of the Executive’s
taxable year next following the Executive’s taxable year in which the Executive remits the
related taxes. Any costs and expenses incurred by the Company on behalf of the Executive
under this Section 9 due to any tax contest, audit or litigation will be paid by the Company
no later than the end of the Executive’s taxable year following the Executive’s taxable year
in which the taxes that are the subject of the tax contest, audit or litigation are remitted
to the taxing authority, or where as a result of such tax contest, audit or litigation no
taxes are remitted, the end of the Executive’s taxable year following the Executive’s
taxable year in which the audit is completed or there is a final and non-appealable
settlement or other resolution of the contest or litigation. If the Accounting Firm
determines that no Excise Tax is payable by the Executive, it shall furnish the Executive
with a written opinion to such effect, and to the effect that failure to report the Excise
Tax, if any, on the Executive’s applicable federal income tax return should not result in
the imposition of a negligence or similar penalty.




(c) As a result of the uncertainty in the application of Section 4999 of the Code at
the time of the Determination, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made (“Underpayment”) or Gross-Up Payments are
made by the Company which should not have been made (“Overpayment”), consistent with the
calculations required to be made hereunder. In the event that the Executive thereafter is
required to make payment of any Excise Tax or additional Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such Underpayment
(together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) shall be
promptly paid by the Company to or for the benefit of the Executive. In the event the
amount of the Gross-Up Payment exceeds the amount necessary to reimburse the Executive for
his Excise Tax, the Accounting Firm shall determine the amount of the Overpayment that has
been made and any such Overpayment (together with interest at the rate provided in Section
1274(b)(2) of the Code) shall be promptly paid by the Executive (to the extent he has
received a refund if the applicable Excise Tax has been paid to the Internal Revenue
Service) to or for the benefit of the Company. The Executive shall cooperate, to the extent
his expenses are reimbursed by the Company, with any reasonable requests by the Company in
connection with any contest or disputes with the Internal Revenue Service in connection with
the Excise Tax.




(d) The parties hereto expressly acknowledge and agree that the Executive shall be
eligible to receive a Gross-Up Payment with regard to payments and benefits received in
connection with the Merger and/or any Change of Control occurring subsequent to the Merger
during the Employment Period.



10. Mitigation. The Executive shall not be required to mitigate amounts payable under
this Agreement by seeking other employment or otherwise, and there shall be no offset against
amounts due the Executive under this Agreement on account of subsequent employment except as
specifically provided herein. Additionally, amounts owed to the Executive under this Agreement
shall not be offset by any claims the Company may have against the Executive, and the Company’s
obligation to make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any other circumstances, including, without
limitation, any counterclaim, recoupment, defense or other right which the Company may have against
the Executive or others.



11. Restrictive Covenants.




(a) Confidential Information.




(i) The Executive acknowledges that the Company and its Affiliates continually
develop Confidential Information, that the Executive has developed and will develop
Confidential Information for the Company or its Affiliates and that the Executive
has learned and will learn of Confidential Information during the course of his
employment. The Executive will comply with the policies and procedures of the
Company and its Affiliates for protecting Confidential Information. The Executive
shall hold in a fiduciary capacity for the benefit of the Company all trade secrets
and Confidential Information, knowledge or data relating to the Company, its
Affiliates and their businesses and investments, which shall have been obtained by
the Executive during the Executive’s employment by the Company and which is not
generally available public knowledge (other than by acts of the Executive in
violation of this Agreement or by any other person having an obligation of
confidentiality to the Company or any of its Affiliates). Except as may be required
or appropriate in connection with carrying out his duties under this Agreement, the
Executive shall not, without the prior written consent of the Company or as may
otherwise be required by law or any legal process, or as is necessary in connection
with any adversarial proceeding against the Company (in which case the Executive
shall use his reasonable best efforts in cooperating with the Company in obtaining a
protective order against disclosure by a court of competent jurisdiction), use,
communicate or divulge any such trade secrets, Confidential Information, knowledge
or data to anyone other than the Company and those designated by the Company or on
behalf of the Company in the furtherance of its business; provided, that the
Executive may disclose Confidential Information to his attorneys, accountants and
other advisors. The Executive understands that this restriction shall continue to
apply after his employment terminates, regardless of the reason for such
termination.




For purposes of this Agreement, “Confidential Information” shall mean any and
all information of the Company and its Affiliates that is not generally known by
those with whom the Company or any of its Affiliates competes or does business, or
with whom the Company or any of its Affiliates plans to compete or do business, and
any and all information, publicly known in whole or in part or not, which, if
disclosed by the Company or any of its Affiliates, would assist in competition
against them. Confidential Information includes, without limitation, such
information relating to (i) the development, research, testing, manufacturing,
marketing and financial activities of the Company and its Affiliates, (ii) the
costs, sources of supply, financial performance and strategic plans of the Company
and its Affiliates, (iii) the identity and special needs of the customers of the
Company and its Affiliates and (iv) the people and organizations with whom the
Company and its Affiliates have business relationships and the nature and substance
of those relationships. Confidential Information also includes any information that
the Company or any of its Affiliates has received, or may receive hereafter,
belonging to customers or others with any understanding, express or implied, that
the information would not be disclosed to others.




For purposes of this Agreement, “Affiliates” shall mean all persons and
entities directly or indirectly controlling, controlled by or under common control
with the Company, where control may be by management authority, contract or equity
interest. For the avoidance of doubt, Affiliates includes Worldwide.




(ii) All documents, records, tapes and other media of every kind and
description relating to the business, present or otherwise, of the Company or its
Affiliates, and any copies, in whole or in part, thereof (the “Documents”), whether
or not prepared by the Executive, shall be the sole and exclusive property of the
Company and its Affiliates. The Executive shall safeguard all Documents and shall
surrender to the Company at the time his employment terminates, or at such earlier
time or times as the Board or the Company or its designee may specify, all Documents
then in the Executive’s possession or control.




(b) Restricted Activities. The Executive hereby agrees that some restrictions
on his activities during and after his employment are necessary to protect the goodwill,
trade secrets, Confidential Information and other legitimate interests of the Company and
its Affiliates. In consideration of the Executive’s employment hereunder, and the Company’s
agreement to grant the Executive access to trade secrets and other Confidential Information
of the Company and its Affiliates and to their customers, and in view of the confidential
position to be held by the Executive hereunder, the Executive agrees as follows:




(i) Non-Solicitation. During the Employment Period and during the
two-year period immediately following termination of the Employment Period (such
two-year period is herein called the “Restricted Period”), the Executive shall not,
directly or indirectly, hire, solicit for hiring or assist in any way in the hiring
of any employee or exclusive independent contractor of the Company or any of its
Affiliates, or induce or otherwise attempt to influence any employee or independent
contractor to terminate or diminish such employment or contractor relationship or to
become employed by any other Competing Business or in any other business in which
the Company or any of its Affiliates is engaged. For the purposes of this Section
11, a “Competing Business” is a person or enterprise engaged in the following
activities: (i) the promotion or production of live music shows or (ii) the
following activities, to the extent the Company or any of its Affiliates is actively
and meaningfully engaged in such activity: (A) the operation of entertainment
venues or (B) the management of its third-party ticketing relationships, in-house
ticketing operations and online and wireless ticketing and music distribution
activities. For purposes of this Agreement, an “employee” of the Company or any of
its Affiliates is any person who was such at any time during the Restricted Period.




(c) Assignment of Rights to Intellectual Property.




(i) The Executive shall promptly and fully disclose all Intellectual Property
to the Company. The Executive hereby assigns and agrees to assign to the Company
(or as otherwise directed by the Company) the Executive’s full right, title and
interest in and to all Intellectual Property. The Executive agrees to execute any
and all applications for domestic and foreign patents, copyrights or other
proprietary rights and to do such other acts (including, without limitation, the
execution and delivery of instruments of further assurance or confirmation)
requested by the Company to assign the Intellectual Property to the Company and to
permit the Company to enforce any patents, copyrights or other proprietary rights to
the Intellectual Property. The Executive will not charge the Company for time spent
in complying with these obligations. All copyrightable works that the Executive
creates shall be considered “work made for hire” and shall, upon creation, be owned
exclusively by the Company.




(ii) For purposes of this Agreement, “Intellectual Property” means inventions,
discoveries, developments, methods, processes, compositions, works, concepts and
ideas (whether or not patentable or copyrightable or constituting trade secrets)
conceived, made, created, developed or reduced to practice by the Executive (whether
alone or with others, whether or not during normal business hours or on or off
Company premises) during the Executive’s employment that relate to either the
Products or any prospective activity of the Company or any of its Affiliates or that
make use of Confidential Information or any of the equipment or facilities of the
Company or any of its Affiliates; and “Products” means all products planned,
researched, developed, tested, manufactured, sold, licensed, leased or otherwise
distributed or put into use by the Company or any of its Affiliates, together with
all services provided or planned by the Company or any of its Affiliates, during the
Executive’s employment.




(d) Conflict of Interest. The Executive agrees that, during his employment
with the Company, he will not undertake any outside activity, whether or not competitive
with the business of the Company or its Affiliates that could reasonably give rise to a
conflict of interest or otherwise interfere with his duties and obligations to the Company
or any of its Affiliates.




(e) Modification of Covenants. The parties hereby acknowledge that the
restrictions in this Section 11 have been specifically negotiated and agreed to by the
parties hereto, and are limited only to those restrictions necessary to protect the Company
and its Affiliates from unfair competition. The Executive acknowledges that he has
carefully read and considered all the terms and conditions of this Agreement, including the
restrictions in Section 11 hereof, and agrees without reservation that each of the
restraints contained herein is necessary for the reasonable and proper protection of the
goodwill, trade secrets, Confidential Information and other legitimate interests of the
Company and its Affiliates; and that each and every one of those restraints is reasonable in
respect to subject matter, length of time and geographic area. The parties hereby agree
that if the scope or enforceability of any provision, paragraph or subparagraph of this
Section 11 is in any way disputed at any time, and should a court find that such
restrictions are overly broad, the court shall modify and enforce the covenant to permit its
enforcement to the maximum extent permitted by law. Each provision, paragraph and
subparagraph of this Section 11 is separable from every other provision, paragraph and
subparagraph, and constitutes a separate and distinct covenant.




(f) Remedies. The Executive hereby expressly acknowledges that any breach or
threatened breach by the Executive of any of the terms set forth in Section 11 of this
Agreement would result in significant, irreparable and continuing injury to the Company, the
monetary value of which would be difficult to establish or measure. Therefore, the
Executive agrees that, in addition to any other remedies available to it, the Company shall
be entitled to preliminary and permanent injunctive relief in a court of appropriate
jurisdiction against any breach or threatened breach, without having to post bond, as well
as the recovery of all reasonable attorneys’ fees expended in enforcing its rights
hereunder.



12. Indemnification.




(a) General. The Company agrees that if the Executive is made a party or is
threatened to be made a party to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a “Proceeding”), by reason of the fact that the Executive
is or was a trustee, director or officer of the Company, Live Nation Entertainment, Inc. or
any subsidiary thereof, or is or was serving at the request of the Company or any subsidiary
as a trustee, director, officer, member, employee or agent of another corporation or a
partnership, joint venture, trust or other enterprise, including, without limitation,
service with respect to employee benefit plans, whether or not the basis of such Proceeding
is alleged action in an official capacity as a trustee, director, officer, member, employee
or agent while serving as a trustee, director, officer, member, employee or agent, the
Executive shall be indemnified and held harmless by the Company to the fullest extent
authorized by Delaware law, as the same exists or may hereafter be amended, against all
Expenses incurred or suffered by the Executive in connection therewith, and such
indemnification shall continue as to the Executive even if the Executive has ceased to be an
officer, director, trustee or agent, or is no longer employed by the Company, and shall
inure to the benefit of his heirs, executors and administrators.




(b) Expenses. As used in this Agreement, the term “Expenses” shall include,
without limitation, damages, losses, judgments, liabilities, fines, penalties, excise taxes,
settlements, costs, attorneys’ fees, accountants’ fees and disbursements and costs of
attachment or similar bonds, investigations and any expenses of establishing a right to
indemnification under this Agreement.




(c) Enforcement. If a valid claim or request under this Agreement is not paid
by the Company or on its behalf within 30 days after a written claim or request has been
received by the Company, the Executive may at any time thereafter bring suit against the
Company to recover the unpaid amount of the claim or request and, if successful in whole or
in part, the Executive shall be further entitled to be paid the expenses of prosecuting such
suit. All obligations for indemnification hereunder shall be subject to, and paid in
accordance with, applicable Delaware law.




(d) Partial Indemnification. If the Executive is entitled under any provision
of this Agreement to indemnification by the Company for some or a portion of any Expenses,
but not, however, for the total amount thereof, the Company shall nevertheless indemnify the
Executive for the portion of such Expenses to which the Executive is entitled.




(e) Advances of Expenses. Expenses incurred by the Executive in connection
with any Proceeding shall be paid by the Company in advance upon request of the Executive
that the Company pay such Expenses; but, only in the event that the Executive shall have
delivered in writing to the Company (i) an undertaking to reimburse the Company for Expenses
with respect to which the Executive is not entitled to indemnification and (ii) an
affirmation of his good faith belief that the standard of conduct necessary for
indemnification by the Company has been met.




(f) Notice of Claim. The Executive shall give to the Company notice of any
claim made against him for which indemnification will or could be sought under this
Agreement. In addition, the Executive shall give the Company such information and
cooperation as it may reasonably require and as shall be within the Executive’s power and at
such times and places as are mutually convenient for the Executive and the Company.




(g) Defense of Claim. With respect to any Proceeding as to which the Executive
notifies the Company of the commencement thereof:




(i) The Company will be entitled to participate therein at its own expense.




(ii) Except as otherwise provided below, to the extent that it may wish, the
Company will be entitled to assume the defense thereof, with counsel reasonably
satisfactory to the Executive, which in the Company’s sole discretion may be regular
counsel to the Company and may be counsel to other officers and directors of the
Company or any subsidiary. The Executive shall also have the right to employ his
own counsel in such action, suit or proceeding if he reasonably concludes that
failure to do so would involve a conflict of interest between the Company and the
Executive, and, under such circumstances, the fees and expenses of such counsel
shall be at the expense of the Company.




(iii) Neither the Company nor its Affiliates shall be liable to indemnify the
Executive under this Agreement for any amounts paid in settlement of any action or
claim effected without its written consent. The Company shall not settle any action
or claim in any manner which would impose any penalty or limitation on the Executive
without the Executive’s written consent. Neither the Company nor the Executive will
unreasonably withhold or delay their consent to any proposed settlement.




(h) Non-Exclusivity. The right to indemnification and the payment of expenses
incurred in defending a Proceeding in advance of its final disposition conferred in this
Section 12 shall not be exclusive of any other right which the Executive may have or
hereafter may acquire under any statute, provision of the declaration of trust or
certificate of incorporation or bylaws of the Company, Worldwide or any subsidiary,
agreement, vote of shareholders or disinterested directors or trustees or otherwise.



13. Arbitration. Except as provided for in Section 11 of this Agreement, if any
contest or dispute arises between the parties with respect to this Agreement, such contest or
dispute shall be submitted to binding arbitration for resolution in Los Angeles, California, in
accordance with the rules and procedures of the Employment Dispute Resolution Rules of the American
Arbitration Association then in effect. The decision of the appointed arbitrator shall be final
and binding on both parties, and any court of competent jurisdiction may enter judgment upon the
award. The losing party shall pay all expenses relating to such arbitration, including, without
limitation, the prevailing party’s legal fees and expenses, within 60 days after the parties enter
into a legally binding settlement of the dispute or any final and nonappealable judgment or other
binding decision.



14. Successors; Binding Agreement.




(a) Company’s Successors. No rights or obligations of the Company under this
Agreement may be assigned or transferred, except that the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to expressly assume and agree
to perform this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession had taken place. As used in this Agreement,
“Company” shall mean the Company as hereinabove defined and any successor to its business
and/or assets (by merger, purchase or otherwise) which executes and delivers the agreement
provided for in this Section 14 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.




(b) Executive’s Successors. No rights or obligations of the Executive under
this Agreement may be assigned or transferred by the Executive other than his right to
payments or benefits hereunder, which may be transferred only by will or the laws of descent
and distribution. Upon the Executive’s death, this Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be enforceable by the Executive’s
beneficiary or beneficiaries, personal or legal representatives, or estate, to the extent
any such person succeeds to the Executive’s interests under this Agreement. Executive shall
be entitled to select and change a beneficiary or beneficiaries to receive any benefit or
compensation payable hereunder following the Executive’s death by giving the Company written
notice thereof. In the event of the Executive’s death or a judicial determination of his
incompetence, reference in this Agreement to the Executive shall be deemed, where
appropriate, to refer to his beneficiary(ies), estate or other legal representative(s). If
the Executive should die following his Date of Termination while any amounts would still be
payable to him hereunder if he had continued to live, all such amounts unless otherwise
provided herein shall be paid in accordance with the terms of this Agreement to such person
or persons so designated in writing by the Executive, or otherwise to his legal
representatives or estate.



15. Obligations. Notwithstanding anything in this Agreement to the contrary, the
Company and Worldwide shall be jointly and severally liable with respect to any and all obligations
of the Company arising under this Agreement.



16. Notices. Any notice provided for in this Agreement will be in writing and will
be deemed to have been given when delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid. If to the Company, the notice will be sent to
Live Nation, Attention: General Counsel, 9348 Civic Center Drive, Beverly Hills, California 90210.
If to the Executive, the notice will be sent to the Executive’s home address then on file with the
Company’s Human Resources Department. Such notices may alternatively be sent to such other address
as any party may have furnished to the other in writing in accordance with this Agreement, except
that notices of change of address shall be effective only upon receipt.



17. Miscellaneous. No provisions of this Agreement may be amended, modified or waived
unless such amendment or modification is agreed to in writing signed by the Executive and by a duly
authorized officer of the Company, and such waiver is set forth in writing and signed by the party
to be charged. No waiver by either party hereto at any time of any breach by the other party
hereto of any condition or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The respective rights and obligations of the parties hereunder shall
survive the Executive’s termination of employment and the termination of this Agreement to the
extent necessary for the intended preservation of such rights and obligations. The validity,
interpretation, construction and performance of this Agreement shall be governed by the laws of the
State of California without regard to its conflicts of law principles.



18. Validity. The invalidity or unenforceability of any provision or provisions of
this Agreement shall not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.



19. Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and the same
instrument.



20. Entire Agreement. This Agreement sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein, and, except as expressly set forth in
Sections 5(c) and (d) above, supersedes all prior agreements, promises, covenants, arrangements,
communications, representations or warranties, whether oral or written, by any officer, employee or
representative of any party hereto in respect of such subject matter, including, without
limitation, the 2007 Agreement, and excluding only (i) any existing obligations on the part of the
Executive with respect to Confidential Information, assignment of intellectual property and the
like and (ii) any existing equity award agreements between the Company and the Executive. Except
as expressly set forth in Sections 5(c) and (d) above, any prior agreement of the parties hereto in
respect of the subject matter contained herein is hereby terminated and cancelled.



21. Effectiveness. This Agreement shall become effective upon the closing of the
Merger. Notwithstanding anything contained herein, in the event that the Merger Agreement is
terminated in accordance with its terms or that the Merger is not consummated for any other reason,
this Agreement shall automatically, and without notice, terminate without any obligation due to the
other party and the provisions of this Agreement shall be of no force or effect.



22. Taxes. All payments hereunder shall be subject to any required withholding of
federal, state and local taxes pursuant to any applicable law or regulation.



23. Noncontravention. The Company represents that the Company is not prevented from
entering into or performing this Agreement by the terms of any law, order, rule or regulation, its
bylaws or declaration of trust or any agreement to which it is a party, other than which would not
have a material adverse effect on the Company’s ability to enter into or perform this Agreement.



24. Section Headings. The section headings in this Agreement are for convenience of
reference only, and they form no part of this Agreement and shall not affect its interpretation.



IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.



	 	 	 
	 	 	EXECUTIVE
	DATE: 10/21/09
	 	/s/ Michael Rapino

	 
	 	 

	 	 	Michael Rapino

LIVE NATION, INC.

BY:

	 	 	/s/ Michael G. Rowles

	 	 	 

	DATE: 10/21/09
	 	Michael G. Rowles

	 
	 	


	 	 	Executive Vice President, General Counsel and Secretary

	DATE: 10/21/09
	 	LIVE NATION WORLDWIDE, INC.

BY:

	 
	 	


	 	 	/s/ Michael Rowles

	 	 	 

	 	 	Michael G. Rowles

Executive Vice President, General Counsel and Secretary







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EXHIBIT A TO

RAPINO EMPLOYMENT AGREEMENT




RELEASE OF CLAIMS




FOR AND IN CONSIDERATION OF the benefits to be provided me in connection with the termination
of my employment, as set forth in the employment agreement between me and Live Nation Worldwide,
Inc. (the “Company”) effective as of the date of the closing of the transactions contemplated by
that certain Agreement and Plan of Merger dated as of February 10, 2009 by and among Live Nation,
Inc., Ticketmaster Entertainment, Inc. and merger subsidiary (the “Merger”) (“Agreement”), which
are conditioned on my signing this Release of Claims and to which I am not otherwise entitled, and
for other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, I, on my own behalf and on behalf of my heirs, executors, administrators,
beneficiaries, representatives and assigns, and all others connected with or claiming through me,
hereby release and forever discharge the Company, and all of its subsidiaries and other affiliates,
past, present and future officers, directors, trustees, stockholders, employees, agents, general
and limited partners, members, managers, joint venturers, representatives, successors and assigns
and all others connected with any of them, all of the foregoing both individually and in their
official capacities, from any and all causes of action, rights or claims of any type or
description, known or unknown, which I have had in the past, now have, or might now have, through
the date of my signing of this Release of Claims, in any way resulting from, arising out of or
connected with my employment by the Company or any of its subsidiaries or other affiliates or the
termination of that employment, including, without limitation, (i) any and all claims pursuant to
any federal, state or local law, regulation or other requirement; and (ii) any and all claims of
employment discrimination on any basis under Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act, the Americans with Disabilities Act and the fair employment
practices laws of the state or states in which I have been employed by the Company or any of its
subsidiaries or other affiliates, each as amended from time to time.



Excluded from the scope of this Release of Claims is (i) any claim arising under the terms of the
Agreement after the effective date of this Release of Claims, (ii) claims to enforce my rights
and/or the Company’s obligations pursuant to Sections 8, 9, 10 and 12 of the Agreement; (iii) any
right of indemnification or contribution that I have pursuant to the certificate of incorporation
or bylaws of the Company or any of its subsidiaries or other affiliates and (iv) any claims under
any of the equity incentive plan and equity-based award agreements referenced in the Agreement with
respect to any securities (including shares, options and any other equity-based rights) that I
continue to hold after I sign this Release of Claims.



This Release of Claims covers both claims that I know about and those I may not know about. I
expressly waive all rights afforded by any statute which limits the effect of a release with
respect to unknown claims. I understand the significance of my release of unknown claims and my
waiver of statutory protection against a release of unknown claims, including, without limitation,
claims otherwise protected under California Civil Code Section 1542 (“Section 1542”) or any other
applicable similar state or federal law. Section 1542 provides: “A general release does not
extend to claims which the creditor does not know or suspect to exist in his or her favor at the
time of executing the release, which if known by him or her must have materially affected his or
her settlement with the debtor.”



For a period of two years following the date hereof, I agree that I will not make or cause to be
made any statements, verbally, electronically, in writing or in any other form, with the intent to
be derogatory or disparaging about the Company, its businesses, affiliates, subsidiaries, officers,
directors or employees.



In signing this Release of Claims, I acknowledge my understanding that I may not sign it prior to
the termination of my employment, but that I may consider the terms of this Release of Claims for
up to 21 days (or such longer period as the Company may specify) from the later of the date my
employment with the Company terminates or the date I receive this Release of Claims. I also
acknowledge that I am advised by the Company and its subsidiaries and other affiliates to seek the
advice of an attorney prior to signing this Release of Claims; that I have had sufficient time to
consider this Release of Claims and to consult with an attorney, if I wished to do so, or to
consult with any other person of my choosing before signing; and that I am signing this Release of
Claims voluntarily and with a full understanding of its terms.



I further acknowledge that, in signing this Release of Claims, I have not relied on any promises or
representations, express or implied, that are not set forth expressly in the Agreement. I
understand that I may revoke this Release of Claims at any time within seven days of the date of my
signing by written notice to the Chairman of the Board of Directors of the Company and that this
Release of Claims will take effect only upon the expiration of such seven day revocation period and
only if I have not timely revoked it.



Intending to be legally bound, I have signed this Release of Claims under seal as of the date
written below.



Signature:       



Name (please print):       



Date Signed:       



2



EXHIBIT B TO

RAPINO EMPLOYMENT AGREEMENT




RELEASE OF CLAIMS




FOR GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which is hereby
acknowledged, and as required by the agreement between Live Nation Worldwide, Inc. (the “Company’)
and Michael Rapino (the “Executive”) dated effective as of the date of the closing of the
transactions contemplated by that certain Agreement and Plan of Merger dated as of February 10,
2009 by and among Live Nation, Inc., Ticketmaster Entertainment, Inc. and merger subsidiary (the
“Merger”) (the “Agreement”), the Company, and on behalf of its predecessors, affiliates and
successors, and each of its past, present and future officers, directors, employees,
representatives, attorneys, insurers, agents and assigns, individually and in their official
capacities, hereby release and forever discharge the Executive from any and all causes of action,
rights or claims of any type or description, known or unknown, which they have had in the past, now
have, or might now have, through the date of signing of this Release of Claims, in any way
resulting from, arising out of or connected with the Executive’s employment by the Company or any
of its subsidiaries or other affiliates or the termination of that employment or pursuant to any
federal, state or local law, regulation or other requirements, including, without limitation, those
arising under common law.



Excluded from the scope of this Release of Claims is (i) any claim arising under Sections 11 (a),
(b) and (c) of the Agreement after the effective date of this Release of Claims and (ii) any claims
relating to the Executive’s commission of fraud or criminal acts against Company or its affiliates,
or other substantial, willful and intentional misconduct related to the Executive’s employment with
the Company or any of its affiliates.



Intending to be legally bound, the Company has signed this Release of Claims as of the date written
below.



Live Nation Worldwide, Inc.



By:



     


Name:




	 	 	Title:





Date Signed:       




3