EXHIBIT 10.6
Tickets.com, Inc.
555 Anton Boulevard
Costa Mesa, California 92626
February 9, 2005
Christian O. Henry
455 Legion Street
Laguna Beach, CA 92651
Re: Restated Change in Control Bonus
Dear Christian:
The Compensation Committee of the Board of Directors of Tickets.com, Inc.
(the "Company") has approved the amendment and restatement of your existing
Change in Control Bonus Agreement dated August 12, 2004 (the "Prior Agreement"),
which in turn superseded a similar agreement, to amend and clarify certain
provisions of your change in control bonus program that provides you an
opportunity to earn an incentive bonus if you remain employed with the Company
through a change in control. This amended and restated agreement (the "Restated
Agreement") sets forth the amended terms and conditions under which you will be
entitled to receive such a bonus and supersedes the Prior Agreement. Capitalized
terms used in this Restated Agreement shall have the meaning set forth in
Section II.
I. BONUS
A. The amount of your acquisition bonus will be determined by multiplying
the Acquisition Proceeds by 0.6%.
B. The amount of your acquisition bonus as calculated pursuant to the
paragraph above will be payable only if you continue to provide Service through
the effective date of the Qualifying Acquisition. For purposes of this Restated
Agreement, you shall be deemed to have continued to provide Service through a
Qualifying Acquisition if (1) you are an employee of the Company on the day on
which the Qualifying Acquisition is deemed to have occurred, or (2) you are
terminated by the Company without cause within sixty (60) days prior to the date
the Qualifying Acquisition is deemed to have occurred. Your bonus payment will
be subject to the Company's collection of all applicable federal, state and
local income and employment taxes (the "Taxes") required to be withheld
therefrom, and the bonus payment made to you shall accordingly be reduced by the
amount of the Taxes withheld. In the event that the Company fails to pay your
bonus to you within five (5) business days from the date such bonus becomes due,
you shall be entitled to receive, in addition to your bonus, interest thereon at
the rate of 10% per annum until the bonus is paid in full.
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C. Your bonus payment will be paid at substantially the same time as and in the
same form as the Company's stockholders are paid; except that, if the Qualifying
Acquisition includes a Tender/Merger, your bonus payment will be paid upon the
Qualifying Acquisition being deemed to have occurred, provided that any bonus
amount attributable to a second-step merger which occurs after the Qualifying
Acquisition is deemed to have occurred will be due and payable to you within
five (5) business days following the closing of such merger. The Compensation
Committee shall take whatever action necessary to effect this provision. You
will be required to execute and deliver a general release in the form attached
hereto as Exhibit A as a condition to your receiving any bonus under this
Restated Agreement.
D. Your bonus entitlement under this Restated Agreement will terminate,
and you will cease to have any further benefit entitlements under this Restated
Agreement, upon the receipt of the bonus payments that become due and payable to
you in connection with the first transaction or series of related transactions
constituting a Qualifying Acquisition. You will not be entitled to any
additional bonus payments for any subsequent transactions that may otherwise
satisfy the criteria for a Qualifying Acquisition.
II. DEFINITIONS
A. Acquisition Proceeds shall mean the following items of consideration
(in cash, securities or other property) paid by the acquiring person or persons
in effecting the Qualifying Acquisition:
1. to the extent the Qualifying Acquisition is effected by a merger
or consolidation or by the direct purchase of the Company's outstanding
securities, the aggregate amount of consideration (valued at fair market value
as reasonably determined by the Compensation Committee) payable to the holders
of the Company's outstanding securities in acquisition of their stockholder
interests; or
2. to the extent the Qualifying Acquisition is effected by the
purchase of all or substantially all of the Company's assets, the aggregate
amount of consideration (valued at fair market value as reasonably determined by
the Compensation Committee) paid to the Company in acquiring the Company's
assets, excluding any liabilities of the Company assumed or discharged by the
acquiring person or persons in connection with the Qualifying Acquisition, less
any liabilities retained by the Company immediately following the Qualifying
Acquisition.
Notwithstanding the foregoing, in the event the Qualifying
Acquisition includes a proposed tender offer for the shares of common stock of
the Company and such tender offer is consummated or commenced and terminated
because an insufficient number of shares are tendered, "Acquisition Proceeds"
shall also include the total consideration which would have been paid to the
holders of the Company's common stock if all outstanding shares had been
tendered and acquired by the tenderor pursuant to the tender offer, provided
that consideration for such shares is not otherwise included in the Acquisition
Proceeds.
B. Compensation Committee shall mean the Compensation Committee of the
Board of Directors of the Company.
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C. Qualifying Acquisition shall mean a change in ownership or control
of the Company effected through any of the following transactions:
1. a merger, consolidation or other reorganization unless
securities representing 50% or more of the total combined voting power of the
voting securities of the successor corporation are immediately thereafter
beneficially owned, directly or indirectly and in substantially the same
proportion, by the persons who beneficially owned the Company's outstanding
voting securities immediately prior to such transaction;
2. a sale, transfer or other disposition of all or substantially
all of the Company's assets; or
3. a transaction or series of related transactions approved or
recommended by the Board of Directors of the Company (or committee of the Board)
resulting in the acquisition, directly or indirectly, by any person or related
group of persons (other than (i) a person that directly or indirectly controls,
is controlled by, or is under common control with, the Company or (ii) General
Atlantic Partners, LLC or any affiliate thereof), of beneficial ownership
(within the meaning of Rule 13d-3 of the Securities Exchange Act of 1934, as
amended) of either (A) securities possessing more than 50% of the total combined
voting power of the Company's outstanding securities or (B) securities
possessing total combined voting power sufficient to elect a majority of the
members of the Company's Board of Directors, from a person or persons; provided,
however, if the transaction or series of related transactions approved or
recommended by the Board of Directors of the Company (or committee of the Board)
includes a proposed tender offer, to be followed by a second-step merger to
acquire any shares that were not tendered (for purposes of this Restated
Agreement, a "Tender/Merger"), then a "Qualifying Acquisition" for purposes of
this Restated Agreement shall only be deemed to have occurred if and when one of
the following has also occurred: (x) the consummation of the second-step merger
of the Company with the other entity, (y) sixty (60) days have passed since the
closing of the tender offer, or (z) ten (10) days have passed since the proposed
tender offer has been abandoned or terminated pursuant to its terms.
D. Service shall mean your service as a full-time employee of the
Company.
III. MISCELLANEOUS
A. This Restated Agreement will in no way affect the right of the
Company to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.
B. Your interest in this Restated Agreement or any rights or interests
pertaining hereto may not be transferred, assigned, pledged or encumbered, other
than a transfer effected by will or the laws of inheritance following your
death.
C. This Restated Agreement will not confer any right upon you to
continue in Service for any period of specific duration or interfere with or
otherwise restrict in any way the rights of the Company or your rights to
terminate your Service at any time for any reason, with or without cause.
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D. The provisions of this Restated Agreement will be governed by and
construed in accordance with the laws of the State of California without resort
to that State's conflict-of-laws rules. If any legal proceedings are necessary
to enforce or interpret the terms of this Restated Agreement, or to recover
damages for breach therefor, the prevailing party shall be entitled to
reasonable attorneys' fees, as well as costs and disbursements, in addition to
any other relief to which the prevailing party may be entitled.
E. The liabilities and obligations of the Company under this Restated
Agreement will be binding upon any successor corporation or entity that succeeds
to all or substantially all of the assets and business of the Company by merger
or other transaction, whether or not such transaction constitutes a Qualifying
Acquisition.
F. This Restated Agreement can only be amended in a written amendment
executed by you and the Company.
G. The Prior Agreement is hereby terminated and shall have no further
force or effect.
We hope that you find the benefits of this Restated Agreement to be a
significant addition to your total compensation package that will encourage you
to continue in the Company's employ and share in its future growth and financial
success.
We ask that you acknowledge your receipt of this Restated Agreement and
your acceptance of the terms and conditions contained in it by signing and
dating the Acceptance section below and returning it to Betsy Webb at the
Company as soon as possible.
Tickets.com, Inc.
Name: /s/ Ronald Bension
___________________________
Title: Chief Executive Officer
__________________________
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ACCEPTANCE
I hereby acknowledge receipt of the Company's Restated Agreement, dated
February 9, 2005, which set forth the terms and conditions governing a potential
acquisition bonus tied to a future sale of the Company. I hereby agree to and
accept all those terms and conditions, including, but not limited to, the
termination of the Prior Agreement, and my entitlement to any actual bonus
payment under the Restated Agreement shall be determined solely by the terms and
conditions of such Restated Agreement.
Signature: /s/ Christian O. Henry
____________________________
Christian O. Henry
Dated: February 9, 2005
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EXHIBIT A
GENERAL RELEASE
WHEREAS, the undersigned, _____________ (the "Executive"), is a
party to that certain Restated Change in Control Bonus Agreement, dated as of
February 9, 2005 (the "Bonus Agreement"), by and between the undersigned and
Tickets.com, Inc., a Delaware corporation (the "Company"); and
WHEREAS, pursuant to the terms of the Bonus Agreement, the
undersigned, as a condition to the undersigned's receipt of the bonus provided
for therein, must grant this general release of claims to the Company and the
Company Parties (as such term is defined herein).
NOW, THEREFORE, in consideration of the Executive's receipt of cash
consideration in the form of the bonus pursuant to the terms of the Bonus
Agreement, the Executive hereby agrees as follows:
1. The Executive hereby acknowledges and agrees that upon receipt of
the sum of $________, less applicable deductions and withholdings, either from
the Company or from the escrow account established pursuant to that certain
Change in Control Bonus Escrow Agreement, dated as of February __, 2005, by and
among MLB Advanced Media, L.P. ("Parent"), U.S. Bank, N.A. as escrow agent and
the individuals party thereto (the "Bonus Escrow Agreement"), in either case,
(a) such payment shall be in full satisfaction of all obligations to the
Executive pursuant to the Bonus Agreement, and (b) the Bonus Agreement shall be
terminated and rendered null and void and of no further force or effect.
2. The Executive, for [himself] and [his] spouse, heirs, assigns,
executors, administrators, personal representatives, successors, attorneys, and
agents, if any, fully, finally and forever releases and discharges Parent, MLBAM
Acquisition Corp. ("Purchaser"), the Company, all subsidiary and/or affiliated
companies, as well as its and their successors, assigns, officers, owners,
directors, agents, representatives, attorneys, and employees, of and from all
claims, demands, actions, causes of action, suits, damages, losses, and
expenses, of any and every nature whatsoever, as a result of actions or
omissions occurring through the Effective Time of the Merger (as such terms are
defined in that certain Agreement and Plan of Merger, dated February __, 2005,
by and among Parent, Purchaser and the Company); provided, however, that there
is specifically excluded from such release and discharge:
i. Claims for indemnification pursuant to the Company's
Certificate of Incorporation and/or Bylaws for acts or omissions in
the Executive's capacity as an officer and/or director, or former
officer and/or director, of the Company; and
ii. Claims related to obligations of the Company under or
pursuant to those agreements, arrangements, contracts, plans or
commitments (other than the Bonus Agreement) set forth on Schedule 1
of that certain Estoppel Certificate, dated February __, 2005, given
by the Executive to each of Parent, Purchaser and the Company.
3. With respect to the matters released herein, the Executive
expressly waives any and all rights under Section 1542 of the California Civil
Code, and any like provision or principal of common law in any foreign
jurisdiction. Section 1542 provides as follows:
SECTION 1542. [CERTAIN CLAIMS NOT AFFECTED BY GENERAL RELEASE] A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES
NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS
SETTLEMENT WITH THE DEBTOR.
Notwithstanding the provisions of Section 1542, and for the purpose
of implementing a full and complete release and discharge of all matters
released herein, the Executive expressly acknowledges that this General Release
is intended to include, without limitation, claims and causes of action which
[he/she] does not know or suspect to exist in [his/her] favor at the time of
execution hereof, and that this General Release contemplates extinguishment of
all such claims and causes of action.
4. Should any provision of this General Release and/or any
attachments hereto become legally unenforceable, no other provision of this
General Release and/or any attachments hereto shall be affected, and this
General Release and any attachments shall be construed as if they had never
included the unenforceable provision.
5. Each of the parties acknowledge that this General Release was
jointly negotiated and reviewed and approved by them and that they had the
opportunity to consult with an attorney. The General Release shall not be
construed by any court of law or equity against any party solely by virtue of
any party having drafted this General Release.
6. No Modifications Unless In Writing. The parties to this General
Release agree that any modification of this General Release must be in writing
signed by the Executive and the Company, and must refer specifically to this
General Release and the provisions modified. No other modifications will be
valid.
7. The provisions of this General Release are contractual and not a
mere recital and this General Release is entered into by the Executive with full
and complete knowledge and understanding of its contents and its implications.
IN WITNESS WHEREOF, this General Release has been given as of
___________- __, 2005
By: /s/
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Name:
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Title:
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