1
Exhibit 10.14
RESTATED EMPLOYMENT AGREEMENT
This RESTATED EMPLOYMENT AGREEMENT ("Agreement") effective as
of January 1, 1999, between Penton Media, Inc. (formerly known as Penton
Publishing, Inc.), a Delaware corporation (the "COMPANY"), and Xxxxxx X. Xxxxxxx
("EXECUTIVE")
WITNESSETH:
WHEREAS, Executive is presently the President and Chief
Operating Officer of the Company and has made and is expected to continue to
make major contributions to the profitability, growth and financial strength of
the Company;
WHEREAS, the Company recognizes that, as is the case with many
publicly held companies, the possibility of a Change of Control (as that term is
hereafter defined) exists;
WHEREAS, the Company wishes to assure itself of both present
and future continuity of management in the event of any Change of Control;
WHEREAS, the Company wishes to ensure that certain of its
executives are not practically disabled from discharging their duties upon a
Change of Control; and
WHEREAS, the Company and Executive currently are parties to an
Employment Agreement (the "PRIOR AGREEMENT") providing certain benefits, and the
Company and Executive desire to amend and restate the Prior Agreement;
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. EMPLOYMENT. The Company shall employ Executive, and
Executive accepts continued employment with the Company as of the date hereof,
upon the terms and conditions set forth in this Agreement for the period
beginning on the date hereof and ending as provided in paragraph 5 hereof (the
"EMPLOYMENT PERIOD").
2. POSITION AND DUTIES.
(a) During the Employment Period, Executive shall serve as the
chief operating officer of the Company and shall have the normal duties,
responsibilities and authority of an executive serving in such position, subject
to the power of the Board of Directors of the Company (the "BOARD") or the Chief
Executive Officer of the Company to expand or limit such duties,
responsibilities and authority, either generally or in specific instances.
Executive shall have the title President of the Company, subject to the power of
the Board to change such title from time to time. During the Employment Period,
Executive shall also serve as a director of the Company for so long as the Board
(or a nominating committee of the Board) nominates him to that position and he
is elected to it, and as a director of any affiliate of the Company designated
by the Board for so long as the Board causes him to be elected to such position.
2
(b) Executive shall report to the Chief Executive Officer of
the Company.
(c) During the Employment Period, Executive shall devote his
best efforts and his full business time and attention (except for permitted
vacation periods, reasonable periods of illness or other incapacity, and,
provided such activities do not have more than a DE MINIMIS effect on
Executive's performance of his duties under this Agreement, participation in
charitable and civic endeavors and management of Executive's personal
investments and business interests) to the business and affairs of the Company,
its subsidiaries and affiliates. Executive shall perform his duties and
responsibilities to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner.
(d) Executive shall perform his duties and responsibilities
principally in the Cleveland, Ohio metropolitan area, and shall not be required
to travel outside that area any more extensively than he has done in the past in
the ordinary course of the business of the Company.
3. COMPENSATION AND BENEFITS.
(a) SALARY. The Company agrees to pay Executive a salary
during the Employment Period, in semi-monthly installments. Executive's initial
salary shall be $365,000 per year. The Compensation Committee of the Board (or,
if there is no such Committee, the Board) shall review Executive's salary from
time to time and may, in its sole discretion, increase it.
(b) BONUS(ES). Effective January 1, 1999 and for subsequent
years, Executive will be eligible for an annual bonus based on the achievement
of specified Company goals (the "Target Bonus") (as determined by the
Compensation Committee of the Board (or, if there is no such Committee, the
Board)). Any bonus payable pursuant to this subparagraph (b) may, at the
discretion of the Compensation Committee of the Board (or, if there is no such
Committee, the Board), after considering any preference expressed by Executive,
be paid in the form of cash, in a Performance Shares Award related to shares of
the Company's Common Stock or in a combination of both.
(c) STOCK OPTIONS. The Company has adopted a plan (the "1998
STOCK OPTION PLAN") pursuant to which options to purchase shares of the
Company's Common Stock, and other equity-based incentive compensation awards,
may be granted to Executive and other officers of the Company. Executive shall
be eligible to receive grants of options and other awards under the 1998 Stock
Option Plan, at the discretion of the Compensation Committee of the Board (or,
if there is no such Committee, the Board). Under the terms of the 1998 Stock
Option Plan, the Compensation Committee of the Board (or, if there is no such
Committee, the Board) has the right to amend the 1998 Stock Option Plan. If, at
the time of the grant of any option pursuant to this paragraph (c), the issuance
of shares upon exercise thereof has not been registered under the Securities Act
of 1933, as amended, it shall be a condition to such grant that Executive
execute and deliver to the Company a certificate confirming that Executive is an
accredited investor (as such term is used in Regulation D under such Act) and
including transfer restrictions and other provisions customary in connection
with grants under such circumstances. Each option to be granted as set forth
above shall be substantially in the form of EXHIBIT 1 attached to this
Agreement, except that it is understood that reference to any then existing
registration statement or related plan information document in EXHIBIT 1, or its
equivalent, shall be included if and only if the same exists at the time of
grant and is relevant to such option.
3
(d) EXPENSE REIMBURSEMENT. The Company shall reimburse
Executive for all reasonable expenses incurred by him during the Employment
Period in the course of performing his duties under this Agreement that are
consistent with the Company's policies in effect from time to time with respect
to travel, entertainment and other business expenses, subject to the Company's
requirements applicable generally with respect to reporting and documentation of
such expenses. Executive acknowledges that under the Company's current air
travel reimbursement policy, reimbursement is limited to coach fare (plus
Executive's cost of any upgrade certificates used to upgrade to first class) on
travel within the United States and is limited to business class fare on travel
to and from foreign cities.
(e) STANDARD EXECUTIVE BENEFITS PACKAGE. In addition to the
salary, bonus(es), stock options and expense reimbursements payable to Executive
pursuant to this paragraph 3, Executive shall be entitled during the Employment
Period to participate, on the same basis as other executives of the Company, in
the Company's Standard Executive Benefits Package. The Company's "STANDARD
EXECUTIVE BENEFITS PACKAGE" means those benefits (including insurance, vacation,
Company car or car allowance, equity-based benefits, and other benefits) for
which substantially all of the executives of the Company are from time to time
generally eligible, as determined from time to time by the Board.
(f) ADDITIONAL BENEFITS. In addition to participation in the
Company's Standard Executive Benefits Package pursuant to this paragraph,
Executive shall be entitled during the Employment Period to:
(i) additional term life insurance coverage in an amount
equal to Executive's salary, but only if and so long
as such additional coverage is available at standard
rates from the insurer providing term life insurance
coverage under the Standard Executive Benefits
Package or from a comparable insurer acceptable to
the Company;
(ii) supplementary long-term disability coverage in an
amount that will include maximum covered annual
compensation of $330,000 and maximum monthly payments
of $18,333, but only if and so long as such
supplementary coverage is available at standard rates
from the insurer providing long-term disability
coverage under the Standard Executive Benefits
Package or a comparable insurer acceptable to the
Company; and
(iii) pursuant to authorization by the Compensation
Committee of the Board (or, if there is no such
Committee, the Board), participation in the Penton
Media, Inc. Supplemental Executive Retirement Plan
(the "SERP"), effective August 7, 1998, as currently
in effect, except that the beginning date for accrual
of a benefit shall be the date on which Executive's
employment with the Company began.
(g) INDEMNIFICATION. With respect to Executive's acts or
failures to act during the Employment Period in his capacity as a director,
officer, employee or agent of the Company, Executive shall be entitled to
indemnification from the Company, and to liability insurance coverage (if any),
on the same basis as other directors and officers of the Company.
4
4. ADJUSTMENTS. Notwithstanding any other provision of this
Agreement, it is expressly understood and agreed that if there is a significant
reduction in the level of the business to which Executive's duties under this
Agreement relate, or if all or any significant part of such business is disposed
of by the Company and/or its subsidiaries or affiliates during the Employment
Period but Executive thereafter remains an employee of the Company, the
Compensation Committee of the Board (or, if there is no such Committee, the
Board) may make adjustments in Executive's duties, responsibility and authority,
and in Executive's compensation, as the Compensation Committee of the Board (or,
if there is no such Committee, the Board) deems appropriate to reflect such
reduction or disposition.
5. EMPLOYMENT PERIOD.
(a) Except as hereinafter provided, the Employment Period
shall continue until, and shall end upon, the third anniversary of the date on
which the Employment Period begins.
(b) On each anniversary of the date on which the Employment
Period begins which precedes Executive's sixty-fifth birthday by more than two
years, unless the Employment Period shall have ended early pursuant to (c) below
or either party shall have given the other party written notice that the
extension provision in this sentence shall no longer apply, the Employment
Period shall be extended for an additional year (unless Executive's sixty-fifth
birthday occurs during such additional year, in which event the Employment
Period shall be extended only until such birthday). In no event shall the
Employment Period be extended beyond Executive's sixty-fifth birthday except by
mutual written agreement of the Company and Executive.
(c) Notwithstanding (a) and (b) above, the Employment Period
shall end early upon the first to occur of any of the following events:
(i) Executive's death;
(ii) Executive's retirement upon or after reaching age 65
("RETIREMENT");
(iii) the Company's termination of Executive's employment
on account of Executive's having become unable (as
determined by the Board in good faith) to regularly
perform his duties hereunder by reason of illness or
incapacity for a period of more than six (6)
consecutive months ("TERMINATION FOR DISABILITY");
(iv) the Company's termination of Executive's employment
for Cause ("TERMINATION FOR CAUSE");
(v) the Company's termination of Executive's employment
other than a Termination for Disability or a
Termination for Cause ("TERMINATION WITHOUT CAUSE");
(vi) Executive's termination of Executive's employment for
Good Reason, by means of advance written notice to
the Company at least thirty (30) days prior to the
effective date of such termination identifying such
termination as a Termination by Executive for Good
Reason and identifying the Good Reason ("TERMINATION
BY EXECUTIVE FOR GOOD REASON") (it being expressly
5
understood that Executive's giving notice that the
extension provision in the first sentence of
paragraph 5(b) hereof shall no longer apply shall not
constitute a Termination by Executive for Good
Reason);
(vii) Executive's termination of Executive's employment for
any reason other than Good Reason, by means of
advance written notice to the Company at least one
hundred twenty (120) days prior to the effective date
of such termination identifying such termination as a
Termination by Executive with Advance Notice
("TERMINATION BY EXECUTIVE WITH ADVANCE NOTICE") (it
being expressly understood that Executive's giving
notice that the extension provision in the first
sentence of paragraph 5(b) hereof shall no longer
apply shall not constitute a Termination by Executive
with Advance Notice); or
(viii) the termination of Executive's employment (A) on
account of a Termination without Cause before the
second anniversary of a Change of Control, (B) on
account of a Termination by Executive for Good Reason
before the second anniversary of a Change of Control
or (C) in connection with but prior to a Change of
Control and following the commencement of any
discussion with any third party that (i) requests or
suggests that Executive's employment be terminated
and (ii) ultimately engages in a Change of Control
(collectively, "TERMINATION FOLLOWING A CHANGE OF
CONTROL").
(d) For purposes of this Agreement, "CAUSE" shall mean:
(i) the commission by Executive of a felony or a crime
involving moral turpitude;
(ii) the commission by Executive of a fraud;
(iii) the commission by Executive of any act involving
dishonesty or disloyalty with respect to the Company
or any of its subsidiaries or affiliates that xxxxx
or damages any of them to any extent;
(iv) conduct by Executive that brings the Company or any
of its subsidiaries or affiliates into substantial
public disgrace or disrepute;
(v) gross negligence or willful misconduct by Executive
with respect to the Company or any of its
subsidiaries or affiliates;
(vi) repudiation of this Agreement by Executive or
Executive's abandonment of his employment with the
Company (it being expressly understood that a
Termination by Executive for Good Reason or a
Termination by Executive with Advance Notice shall
not constitute such a repudiation or abandonment);
(vii) breach by Executive of any of the agreements in
paragraph 8 hereof prior to the end of the Employment
Period; or
6
(viii) any other breach by Executive of this Agreement which
is material and which is not cured within thirty (30)
days after written notice thereof to Executive from
the Company.
(ix) Notwithstanding the foregoing, Executive shall in no
event be deemed to have been terminated for "Cause"
hereunder unless prior to his termination there shall
have been delivered to Executive a copy of a
resolution duly adopted by the affirmative vote of
not less than a majority of the non- employee
Directors then in office at a meeting of the Board
called and held for such purpose, after reasonable
notice to Executive and an opportunity for Executive,
together with Executive's counsel (if Executive
chooses to have counsel present at such meeting), to
be heard before the Board, finding that, in the good
faith opinion of the Board, Executive had committed
an act constituting "Cause" as herein defined and
specifying the particulars thereof in detail. While
such a determination will be a condition precedent
for the existence of "Cause" for purposes of this
Agreement, such a determination will not be
determinative or create a presumption that "Cause" in
fact exists and nothing herein will limit the right
of Executive or his beneficiaries to contest the
validity or propriety of any such determination.
(e) For purposes of this Agreement, "GOOD REASON" shall
mean:
(i) a reduction by the Company in Executive's salary to
an amount less than "EXECUTIVE'S REFERENCE SALARY"
(i.e., Executive's initial salary or, in the event
the Employment Period has been extended pursuant to
paragraph 5(b) hereof, Executive's salary on the date
on which the most recent such extension occurred) or
any downward adjustment in Executive's Target Bonus;
or
(ii) the Company's giving notice that the extension
provision in the first sentence of paragraph 5(b)
hereof shall no longer apply; or
(iii) any breach by the Company of this Agreement which is
material and which is not cured within thirty (30)
days after written notice thereof to the Company from
Executive.
(f) For purposes of this Agreement, "CHANGE OF CONTROL" shall
mean the occurrence of any of the following events during the Employment Period:
(i) The acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (a "Person") of
beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 40% or more of either: (A) the
then-outstanding shares of common stock of the Company (the "Company
Common Stock") or (B) the combined voting power of the then-outstanding
voting securities of the Company entitled to vote generally in the
election of directors ("Voting Stock"); PROVIDED, HOWEVER, that for
purposes of this subparagraph (i), the following acquisitions shall not
constitute a Change of Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company, a subsidiary of the
Company or the Xxxxxx Group, (C) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any subsidiary of the Company,
7
or (D) any acquisition by any Person pursuant to a transaction which
complies with clauses (A), (B) and (C) of subparagraph (iii) of this
paragraph 5(f); or
(ii) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason (other than death or
disability) to constitute at least a majority of the Board; PROVIDED,
HOWEVER, that any individual becoming a director subsequent to the date
hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (either by a specific
vote or by approval of the proxy statement of the Company in which such
person is named as a nominee for director, without objection to such
nomination) shall be considered as though such individual were a member
of the Incumbent Board, but excluding for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule
14a-11 of the Exchange Act) with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all
of the assets of the Company (a "Business Combination"), in each case,
unless, following such Business Combination, (A) all or substantially
all of the individuals and entities who were the beneficial owners,
respectively, of the Company Common Stock and Voting Stock immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than a majority of, respectively, the then-outstanding
shares of common stock and the combined voting power of the
then-outstanding voting securities entitled to vote generally in the
election of directors, as the case may be, of the entity resulting from
such Business Combination (including, without limitation, an entity
which as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions
relative to each other as their ownership, immediately prior to such
Business Combination, of the Company Common Stock and Voting Stock of
the Company, as the case may be, (B) no Person (excluding any entity
resulting from such Business Combination, the Xxxxxx Group or any
employee benefit plan (or related trust) sponsored or maintained by the
Company, a subsidiary of the Company or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 40% or
more of, respectively, the then-outstanding shares of common stock of
the entity resulting from such Business Combination, or the combined
voting power of the then-outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the Business Combination and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(v) For purposes of this paragraph 5(f), the "Xxxxxx Group"
shall mean Messrs. Xxxxxx X. Xxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxxx,
Xxxxxxx X. Xxxxxx and June X. Xxxxxxx, and their respective spouses,
descendants and spouses of descendants, trustees of trusts established
for the benefit of such persons (acting in their capacity as trustees
of such trusts),
8
and executors of estates of such persons (acting in their capacity as
executors of such estates), and each person of which any of the
foregoing owns (i) more than fifty percent (50%) of the voting stock or
other voting interests and (ii) stock or other interests representing
more than fifty percent (50%) of the total value of the stock or other
interests of such person.
6. POST-EMPLOYMENT PERIOD PAYMENTS.
(a) If the Employment Period ends on the date on which
(without any extension thereof) it is then scheduled to end pursuant to
paragraph 5 hereof, or if the Employment Period ends early pursuant to paragraph
5 hereof for any reason, Executive shall cease to have any rights to salary,
bonus (if any), options, expense reimbursements or other benefits other than:
(i) any salary which has accrued but is unpaid, any reimbursable expenses which
have been incurred but are unpaid, and any unexpired vacation days which have
accrued under the Company's vacation policy but are unused, as of the end of the
Employment Period, (ii) any option rights or plan benefits which by their terms
extend beyond termination of Executive's employment (but only to the extent
provided in any option theretofore granted to Executive or in the SERP or any
other benefit plan in which Executive has participated as an employee of the
Company), (iii) any benefits to which Executive is entitled under Part 6 of
Subtitle B of Title I of the Employee Retirement Income Security Act of 1974, as
amended ("COBRA"), and (iv) any other amount(s) payable pursuant to the
succeeding provisions of this paragraph 6.
(b) If the Employment Period ends pursuant to paragraph 5
hereof on Executive's sixty-fifth birthday, or if the Employment Period ends
early pursuant to paragraph 5 hereof on account of Executive's death, Retirement
(provided such Retirement is not a Termination Following a Change of Control) or
Termination for Disability, the Company shall make no further payments to
Executive except as contemplated in (a)(i), (ii) and (iii) above.
(c) If the Employment Period ends early pursuant to paragraph
5 hereof on account of Termination for Cause, the Company shall pay Executive an
amount equal to that amount Executive would have received as salary (based on
Executive's salary then in effect) had the Employment Period remained in effect
until the later of the effective date of the Company's termination of
Executive's employment or the date thirty days after the Company's notice to
Executive of such termination. The Company shall make no further payments to
Executive except as contemplated in (a)(i), (ii) and (iii) above.
(d) If the Employment Period ends early pursuant to paragraph
5 hereof on account of a Termination without Cause or a Termination by Executive
for Good Reason, and such termination does not constitute a Termination
Following a Change of Control, the Company shall pay to Executive a lump sum
payment equal to three times Executive's base salary at the time of such
termination (or, if higher, Executive's Reference Salary). In addition, the
Company shall reimburse Executive (net after taxes on the receipt of such
reimbursement) for any premiums paid by Executive for health insurance provided
to Executive (for Executive and his dependents) by the Company subsequent to the
end of the Employment Period pursuant to the requirements of COBRA as in effect
on the date of this Agreement. The Company shall make no further payments to
Executive except as contemplated in (a)(i), (ii) and (iii) above. It is
expressly understood that the Company's payment obligations under this
subparagraph (d) shall cease in the event Executive breaches any of his
agreements in paragraph 7 or 8 hereof.
9
(e) If the Employment Period ends early pursuant to paragraph
5 hereof on account of a Termination by Executive with Advance Notice, and such
termination does not constitute a Termination Following a Change of Control, the
Company shall make no further payments to Executive except as contemplated in
(a)(i), (ii) and (iii) above.
(f)(i) If the Employment Period ends early pursuant to
paragraph 5 hereof on account of a Termination
Following a Change of Control, Executive shall be
entitled to receive the following:
(A) For a period of three years following the
date of termination, Executive's base salary
at the time of such termination (or, if
higher, Executive's Reference Salary)
payable at the times such amounts would have
been paid; PROVIDED, HOWEVER, that if
Executive so chooses, in his sole
discretion, such payment under this
subparagraph (f)(i)(A) shall be made in a
lump sum;
(B) A lump sum payment equal to Executive's
Target Bonus for the year in which such
termination occurs (or, if higher,
Executive's Target Bonus for the preceding
year or the year in which the Change of
Control occurs);
(C) If Executive's employment is terminated
after July 1 of the then- current year, an
additional amount equal to the product of
(x) Executive's Target Bonus for the year in
which such termination occurs (or, if
higher, Executive's Target Bonus for the
preceding year or the year in which the
Change of Control occurs) multiplied by (y)
a fraction, the numerator of which shall be
the number of months that have elapsed, on
the day of termination, during the
then-current year (rounded up to the nearest
full month) and the denominator of which
shall be 12; and
(D) For a period of one year following the date
of termination, Executive shall be entitled
to be a full participant in, and shall be
entitled to the benefits provided under, the
Company's Standard Executive Benefits
Package (but shall not be entitled to stock
option, performance share, performance unit,
stock purchase, stock appreciation or
similar equity-based compensatory benefit
awards) and the additional benefits set
forth in Section 3(f) hereof at the time of
such termination (or, if higher, for the
preceding year or the year in which the
Change of Control occurs). If, however,
Executive is not eligible to participate in
the benefits as set forth in the preceding
sentence, the Company shall reimburse
Executive, on a monthly basis (net after
taxes on the receipt of such reimbursement),
for any premiums or other fees paid by
Executive to obtain benefits (for Executive
and his dependents) equivalent to the
Standard Executive Benefits Package and the
additional benefits set forth in Section
3(f). Notwithstanding the foregoing or any
other provision of this Agreement, (A) for
the purpose of determining the period of
continuation coverage to which the Executive
or any of his dependents is entitled
pursuant to the
10
requirements of COBRA, the Executive's
"qualifying event," subject to the
requirements of applicable plans, will be
the termination of the one-year period set
forth above in this subparagraph (f)(i)(D)
and the Executive will be considered to have
remained actively employed on a full time
basis through that date and (B) the Company
shall reimburse Executive (net after taxes
on the receipt of such reimbursement) for
any premiums paid by Executive for health
insurance provided to Executive (for
Executives and his dependents) by the
Company pursuant to the requirements of
COBRA as in effect on the date of this
Agreement.
(ii) LIMITATION ON PAYMENTS AND BENEFITS. Notwithstanding
any provision of this Agreement to the contrary, if
any amount or benefit to be paid or provided under
this Agreement or otherwise pursuant to or by reason
of any other agreement, policy, plan, program or
arrangement, including without limitation any bonus,
stock option, performance share, performance unit,
stock appreciation right or similar right, or the
lapse or termination of any restriction on or the
vesting or exercisability of any of the foregoing
would be an "Excess Parachute Payment," within the
meaning of Section 280G of the Code, or any successor
provision thereto, but for the application of this
sentence, then the payments and benefits to be paid
or provided under this Agreement shall be reduced to
the minimum extent necessary (but in no event to less
than zero) so that no portion of any such payment or
benefit, as so reduced, constitutes an Excess
Parachute Payment; provided, however, that the
foregoing reduction shall be made only if and to the
extent that such reduction would result in an
increase in the aggregate payment and benefits to be
provided to Executive, determined on an after-tax
basis (taking into account the excise tax imposed
pursuant to Section 4999 of the Code, or any
successor provision thereto, any tax imposed by any
comparable provision of state law, and any applicable
federal, state and local income taxes). The
determination of whether any reduction in such
payments or benefits to be provided under this
Agreement is required pursuant to the preceding
sentence shall be made at the expense of the Company,
if requested by the Executive or the Company, by the
Company's independent accountants. The fact that the
Executive's right to payments or benefits may be
reduced by reason of the limitations contained in
this paragraph 6(f) shall not of itself limit or
otherwise affect any other rights of the Executive
other than pursuant to this Agreement. In the event
that any payment or benefit intended to be provided
under this Agreement is required to be reduced
pursuant to this paragraph 6(f), the Executive shall
be entitled to designate the payments and/or benefits
to be so reduced in order to give effect to this
paragraph 6(f). The Company shall provide the
Executive with all information reasonably requested
by the Executive to permit the Executive to make such
designation. In the event that the Executive fails to
make such designation within 10 business days of the
Date of Termination, the Company may effect such
reduction in any manner it deems appropriate.
(g) Without limiting the rights of the Executive at law or in
equity, if the Company fails to make any payment or provide any benefit required
to be made or provided
11
hereunder on a timely basis, the Company will pay interest on the amount or
value thereof at an annualized rate of interest equal to the so-called composite
"prime rate" as quoted from time to time during the relevant period in the
Midwest Edition of THE WALL STREET JOURNAL. Such interest will be payable as it
accrues on demand. Any change in such prime rate will be effective on and as of
the date of such change.
(h) Executive shall not be required to mitigate the amount of
any payment or benefit provided for in this Agreement by seeking other
employment or otherwise.
7. CONFIDENTIAL INFORMATION. Executive acknowledges that the
information, observations and data obtained by him while employed by the Company
pursuant to this Agreement, as well as those obtained by him while employed by
the Company or any of its subsidiaries or affiliates or any predecessor thereof
prior to the date of this Agreement, concerning the business or affairs of the
Company or any of its subsidiaries or affiliates or any predecessor thereof
(unless and except to the extent the foregoing become generally known to and
available for use by the public other than as a result of Executive's acts or
omissions to act, "CONFIDENTIAL INFORMATION") are the property of the Company or
such subsidiary or affiliate. Therefore, Executive agrees that during the
Employment Period and for three years thereafter he shall not disclose any
Confidential Information without the prior written consent of the Chief
Executive Officer of the Company unless and except to the extent that such
disclosure is (i) made in the ordinary course of Executive's performance of his
duties under this Agreement or (ii) required by any subpoena or other legal
process (in which event Executive will give the Company prompt notice of such
subpoena or other legal process in order to permit the Company to seek
appropriate protective orders), and that he shall not use any Confidential
Information for his own account without the prior written consent of the Chief
Executive Officer of the Company. Executive shall deliver to the Company at the
termination of the Employment Period, or at any other time the Company may
reasonably request, all memoranda, notes, plans, records, reports, computer
tapes and software and other documents and data (and copies thereof) relating to
the Confidential Information, or to the work product or the business of the
Company or any of its subsidiaries or affiliates which he may then possess or
have under his control.
8. NON-COMPETE, NON-SOLICITATION.
(a) Executive acknowledges that in the course of his
employment with the Company pursuant to this Agreement he will become familiar,
and during the course of his employment by the Company or any of its
subsidiaries or affiliates or any predecessor thereof prior to the date of this
Agreement he has become familiar, with trade secrets and customer lists of and
other confidential information concerning the Company and its subsidiaries and
affiliates and predecessors thereof and that his services have been and will be
of special, unique and extraordinary value to the Company.
(b) Executive agrees that during the Employment Period and for
a period of one year after termination of his employment with the Company, he
shall not in any manner, directly or indirectly, through any person, firm or
corporation, alone or as a member of a partnership or as an officer, director,
shareholder, investor or employee of or in any other corporation or enterprise
or otherwise, engage in or be engaged in, or assist any other person, firm,
corporation or enterprise in engaging or being engaged in, any business then
actively being conducted by the Company or any of its subsidiaries or
affiliates.
12
(c) Executive further agrees that during the Employment Period
and for a period of two years after termination of his employment with the
Company, he shall not in any manner, directly or indirectly, induce or attempt
to induce any employee of the Company or of any of its subsidiaries or
affiliates to quit or abandon his employ.
(d) Nothing in this paragraph 8 shall prohibit Executive from
being: (i) a shareholder in a mutual fund or a diversified investment company or
(ii) a passive owner of not more than 5% of the outstanding equity securities of
any class of a corporation or other entity which is publicly traded, so long as
Executive has no active participation in the business of such corporation or
other entity.
(e) If, at the time of enforcement of this paragraph, a court
holds that the 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 to revise
the restrictions contained herein to cover the maximum period, scope and area
permitted by law.
9. ENFORCEMENT. Because Executive's services are unique and
because Executive has access to Confidential Information and work product, the
parties hereto agree that the Company would be damaged irreparably in the event
any of the provisions of paragraph 8 hereof were not performed in accordance
with their specific terms or were otherwise breached and that money damages
would be an inadequate remedy for any such non-performance or breach. Therefore,
the Company or its successors or assigns shall be entitled, in addition to other
rights and remedies existing in their favor, to an injunction or injunctions to
prevent any breach or threatened breach of any of such provisions and to enforce
such provisions specifically (without posting a bond or other security).
10. EXECUTIVE REPRESENTATIONS. Executive represents and
warrants to the Company that (i) the execution, delivery and performance of this
Agreement by Executive does not and will not conflict with, breach, violate or
cause a default under any contract, agreement, instrument, order, judgment or
decree to which Executive is a party or by which he is bound, (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms.
11. SURVIVAL. Subject to any limits on applicability contained
therein, paragraphs 7 and 8 hereof shall survive and continue in full force in
accordance with their terms notwithstanding any termination of the Employment
Period.
12. NOTICES. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, sent by reputable
overnight carrier or mailed by first class mail, return receipt requested, to
the recipient at the address below indicated:
NOTICES TO EXECUTIVE:
---------------------
Xx. Xxxxxx X. Xxxxxxx
0000 Xxxx'x Xxx Xxxx
Xxxxxxxx, XX 00000
13
NOTICES TO THE COMPANY:
-----------------------
Xx. Xxxxxx X. Xxxx
Chief Executive Officer
Penton Media, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
or 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. Any
notice under this Agreement will be deemed to have been given when so delivered,
sent or mailed.
13. 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.
14. PAYMENT OF CERTAIN COSTS AND EXPENSES.
(a) PREVAILING PARTY'S LITIGATION EXPENSES. In the event of
litigation between the Company and Executive related to this Agreement, the
non-prevailing party shall reimburse the prevailing party for any costs and
expenses (including without limitation attorneys' fees) reasonably incurred by
the prevailing party in connection therewith.
(b) CHANGE OF CONTROL OF THE COMPANY. Without limiting the
generality of (a) above, in the event that there is a Change of Control of the
Company, if it should appear to Executive that the Company has failed to comply
with any of its obligations under this Agreement or if it wrongfully withholds
from Executive any amount payable to Executive pursuant to the SERP, or in the
event that the Company or any other person takes or threatens to take any action
to declare this Agreement void or unenforceable, or institutes any litigation or
other action or proceeding designed to deny, or to recover from, Executive the
benefits provided or intended to be provided to Executive hereunder, the Company
irrevocably authorizes Executive from time to time to retain counsel of
Executive's choice, at the expense of the Company as hereafter provided, to
advise and represent Executive in connection with any such interpretation,
enforcement or defense, including without limitation the initiation or defense
of any litigation or other legal action, whether by or against the Company or
any Director, officer, shareholder or other person affiliated with the Company,
in any jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company irrevocably
consents to Executive's entering into an attorney-client relationship with such
counsel, and in that connection the Company and Executive agree that a
confidential relationship will exist between Executive and such counsel. Without
respect to whether Executive prevails, in whole or in part, in connection with
any of the foregoing, the Company will pay and be solely financially responsible
for any and all attorneys' and related fees and expenses incurred by Executive
in connection with any of the foregoing.
(c) SOURCE OF PAYMENTS. Except as otherwise specified herein,
in the event a Change of Control occurs, any payments to Executive pursuant to
this Agreement and the
14
performance of the Company's obligations hereunder shall be secured by amounts
deposited or to be deposited in a trust established by the Company for the
benefit of Executive (and, at the Company's option, for the benefit of other
executives of the Company who are entitled to payments similar to those provided
in this Agreement) (the "Trust"). The Company shall transfer to such Trust
assets from which all or a portion of the payments provided under this Agreement
are to be paid, provided that such assets of the Trust shall at all times be
subject to the claims of general unsecured creditors of the Company and that
neither Executive nor any other person entitled to payments through the Trust
shall at any time have a prior claim to such assets. Any payments to Executive
under this Agreement that are not paid through the Trust shall be paid from the
Company's general assets, and Executive shall have the status of a general
unsecured creditor with respect to the Company's obligations to make payments
under this Agreement.
15. COMPLETE AGREEMENT. This Agreement embodies the complete
agreement and understanding between the parties with respect to the subject
matter hereof and effective as of its date supersedes and preempts any prior
understandings, agreements or representations by or between the parties, written
or oral, which may have related to the subject matter hereof in any way.
16. COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which shall be deemed to be an original and both of which
taken together shall constitute one and the same agreement.
17. SUCCESSORS AND ASSIGNS. This Agreement shall bind and
inure to the benefit of and be enforceable by Executive, the Company and their
respective heirs, executors, personal representatives, successors and assigns,
except that neither party may assign any of his or its rights or delegate any of
his or its obligations hereunder without the prior written consent of the other
party. Executive hereby consents to the assignment by the Company of all of its
rights and obligations hereunder to any successor to the Company by merger or
consolidation or purchase of all or substantially all of the Company's assets,
provided such transferee or successor assumes the liabilities of the Company
hereunder.
18. CHOICE OF LAW. This Agreement shall be governed by the
internal law, and not the laws of conflicts, of the State of Ohio.
19. AMENDMENT AND WAIVER. The provisions of this Agreement may
be amended or waived only with the prior written consent of the Company and
Executive, and no course of conduct or failure or delay in enforcing the
provisions of this Agreement shall affect the validity, binding effect or
enforceability of this Agreement.
15
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date written below.
PENTON MEDIA, INC.
Date: February 5, 1999 By /S/ XXXXXX X. XXXX
------------------------------------
Xxxxxx X. Xxxx
Chief Executive Officer
Date: February 10, 1999 /S/ XXXXXX X. XXXXXXX
------------------------------------
XXXXXX X. XXXXXXX
