EXHIBIT 10.40
 
June 12, 1997
 
Muzak Limited Partnership/Chuck Saldarini Employment Agreement
 
In accordance with our discussions, this letter outlines the terms of my
employment at Muzak Limited Partnership ("the Company") on terms more fully
described below:
 
1.  Title/Responsibility. President of Muzak Limited Partnership during my
    employment. I will report to William Boyd, Chief Executive Officer and
    Chairman of the Board, and will spend my full-time with responsibility for
    all aspects of the Company's operations with the primary goal of maximizing
    shareholder value;
 
2.  Base Salary. My base salary will be $250,000.00 annually; salary to be
    reviewed annually;
 
3.  Bonus. The Company will establish a bonus plan for all senior employees. My
    annual bonus potential will be up to $125,000.00 payable at the end of each
    fiscal year based on the achievement of certain goals to be mutually agreed
    upon; year one, $20 million; year two, $23 million; year three, $26 million.
    All of these numbers shall be based upon accounting principals which were in
    effect at Muzak at January 1, 1997 and shall be exclusive of all severance
    and extraordinary costs;
 
4.  Contract Term. The contract will have a four-year term commencing on July
    21, 1997, with the fourth year being dependent upon William Boyd's remaining
    as the Company's Chief Executive Officer;
 
5.  Stock Options. I will receive options to acquire 500,000 partnership units
    of the company at a price per unit equal to $2.33 per share. 200,000 units
    of these options will be subject to vesting in equal annual amounts over a
    three-year period; 150,000 of these units will be subject to the same
    vesting but will be earned upon the Company's achieving $22 million of
    EBITDA within three years. Options on the final 150,000 of these units will
    be subject to the same vesting but will be earned upon the Company's
    achieving $25 million of EBITDA within three years. The vesting period will
    be accelerated upon a "change of control." Calculation of the EBITDA levels
    shall be comparable to these under item No. 3;
 
6.  Non Competition Agreement. The contract will contain a covenant by me not to
    compete with the Company or to hire any of its employees for a period of two
    years after any termination event; and
 
7.  Benefits. I will be entitled to participate in all of the Company's employee
    benefit plans.
 
I very much look forward to the opportunity to be a part of Muzak's leadership,
and I am confident I will have a significant, positive impact on the company.
 
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