EXHIBIT 10.39
CONFIDENTIAL
EXECUTIVE AGREEMENT
THIS EXECUTIVE AGREEMENT (this "Agreement") is made as of October 1,
2004 (the "Effective Date"), by and between Ziff Xxxxx Media Inc., a Delaware
corporation (the "Company") and Xxxxxxx Xxxxxx ("Executive"). Certain
definitions are set forth in the Appendix to this Agreement.
In consideration of the representations and covenants set forth
herein, the parties hereby agree as follows:
1. Employment. The Company shall employ Executive, and Executive hereby
accepts employment with the Company, upon the terms and conditions set forth in
this Agreement for the period beginning October 1, 2004 and ending August 30,
2007 or earlier pursuant to Section 4 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the Executive
Vice President and Editorial Director of the Company and Editor-in-Chief of PC
Magazine and shall have the normal duties, responsibilities and authority
implied by such positions. Executive shall hold similar positions with any
Affiliate of the Company to the extent Executive may be so appointed by the
Company in its sole discretion.
(b) Executive (i) shall report directly to the Company's Chief Executive
Officer ("CEO") and to the President or such other senior Company executive as
the CEO may direct, with respect to Executive's capacity as Editorial Director
of the Company and (ii) shall report directly to the Publisher of PC Magazine
with respect to Executive's capacity as Editor-in-Chief of PC Magazine to the
extent related to budgetary and business matters (but not to the extent related
to editorial matters), and shall devote his best efforts and substantially all
of his business time and attention to the business and affairs of the Company
(and to the extent applicable, its Affiliates). Executive shall perform
Executive's duties and responsibilities to the best of Executive's abilities in
a diligent, trustworthy, businesslike and efficient manner. Nothing herein shall
prohibit Executive from writing a book, outside of business hours, provided that
Executive otherwise complies with the confidentiality and other provisions of
this Agreement or the Agreement between Executive and the Company dated as of
March 3, 2003 related to options to acquire shares of capital stock of Ziff
Xxxxx Holdings Inc.
3. Base Salary; Benefits and Bonuses.
(a) During the Employment Period, Executive's base salary shall be
$370,000 per annum, or such higher rate as the Company may designate from time
to time (the "Base Salary"), which salary shall, if the Company pays cost of
living increases to its senior executives generally, shall include such a cost
of living increase, and which salary shall be payable by the Company in regular
installments in accordance with the Company's general payroll practices and
shall be subject to customary withholding.
(b) In addition to the Base Salary, during the Employment Period Executive
shall be eligible to receive an annual bonus (the "Bonus") in an amount
determined by the Company in accordance with the bonus plan the Company may from
time to time develop for Executive, payable at the Company's discretion. Any
such Bonus - which shall be not less than $50,000 and shall be higher if and as
determined by the Company to be payable - shall be payable within ninety (90)
days following the end of each fiscal year during the Employment Period.
(c) During the Employment Period, (i) Executive shall be entitled to
participate in all of the Company's employee benefit plans and programs for
which senior executive employees of the Company are generally eligible, which
currently include, but shall not be limited to, health insurance, dental
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insurance, life insurance, short-term and long-term disability insurance and
participation in the Company's 401(k) plan and (ii) Executive shall be eligible
for four (4) weeks of paid vacation in accordance with the policies of the
Company. Executive's right to participate in any employee benefit plans or
programs of the Company shall be subject to the Company's right to amend, modify
or terminate any such plan or program in accordance with its terms and
applicable law and subject in each case to any applicable waiting periods or
other restrictions contained in such benefit plans or programs.
(d) The Company shall reimburse Executive for all reasonable business
expenses incurred by Executive in the course of performing Executive's duties
under this Agreement which are consistent with the Company's policies in effect
from time to time for senior executive employees of the Company with respect to
travel, entertainment and other business expenses, subject to the Company's
requirements with respect to reporting and documentation of such expenses.
4. Termination; Severance.
(a) The Employment Period (i) shall terminate upon Executive's death or
Incapacity; (ii) may be terminated by the Company at any time with Cause or
without Cause; and (iii) may be terminated by Executive at any time for Good
Reason or other than for Good Reason. Executive acknowledges and agrees that
nothing contained herein or in any other agreement or document shall entitle
Executive to remain in the employment of the Company or any of its Affiliates.
"Termination" means such time as of which Executive ceases to be Employed by the
Company, for any reason, whether on account of termination by the Company,
resignation by Executive, Executive's death or Incapacity or otherwise and
"Termination Date" means the date on which Termination occurs.
(b) Upon any Termination, Executive shall be entitled to receive
Executive's Base Salary earned through the Termination Date, prorated on a daily
basis together with all accrued but unpaid vacation time earned by Executive
during the calendar year in which such Termination occurs and any Bonus in
respect of a prior, completed calendar year which is then due and owing and has
not been paid. Except as set forth in Section 4(d), Executive shall not be
entitled to receive Executive's Base Salary or any bonuses or other benefits
from the Company for any period after the Termination Date.
(c) In the event Executive's employment is terminated (i) by the Company
with Cause, (ii) by Executive other than for Good Reason, or (iii) upon
Executive's death or Incapacity, or upon any Termination on or after August 30,
2007, the Company shall have no obligation to make any severance or other
similar payment to or on behalf of Executive.
(d) In the event that Executive's employment is terminated (i) by the
Company without Cause or (ii) by Executive for Good Reason (in either case prior
to August 30, 2007), following such Termination and upon execution and delivery
by Executive within thirty (30) calendar days after the Termination Date of a
general release in favor of the Company and its Affiliates and its and their
respective officers, directors, employees, representatives, agents and
attorneys, and the successors and assigns of each of the foregoing, in form and
substance satisfactory to the Company, the Company shall, through the first
(1st) anniversary of the Termination Date, (x) pay Executive his annual Base
Salary (as in effect on the Termination Date) in regular installments in
accordance with the Company's general payroll practices and (y) if Executive
elects under COBRA to maintain health insurance benefits through the Company's
group plan (if any), pay that portion of the premium for such benefits that the
Company would have paid had Executive remained an employee of the Company for
such period. After payment of the severance amounts described in this Section
4(d), the Company shall have no obligation to make any further severance or
other payment or provide any other benefit to or on behalf of Executive.
Notwithstanding the foregoing, in the event that Executive shall breach any of
Executive's obligations under Section 5 of this Agreement (except any breach
which Executive carries the burden of proving is solely of a technical nature,
is immaterial and was inadvertent), then, in addition to any other rights that
the Company may have
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CONFIDENTIAL
under this Agreement or otherwise, the Company shall be relieved from and shall
have no further obligation to pay Executive any amounts to which Executive would
otherwise be entitled pursuant to this Section 4.
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CONFIDENTIAL
5. Noncompete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of Executive's employment
with the Company and any applicable Affiliate thereof, Executive will during the
Employment Period become familiar with the trade secrets, business plans and
business strategies and with other Confidential Information (as defined on the
Appendix hereto) concerning the Company and any applicable Affiliate of the
Company (and their respective predecessors, successors and assigns) and that
Executive's services have been and shall be of special, unique and extraordinary
value to the Company and any applicable Affiliate of the Company. Therefore,
Executive agrees that, during the Employment Period and for one (1) year
thereafter (such period, the "Noncompete Period"), Executive shall not directly
or indirectly (whether for Executive or for any other Person) (A) operate,
manage, control, engage in, participate in (whether as an officer, director,
employee, partner, agent, representative or otherwise), permit Executive's name
to be used by, consult with, advise, render services for (alone or in
association with any other Person), or otherwise assist in any manner
(collectively, to "Participate" or have "Participation" in) or (B) own any
interest in, lend to or invest in (i) International Data Group, Inc., CMP Media,
Inc. (a subsidiary of United News & Media PLC), The Future Network PLC or CNET
Networks, Inc., or any of their respective Affiliates; (ii) any Person known to
Executive to be a successor, assignee, partner, joint venturer, subsidiary,
division or Affiliate of any of the Persons referenced in clause (i) of this
sentence; (iii) any Person known by Executive to Participate in any business or
enterprise which directly or indirectly engages in the Specified Line(s) of
Business (as defined below); or (iv) any Person known to Executive to be a
successor, assignee, partner, joint venturer, subsidiary, division or Affiliate
of any of the Persons referenced in clause (iii) of this sentence (the Persons
referenced in this sentence shall be referred to each individually as a
"Restricted Person"). For purposes of Section 5(a), Executive shall not be
considered to "own any interest in, lend to or invest in" any corporation with
respect to which (x) Executive owns, indirectly through a mutual fund or other
similar pooled investment vehicle, a passive investment in the publicly-traded
stock of such corporation or (y) Executive owns (either as shareholder of record
or as beneficial owner) stock of a corporation that constitutes less than 1% of
the outstanding shares of such corporation, provided that (I) with respect to
Persons referenced in clause (i) of the preceding sentence, Executive did not
acquire such interest after October 1, 2004, (II) with respect to Persons
referenced in clauses (ii), (iii) or (iv) of the preceding sentence, Executive
did not acquire such interest after the date Executive obtained knowledge of
facts that would result in such Person being deemed to be a Restricted Person
and (III) the fair market value of the stock held by Executive in any such
corporation does not comprise more than two percent (2%) of Executive's net
worth. Notwithstanding the foregoing, Executive may Participate in any business
of any entity listed in clauses (iii) or (iv) of Section 5(a) to the extent his
Participation is not directly related to the Specified Line(s) of Business. The
Company and Executive expressly acknowledge and agree that each and every
restriction imposed by this Section 5(a) is reasonable with respect to subject
matter, time period and geographical area.
(b) During the Employment Period and for one (1) year thereafter,
Executive shall not directly or indirectly through another Person (i) induce or
attempt to induce any employee of the Company or any Affiliate of the Company to
leave the employ of the Company or such Affiliate, or in any way interfere with
the relationship between the Company or any Affiliate of the Company and any
employee thereof, (ii) hire any person who was an employee of the Company or any
Affiliate of the Company at any time during the one (1) year period prior to the
termination of the Employment Period, (iii) call on, solicit or service any
customer, supplier, licensee, licensor, franchisee or other business relation of
the Company or any Affiliate of the Company in order to induce or attempt to
induce such Person to cease or reduce doing business with the Company or such
Affiliate (for avoidance of doubt and without limiting the foregoing, it shall
constitute a material violation of this Section 5(b) for Executive to make any
effort to cause any customer, supplier, licensee, licensor, franchisee or other
business relation of the Company to purchase from a third party any goods or
services that are offered at such time by the Company), or in any way interfere
with the relationship between any such customer, supplier, licensee or business
relation and the Company or any Affiliate of the Company, including, without
limitation, making any negative statements
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or communications about the Company or any of its Affiliates, or (iv) directly
or indirectly acquire or attempt to acquire any business in the United States of
America to which the Company or any of its Affiliates has made an acquisition
proposal prior to the Termination Date relating to the possible acquisition of
such business (an "Acquisition Target") by the Company or any of its Affiliates,
or take any action to induce or attempt to induce any Acquisition Target to
consummate any acquisition, investment or other similar transaction with any
Person other than the Company or any of the Company's Affiliates.
(c) If, at the time of enforcement of Section 5 of this Agreement, a court
shall hold that the duration, scope, or area restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope or geographical area reasonable under such
circumstances shall be substituted for the stated period, scope or area and that
the court shall be allowed and directed to revise the restrictions contained
herein to cover the maximum period, scope and area permitted by law. Because
Executive's services are unique and because Executive has access to Confidential
Information and Work Product (as defined on the Appendix hereto), the parties
hereto agree that money damages would not be an adequate remedy for any breach
of this Agreement. Therefore, in the event a breach or threatened breach of this
Agreement, the Company or its successors or assigns may, in addition to other
rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in order
to enforce, or prevent any violations of, the provisions hereof (without posting
a bond or other security). In addition, in the event of an alleged breach or
violation by Executive of Section 5, the period set forth in Section 5 shall be
tolled until such breach or violation has been duly cured. Executive agrees that
the restrictions contained in Section 5 are reasonable and that Executive has
received consideration in exchange therefor.
(d) As used herein, "Specified Line(s) of Business" shall mean (i) any
business that is primarily related to (x) the creation or display of content in
any medium (including without limitation in print, through electronic mail or
via Internet web sites), which content is primarily related to technology
products and/or services, and/or (y) the sale of advertising or subscriptions
related to such content; and (ii) any business directly competitive with any
other Company business (including without limitation any business acquired or
developed by the Company after the Effective Date) with respect to which
Executive spends a significant portion of his time rendering executive services
during the Employment Period.
6. Other Terms and Conditions. The terms and conditions set forth on the
Appendix attached hereto are incorporated herein by reference as if fully set
forth herein and constitute an integral part of this Agreement.
* * * *
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IN WITNESS WHEREOF, the parties hereto have executed this Executive
Agreement on the date first written above.
ZIFF XXXXX MEDIA INC.
BY: ______________________________________
ITS: ______________________________________
EXECUTIVE:
___________________________________________
XXXXXXX XXXXXX
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CONFIDENTIAL
APPENDIX TO EXECUTIVE AGREEMENT
A. Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the recipients at the address indicated below or to
such other address or to the attention of such other person as the recipient
party shall have specified by prior written notice to the sending party: (i) if
to Executive: 00 Xxxxxxxxx Xxxxxx, Xxxxxxxx, Xxxxxxxxxxx 00000 and (ii) if to
the Company: Ziff Xxxxx Media Inc., 00 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: General Counsel. Any notice under this Agreement shall be deemed to
have been given five (5) calendar days after deposit in the U.S. mail, if
mailed, or otherwise when so delivered or sent otherwise.
B. Representations and Warranties.
(i) By the Company. In connection with the execution and delivery of this
Agreement, the Company represents and warrants to Executive as of the Effective
Date that (a) the execution, delivery and performance of this Agreement have
been duly and validly authorized by all necessary corporate action and (b) this
Agreement constitutes a valid and binding obligation of the Company, enforceable
in accordance with its terms.
(ii) By Executive. In connection with the execution and delivery of this
Agreement, Executive represents and warrants to the Company as of the Effective
Date that (a) this Agreement constitutes the legal, valid and binding obligation
of Executive, enforceable in accordance with its terms, and the execution,
delivery and performance of this Agreement by Executive does not and shall not
conflict with, violate or cause a breach of any agreement, contract or
instrument to which Executive is a party or any judgment, order or decree to
which Executive is subject; (b) Executive is not a party to or bound by any
employment agreement, noncompete agreement or confidentiality agreements with
any person or entity other than the Company; (c) Executive has consulted with
independent legal counsel regarding his/her rights and obligations under this
Agreement and that Executive fully understands the terms and conditions
contained herein; and (d) Executive has obtained advice from persons other than
the Company and its counsel regarding the tax effects of the transaction
contemplated hereby.
C. General Provisions
(i) 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 is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provision or any other jurisdiction, but this Agreement shall be
reformed, construed and enforced in such jurisdiction as if such invalid,
illegal or unenforceable provision had never been contained herein.
(ii) Complete Agreement. This Agreement, those documents expressly
referred to herein and other documents of even date herewith embody the complete
agreement and understanding among the parties and supersede and preempt any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(iii) Counterparts; Signatures Received via Facsimile. This Agreement may
be executed in separate counterparts, each of which is deemed to be an original
and all of which taken together constitute one and the same agreement.
Signatures received via facsimile shall be deemed originals for all purposes.
(iv) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company and their respective successors and assigns; provided
that the rights and obligations of Executive under this Agreement shall not be
assignable.
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(v) GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF DELAWARE WILL GOVERN
ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS STOCKHOLDERS.
ALL OTHER ISSUES CONCERNING THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO ANY
CHOICE OF LAW OR CONFLICT OF LAW PROVISION OR RULE (WHETHER OF THE STATE OF NEW
YORK OR ANY OTHER JURISDICTION) THAT WOULD CAUSE THE APPLICATION OF THE LAW OF
ANY JURISDICTION OTHER THAN THE STATE OF NEW YORK.
(vi) Jurisdiction. The state and federal courts located in New York
County, New York (the "Permitted Courts"), shall have sole and exclusive
jurisdiction of any dispute arising out of or related to this Agreement
(including without limitation allegations of the breach or attempted breach
thereof) (a "Proceeding"). Notwithstanding the foregoing, nothing in this
paragraph alters any agreement the parties may previously have made or may in
the future make to arbitrate disputes. Each of the parties hereby expressly
consents to the personal jurisdiction of each of the Permitted Courts with
respect to any Proceeding and waives any objection, whether on the grounds of
venue, residence or domicile or on the ground that the Proceeding has been
brought in an inconvenient forum, to any Proceeding brought in a Permitted
Court. Executive agrees that a final judgment of a Permitted Court in any
Proceeding shall be conclusive and binding upon Executive and may be enforced in
other courts to whose jurisdiction Executive or his or her assets is or may be
subject, by suit upon such judgment.
(vii) Remedies. Each of the parties to this Agreement shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(viii) Interpretation. The Article and Section headings used herein are
for convenience only and do not define, limit or construe the content of such
sections. Each party acknowledges that it is entering into this Agreement after
consulting with counsel to the extent such party desired and based upon equal
bargaining power, with each party having the ability to participate in its
preparation. The terms of this Agreement shall not be interpreted in favor of or
against any party on account of the draftsperson, but shall be interpreted
solely for the purpose of fairly effectuating the intent of the parties hereto.
(ix) Survival. The provisions set forth in Section 4 and Section 5 of the
Agreement and the provisions set forth in this Appendix shall survive and
continue in full force and effect in accordance with their terms notwithstanding
any termination of the Employment Period.
(x) Amendment and Waiver. The provisions of this Agreement may be amended
and waived only by means of a written instrument signed by each of the Company
and Executive.
D. Certain Definitions
(i) "Affiliate" of a Person means any other Person, entity or investment
fund controlling, controlled by or under common control with the first-mentioned
Person and, without limiting the foregoing, in the case of a partnership, any
partner thereof is deemed to be an Affiliate of the partnership.
(ii) "Cause" means (a) the commission by Executive of a felony or a crime
involving moral turpitude; (b) the commission of any other act or omission by
Executive constituting fraud against the Company or any of its Affiliates, or
the violation of the duty of loyalty to the Company and/or its Affiliates under
applicable law; (c) substantial failure by Executive to act as reasonably
directed by the CEO of the Company, which failure, if curable, is not cured
within fifteen (15) calendar days after notice thereof to Executive; (d) willful
or reckless misconduct or, if curable, gross negligence by Executive which is
not cured within fifteen (15) days after written notice thereof to Executive,
with respect to the Company or any of its Affiliates; or
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CONFIDENTIAL
(e) any other material breach by Executive of this Agreement or Company policy
established by the CEO of the Company, which breach, if curable, is not cured
within fifteen (15) calendar days after written notice thereof to Executive.
(iii) "COBRA" means the requirements of Part 6 of Subtitle B of Tile I of
the Employee Retirement Income Security Act of 1974, as amended, and Section
4980B of the Internal Revenue Code of 1986, as amended, and any successor
statutes thereto.
(iv) "Confidential Information" means all information of a confidential or
proprietary nature (whether or not specifically labeled or identified as
"confidential"), in any form or medium, that is or was disclosed to, or
developed or learned by, Executive in connection with Executive's relationship
with the Company or any of its Affiliates prior to the date hereof or during the
Employment Period and that relates to the business, products, services,
financing, research or development of the Company or any of its Affiliates or
their respective suppliers, distributors or customers. Confidential Information
includes, but is not limited to, the following: (a) internal business
information (including information relating to strategic and staffing plans and
practices, business, training, marketing, promotional and sales plans and
practices, cost, rate and pricing structures, accounting and business methods);
(b) identities of, individual requirements of, specific contractual arrangements
with, and information about, any of the Company's or any of its Affiliates'
suppliers, distributors and customers and their confidential information; (c)
trade secrets, know-how, compilations of data and analyses, techniques, systems,
formulae, research, records, reports, manuals, documentation, models, data and
data bases relating thereto; (d) inventions, innovations, improvements,
developments, methods, designs, analyses, drawings, reports and all similar or
related information (whether or not patentable); and (e) Acquisition Targets and
potential acquisition candidates. Confidential Information shall not include
information that Executive can demonstrate: (1) is or becomes publicly known
through no wrongful act or breach of obligation of confidentiality; (2) was
rightfully received by Executive from a third party (other than ZD, Inc. or any
of its successors or Affiliates) without a breach of any obligation of
confidentiality by such third party; (3) was known to Executive prior to his
employment with the Company and its Affiliates, or (4) is required to be
disclosed pursuant to any applicable law or court order; provided, however, that
Executive provides the Company with prior written notice of the requirement for
disclosure that details the Confidential Information to be disclosed and
cooperates with the Company to preserve the confidentiality of such information
to the extent possible.
(v) "Good Reason" means the occurrence, without Executive's consent, of
any of the following: (i) unless corrected within fifteen (15) calendar days
after written notice by Executive to the CEO of the Company of objection
thereto, the assignment to Executive of any significant duties materially
inconsistent with Executive's status as the Executive Vice President and
Editorial Director of the Company and Editor-in-Chief of PC Magazine of the
Company or a diminution of Executive's title(s), or a substantial adverse
alteration in the nature or status of Executive's responsibilities; (ii) a
reduction in Executive's annual Base Salary as contemplated hereby, except for
across-the-board salary reductions similarly affecting all senior executives of
the Company; or (iii) the Company requires Executive to relocate from the New
York metropolitan area.
(vi) "Incapacity" means the disability of Executive caused by any physical
or mental injury, illness or incapacity as a result of which Executive is unable
to effectively perform the essential functions of Executive's duties as
determined by the Company in good faith, for a period of ninety (90) consecutive
calendar days or a period of one hundred and twenty (120) calendar days during
any one hundred and eighty (180) calendar day period.
(vii) "Person" means an individual or a corporation, partnership, limited
liability company, trust, unincorporated organization, association or other
entity.
(viii) "Work Product" means all inventions, innovations, improvements,
developments, methods, processes, designs, analyses, drawings, reports and all
similar or related information (whether or not patentable or reduced to practice
or comprising Confidential Information) and any copyrightable work, trade xxxx,
trade
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secret or other intellectual property rights (whether or not comprising
Confidential Information) and any other form of Confidential Information, any of
which relate to the Company's or any of its Affiliates' actual or anticipated
business, research and development or existing or future products or services
and which were or are conceived, reduced to practice, contributed to, developed,
made or acquired by Executive (whether alone or jointly with others) while
employed (both before and after the Effective Date) by the Company (or its
successors or assigns) and its Affiliates.
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