As filed with the Securities and Exchange Commission on June 25, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
USA NETWORKS, INC.
(Exact name of registrant as specified in its charter)
Delaware 59-2712887
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
152 West 57th Street, New York, NY 10019
(Address of Principal Executive Offices) (Zip Code)
TICKETMASTER GROUP, INC. STOCK OPTION AGREEMENT
WITH FREDRIC D. ROSEN
(Full title of the plan)
THOMAS J. KUHN
USA NETWORKS, INC.
152 WEST 52ND STREET
NEW YORK, NY 10019
(Name and address of agent for service)
(212) 314-7300
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ------------------------------------ ---------------- ----------------------- ----------------------- -------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED(1) PER SHARE OFFERING PRICE REGISTRATION FEE
- ------------------------------------ ---------------- ----------------------- ----------------------- -------------------
==================================== ================ ======================= ======================= ===================
<S> <C> <C> <C> <C>
Common Stock, 1,499,089 N/A 35,108,664 (2)
par value $.01 per share shares
==================================== ================ ======================= ======================= ===================
</TABLE>
(1) Also includes an indeterminable number of additional shares that may
become issuable pursuant to the anti-dilution provisions of the Plan.
(2) All filing fees payable in connection with the registration of the
issuance of these securities were paid in connection with the filing of
(a) preliminary proxy materials on Schedule 14A of Ticketmaster Group,
Inc. on May 1, 1998, (b) the Registrant's Registration Statement on
Form S-4 (333-53093) on May 20, 1998, and (c) Amendment No. 2 thereto,
filed on June 24, 1998.
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
INTRODUCTORY STATEMENT
This Registration Statement on Form S-8 (the "Registration Statement")
of USA Networks, Inc., a Delaware corporation (the "Company" or the
"Registrant"), relates to up to 1,499,089 shares of the Registrant's common
stock, par value $.01 per share (the "Common Stock"), issuable in connection
with the Ticketmaster Group, Inc. ("Ticketmaster") Stock Option Agreement with
Fredric D. Rosen (the "Plan"). All such shares of Common Stock were previously
included in the Registration Statement on Form S-4 (as amended) originally filed
by the Registrant with the Securities and Exchange Commission on May 20, 1998
(No. 333-53093).
On June 24, 1998, Brick Acquisition Corp., a Delaware corporation and
a wholly owned subsidiary of the Registrant ("Brick"), was merged with and into
Ticketmaster (the "Merger") pursuant to an Agreement and Plan of Merger, dated
as of March 20, 1998, among the Registrant, Brick and Ticketmaster (the
"Ticketmaster Merger Agreement"). As a result of the Merger, each outstanding
share of Ticketmaster Common Stock (with certain specified exceptions) was
converted into shares of Common Stock pursuant to the exchange ratio (the
"Exchange Ratio") set forth in the Merger Agreement. Also as a result of the
Merger, shares of Ticketmaster Common Stock are no longer issuable upon the
exercise of options to purchase Ticketmaster Common Stock ("Options") pursuant
to the Plan. Instead, upon exercise of Options, the participant in the Plan will
receive that number of shares of Common Stock of the Registrant equal to the
number of shares of Ticketmaster Common Stock issuable immediately prior to the
effective time of the Merger upon exercise of an Option multiplied by the
Exchange Ratio, with an exercise price for each share of Common Stock equal to
the exercise price for a share of Ticketmaster Common Stock which existed under
the corresponding Option divided by the Exchange Ratio (subject to adjustment as
provided in the applicable Plan).
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The documents listed below are incorporated by reference in this
Registration Statement. All documents filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), subsequent to the date of the filing of this Registration
Statement and prior to the filing of a post-effective amendment that indicates
that all securities registered hereunder have been sold, or that deregisters all
securities then remaining unsold, shall be deemed to be incorporated by
reference in this Registration Statement and to be a part hereof from the date
of the filing of such documents.
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1998; and the Company's Current Reports on Form 8-K filed January 9,
1998 (amending Form 8-K filed on February 13, 1996), January 16, 1998, January
23, 1998, February 13, 1998, February 23, 1998, April 1, 1998, May 1, 1998 and
May 19, 1998;
II-1
<PAGE>
(c) The information contained in the Company's Proxy Statement, dated
January 12, 1998, for its annual meeting of stockholders held on February 11,
1998, filed with the Commission on January 13, 1998; and
(d) The description of the Common Stock contained in the Company's
Registration Statement on Form S-4, dated November 20, 1996 (No. 333-16437).
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's Restated Certificate of Incorporation limits, to the
maximum extent permitted by Delaware law, the personal liability of directors
for monetary damages for breach of their fiduciary duties as directors. The
Registrant's By-Laws provide that the directors, officers and certain other
persons will be indemnified with respect to third-party actions or suits,
provided such person acted in good faith and in a manner such person reasonably
believed to be in or not opposed to the best interests of the Registrant. The
Registrant's By-Laws further provide that directors, officers and certain other
persons will be indemnified with respect to actions or suits by or in the right
of the Registrant, provided that such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
the Registrant; except that no indemnification shall be made in the event that
such person shall be adjudged to be liable to the Registrant, unless a court
determines that indemnification is fair and reasonable in view of all the
circumstances. The Registrant's By-Laws allow the Registrant to pay all expenses
incurred by a director, officer, employee or agent in defending any proceeding
within the scope of the indemnification provisions as such expenses are incurred
in advance of its final disposition, subject to repayment if it is ultimately
determined that such party was not entitled to indemnity by the Registrant. The
Registrant believes that these agreements are necessary to attract and retain
qualified persons as directors and officers.
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify a director, officer, employee or agent made a party to
an action by reason of the fact that he was a director, officer or agent of the
corporation or was serving at the request of the corporation against expenses
actually and reasonably incurred by him in connection with such action if he
acted in good faith and in a manner he reasonably believed to be in, or not
opposed to, the best interests of the corporation and, with respect to any
criminal action, had no reasonable cause to believe his conduct was unlawful.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended (the "Securities Act"), may be permitted to
directors, officers or persons controlling the Registrant pursuant to the
foregoing provisions, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission, such indemnification is against public
policy as expressed in the Securities Act and is, therefore, unenforceable.
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<PAGE>
ITEM 8. EXHIBITS.
Exhibit
Number Description of Exhibit
- ------- ----------------------
5.01 Opinion of Wachtell, Lipton, Rosen & Katz as to legality of the
shares of Common Stock being registered
23.01 Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.01
hereto)
23.02 Consent of Deloitte & Touche LLP
23.03 Consent of Ernst & Young LLP
23.04 Consent of KPMG Peat Marwick LLP
23.05 Consent of Price Waterhouse LLP
23.06 Consent of Price Waterhouse LLP
24.01 Power of Attorney (included on Page II-6 of this Registration
Statement)
99.01 Ticketmaster Group, Inc. Stock Option Agreement, dated December 15,
1993, between Ticketmaster Group, Inc. and Fredric D. Rosen
ITEM 9. UNDERTAKINGS.
A. The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement: (i) to
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933, as amended (the "Securities Act"); (ii) to reflect in the
prospectus any facts or events arising after the effective date of the
Registration Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a fundamental
change in the information set forth in the Registration Statement; and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
provided, however, that clauses (i) and (ii) do not apply if the
information required to be included in a post-effective amendment by those
clauses is contained in periodic reports filed with or furnished to the
Securities and Exchange Commission by the Registrant pursuant to Section 13
or Section 15(d) of the Exchange Act that are incorporated by reference in
the Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and
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<PAGE>
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
B. The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act that is incorporated by reference in the Registration Statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
C. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the provisions described under Item 6 above or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing this Registration Statement on Form S-8 and has
duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of New York, State of New
York, on the 25th day of June, 1998.
USA NETWORKS, INC.
By: /s/ Barry Diller
----------------------------
Barry Diller
Chairman of the Board and
Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Victor A. Kaufman and Thomas J. Kuhn,
jointly and severally, his attorneys-in-fact, each with the power of
substitution, for him in any and all capacities, to sign any amendments to this
Registration Statement and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement on Form S-8 has been signed by the following persons in
the capacities on June 25, 1998.
SIGNATURE TITLE
/s/ Barry Diller Chairman of the Board,
- ------------------------------------ Chief Executive Officer and Director
Barry Diller
/s/ Victor A. Kaufman Office of the Chairman, Chief Financial
- ------------------------------------ Officer and Director (Principal Financial
Victor A. Kaufman Officer)
/s/ Michael P. Durney Controller (Chief Accounting Officer)
- ------------------------------------
Michael P. Durney
/s/ Paul G. Allen Director
- ------------------------------------
Paul G. Allen
/s/ Frank J. Biondi Director
- ------------------------------------
Frank J. Biondi, Jr.
/s/ Edgar Bronfman Director
- ------------------------------------
Edgar Bronfman, Jr.
/s/ James G. Held Director
- ------------------------------------
James G. Held
/s/ Robert W. Matschullat Director
- ------------------------------------
Robert W. Matschullat
/s/ Samuel Minzberg Director
- ------------------------------------
Samuel Minzberg
/s/ William D. Savoy Director
- ------------------------------------
William D. Savoy
/s/ H. Norman Schwarzkopf Director
- ------------------------------------
H. Norman Schwarzkopf
/s/ Richard E. Snyder Director
- ------------------------------------
Richard E. Snyder
II-6
<PAGE>
EXHIBIT INDEX
EXHIBIT
NUMBER EXHIBIT DESCRIPTION
5.01 Opinion of Wachtell, Lipton, Rosen & Katz as to legality of the
shares of Common Stock being registered
23.01 Consent of Wachtell, Lipton, Rosen & Katz (included in Exhibit 5.01
hereto)
23.02 Consent of Deloitte & Touche LLP
23.03 Consent of Ernst & Young LLP
23.04 Consent of KPMG Peat Marwick LLP
23.05 Consent of Price Waterhouse LLP
23.06 Consent of Price Waterhouse LLP
24.01 Power of Attorney (included on Page II-6 of this Registration
Statement)
99.01 Ticketmaster Group, Inc. Stock Option Agreement, dated December 15,
1993, between Ticketmaste Group, Inc. and Fredric D. Rosen
EXHIBIT 5.01
[LETTERHEAD OF WACHTELL, LIPTON, ROSEN & KATZ]
June 24, 1998
USA Networks, Inc.
152 West 57th Street
New York, New York 10019
Re: Registration Statement on Form S-8 of USA Networks, Inc.
--------------------------------------------------------
Members of the Board:
We are acting as special counsel to USA Networks, Inc., a
Delaware corporation ("the Company"), in connection with the above-captioned
Registration Statement on Form S-8 filed with the Securities and Exchange
Commission (the "Registration Statement") with respect to the up to 1,499,089
shares of common stock, par value $.01 per share (the "Common Stock"), of the
Company pursuant to the Ticketmaster Group, Inc. ("Ticketmaster") Stock Option
Agreement with Fredric D. Rosen (the "Plan").
In connection with this opinion, we have reviewed the
Registration Statement and the exhibits thereto, and we have examined originals
or copies, certified or otherwise identified to our satisfaction, of such
corporate records, agreements, certificates of public officials and of officers
of the Company, the Plan and other instruments, and such matters of law and fact
as we have deemed necessary to render the opinion contained herein.
<PAGE>
USA Networks, Inc.
June 24, 1998
Page 2
Based upon and subject to the foregoing, we are of the opinion
that the shares of Common Stock available under the Plan, when issued, delivered
and paid for in accordance with the terms and conditions of the Plan, will be
validly issued, fully paid, and non-assessable.
We hereby consent to the filing of this opinion with the
Securities and Exchange Commission as an exhibit to the Registration Statement.
In giving such consent, we do not hereby admit that we are in the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended.
Very truly yours,
/s/ WACHTELL, LIPTON, ROSEN & KATZ
Exhibit 23.02
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in a Registration Statement of
USA Networks, Inc. (formerly HSN, Inc. and Silver King Communications, Inc.)
on Form S-8, pertaining to the registration of common stock of USA Networks,
Inc. for issuance in connection with the Ticketmaster Group, Inc. Stock
Option Agreement with Fredric D. Rosen, of our report dated July 2, 1996
appearing in the Annual Report on Form 10-K of USA Networks, Inc. for the
year ended December 31, 1997.
/s/ Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
Tampa, Florida
June 23, 1998
Exhibit 23.03
CONSENT OF ERNST & YOUNG LLP
We consent to the incorporation by reference in the Registration Statement on
Form S-8 pertaining to the Ticketmaster Group, Inc. Stock Option Agreement with
Fredric D. Rosen of our report dated March 13, 1998, with respect to the
consolidated financial statements and schedule of USA Networks, Inc. included in
its Annual Report (Form 10-K) for the year ended December 31, 1997, filed with
the Securities and Exchange Commission.
/s/ Ernst & Young LLP
New York, New York
June 19, 1998
Exhibit 23.04
[Letterhead of KPMG Peat Marwick]
CONSENT OF KPMG PEAT MARWICK
The Board of Directors
USA Networks, Inc.
We consent to the use of our report dated February 24, 1995 incorporated herein
by reference.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
New York, New York
June 19, 1998
Exhibit 23.05
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of USA Networks, Inc. of our report dated February 21,
1997 relating to the financial statements of USA Networks appearing on page H-7
of HSN, inc's (subsequently renamed USA Networks, Inc.) proxy statement dated
January 12, 1998.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
June 19, 1998
New York, NY
Exhibit 23.06
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of USA Networks, Inc. of our report dated December 8, 1997
relating to the financial statements of Universal Television Group appearing on
page I-9 of HSN, inc's (subsequently renamed USA Networks, Inc.)
proxy statement dated January 12, 1998.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
June 23, 1998
Century City, CA
EXHIBIT 99.01
TICKETMASTER HOLDINGS GROUP, LTD.
STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into as of December 15, 1993, by
and between TICKETMASTER HOLDINGS GROUP, LTD., an Illinois corporation (the
"Company"), and FREDRIC D. ROSEN ("Employee").
WHEREAS, the Employee is a valued employee of the Company and the
Company wishes to induce him to enter into an employment agreement dated of even
date herewith (the "Employment Agreement") and to encourage him in the
performance of his duties thereunder by granting him an option to purchase
shares of Class A common stock, no par value, of the Company (the "Common
Stock").
WHEREAS, the Employee wishes to acquire the right to purchase shares
of Common Stock.
NOW, THEREFORE, for good and valuable consideration, the parties
hereto, intending to be legally bound, hereby agree as follows:
1. Grant of Option. Subject to the provisions of Sections 2 and 3
hereof, the Company hereby grants to the Employee the right, privilege and
option to purchase on the terms and conditions hereinafter set forth 3,994,019
shares of the Company's Common Stock at an exercise price of $4.715 per share
plus such amount, if any, determined by dividing 36,699,041 (as adjusted for any
stock dividend, stock split or combination or similar transaction involving the
Company's Common Stock) into any additional capital contribution made by Paul
Allen to the Company pursuant to a letter agreement of even date between the
Company and Paul Allen (the "Option"). The Option is not intended to qualify as
an incentive stock option under Section 422 of the Internal Revenue Code of
1986, as amended (the "Code"). All provisions of this Agreement are to be
construed in conformity with this intention. Further, in the event that a
subsidiary of the Company, including Ticketmaster Corporation, sells any of its
equity securities to the public pursuant to a registration statement under the
Securities Act of 1933, as amended, other than on Forms S-4 or S-8, prior to the
time the Company sells its equity securities to the public as aforesaid,
Executive shall have the right concurrently with or after the exercise of the
option to receive shares of such Subsidiary's common stock having a value
substantially equal to the value of the Common Stock which the Employee has or
would have received from the Company.
2. Term. Except as provided in Section 3 hereof, the Option shall
be valid for a term commencing on the date hereof (the "Date of Grant") and
ending 10 years from the Date of Grant (the "Termination Date"); provided
however, that the Option shall terminate in accordance with the following:
(a) If the Employee's employment by the Company is terminated
voluntarily by the Employee or on account of Disability (as such term is defined
in the Employment Agreement), the Employee may exercise in whole or in part that
portion of the Option which has vested but not yet been exercised as of the date
of such termination at any time prior to the earlier of (i) the
<PAGE>
Termination Date, or (ii) six months following such termination. Thereafter,
the Option shall terminate, and the Employee shall have no further rights
hereunder.
(b) If the Employee's employment by the Company is terminated by
the Company for Good Reason (as such term is defined in the Employment
Agreement), the Employee may exercise in whole or in part that portion of the
Option which has vested but not yet been exercised as of the date of such
termination at any time prior to the earlier of (i) the Termination Date, or
(ii) two years following such termination. Thereafter, the Option shall
terminate, and the Employee shall have no further rights hereunder.
(c) If the Employee's employment by the Company is terminated by
the Company for Cause (as such term is defined in the Employment Agreement), the
Option shall terminate on the date on which the Employee's employment is
terminated, and the Employee shall have no further rights hereunder.
(d) Following the death of the Employee, any vested portion of the
Option may be exercised by the Employee's personal representative or by the
distributee to whom the Employees' rights under the Option shall pass by will or
by the laws of descent and distribution, at any time prior to the earlier of (i)
the Termination Date or (ii) within six months after the date of Employee's
death.
3. Vesting. During the term provided in Section 2, the Option may
be exercised only to the extent that Employee is then vested in such Option. The
Employee shall vest in 25% of the Option as of the date hereof, and shall vest
in the remaining 75% of the Option monthly prorata over a 36 month period
beginning on January 1, 1995 and ending on January 1, 1998.
4. Method of Exercise. The Option may be exercised by written
notice (the "Notice"), addressed and delivered to the Company (Attention: Chief
Financial Officer), specifying the number of shares of Common Stock to be
purchased and accompanied by (i) a check, or (ii) that number of shares of
Common Stock which have an aggregate fair market value as of the date of
exercise equal to the exercise price, or (iii) any combination thereof. For
purposes of this Agreement, "fair market value" of a share of Common Stock shall
mean: (i) if the Common Stock is traded on a national stock exchange on the date
of exercise of the Option, fair market value shall be the closing price reported
by the applicable composite transactions report on such day, or if the Common
Stock is not traded on such date, the mean between the closing bid-and-asked
prices thereof on that date on such exchange; (ii) if the Common Stock is traded
over-the-counter and is classified as a national market issue on the date of
exercise of the Option, fair market value shall be the last reported transaction
price quoted by the NASDAQ on that day; (iii) if the Common Stock is traded
over-the-counter and is not classified as a national market issue on the date of
exercise of the Option, fair market value shall be the mean between the last
representative bid-and-asked prices quoted by the NASDAQ on that day; or (iv) if
none of the foregoing provisions is applicable, fair market value as of the date
of exercise of the Option shall be determined by the Board of Directors in good
faith on such basis as it deems appropriate. In all cases, the determination of
fair market value shall be binding and conclusive on all persons.
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<PAGE>
5. Loan. Upon written request of the Employee, the Company shall
loan Employee, from time to time, the following amount: (i) the amount necessary
to purchase the number of shares of Common Stock to be acquired upon the
exercise of the Option under Section 4, and (ii) the amount necessary to pay all
federal and state income taxes thereon. The proceeds of each loan shall be
utilized solely for the foregoing purposes. Each such loan shall bear interest
at the minimum rate which would not constitute a "below market loan" as
determined under Section 7872 of the Code. The loan shall be secured by the
shares acquired by exercise of the Option and shall be for a term expiring on
the earliest to occur of (i) the sale by Employee of shares of Common Stock
securing such loan, (ii) two years after termination of employee's employment
with the Company, regardless of cause and (iii) January 31, 1999.
6. Delivery of Stock Certificates. The Option shall be deemed to
have been exercised upon receipt by the Company of the Notice (the "Exercise
Date"). The certificate representing the shares of Common Stock purchased upon
exercise of the Option shall be issued as of the Exercise Date free and clear of
all liens or encumbrances except any liens in favor of the Company by virtue of
Section 5, and shall (i) either be delivered by the Company to the Employee
within five days following the Exercise Date or as soon thereafter as
practicable or (ii) if a loan has been made pursuant to Section 5, shall be
retained by the Company until the loan is paid in full. As a condition to the
exercise of the Option, the Company may require the Employee to represent and
warrant at the time of any such exercise that the shares of Common Stock are
being purchased for investment purposes only, for the account of the Employee
and without any intention to distribute such shares. If the shares of Common
Stock issuable upon exercise of the Option have not previously been registered
under the Securities Act of 1933, as amended (the "Securities Act"), each
certificate evidencing shares of Common Stock acquired upon exercise of the
Option shall contain on its face, or on the reverse side thereof, the following
legend:
"These shares have not been registered under the Securities Act of
1933 or under any applicable state law. They may not be offered for
sale, sold, transferred, or pledged without (1) registration under
the Securities Act of 1933 and any applicable state law, or (2) an
opinion of legal counsel satisfactory to the Company that
registration is not required."
7. Shareholder Approval. This Agreement is conditioned upon the
approval by the shareholders of the Company within twelve months after the date
of this Agreement in accordance with Rule 16b.3(b) of the Securities Exchange
Act of 1934, as it exists now or from time to time may hereafter be amended. If
such shareholder approval is obtained at a duly held shareholder's meeting, it
may be obtained by the affirmative vote of the holders of a majority of the
shares of the Company present at the meeting or represented and entitled to vote
thereon.
8. Adjustment Provisions. If, during the term of this Agreement,
there shall be any stock dividend, stock rights distribution, stock split or
combination, recapitalization, merger, consolidation, sale of assets,
reorganization or other similar change or transaction of or by the Company, an
appropriate adjustment shall be made to the number and kind of shares remaining
to be acquired upon exercise of the Option and to the exercise price of the
Option so that the value to be received by the Employee upon exercise of the
Option shall, in the aggregate, be reasonably
-3-
<PAGE>
equivalent to the value the Employee would have received if none of the
foregoing transactions had occurred.
9. Merger, Consolidation or Sale of Assets. In the event the
Company enters into an agreement providing for (i) the sale of all or
substantially all of the assets of the Company or (ii) a merger, consolidation
or reorganization which would result in the stockholders of the Company
immediately prior to such transaction owning less that 50% of the surviving
corporation (a "Change in Control"), the Option shall become exercisable in full
without regard to any vesting limitations, and the Employee shall be entitled at
his election to either (a) receive in exchange for cancellation of his Option
the difference between the exercise price for such shares and the amount the
Employee would receive if he exercised the Option immediately prior to the
transaction and then received a distribution on such shares or disposed of the
shares in the transaction, or (b) in the case of a merger, consolidation or
reorganization, convert the Option to an option to acquire shares of equivalent
value in the surviving corporation, if the surviving corporation is not the
Company. The Company shall notify Employee at least 10 days prior to any Change
in Control.
10. Withholding Obligations. In the event that the Company is
required to satisfy withholding obligations under the Code as a result of the
exercise of the Option, the Employee may request that, in lieu of withholding
amounts from the Employee's paycheck or requiring that the Employee deliver a
check in the amount of the withholding obligation, the Company shall withhold
that number of shares of Common Stock which have a fair market value (determined
in accordance with the provisions of Section 4 hereof) on the Exercise Date
equal to the amount required to be withheld.
11. Non-Transferability. The Option is not transferable or
assignable by the Employee other than by will or by the laws of descent and
distribution and are exercisable during the lifetime of the Employee only by the
Employee.
12. Compliance with Law. By accepting the Option, the Employee
agrees for himself and his legal representative that the Company shall not be
required to deliver any shares of Common Stock upon the exercise of the Option
until such shares have been qualified for delivery under applicable securities
laws and regulations as reasonably determined by the Company or its legal
counsel.
13. Rights as a Stockholder; Not an Employment Agreement. The
Employee shall have no rights as a stockholder of the Company with respect to
shares of Common Stock subject to the Option until the Option has been exercised
and payment made as herein provided and certificates representing the shares as
to which the Option has been exercised have been delivered to the Employee or
retained by the Company as security for a loan made pursuant to Section 5.
Nothing contained in this Agreement shall be construed to be a contract of
employment between the Company and the Employee.
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<PAGE>
14. Construction.
(a) Successors. This Agreement and all the terms and provisions
hereof shall be binding upon and shall inure to the benefit of the parties
hereto and their respective legal representatives, heirs and successors, except
as expressly herein otherwise provided.
(b) Entire Agreement; Modification. This Agreement contains the
entire understanding between the parties with respect to the matters referred to
herein and such agreement shall not be modified, except by written instrument
signed by the parties hereto.
(c) Headings; Pronouns; Governing Law. The descriptive headings of
the respective sections and subsections of this Agreement are inserted for
convenience of reference only and shall not be deemed to modify or construe the
provisions which follow them. Any use of any masculine pronoun shall include the
feminine and vice-versa and any use of a singular, the plural and vice-versa, as
the context and facts may require. The construction and interpretation of this
Agreement shall be governed in all respects by the laws of the State of
Illinois.
(d) Notices. All communications between the parties shall be in
writing and shall be deemed to have been duly given as of the date and time of
hand delivery or three days after mailing via certified or registered mail,
return receipt requested, proper postage prepaid to the following or such other
addresses of which the parties shall from time to time notify one another:
If to the Company:
Ticketmaster Holdings Group, Ltd.
3701 Wilshire Boulevard
Los Angeles, California 90010
If to the Employee:
Fredric D. Rosen
3701 Wilshire Boulevard
Los Angeles, California 90010
(e) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement or the application
thereof to any party or circumstance shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the minimal extent of
such provision or the remaining provisions of this Agreement or the application
of such provision to other parties or circumstances.
IN WITNESS WHEREOF, the parties have executed or caused to be
executed this Agreement as of the date first above written.
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<PAGE>
TICKETMASTER HOLDINGS GROUP, LTD.
By:
--------------------------------
Title:
EMPLOYEE:
/s/ Fredric D. Rosen
-----------------------------------
FREDRIC D. ROSEN
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