Document:

exv10w6

 

Exhibit 10.6

CCE SPINCO, INC.

2006 ANNUAL INCENTIVE PLAN

1. Purpose. The purpose of the plan is to provide performance-based incentive compensation
to executive officers and other selected key executives of CCE SPINCO, Inc. (the “Company”) and its
subsidiaries, which, as applicable, will not be subject to the executive compensation deduction
limitations of Section 162(m) of the Internal Revenue Code of 1986 (the “Code”).

2. Administration.

     2.1 The Committee. The plan will be administered by the compensation committee of the
Company’s board of directors, or a committee of such other persons as the board of directors may
appoint. Unless the board of directors determines otherwise, the members of the committee must be
“outside directors” for purposes of 162(m) of the Code.

     2.2 Responsibility and Authority of the Committee. Subject to the provisions of the
plan, the committee, acting in its discretion, will have responsibility and authority to (a) select
the individuals who may participate in the plan, (b) prescribe the terms and conditions of each
participant’s award and make amendments thereto, (c) determine whether and the extent to which
performance goals have been met, (d) construe, interpret and apply the provisions of the plan and
of any agreement or other document evidencing an award made under the plan, and (e) make any and
all determinations and take any and all other actions as it deems necessary or desirable in order
to carry out the terms of the plan. In exercising its responsibilities, the committee may obtain at
the Company’s expense such advice, guidance and other assistance from outside compensation
consultants and other professional advisers as it deems appropriate. The decision of the committee
regarding any disputed question, including questions of construction, interpretation and
administration, shall be final and conclusive on all persons.

     2.3 Manner of Exercise of Committee Authority. The Committee may delegate
responsibilities with respect to the administration of the Plan to one or more officers of the
Company or any of its subsidiaries, to one or more members of the Committee or to one or more
members of the Board; provided, however, that the Committee may not delegate its
responsibility if and to the extent such delegation would cause an award to fail to constitute
“qualified performance-based compensation” under Section 162(m) of the Code. The committee may also
appoint agents to assist in the day-to-day administration of the Plan and may delegate the
authority to execute documents under the plan to one or more members of the committee or to one or
more officers of the Company.

     2.4 Indemnification. The Company shall indemnify and hold harmless each member of the
board of directors and of the committee or any employee of the Company or any of its subsidiaries
and affiliates who provides assistance with the administration of the plan or to whom a
plan-related responsibility is delegated from and against any loss, cost, liability (including any
sum paid in settlement of a claim with the approval of the board of directors), damage and expense
(including reasonable legal fees and other expenses incident thereto and, to the extent permitted
by applicable law, advancement of such fees and expenses) arising out of or incurred

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in connection with the plan, unless and except to the extent attributable to such person’s
fraud or willful misconduct.

3. Performance-Based Compensation Opportunities.

     3.1 General. Each award made under the plan will represent the right to receive
incentive compensation upon the achievement of one or more performance objectives that are
established by the committee and communicated to the recipient of the award by the 90th
day of the applicable performance period or, if earlier, before 25% of the applicable performance
period has elapsed. The committee will determine the performance period applicable to an award.
Subject to the requirements of the plan and applicable law, each award will contain such other
terms and conditions as the committee, acting in its discretion, may prescribe.

     3.2 Performance Criteria. Performance objectives may be based upon any one or more of
the following criteria: revenue growth, operating income before depreciation and amortization and
non-cash compensation expense (“OIBDAN”), OIBDAN growth, funds from operations, funds from
operations per share and per share growth, cash available for distribution, cash available for
distribution per share and per share growth, operating income and operating income growth, net
earnings, earnings per share and per share growth, return on equity, return on assets, share price
performance on an absolute basis and relative to an index, improvements in attainment of expense
levels, implementing or completion of critical projects, or improvement in cash-flow (before or
after tax).

     3.3 Performance Objectives. The amount, if any, payable to a participant with respect
to an award will depend upon whether and the extent to which the performance objective(s) of the
award are achieved during the applicable performance period. Performance objectives may be
established on a periodic, annual, cumulative or average basis and may be established on a
corporate-wide basis and/or with respect to operating units, divisions, subsidiaries, acquired
businesses, minority investments, partnerships or joint ventures. The committee may establish
different levels of payment under an award to correspond with different levels of achievement of
performance objectives specified in the award. Awards may contain more than one performance
objective; and performance objectives may be based upon multiple performance criteria. Multiple
performance objectives contained in an award may be aggregated, weighted, expressed in the
alternative or otherwise specified by the committee. The level or levels of performance specified
with respect to a performance objective may be expressed in absolute terms, as objectives relative
to performance in prior periods, as an objective compared to the performance of one or more
comparable companies or an index covering multiple companies, or otherwise as the committee may
determine. Notwithstanding anything to the contrary contained in the plan, the performance
objectives under any award must be objective and must otherwise meet the requirements of Section
162(m) of the Code.

     3.4 Adjustments. The committee may reduce or eliminate an award made under the plan
for any reason, including, without limitation, changes in the position or duties of a participant
during or after a performance period, whether due to termination of employment (including death,
disability, retirement, voluntary termination or termination with or without cause) or otherwise.
In addition, to the extent necessary to preserve the intended economic effects of the plan and
individual awards, the committee may make appropriate adjustments to

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the performance objectives and other terms of an award to properly reflect (a) a change in
corporate capitalization; (b) a material or extraordinary corporate transaction involving the
Company or a subsidiary, including, without limitation, a merger, consolidation, reorganization,
spin-off, or the sale of a subsidiary or of the assets of a business or division (whether or not
such transaction constitutes a reorganization within the meaning of Section 368(a) of the Code);
(c) a partial or complete liquidation of the Company or a subsidiary, or (d) a change in accounting
or other relevant rules or regulations; provided, however, that no adjustment
hereunder shall be authorized or made if and to the extent that the authority to make or the making
of such adjustment would cause an award to fail to satisfy the requirements for “qualified
performance-based compensation” under Section 162(m) of the Code.

     3.5 Certification. Following the completion of the performance period applicable to an
award, the committee shall determine and shall certify in writing whether and the extent to which
the performance objective(s) under the award have been achieved, as well as the amount, if any,
payable to the participant as a result of such achievement(s), which determination(s) and
certification(s) shall be subject to and shall be made in accordance with the requirements of
Section 162(m) of the Code.

     3.6 Payment of Amounts Earned. Subject to such deferral and/or other conditions as may
be permitted or required by the committee, amounts earned under an award will be paid or
distributed as soon as practicable following the committee’s determination and certification of
such amounts.

     3.7 Maximum Annual Amount Payable to a Participant. Notwithstanding anything to the
contrary contained herein, no individual may earn more than $15,000,000 in any calendar year
pursuant to an award made to such individual under the plan.

4. Termination of Employment; Death. Unless the committee determines otherwise, no amount
will be payable under an award made to a participant whose employment with the Company and its
subsidiaries terminates (for any reason other than death) before the payment date of such award. If
a participant dies before receiving payment of an amount earned under the plan, such payment will
be made to the deceased participant’s designated beneficiary, if any, or, if none, to the deceased
participant’s estate. No beneficiary designation shall be effective unless it is in writing and
received by the committee prior to the participant’s death, and any such designation will supersede
and be deemed a revocation of any prior beneficiary designation made by the participant.

5. Withholding Taxes. All amounts payable pursuant to the settlement of an award made under
the plan are subject to applicable tax withholding. The Company and its subsidiaries shall withhold
funds (or other property) from the payment of any such award and shall be entitled to take such
other action with respect to other amounts that are or may become payable to the participant as may
be necessary or appropriate in order to enable the Company and its subsidiaries to satisfy such tax
withholding requirements.

6. No Implied Rights Afforded to Participants. No award and nothing contained in the plan
or in any document relating to the plan shall confer upon an eligible employee or participant any
right to continue as an employee of the Company or a subsidiary or constitute a contract or

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agreement of employment, or interfere in any way with the right of the Company and its subsidiaries
to reduce such person’s compensation, to change the position held by such person or to terminate
such person’s employment, with or without cause.

7. Non-transferability. No interest in or under an award made or a payment due or to become
due under the plan may be assigned, transferred or otherwise alienated other than by will or the
laws of descent and distribution, and any attempted assignment, alienation, sale, transfer, pledge,
encumbrance, charge or other alienation of any such interest shall be void and unenforceable.

8. Amendment and Termination. The board of directors of the Company or the committee may
amend the plan at any time and from time to time. Any such amendment may be made without approval
of the Company’s stockholders unless and except to the extent such approval is required in order to
satisfy the stockholder approval requirements of Section 162(m) of the Code. The Company’s board of
directors may terminate the plan.

9. Unfunded Status of Awards. The plan is intended to constitute a bonus plan and not a
pension other employee benefit plan or purposes of ERISA. The right of a participant (or
beneficiary) to receive payment(s) under a plan award will constitute and be equivalent to the
right of a general unsecured creditor of the Company (or the subsidiary by whom the participant is
or was employed, as the case may be), whether or not a trust is created and funded in order to
facilitate the payment of amounts due or to become due under the plan (including, for this purpose,
any deferral arrangement made with respect to any such payment).

10. Miscellaneous.

     10.1 Governing Law. The plan and any award made under the plan will be subject to and
construed in accordance with the laws of the State of Delaware, without giving effect to principles
of conflicts of laws, and applicable federal law.

     10.2 Section 162(m) of the Code. It is intended that amounts payable pursuant to
awards made under the plan will constitute “qualified performance based compensation” and thus be
exempt from the annual $1 million limitation on the deductibility of executive compensation. The
plan and each award made under the plan will be interpreted, construed and applied accordingly.

     10.3 Effective Date. The plan is effective as of January 1, 2006. The plan will
terminate on the date of the first annual meeting of the Company’s stockholders following December
31, 2006, unless the plan is approved by the Company’s stockholders at such meeting. The
performance criteria specified in the plan shall be re-submitted for stockholder approval as and
when required by Treasury Department regulations in order to ensure compliance with the stockholder
approval requirements of Section 162(m) of the Code on an ongoing basis.

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                                                                    EXHIBIT 10.7

                              EMPLOYMENT AGREEMENT

      This Employment Agreement is entered into this 17th day of August 2005,
between SFX Entertainment, Inc., d/b/a Clear Channel Entertainment (the
"Company") and Michael Rapino (the "Employee"), and effective on the date signed
by the Company (Effective Date").

      WHEREAS, the Company and the Employee desire to enter into an employment
relationship under the terms and conditions set forth in this Agreement;

      NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:

1.    TERM OF EMPLOYMENT.

The Employee's term of employment starts on the Effective Date of this Agreement
and ends on the close of business on August 31, 2007 (the "Employment Period" or
"Term of Employment"). However, beginning on August 31, 2007, the Employment
Period shall be automatically extended from day to day for twelve months, so
that commencing on September 1, 2007 and continuing for so long thereafter as
Employee is employed hereunder, there will always be exactly one year remaining
in the Term of Employment hereunder, until either party terminates in accordance
with Section 7. The term "Employment Period" or "Term of Employment" shall refer
to the Employment Period if and as so extended. Upon the closing of the proposed
spin-off of the Entertainment business from Clear Channel Communications, Inc.,
as announced on April 29, 2005, this Agreement shall be automatically assigned
by SFX Entertainment, Inc. to, and assumed by, CCE Spinco, Inc. (or other name
as such entity may assume, and referred to herein as "CCE Spinco"), the parent
entity for the newly independent, publicly traded company, and Employee shall
then report to the Chairman of the Board of Directors of such entity.

2.    TITLE AND DUTIES.

      (a) DUTIES. The Employee's title is President and CEO, SFX Entertainment,
Inc., d/b/a Clear Channel Entertainment. The Employee will perform job duties
that are usual and customary for this position, and will perform additional
services and duties that the Company may from time to time designate that are
consistent with the usual and customary duties of this position. The Employee
will report to President and CEO, Clear Channel Communications, Inc., currently
Mark P. Mays. The Employee will devote his full working time and efforts to the
business and affairs of Company.

      (b) EXCLUSIVE SERVICES. During employment with the Company, Employee shall
not be employed elsewhere, nor shall he engage in any competitive activity and,
except as set forth in the preceding clause (a) of this Section 2, Employee
shall not render any services to any other person or business, or acquire any
interest of any type in any other business which is in competition with Company,
provided, however, that the foregoing shall not be deemed to prohibit Employee
from acquiring, solely as an investment, (i) up to 10% of any securities of a

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partnership, trust, corporation or other entity so long as Employee remains a
passive investor in such entity and such entity is not, directly or indirectly,
in competition with Company or (ii) up to 5.0% of the outstanding equity
interests of any publicly held company.

3.    COMPENSATION AND BENEFITS

      (a) BASE SALARY. The Company will pay the Employee an annual base salary
of $550,000.00. Company agrees that the salary will not be decreased in the
future. All payments of base salary will be made in installments according to
the Company's regular payroll practice, prorated monthly or weekly where
appropriate, and subject to any increases that are determined to be appropriate
by the Compensation Committee of the Company's Board of Directors ("Compensation
Committee").

      (b) PERFORMANCE BONUS. No later than March 31 of each year, Employee will
be eligible to receive a performance bonus for the prior year. Employee is not
required to be employed by Company on the date of the bonus payment in order to
receive it. The amount of annual bonus for any partial year of this Agreement
will be prorated monthly unless Employee is terminated for Cause. The potential
performance bonus for calendar year 2005 is stated on the attached Exhibit A.
The 2005 bonus shall not be prorated and shall be in lieu of any other prior
bonus agreement. For calendar years 2006, 2007, and any additional years under
this Agreement, any performance bonus shall be at the discretion of the
Compensation Committee; however, the Company shall not set incentive performance
criteria for 2006 and 2007 that are more stringent or less favorable to Employee
than the requirements stated in Exhibit A.

      (c) EMPLOYMENT BENEFIT PLANS. The Employee will be entitled to participate
in all pension, profit sharing, and other retirement plans, all incentive
compensation plans, and all group health, hospitalization and disability or
other insurance plans, paid vacation, sick leave and other employee welfare
benefit plans in which other similarly situated employees of the Company may
participate as stated in the Employee Guide.

      (d) VACATION. Employee will be entitled to accrue twenty days of paid
vacation per calendar year, with such accrual pro-rated for partial years and
suspended for periods of unpaid leave, and subject to the Company's policy
regarding maximum vacation accrual.

      (e) EXPENSES. The Company will pay or reimburse the Employee for all
normal and reasonable travel and entertainment expenses incurred by the Employee
in connection with the Employee's responsibilities to the Company upon
submission of proper vouchers in accordance with the Company's expense
reimbursement policy. The Company's obligation to provide reimbursement for
expenses incurred during the Employee's employment by the Company shall survive
any termination of the Employee's employment. The Company will provide the
Employee with access to a credit card, subject to the approval of the credit
card company and based on the Employee's credit history, and which should only
be used for business purposes. Payment is the responsibility of the Employee.

      (f) MISCELLANEOUS. During full-time employment under this Agreement, the
Company will have a laptop computer and cellular phone available for Employee to
use for

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business purposes. Employee will also be provided with Assistant services.
Employee will be provided with the use of an office befitting his position as an
Executive of the Company.

      (g) STOCK OPTIONS. Employee shall receive a grant of 120,000 stock options
for shares of common voting stock in CCE Spinco. Such grant shall be contingent
on the closing of the spin-off of the Company from its current parent, Clear
Channel Communications, Inc. and issued at the time of the spin-off of the
Company. The option price shall be the fair market value on the grant date,
which shall be on the 3rd day following the closing of the anticipated spin-off
of the Company from its current parent, Clear Channel Communications, Inc. Any
further stock option grants for shares of voting common stock will be granted
based upon the performance of the Employee, which will be assessed in the sole
discretion of the Compensation Committee of the Board. Options shall be issued
in a manner consistent with the current vesting schedule for Clear Channel
Communications, Inc. or as subsequently amended by the Board of CCE Spinco;
however, subsequent amendments to the vesting schedule shall be no less
favorable to Employee unless he agrees to such amendment. Of the options that
are granted, ISOs shall be granted to the extent allowed by law; otherwise,
non-qualified options shall be granted. If the Compensation Committee determines
that Employee's performance merits issuance of options, then such options shall
be issued as stated on the attached Exhibit A for calendar year 2005. For future
years, any grant of options shall be determined in the discretion of the
Compensation Committee; however, for 2006 and 2007, the Company shall not set
incentive performance criteria that are more stringent or less favorable to
Employee than the requirements stated in Exhibit A. All option grants shall be
made under the terms and conditions set forth in the applicable Stock Option
Plan under which they are issued. The Company reserves the right to modify any
future Company stock option plan with respect to the change of control or any
other provision of said plan. The Company's obligations under this Section are
conditioned upon and subject to the Company's decision, in its sole discretion,
to alter, suspend or discontinue its stock option grant program, but if the
Company does so, it shall replace the program with an alternative form or method
of compensation which would yield equal compensation to Employee for the same
level of performance.

4.    NONDISCLOSURE OF CONFIDENTIAL INFORMATION.

      During the course of the Employee's employment with the Company, the
Company will provide the Employee with access to certain confidential
information, trade secrets, and other matters which are of a confidential or
proprietary nature, including but not limited to the Company's customer lists,
pricing information, production and cost data, compensation and fee information,
strategic business plans, budgets, financial statements, and other information
the Company treats as confidential or proprietary (collectively the
"Confidential Information"). The Company provides on an ongoing basis such
Confidential Information as the Company deems necessary or desirable to aid the
Employee in the performance of his duties. The Employee understands and
acknowledges that such Confidential Information is confidential and proprietary,
and agrees not to disclose such Confidential Information to anyone outside the
Company except to the extent that (i) the Employee deems such disclosure or use
reasonably necessary or appropriate in connection with performing his duties on
behalf of the Company; (ii) the Employee is required by order of a court of
competent jurisdiction (by subpoena or similar process) to disclose or discuss
any Confidential Information, provided that in such case, the Employee shall
promptly inform the Company of such event, shall cooperate with the Company

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in attempting to obtain a protective order or to otherwise restrict such
disclosure, and shall only disclose Confidential Information to the minimum
extent necessary to comply with any such court order; (iii) the Employee may
disclose Confidential Information to his attorneys and financial advisors,
provided Employee advises his attorneys and financial advisors that such
Confidential Information is confidential and that by receiving such Confidential
Information such attorneys and financial advisors are agreeing to be bound by
this Section; or (iv) such Confidential Information becomes generally known to
and available for use in the industries in which the Company does business,
other than as a result of any action or inaction by the Employee. The Employee
further agrees that he will not during employment and/or at any time thereafter
use such Confidential Information in competing, directly or indirectly, with the
Company. At such time as the Employee shall cease to be employed by the Company,
he will immediately turn over to the Company all Confidential Information,
including papers, documents, writings, electronically stored information, other
property, and all copies of them, provided to or created by him during the
course of his employment with the Company, provided however, that Employee shall
be entitled to retain a copy of his personal rolodex. This nondisclosure
covenant is binding on the Employee, as well as his heirs, successors, and legal
representatives, and will survive any expiration or termination of this
Agreement, or the end of employment, regardless of the reason or circumstance.

5.    NONSOLICITATION OF COMPANY EMPLOYEES OR VENDORS.

      To further preserve the rights of the Company pursuant to the
nondisclosure covenant discussed above, and for the consideration promised by
the Company under this Agreement, during the term of the Employee's employment
with the Company and for a period of 12 months thereafter, regardless of the
reason for the termination or end of employment, the Employee will not, directly
or indirectly, (i) hire any current or prospective employee or vendor of the
Company, or any subsidiary or affiliate of the Company (including, without
limitation, any current employee or vendor of the Company within the 6-month
period preceding the Employee's last day of employment with the Company or
within the 12-month period of this covenant) who worked, works, or has been
offered employment by the Company; (ii) solicit or encourage any such employee
to terminate their employment or any vendor to terminate its business
relationship with the Company, or any subsidiary or affiliate of the Company; or
(iii) solicit or encourage any such employee or vendor to accept employment or a
contract with any business, operation, corporation, partnership, association,
agency, or other person or entity with which the Employee may be associated.
This Nonsolicitation Covenant is binding on the Employee and will survive the
expiration or termination of this Agreement, or the end of employment for any
reason.

6.    NON-COMPETITION DURING TERM.

      To further preserve the rights of the Company pursuant to the
nondisclosure covenant stated above, and for the consideration promised by the
Company under this Agreement, during the Employee's employment with the Company
the Employee will not, directly or indirectly, as an owner, director, principal,
agent, officer, employee, partner, consultant, servant, or otherwise, carry on,
operate, manage, control, or become involved in any manner with any business,
operation, corporation, partnership, association, agency, or other person or
entity which is in the same business as the Company in any location in which the
Company, or any parent, subsidiary

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or affiliate of the Company, operates or has plans or has projected to operate
during the Employee's employment with the Company, including any area within a
50-mile radius of any such location. The foregoing shall not prohibit the
Employee from owning up to 5.0% of the outstanding stock of any publicly held
company.

      The Company and the Employee agree that the restrictions contained in this
noncompetition covenant are reasonable in scope and duration and are necessary
to protect the Company's business interests and Confidential Information.

7.    TERMINATION.

      The Employee's employment with the Company may be terminated under the
following circumstances:

      (a) DEATH. The Employee's employment with the Company shall terminate upon
his death.

      (b) DISABILITY. The Company may terminate the Employee's employment with
the Company if, as a result of the Employee's incapacity due to physical or
mental illness, the Employee is unable to perform his duties under this
Agreement on a substantially full-time basis for more than 90 days in any 12
month period, as determined by a mutually designated physician.

      (c) TERMINATION BY THE COMPANY. The Company may terminate the Employee's
employment with the Company without Cause at any time after August 31, 2007. The
Company may also terminate his employment for Cause, based upon reasonable
determinations by the Company's Board of Directors. For purposes of this
Agreement, "Cause" shall mean: (i) conduct by the Employee constituting a
material act of willful misconduct in connection with the performance of his
duties, including, without limitation, violation of the Company's policy on
sexual harassment, misappropriation of funds or property of the Company or any
of its affiliates other than the occasional, customary and de minimis use of
Company property for personal purposes, or other willful misconduct; (ii)
continued, willful and deliberate non-performance by the Employee of his duties
hereunder (other than by reason of the Employee's physical or mental illness,
incapacity or disability); (iii) the Employee's refusal or failure to follow
lawful and material directives consistent with his title and position and the
terms of this Agreement; (iv) conviction of the Employee for, or a plea of nolo
contendere by the Employee to, any felony, or lesser crime involving fraud,
embezzlement or misappropriation of the property of the Company, or other
conduct by the Employee that, as reasonably determined by the Board, has
resulted in, or would result in if he were retained in his position with the
Company, material injury to the reputation of the Company; (v) a breach by the
Employee of any of the provisions contained in this Agreement regarding
Nondisclosure of Confidential Information and NonSolicitation (other than an
inadvertent disclosure resulting in no harm to Company); or (vi) a material
violation by the Employee of the Company's employment policies of which he had
notice. The Employee will be given a reasonable opportunity (30 days maximum, in
the discretion of the Company) to cure any of the "Cause" provisions that the
Company's Board of Directors deem to be susceptible to cure, if the conduct has
not been the subject of a prior cure.

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      (d) TERMINATION BY THE EMPLOYEE WITHOUT CAUSE. The Employee may provide
notice at any time after August 31, 2007 of his intent to terminate the
Employee's employment with the Company without cause. Employee must provide the
Company with twelve (12) months advance written notice of his intent to
terminate the employment relationship. If Employee terminates under this
section, the Company may determine an earlier termination date on which
employment will end. The Company shall not be required to continue employment
during the notice period. If the Company elects to terminate prior to the
expiration of the twelve month notice period, such termination shall be deemed a
termination by Company without cause and Section 8(d) shall apply.

      (e) TERMINATION BY EMPLOYEE FOR GOOD REASON. The Employee may terminate
this Agreement at any time for Good Reason, which is defined as: (i) a repeated
failure of the Company to comply with a material term of the Agreement after
written notice by the Employee specifying the alleged failure; or (ii) a
substantial and unusual change in Employee's position, resulting in significant
and unusual additional duties, responsibilities, and authority, without an offer
of additional reasonable compensation as determined by Company in light of
compensation levels for similarly situated employees; (iii) a substantial and
unusual reduction in Employee's duties, responsibilities and authority; (iv)
Company's requirement that Employee move from or render his services primarily
in a location outside of the Los Angeles metropolitan area; (v) if Employee is
not appointed to the Board of Directors of CCE Spinco, Inc. (or other name as
such entity may assume) before, or within three months from, the closing of the
spin-off transaction; (vi) Change of Control (as defined in section 9), or (vii)
if there is no spin-off (as contemplated by the announcement on April 29, 2005)
and no Change in Control (as defined in section 9) prior to December 31, 2006.
If Employee elects to terminate for Good Reason under (i), (ii), (iii), or (iv),
Company shall have thirty (30) days after written notice within which to cure.

8.    COMPENSATION UPON TERMINATION.

      (a) DEATH. If the Employee's employment with the Company terminates by
reason of his death, the Company will, within 30 days, pay in a lump sum amount
to such person as the Employee shall designate in a notice filed with the
Company or, if no such person is designated, to the Employee's estate, the
Employee's accrued and unpaid base salary, vacation pay, and prorated bonus, if
any (See Exhibit A), unreimbursed expenses, and any paymesnts to which the
Employee's spouse, beneficiaries, or estate may be entitled under any applicable
employee benefit plan (according to the terms of such plans and policies).

      (b) DISABILITY. If the Employee's employment with the Company terminates
by reason of his disability, the Company shall, within 30 days, pay in a lump
sum amount to the Employee his accrued and unpaid base salary, vacation pay, and
prorated bonus, if any (See Exhibit A), unreimbursed expenses, and any payments
to which he may be entitled under any applicable employee benefit plan
(according to the terms of such plans and policies).

      (c) TERMINATION BY THE COMPANY FOR CAUSE. If the Employee's employment
with the Company is terminated by the Company for Cause, the Company will,
within 30 days, pay in a lump sum amount to the Employee his accrued and unpaid
base salary, vacation pay,

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unreimbursed expenses and any payments to which he may be entitled under any
applicable employee benefit plan (according to the terms of such plans and
policies).

      (d) TERMINATION BY COMPANY WITHOUT CAUSE; TERMINATION BY EMPLOYEE FOR GOOD
REASON - SEVERANCE AND CONSULTING OPTION: If employment is terminated by the
Company without Cause (and other than for death or disability) or if this
Agreement is terminated by Employee for Good Reason, the Company will, within 30
days, pay in a lump sum amount to the Employee his accrued and unpaid base
salary through the date of termination and any payments to which he may be
entitled under any applicable employee benefit plan (according to the terms of
such plans and policies). Additionally, in lieu of a termination of employment,
Employee has the option of continuing employment by electing, within ten days
from notice by Company, to become a part-time consultant to Company in exchange
for severance pay. In that event, Company will pay Employee the Employee's base
salary ("severance pay") as set forth in Section 3(a) for a twelve month period,
in periodic payments in accordance with ordinary payroll practices and
deductions, provided that Employee: (i) will serve as an exclusive part-time
consultant during the severance payout period; (ii) agrees not to compete with
Company, directly or indirectly, during the payment and consulting period in
accordance with Section 2(b); and (iii) agrees to and signs a general release of
all claims (other than executory termination obligations of the Company) in a
form and manner satisfactory to the Company. However, if Employee terminates for
Good Reason under Section 7(e)(vii), the severance pay during the consulting
period shall be $1,000,000 in addition to the salary stated in Section 3(a). If
Company terminates Without Cause, and if Employee opts to continue as a part-
time consultant in accordance with this Section, then Employee shall be
entitled, at the end of his employment as a consultant, to accelerated vesting
of a pro rata portion of outstanding options. The pro rata portion of
outstanding options that shall vest immediately will be determined by applying a
Vesting Factor to each option grant. The "Vesting Factor" shall be calculated by
dividing the number of months since the option was granted by the total months
contained in the original vesting period.

      (e) EFFECT OF COMPLIANCE WITH COMPENSATION UPON TERMINATION PROVISIONS.
Upon complying with Subparagraphs 8(a) through 8(d) above, as applicable, the
Company will have no further obligations to the Employee except as otherwise
expressly provided under this Agreement, provided that such compliance will not
adversely affect or alter the Employee's rights under any employee benefit plan
of the Company in which the Employee has a vested interest, unless otherwise
provided in such employee benefit plan or any agreement or other instrument
attendant thereto.

9.    CHANGE OF CONTROL. In the event of a Change in Control, all of Employee's
stock options that are outstanding on the date of such Change in Control shall
become immediately and fully exercisable and any restricted stock shall no
longer be restricted. For purposes of this Agreement, "Change of Control" means:
(i) any "person," as such term is used in Sections 3(a)(9) and 13(d) of the
Securities Exchange Act of 1934 (other than the Executive or entities controlled
by the Executive), becomes a beneficial owner of 50% or more of the voting power
of the Company; (ii) all or substantially all of the assets or business of the
Company are disposed of pursuant to a merger, consolidation, sale or other
transaction (unless the shareholders of the Company, immediately prior to such
merger, consolidation or other transaction beneficially own,

                                        7
<PAGE>

directly or indirectly, in substantially the same proportion as they owned the
voting power of the Company, all of the voting power or other ownership
interests of the entity or entities, if any, that succeed to the business of the
Company; (iii) the Company combines with another company and, immediately after
such combination, (a) the shareholders of the Company immediately prior to the
combination do not hold, directly or indirectly, more than 50% of the voting
power of the combined company or (b) the members of the Board immediately prior
to the Board's approval of the merger transaction do not constitute a majority
of the combined company's board of directors; or (iv) the liquidation or
dissolution of the Company. "Change of Control" does not include the spin-off of
the Company announced on April 29, 2005. However, if prior to December 31, 2006,
there is a Change of Control as defined above and no spin-off (as contemplated
by the announcement on April 29, 2005) has occurred prior to such Change in
Control, and if the successor does not assume this Agreement or offer to
Employee an agreement that is at least as favorable as this Agreement, or if
Employee chooses to decline such employment or other agreement with the
successor, then this Agreement shall terminate and Company shall pay $1,000,000
to Employee within 30 days of the transaction but only if Employee agrees to and
signs a general release of all claims (other than executory termination
obligations of the Company) in a form and manner satisfactory to the Company and
agrees that he shall not work for or provide his services to the successor,
whether directly or indirectly, and whether characterized as an employee, a
consultant, or otherwise, for a period of one year following the payment Such
termination shall not entitle Employee to any further payments under Section 8
other than his accrued and unpaid base salary, vacation pay, and prorated bonus,
if any, unreimbursed expenses, and any payments to which he may be entitled
under any applicable employee benefit plan (according to the terms of such plans
and policies).

10.   PARTIES BENEFITED; ASSIGNMENTS.

This Agreement shall be binding upon the Employee, his heirs and his personal
representative or representatives, and upon the Company and its respective
successors and assigns. Neither this Agreement nor any rights or obligations
hereunder may be assigned by the Employee, other than by will or by the laws of
descent and distribution, without the Board's prior consent, and the Board shall
give good faith consideration to any such request made by Employee. The Company
may not assign or transfer this Agreement or any rights or obligations
hereunder; provided, however, that a transfer of this Agreement and the rights
and obligations hereunder to a successor or surviving entity in connection with
a sale or divestiture of all or substantially all the assets or any transaction
or series of related transactions (including, without limitation, any spin-off,
merger, reorganization, consolidation or purchase of outstanding equity
interests), shall not be considered an assignment or transfer.

11.   GOVERNING LAW.

      This Agreement shall be governed by and construed in accordance with the
internal laws of the State of Texas without giving effect to any choice of law
or conflict provisions or rule (whether of the State of Texas any other
jurisdiction) that would cause the application of the laws of any jurisdiction
other than the State of Texas. The parties agree that the Western District of
Texas is a proper venue for any court filed dispute.

                                        8
<PAGE>

12.   DEFINITION OF COMPANY.

      As used in this Agreement, the term "Company" shall include SFX
Entertainment, Inc., d/b/a Clear Channel Entertainment and any of its past,
present and future divisions, parent, subsidiaries, and successors.

13.   LITIGATION AND REGULATORY COOPERATION.

      During and after the Employee's employment, the Employee shall reasonably
cooperate with the Company in the defense or prosecution of any claims or
actions now in existence or which may be brought in the future against or on
behalf of the Company which relate to events or occurrences that transpired
while the Employee was employed by the Company; provided however, that such
cooperation shall not materially and adversely affect the Employee or expose the
Employee to an increased probability of civil or criminal litigation. The
Employee's cooperation in connection with such claims or actions shall include,
but not be limited to, being available to meet with counsel to prepare for
discovery or trial and to act as a witness on behalf of the Company at mutually
convenient times. During and after the Employee's employment, the Employee also
shall cooperate fully with the Company in connection with any investigation or
review of any federal, state or local regulatory authority as any such
investigation or review relates to events or occurrences that transpired while
the Employee was employed by the Company. The Company will pay the Employee on
an hourly basis (to be derived from his base salary) for requested litigation
and regulatory cooperation that occurs after his termination of employment, and
reimburse the Employee for all costs and expenses incurred in connection with
his performance under this paragraph, including, but not limited to, reasonable
attorneys' fees and costs.

14.   INDEMNIFICATION AND INSURANCE; LEGAL EXPENSES.

      The Company shall indemnify the Employee to the fullest extent permitted
by law, in effect at the time of the subject act or omission, and shall advance
to the Employee reasonable attorneys' fees and expenses as such fees and
expenses are incurred (subject to an undertaking from the Employee to repay such
advances if it shall be finally determined by a judicial decision which is not
subject to further appeal that the Employee was not entitled to the
reimbursement of such fees and expenses), and the Employee will be entitled to
the protection of any insurance policies that the Company may elect to maintain
generally for the benefit of its directors and officers against all costs,
charges and expenses incurred or sustained by him in connection with any action,
suit or proceeding to which he may be made a party by reason of his being or
having been a director, officer or employee of the Company or any of its
subsidiaries, or his serving or having served any other enterprise as a
director, officer or employee at the request of the Company (other than any
dispute, claim or controversy arising under or relating to this Agreement). The
Company covenants to maintain during the Employee's employment for the benefit
of the Employee (in his capacity as an officer and director of the Company)
Directors and Officers Insurance providing benefits to the Employee no less
favorable, taken as a whole, than the benefits provided to the other similarly
situated employees of the Company by the Directors and Officers Insurance
maintained by the Company on the date hereof.

15.   ARBITRATION.

                                        9
<PAGE>

      The Company and Employee agree to arbitrate before a neutral Arbitrator
any and all disputes or claims arising from or relating to Employee's employment
with the Company, or the termination of that employment, including claims
against any current or former agent or employee of the Company, whether the
disputes or claims arise in tort, contract, or statute. The parties understand
and agree that arbitration shall be the sole and exclusive method of resolving
any and all disputes or claims arising out of Employee's employment with the
Company or the termination thereof. Such disputes or claims will not be subject
to trial by jury or by a court of any jurisdiction.

      The Company and Employee understand and agree that nothing in this
Agreement shall prevent either party from seeking from a court the remedy of an
injunction for a claimed misappropriation of a trade secret, patent right,
copyright, trademark, or any other intellectual or confidential property.
Nothing in this Agreement should be interpreted as restricting or prohibiting
the Employee from filing a charge or complaint of discrimination or retaliation
with a federal, state, or local administrative agency charged with investigating
and/or prosecuting complaints under any applicable federal, state or municipal
law or regulation. Any dispute or claim that is not resolved through the
federal, state, or local agency must be submitted to arbitration in accordance
with this Agreement. Either party to this Agreement may, if necessary, seek
judicial relief in order to enforce this agreement to arbitrate and/or seek
dismissal for the failure to honor this agreement to arbitrate. Any demand for
arbitration by either the Employee or the Company shall be submitted within the
statute of limitations that is applicable to the claim(s) upon which arbitration
is sought or required. Any failure to demand arbitration within this timeframe
shall constitute a waiver of all rights to raise any claims in any forum arising
out of any dispute that was subject to arbitration.

      A party seeking to initiate arbitration must submit a "Request For
Arbitration" in writing to the other party within the applicable statute of
limitations period if the matter had been brought in a court of law. If the
"Request For Arbitration" is not submitted in accordance with the aforementioned
time limitations, the initiating party will not be able to raise the claim in
arbitration or any other forum. The Request For Arbitration shall, unless
otherwise required by law, clearly state "Request For Arbitration" at the
beginning of the first page and include the following information: (i) a factual
description of the dispute in sufficient detail to advise the responding party
of the nature of the dispute; (ii) the names, work locations and telephone
numbers of any witnesses with knowledge relevant to the dispute; and (iii) the
relief requested.

      A Request for Arbitration from Employee must be submitted to the Company.
A Request for Arbitration from the Company must be mailed to Employee's last
known address or hand-delivered to Employee. The party to whom the Request for
Arbitration is directed will respond within 30 days so that the Parties can
begin the process of selecting an Arbitrator. Such response may include any
counterclaims.

      The Company and Employee understand and agree that all claims and disputes
will be resolved by a single Arbitrator mutually selected by the Company and
Employee. If the parties cannot agree on an Arbitrator within a reasonable
period of time, then a list of 7 Arbitrators, experienced in employment matters,
shall be obtained from the Federal Mediation and

                                       10
<PAGE>

Conciliation Service. The Arbitrator will be selected by the Parties, who will
alternately strike names from the list. A coin toss shall decide which party
strikes the first name from the list. The last name remaining on the list will
be the Arbitrator selected to resolve the dispute. Upon selection, the
Arbitrator shall set an appropriate time, date and place for the arbitration,
after conferring with the parties. The Company and Employee understand and agree
that the arbitration shall be conducted in accordance with the existing National
Rules for the Resolution of Employment Disputes of the American Arbitration
Associations;-provided, however, that the Arbitrator shall allow the parties all
reasonable discovery authorized by the Federal Rules of Civil Procedure or any
other discovery provided by applicable state law in arbitration proceedings.
Also, to the extent that any of the National Rules for the Resolution of
Employment Disputes or anything in this Agreement conflicts with any arbitration
procedures required by applicable law, the arbitration procedures required by
applicable law shall govern. Employee and the Company also agree that nothing in
this Agreement relieves either of them from any obligation they may have to
exhaust certain administrative remedies before arbitrating any claims or
disputes under this Agreement. The arbitration shall be conducted in Los Angles,
California, or such other location as agreed by the Company and the Employee.

      The Arbitrator shall have authority to award any remedy that would be
available to the Company or Employee if the party brought the same claim in a
court of law. The Company and Employee understand and agree that the Arbitrator
shall issue a written award that sets forth the essential findings and
conclusions on which the award is based. The Arbitrator shall have the authority
only to determine the issue(s) submitted to him/her. The issue(s) must be
identifiable in the "Request For Arbitration" or counterclaim(s). Except as
required by law, any issue(s) not identifiable in those documents is/are outside
the scope of the Arbitrator's jurisdiction and any award involving such
issue(s), upon motion by a party, shall be vacated. The Arbitrator's award shall
be subject to correction, confirmation, or vacation, as provided by any
applicable law setting forth the standard of judicial review of arbitration
awards.

      The Company and Employee understand and agree that the Company will bear
the Arbitrator's fee, as well as any other type of expense or cost that Employee
would not be required to bear if he was free to bring the dispute or claim in
court and any other expense or cost that is unique to arbitration. The Company
and Employee shall each pay their own attorney' fees incurred in connection with
the arbitration, and the Arbitrator shall have the authority to make an award of
attorneys' fees to the prevailing party. If there is a dispute as to whether the
Company or Employee is the prevailing party in the arbitration, the Arbitrator
will decide that issue.

      The Company and Employee understand and agree that this agreement to
arbitrate shall be governed by the Federal Arbitration Act.

16.   REPRESENTATIONS AND WARRANTIES OF THE EMPLOYEE.

      The Employee represents and warrants to the Company that he is under no
contractual or other restriction which is inconsistent with the execution of
this Agreement, the performance of his duties hereunder or the other rights of
Company hereunder. The Employee also represents

                                       11
<PAGE>

and warrants to the Company that he is under no physical or mental disability
that would hinder the performance of his duties under this Agreement.

17.   MISCELLANEOUS.

This Agreement contains the entire agreement of the parties relating to the
subject matter hereof. This Agreement supersedes any prior written or oral
agreements or understandings between the parties relating to the subject matter
hereof. No modification or amendment of this Agreement shall be valid unless in
writing and signed by or on behalf of the parties hereto. The failure of a party
to require performance of any provision of this Agreement shall in no manner
affect the right of such party at a later time to enforce any provision of this
Agreement. A waiver of the breach of any term or condition of this Agreement
shall not be deemed to constitute a waiver of any subsequent breach of the same
or any other term or condition. This Agreement is intended to be performed in
accordance with, and only to the extent permitted by, all applicable laws,
ordinances, rules and regulations. If any provision of this Agreement, or the
application thereof to any person or circumstance, shall, for any reason and to
any extent, be held invalid or unenforceable, such invalidity and
unenforceability shall not affect the remaining provisions hereof or the
application of such provisions to other persons or circumstances, all of which
shall be enforced to the greatest extent permitted by law. The headings in this
Agreement are inserted for convenience of reference only and shall not be a part
of or control or affect the meaning of any provision hereof.

18.   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 Board or
the Company, the notice will be sent to Mark P. Mays, President and Chief
Executive Officer of Clear Channel Communications, Inc., 200 E. Basse Rd., San
Antonio, Texas 78209. If to the Executive, the notice will be sent to Michael
Rapino, 7651 Willow Glen Road, Los Angeles, California, 90046. 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.

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

                                         EMPLOYEE:

DATE: 08/17/05                           /s/ Michael Rapino
                                         ------------------------
                                         MICHAEL RAPINO

                                       12
<PAGE>

                                     SFX ENTERTAINMENT, INC., D/B/A CLEAR
                                     CHANNEL ENTERTAINMENT

DATE:  8/17/05                       BY: /s/ Randall Mays
                                         ------------------------
                                         RANDALL MAYS
                                         INTERIM CEO

                                     CLEARCHANNEL COMMUNICATIONS, INC.

DATE: 8/17/05                        BY: /s/ Mark P. Mays
                                         --------------------------
                                         MARK P. MAYS
                                         PRESIDENT AND CEO

                                   EXHIBIT A

                                       13

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