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Exhibit 10.16
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") made as of August 24,
1999, between Penton Media, Inc., a Delaware corporation (the "Company"), and
Xxxxxx X. XxXxxxxx ("Executive")
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
Chief Financial Officer and Treasurer 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.
(b) Executive shall report to the Chief Executive Officer or
the President and Chief Operating 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.
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.
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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 $260,000 per year. The Compensation Committee of the Board (or,
if there is no such Committee, the Board) shall review Executive's salary at
least annually and may, in its sole discretion, increase it.
(b) Bonus(es). For the calendar year 1999 and for subsequent
calendar 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)). Annual bonus for 1999 shall be based on principles similar to the
foregoing, but with a minimum bonus opportunity of $100,000. 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.
(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, Executive shall be entitled during the Employment
Period to participate, on the same basis as other
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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 annual 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 which will increase maximum covered annual
compensation to $270,000 and the maximum monthly
payments to $15,000; 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) coverage under the Company's Supplemental Executive
Retirement Plan, subject to approval of the
Compensation Committee of the Board (or, if there is
no such Committee, the Board) .
(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. 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 second anniversary of the date on
which the Employment Period begins.
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(b) On each anniversary of the date on which the Employment
Period begins which precedes Executive's sixty-fifth birthday by more than one
year, 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
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
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(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
(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.
(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
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(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, 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
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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), 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 any 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
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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 amounts equal
to the amounts Executive would have received as salary (based on Executive's
salary then in effect or, if greater, Executive's Reference Salary) had the
Employment Period remained in effect for a period of twenty-four (24) months
after the last day of the month in which the Employment Period ends (in the
event Executive is entitled during the payment period to any payments under any
disability benefit plan or the like in which Executive has participated as an
employee of the Company, less such payments), 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 (d) shall be made in a
lump sum. 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.
(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 an amount equal to two times the
sum of (A) Executive's annual base salary at the time
of such termination (or, if higher, Executive's
Reference Salary) and (B) 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), 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) shall be made in a lump sum.
In addition, the Company shall reimburse Executive
(net after taxes on the receipt of such
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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.
(ii) 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 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
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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 two 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 two years 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.
(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,
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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. XxXxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, Xxxx 00000
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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 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.
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13
(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 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.
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14
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date written below.
PENTON MEDIA, INC.
Date: , 1999 By
Xxxxxx X. Xxxx
Chief Executive Officer
Date: , 1999
Xxxxxx X. XxXxxxxx
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Exhibit 1
PENTON MEDIA, INC.
NONQUALIFIED STOCK OPTION AGREEMENT
This AGREEMENT (this "Agreement") is made as of _____________ (the
"Date of Grant"), by and between Penton Media, Inc. a Delaware corporation (the
"Company"), and ____________ (the "Optionee").
1. GRANT OF STOCK OPTION. Subject to and upon the terms,
conditions, and restrictions set forth in this Agreement and in the
Company's 1998 Equity and Performance Incentive Plan (the "Plan"), the
Company hereby grants to the Optionee as of the Date of Grant a stock
option (the "Option") to purchase __________ shares of Common Stock
(the "Optioned Shares"). The Option may be exercised from time to time
in accordance with the terms of this Agreement. The price at which the
Optioned Shares may be purchased pursuant to the Option shall be
___________ per share subject to adjustment as hereinafter provided
(the "Option Price"). The Option is intended to be a nonqualified stock
option and shall not be treated as an "incentive stock option" within
the meaning of that term under Section 422 of the Code, or any
successor provision thereto.
2. TERM OF OPTION. The term of the Option shall commence on the
Date of Grant and, unless earlier terminated in accordance with Section
6 hereof, shall expire ten (10) years from the Date of Grant.
3. RIGHT TO EXERCISE. Subject to Section 6 hereof, the Option
will be exercisable in whole at any time and in part from time to time
after the third anniversary of the Date of Grant but prior to the tenth
anniversary of the Date of Grant; provided, however that:
a. in the event that the employment with the Company
and its Subsidiaries terminates prior to the third anniversary
of the Date of Grant on account of (i) the Optionee's
retirement at or after age 65, (ii) the death of the Optionee
if such death occurs while the Optionee is employed by the
Company or any Subsidiary or (iii) the Optionee's permanent
and total disability if the Optionee becomes permanently and
totally disabled while an employee of the Company or any
Subsidiary, the Option will thereupon become exercisable
immediately with respect to all of the Optioned Shares; and
b. in the event that employment with the Company and
its Subsidiaries terminates prior to the third anniversary of
the Date of Grant other than on account of retirement at or
after age 65, death or permanent and total disability, the
Option will thereupon become exercisable immediately (i) as to
33 1/3% of the Optioned Shares if such termination occurs on
or after the first anniversary of the Date of Grant but prior
to the second anniversary of the Date of Grant, and (ii) as to
66 2/3% of the Optioned Shares if such termination occurs on
or after the second anniversary of the Date of Grant but prior
to the third anniversary of the Date of Grant.
16
Notwithstanding the foregoing, in no event shall the Optionee
be entitled to acquire a fraction of one Optioned Share pursuant to the
Option. The Optionee shall be entitled to the privileges of ownership
with respect to Optioned Shares purchased and delivered to the Optionee
upon the exercise of all or part of the Option.
4. OPTION NONTRANSFERABLE. The Option granted hereby shall be
neither transferable nor assignable by the Optionee other than by will
or by the laws of descent and distribution and may be exercised, during
the lifetime of the Optionee, only by the Optionee, or in the event of
his or her legal incapacity, by his or her guardian or legal
representative acting on behalf of the Optionee in a fiduciary capacity
under state law and court supervision.
5. NOTICE OF EXERCISE; PAYMENT. To the extent then exercisable,
the Option may be exercised by written notice to the Company stating
the number of Optioned Shares for which the Option is being exercised
and the intended manner of payment. Payment equal to the aggregate
Option Price of the Optioned Shares for which the Option is being
exercised shall be tendered in full with the notice of exercise to the
Company in cash in the form of currency or check or other cash
equivalent acceptable to the Company. The Optionee may also tender the
Option Price by (a) the actual or constructive transfer to the Company
of nonforfeitable, nonrestricted shares of Common Stock that have been
owned by the Optionee for (i) more than one year prior to the date of
exercise and for more than two years from the date on which the option
was granted, if they were originally acquired by the Optionee pursuant
to the exercise of an incentive stock option, within the meaning of
Section 422 of the Code or (ii) more than six months prior to the date
of exercise, if they were originally acquired by the Optionee other
than pursuant to the exercise of an incentive stock option, or (b) by
any combination of the foregoing methods of payment, including a
partial tender in cash and a partial tender in nonforfeitable,
nonrestricted shares of Common Stock. Nonforfeitable, nonrestricted
shares of Common Stock that are transferred by the Optionee in payment
of all or any part of the Option Price shall be valued on the basis of
their Market Value per Share. The requirement of payment in cash shall
be deemed satisfied if the Optionee makes arrangements that are
satisfactory to the Company with a broker that is a member of the
National Association of Securities Dealers, Inc. to sell on the
exercise date a sufficient number of Optioned Shares that are being
purchased pursuant to the exercise, so that the net proceeds of the
sale transaction will at least equal the amount of the aggregate Option
Price plus payment of any applicable withholding taxes, and pursuant to
which the broker undertakes to deliver to the Company the amount of the
aggregate Option Price plus payment of any applicable withholding taxes
on a date satisfactory to the Company, but not later than the date on
which the sale transaction will settle in the ordinary course of
business. As a further condition precedent to the exercise of the
Option, the Optionee shall comply with all regulations and requirements
of any regulatory authority having control of, or supervision over, the
issuance of shares of Common Stock and in connection therewith shall
execute any documents that the Board shall in its sole discretion deem
necessary or advisable. The date of the Optionee's written notice shall
be the exercise date.
6. TERMINATION OF AGREEMENT. This Agreement and the Option
granted hereby shall terminate automatically and without further notice
on the earliest of the following dates:
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(a) One (1) year after the Optionee's retirement at
or after age 65;
(b) One (1) year after the Optionee's death if such
death occurs while the Optionee is employed by the Company or
any Subsidiary;
(c) One (1) year after the Optionee's permanent and
total disability, if the Optionee becomes permanently and
totally disabled while an employee of the Company or any
Subsidiary;
(d) Except as provided on a case-by-case basis,
thirty (30) calendar days after the Optionee ceases to be an
employee of the Company and the Subsidiaries for any reason
other than as described in Section 6(a), 6(b) or 6(c) hereof;
or
(e) Ten (10) years from the Date of Grant.
In the event that the Optionee's employment is terminated for cause,
this Agreement shall terminate at the time of such termination
notwithstanding any other provision of this Agreement and the
Optionee's option will cease to be exercisable to the extent
exercisable as of such termination and will not become exercisable
after such termination. For purposes of this provision, "cause" shall
mean the Optionee shall have committed prior to termination of
employment any of the following acts:
(i) an intentional act of fraud, embezzlement,
theft, or any other material violation of
law in connection with the Optionee's duties
or in the course of the Optionee's
employment;
(ii) intentional wrongful damage to material
assets of the Company or any Subsidiary;
(iii) intentional wrongful disclosure of material
confidential information of the Company or
any Subsidiary;
(iv) intentional wrongful engagement in any
competitive activity that would constitute a
material breach of the duty of loyalty to
the Company or any Subsidiary; or
(v) intentional breach of any stated material
employment policy of the Company or any
Subsidiary.
This Agreement shall not be exercisable for any number of Optioned
Shares in excess of the number of Optioned Shares for which this
Agreement is then exercisable, pursuant to Sections 3 and 7 hereof, on
the date of termination of employment. For the purposes of this
Agreement, the continuous employment of the Optionee with the Company
shall not be deemed to have been interrupted, and the Optionee shall
not be deemed to have ceased
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to be an employee of the Company, by reason of the transfer of his or
her employment among the Company and the Subsidiaries or a leave of
absence approved by the Board.
7. ACCELERATION OF OPTION. The Option granted hereby shall become
immediately exercisable in full in the event of (i) a Change of
Control, (ii) the Optionee's retirement at or after age 65, (iii) the
death of the Optionee if such death occurs while the Optionee is
employed by the Company or any Subsidiary or (iv) the Optionee's
permanent and total disability if the Optionee becomes permanently and
totally disabled while an employee of the Company or any Subsidiary.
8. NO EMPLOYMENT CONTRACT. Nothing contained in this Agreement
shall confer upon the Optionee any right with respect to continuance of
employment by the Company or any Subsidiary, nor limit or affect in any
manner the right of the Company or any Subsidiary to terminate the
employment or adjust the compensation of the Optionee.
9. TAXES AND WITHHOLDING. To the extent that the Company shall
be required to withhold any federal, state, local or foreign taxes in
connection with the exercise of the Option, and the amounts available
to the Company for such withholding are insufficient, it shall be a
condition to the exercise of the Option that the Optionee shall pay
such taxes or make provisions that are satisfactory to the Company for
the payment thereof. The Optionee may elect to satisfy all or any part
of any such withholding obligation by (a) surrendering to the Company a
portion of the Optioned Shares that are issued or transferred to the
Optionee upon the exercise of the Option, and the Optioned Shares so
surrendered by the Optionee shall be credited against any such
withholding obligation at the Market Value per Share of such shares on
the date of such surrender or (b) utilizing the broker assistance
arrangement provided in Section 5.
10. COMPLIANCE WITH LAW. The Company shall make reasonable efforts
to comply with all applicable federal and state securities laws;
provided, however, notwithstanding any other provision of this
Agreement, the Option shall not be exercisable if the exercise thereof
would result in a violation of any such law.
11. ADJUSTMENTS. The Board may make or provide for such
adjustments in the number of Optioned Shares covered by the Option, in
the Option Price applicable to the Option, and in the kind of shares
covered thereby, as the Board, in its sole discretion, exercised in
good faith, may determine is equitably required to prevent dilution or
enlargement of the Optionee's rights that otherwise would result from
(a) any stock dividend, stock split, combination of shares,
recapitalization, or other change in the capital structure of the
Company, (b) any merger, consolidation, spin-off, split-off, spin-out,
split-up, reorganization, partial or complete liquidation, or other
distribution of assets or issuance of rights or warrants to purchase
securities, or (c) any other corporate transaction or event having an
effect similar to any of the foregoing. In the event of any such
transaction or event, the Board, in its discretion, may provide in
substitution for the Option such alternative consideration as it may
determine to be equitable in the circumstances and may require in
connection therewith the surrender of the Option.
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12. AVAILABILITY OF COMMON STOCK. The Company shall at all times
until the expiration of the Option reserve and keep available, either
in its treasury or out of its authorized but unissued shares of Common
Stock, the full number of Optioned Shares deliverable upon the exercise
of the Option.
13. AMENDMENTS. Any amendment to the Plan shall be deemed to be an
amendment to this Agreement to the extent that the amendment is
applicable hereto; provided, however, that no amendment shall adversely
affect the rights of the Optionee under this Agreement without the
Optionee's consent.
14. SEVERABILITY. In the event that one or more of the provisions
of this Agreement shall be invalidated for any reason by a court of
competent jurisdiction, any provision so invalidated shall be deemed to
be separable from the other provisions hereof, and the remaining
provisions hereof shall continue to be valid and fully enforceable.
15. RELATION TO PLAN. This Agreement is subject to the terms and
conditions of the Plan. In the event of any inconsistency between the
provisions of this Agreement and the Plan, the Plan shall govern.
Capitalized terms used herein without definition shall have the
meanings assigned to them in the Plan. The Board acting pursuant to the
Plan, as constituted from time to time, shall, except as expressly
provided otherwise herein, have the right to determine any questions
which arise in connection with the Option or its exercise.
16. SUCCESSORS AND ASSIGNS. Without limiting Section 4 hereof, the
provisions of this Agreement shall inure to the benefit of, and be
binding upon, the successors, administrators, heirs, legal
representatives and assigns of the Optionee, and the successors and
assigns of the Company.
17. GOVERNING LAW. The interpretation, performance, and
enforcement of this Agreement shall be governed by the laws of the
State of Ohio, without giving effect to the principles of conflict of
laws thereof.
18. NOTICES. Any notice to the Company provided for herein shall
be in writing to the Company and any notice to the Optionee shall be
addressed to the Optionee at his or her address on file with the
Company. Except as otherwise provided herein, any written notice shall
be deemed to be duly given if and when delivered personally or
deposited in the United States mail, first class certified or
registered mail, postage and fees prepaid, return receipt requested,
and addressed as aforesaid. Any party may change the address to which
notices are to be given hereunder by written notice to the other party
as herein specified (provided that for this purpose any mailed notice
shall be deemed given on the third business day following deposit of
the same in the United States mail).
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed on its behalf by its duly authorized officer and Optionee has
also executed this Agreement in duplicate, as of the day and year first
above written.
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PENTON MEDIA, INC.
By:
The undersigned Optionee hereby acknowledges receipt of an executed original of
this Stock Option Agreement.
Optionee
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