1
EXHIBIT 10.9
EMPLOYMENT AGREEMENT
BY AND AMONG
CMP MEDIA INC.
AND
XXXXXXX X. XXXX
DL&A
NOVEMBER 27, 1996
2
EMPLOYMENT AGREEMENT
TABLE OF CONTENTS
ARTICLE I - EMPLOYMENT
SECTION 1.1 Services...................................... 2
SECTION 1.2 Term.......................................... 2
SECTION 1.3 Representation and Warranties................. 3
SECTION 1.4 Intellectual Property......................... 3
ARTICLE II - COMPENSATION
SECTION 2.1 Base Salary................................... 4
SECTION 2.2 Incentive Bonus............................... 4
SECTION 2.3 Stock......................................... 4
SECTION 2.4 Fringe Benefits............................... 5
SECTION 2.5 Reimbursement of Expenses..................... 5
ARTICLE III - CONFIDENTIALITY; NON-COMPETITION
SECTION 3.1 Protection of Company's business Interests.... 6
SECTION 3.2 Non-Disclosure and Non-Use of Confidential
Information................................. 6
SECTION 3.3 Protection from Unfair Competition............ 7
SECTION 3.4 Prior Notice; Opportunity to Cure............. 10
SECTION 3.5 Other Post-Employment Covenants............... 12
SECTION 3.6 Confidentiality of Agreement.................. 13
SECTION 3.7 Relief for Breach............................. 14
SECTION 3.8 Separate Covenants............................ 15
ARTICLE IV - TERMINATION OF EMPLOYMENT
SECTION 4.1 Death......................................... 15
SECTION 4.2 Permanent Disability.......................... 15
SECTION 4.3 Dismissal Without Cause or Resignation For
Good Reason................................. 17
SECTION 4.4 Voluntary Resignation or Dismissal For Cause.. 18
SECTION 4.5 Retirement.................................... 18
ARTICLE V - PROCEDURE TO BE FOLLOWED IN CASE OF RESIGNATION FOR
GOOD REASON OR DISMISSAL FOR CAUSE
SECTION 5.1 Resignation for Good Reason................... 19
SECTION 5.2 Dismissal For Cause........................... 20
ARTICLE VI - RESOLUTION OF DISPUTES
SECTION 6.1 Arbitration................................... 21
3
SECTION 6.2 Equitable Remedies............................ 21
ARTICLE VII - DEFINITIONS............................................ 21
ARTICLE VIII - MISCELLANEOUS.........................................
SECTION 8.1 Entire Agreement; Binding Effect.............. 24
SECTION 8.2 Amendment..................................... 25
SECTION 8.3 Applicable Law................................ 25
SECTION 8.4 Severability.................................. 25
SECTION 8.5 No Waiver..................................... 25
SECTION 8.6 Notices....................................... 25
SECTION 8.7 Assignment.................................... 27
SECTION 8.8 Survival...................................... 27
SECTION 8.9 Headings...................................... 27
SECTION 8.10 Counterparts.................................. 27
4
EMPLOYMENT AGREEMENT
This Agreement, made and entered into on this 27th day of November, 1996,
by and between CMP Media Inc., a Delaware corporation (the "Company") and
Xxxxxxx X. Xxxx ("Xxx").
W I T N E S S E T H :
WHEREAS, Xxx is a key senior executive of the Company; and
WHEREAS, from his long employment with the Company, Xxx possesses
substantial knowledge, experience and expertise in the businesses in which the
Company is engaged; and
WHEREAS, the parties desire to set forth the terms under which Ken's
employment with the Company will continue and upon which he will refrain from
competing against the Company after the termination of his employment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties, the parties
hereto hereby covenant and agree as follows:
1
5
ARTICLE I
EMPLOYMENT
SECTION 1.1. SERVICES.
The Company shall employ Xxx, and Xxx shall serve the Company, as its
President of Publishing or in such other position as may be assigned to him from
time to time, and he shall perform such services and duties as are commensurate
with such position or as may be from time to time specified by the Company,
consistent with the other terms of this Agreement. At all times during his
employment with the Company, Xxx shall use his best efforts to promote the
interests of the Company and shall devote his full time and energies to the
business and affairs of the Company. Xxx shall not be obligated to perform
duties that would require him to report regularly to an office located more than
fifty (50) miles from Manhasset, New York; provided, however, that Xxx shall
undertake all such travel as may be necessary or appropriate to the performance
of his duties hereunder.
SECTION 1.2. TERM.
Ken's employment by the Company shall be deemed employment at will and
shall not be subject to a fixed term. Either Xxx or the Company may terminate
his employment at any time and for any reason, with or without cause, by
delivering written notice to the other party. If Xxx terminates his employment
by Voluntary Resignation, he shall give the Company not less than ninety (90)
days' prior written notice. In such event, the Company shall have the right to
waive all or part of such notice-period and accept Ken's Voluntary Resignation
effective as of any date prior to the expiration of such 90- day period.
2
6
SECTION 1.3. REPRESENTATIONS AND WARRANTIES.
(a) Xxx represents and warrants to the Company that (i) he has full legal
right, power and authority to enter into this Agreement and to consummate the
transactions herein contemplated; (ii) this Agreement constitutes the valid and
binding obligation of Xxx, enforceable in accordance with its terms, except to
the extent that such enforcement may be limited by applicable bankruptcy,
insolvency or similar laws affecting creditors' rights generally and by general
principles of equity; and (iii) neither this Agreement nor the consummation of
the transactions herein contemplated will conflict with, violate or infringe any
legal restriction, contract or instrument to which Xxx is subject or by which he
is bound.
(b) The Company represents and warrants to Xxx that (i) it has full legal
right, power and authority to enter into this Agreement and to consummate the
transactions herein contemplated; (ii) the execution and delivery of this
Agreement has been duly authorized by all necessary corporate action; (iii) this
Agreement constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general principles of equity; and
(iv) neither this Agreement nor the consummation of the transactions herein
contemplated will conflict with, violate or infringe any legal restriction,
contract or instrument to which the Company is subject or by which it is bound.
SECTION 1.4. INTELLECTUAL PROPERTY.
All ideas, designs, plans and materials developed by Xxx during the period
of his employment with the Company which relate to any business of the CMP Group
shall be the exclusive property of the Company. Xxx shall disclose all such
3
7
ideas, designs, plans and materials to the Company and shall not, without the
Company's prior written consent, use them except for the benefit of the Company.
At the Company's request and cost, Xxx shall take all such actions and shall
execute, acknowledge and deliver all such documents as the Company may deem
necessary or advisable in order to secure to the Company the rights thereto by
patent, copyright, trademark or otherwise.
ARTICLE II
COMPENSATION
SECTION 2.1. BASE SALARY.
As compensation for his services hereunder, the Company shall pay Xxx a
base salary at the rate of $500,000 per year.
SECTION 2.2. INCENTIVE BONUS.
In addition to his base salary, Xxx shall be entitled to participate in an
annual incentive bonus program based on the Company's achievement of its
financial goals and other objectives. The terms of such plan shall be as
determined by the Compensation Committee of the Board of Directors.
SECTION 2.3. STOCK.
In addition to his base salary and incentive bonus, Xxx shall have the
right, pursuant to and subject to the provisions of the Share Purchase Agreement
and the Option Agreement, to purchase restricted shares and option shares of the
Company's Class A Common Stock.
4
8
SECTION 2.4. FRINGE BENEFITS.
During his employment Xxx shall be entitled to participate in all employee
benefit plans which now or hereafter may be in effect for the benefit of
employees of the Company generally and for which he may qualify, subject to and
in accordance with the provisions of such plans as in effect from time to time.
SECTION 2.5. REIMBURSEMENT OF EXPENSES.
The Company shall reimburse Xxx for all reasonable out-of-pocket expenses
actually incurred by him in the performance of his services hereunder in
accordance with the Company's standard travel and business expense-reimbursement
policy as in effect from time to time.
ARTICLE III
CONFIDENTIALITY; NON-COMPETITION
In consideration of the Company's agreement to make post-employment
payments to Xxx under Article IV, which payments Xxx acknowledges and agrees
will provide full and sufficient income to support himself and his dependents
during the period in which such payments are made, and as a specific inducement
to the Company to enter into this Agreement, the Stockholders' Agreement and the
Option Agreement, Xxx hereby accepts and agrees to the provisions of this
Article III and acknowledges that such provisions are necessary and appropriate
for the reasonable protection of the Company's property, investments, business
relationships, economic advantages and goodwill.
5
9
SECTION 3.1. PROTECTION OF COMPANY'S BUSINESS INTERESTS.
As a key senior executive of the Company, Xxx has been intimately involved
in the management of all aspects of the business of the Company and its
Affiliates and has been a major strategist in planning and implementing its
business expansion. In the course of his long employment with the Company, Xxx
has developed special skills, knowledge and abilities in the publishing field
which are of a uniquely personal nature. He has also acquired detailed knowledge
of the internal operations of the Company and its Affiliates and highly
confidential information concerning the national and international business of
the Company and its Affiliates. In addition, he has been afforded the
opportunity to develop special relationships of confidence and trust with the
customers, suppliers, consultants, employees, officers, directors and
stockholders of the Company and its Affiliates. Because of his continuing
responsibilities with the Company and its Affiliates, including his involvement
in strategic planning and the evaluation of proposed investments, it is expected
that Xxx will continue to be entrusted with confidential information and will
continue to have the opportunity to develop such special relationships. The
parties acknowledge and agree that the Company would be unfairly and irreparably
damaged if Xxx were to take any of such skills, knowledge, information or
relationships, which he has acquired and developed during the course of his
employment with the Company, and use them to the detriment of the Company and
its Affiliates.
SECTION 3.2. NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION.
(a) Xxx represents, warrants, covenants and agrees that, without the
Company's express or implied consent while employed or, after termination,
without the prior written consent of the Company's chief executive officer or
the Board of Directors, he will not willfully or knowingly at any time directly
or
6
10
indirectly disclose, communicate or divulge, or use for the benefit of himself
or of any third party, any of the business or trade secrets or other
confidential information of the CMP Group including, solely by way of
illustration but not of limitation, their business strategies, business plans,
budgets, pricing, selling techniques, marketing techniques, operating systems,
financial systems, financial data, procedures, manuals, confidential reports,
personnel records, potential acquisitions, potential business expansions, credit
and financial data of their suppliers and of their present and prospective
customers, data about competitors, new product- development initiatives, custom
research and new product or service concepts and marketing strategy.
(b) Any and all materials of or concerning the CMP Group or their business
or affairs, including without limitation files, memoranda, notes,
correspondence, lists, records, video reproductions, computer tapes and disks,
design and other documents, and data storage and retrieval materials (and all
copies, compilations and summaries thereof), and any and all property of the CMP
Group, including without limitation equipment, software, keys, business cards
and credit cards, that are in Ken's custody or control shall be delivered to the
Company at the time Ken's employment with the Company terminates for any reason.
Xxx shall not destroy any such materials or property, shall not retain any
copies thereof and shall certify in writing to the Company upon request that all
such materials and property have been delivered to the Company.
SECTION 3.3. PROTECTION FROM UNFAIR COMPETITION.
(a) For as long as Xxx is employed by the CMP Group and through the period
ending on the earlier of (i) the fifth anniversary of the date of his
termination of employment or (ii) the date Xxx attains the age of sixty-five
(65), Xxx shall not engage in competition with the CMP Group. For the purposes
of this
7
11
Agreement, Xxx shall be deemed to engage in competition with the CMP
Group if Xxx does any of the following, whether or not in exchange for
consideration, without the Company's express or implied consent while employed
or without the Company's prior written consent after termination:
(A) On his own behalf or on behalf of any other person or entity,
(1) participates or is involved in or has direct responsibility for the
day-to-day management or operation of a Directly Competitive Business, an
Indirectly Competitive Business or any material function thereof (e.g.,
advertising, circulation, production and the like); (2) owns, in whole or in
part, beneficially or of record, directly or indirectly, an equity interest (or
an interest convertible into equity) in a Directly Competitive Business or a
Direct Competitor; (3) renders services as a director, officer, employee,
consultant, advisor, agent or independent sales representative to a Direct
Competitor; or (4) renders services as a director, officer, employee,
consultant, advisor, agent or independent sales representative to an Indirect
Competitor unless Xxx has no responsibility for or participation or involvement
in any Indirectly Competitive Business of such Indirect
Competitor, provided, however, that Xxx xxx have supervisory, advisory,
consulting or sales-representative responsibility over an Indirectly Competitive
Business if the revenue of all Indirectly Competitive Businesses of such
Indirect Competitor over which Xxx has such responsibility represents no more
than fifteen percent (15%) of the total revenue over which Xxx has such
responsibility.
(B) Solicits the service of any employee of the CMP Group for Ken's
own benefit or for the benefit of any person or entity other than the CMP Group,
or induces or helps to induce any such employee to leave employment with the CMP
Group.
(C) Assists, induces or helps any employee or former employee of the
CMP Group or any other person or entity to engage in competition with the CMP
Group or any of its business activities, provided that the giving of a
8
12
favorable reference by Xxx on behalf of such former employee shall not be
prohibited by this clause (C).
(D) Employs or causes any person or entity other than the CMP Group
to employ any former employee of the CMP Group within one (1) year after the
resignation of such former employee from the CMP Group.
(E) Willfully induces or attempts to induce any customer, supplier
or contractor of the Company to terminate any agreement or arrangement with the
Company, or willfully induces or attempts to induce any customer, supplier or
contractor, or any potential customer, supplier or contractor, of the Company
not to enter into any agreement or arrangement with the Company.
(F) Communicates publicly (other than pursuant to subpoena in a
legal proceeding) or to the press, or writes or produces for publication in any
medium, on the subject of, or with express or implied reference to, the CMP
Group or any of their former, current or future stockholders, directors,
officers or employees in their capacities as such. For the purpose hereof,
"implied reference" shall mean a reference that does not expressly name the CMP
Group or any of their former, current or future stockholders, directors,
officers or employees but that nevertheless would be understood by the average
reader or audience-member to refer thereto. It shall not be deemed a violation
of this clause (F) if, after the termination of his employment with the Company,
Xxx responds to inquiries from the public or the press solely by stating, in
form or substance, "I do not discuss any matters relating to CMP; please address
your inquiries directly to the company" or Xxx communicates the fact that he was
formerly employed by the Company and identifies the positions he held and the
dates thereof.
9
13
(b) Notwithstanding the provisions of paragraph (a) of this Section
3.3, Xxx shall not be deemed to be engaged in competition with the CMP Group
solely by reason of Ken's ownership of (i) an equity interest of less than
one-half of one percent (0.5%) in the securities of a Direct Competitor or
Indirect Competitor listed for trading on a national securities exchange or
quoted in the National Market List of NASDAQ or (ii) an interest in a mutual or
other investment fund which owns an interest in a Direct Competitor or Indirect
Competitor, provided that Xxx has no influence or control over the selection of
such fund's investment decisions.
SECTION 3.4. PRIOR NOTICE; OPPORTUNITY TO CURE.
(a) Xxx shall give the Company written notice at least twenty (20)
Business Days before entering into any relationship, transaction or business, or
engaging in any activity, or taking or omitting to take any action, which might
reasonably be deemed a breach of any provision of Section 3.2 or Section 3.3,
such notice to include full and complete particulars as to the proposed
relationship, transaction, activity, action or omission, the services or duties
contemplated and such other facts and circumstances as are reasonably necessary
for the Company to make an informed decision. The Company shall advise Xxx in
writing, within ten (10) Business Days after such notice is given, of the Board
of Directors' determination as to whether such relationship, transaction,
business, activity, action or omission would materially breach any of the
provisions of Section 3.2 or Section 3.3. In the event that, for reasons not
within his control, Xxx gives the Company less than twenty (20) Business Days'
prior written notice, the Company will endeavor in good faith to advise Xxx of
the Board of Directors' determination in less than ten (10) Business Days after
such notice is given, provided that the Company's failure to advise Xxx in less
than ten (10) Business Days shall not be deemed to constitute
10
14
consent to such relationship, transaction, business, activity, action or
omission and shall not give rise to any liability of the Company to Xxx or to
any third party.
(b) Once the Company has advised Xxx in writing that the Board of
Directors has determined that a proposed relationship, transaction, business,
activity, action or omission would not materially breach any of the provisions
of Section 3.2 or Section 3.3, and Xxx has thereupon entered into such
relationship, transaction or business or has begun to engage in such activity or
to take or omit to take such action, the Board of Directors shall have no right
to reverse or otherwise modify its determination; provided, however, that if the
nature, scope or terms of such relationship, transaction, business, activity,
action or omission are to be modified after such determination is made, then in
accordance with paragraph (a) hereof Xxx shall give the Company prior written
notice of such modification and the Company shall advise him as to whether such
relationship, transaction, business, activity, action or omission, as so
modified, would materially breach any of the provisions of Section 3.2 or
Section 3.3.
(c) In the event that, without having given the Company prior notice
pursuant to paragraphs (a) or (b) hereof, Xxx enters into any relationship,
transaction or business or begins to engage in any activity or to take or omit
to take any action, or there is a modification of the nature, scope or terms of
such relationship, transaction, business, activity, action or omission that the
Board of Directors determines is a material breach of any of the provisions of
Section 3.2 or Section 3.3, the Company shall give Xxx written notice of such
determination and, if such breach is continuing, an opportunity to cure such
breach before the Company seeks remedy or relief by judicial process or
arbitration. The opportunity to cure shall be sixty (60) days to the extent such
continuing breach consists of holding an ownership interest in a competitive
business and fifteen (15) days with respect to any other continuing breach.
11
15
SECTION 3.5. OTHER POST-EMPLOYMENT COVENANTS.
(a) During the period in which the Company is making payments to Xxx
pursuant to Article IV, Xxx shall not willfully take any action materially
adverse to the interests of the Company, even if such action is in technical
compliance with the other provisions of this Article III, but shall at all times
conduct himself in the same manner and with the same degree of loyalty to the
Company as if he were still an employee of the Company.
(b) During the period in which the Company is making payments to Xxx
pursuant to Article IV, Xxx shall make himself available to the Company for
consultation and advice at such times as it may reasonably request and as do not
unreasonably interfere with Ken's other permitted business activities or
commitments. Xxx shall not be required to be physically present at any office of
the Company or to allocate regular time to making himself available for such
consultation or advice, provided that he shall respond timely to any requests by
the Company for consultation. Xxx shall maintain, at his own expense, an office
at his home with all furniture and equipment necessary to carry out his
obligations under this Section 3.5(b). The Company shall reimburse Xxx for all
reasonable out-of-pocket expenses he incurs in rendering such consultation or
advice (other than expenses of maintaining his home office).
(c) Both during the period in which the Company is making payments to Xxx
pursuant to Article IV and thereafter, Xxx shall, if requested by the Company,
provide information, testimony and assistance in connection with the prosecution
or defense of any claims by or against the Company arising out of matters of
which he acquired knowledge while an employee of the Company. The Company shall
reimburse Xxx for all reasonable out-of-pocket expenses he incurs in rendering
such assistance.
12
16
(d) Both during the period in which the Company is making payments to Xxx
pursuant to Article IV and thereafter, Xxx shall not willfully make any oral or
written statement which reflects adversely upon the character, honesty, credit,
efficiency or business practices of the CMP Group or its former, current or
future stockholders, directors, officers or employees in their capacities as
such.
SECTION 3.6. CONFIDENTIALITY OF AGREEMENT.
The terms and conditions of this Agreement shall be kept confidential by
the parties, and neither of the parties shall disclose them to any non-party
unless such disclosure is necessitated by (a) legal and/or financial
requirements of the Company, in which case the form of such disclosure shall
first be mutually agreed upon by the Company and Xxx, or (b) any arbitration or
other legal proceeding contesting or seeking to enforce any provision or
interpretation of this Agreement (including any deposition or testimony that
either party provides in connection therewith), regardless of whether such
proceeding is initiated by Xxx or the Company. Except as provided in the
preceding sentence, and without limiting the generality of the foregoing, Xxx
shall not respond to or in any way participate in or contribute to any public
discussion, notice or other publicity concerning or in any way relating to
execution of this Agreement or the events (including any negotiations) which led
to its execution, and Xxx specifically agrees that he shall not disclose
information regarding this Agreement to any current or former employees of the
Company other than those expressly authorized by the Company to have knowledge
hereof. Without limiting the comprehensive confidentiality agreed to, Xxx xxx
disclose this Agreement to his attorneys, financial advisors and members of his
and his spouse's immediate families, provided he informs them of this
confidentiality provision and they agree to abide by it. Xxx hereby agrees that
any disclosure by him of any of the terms and conditions of this Agreement in
13
17
violation of the foregoing shall constitute and be treated as a material breach
of this Agreement and Xxx shall be responsible for damages occasioned thereby,
including but not limited to reasonable attorneys' fees incurred by the Company
to enforce this Section 3.6.
SECTION 3.7. RELIEF FOR BREACH.
(a) Xxx acknowledges and agrees that any breach or anticipatory breach by
him of any of the provisions of this Article III would cause the Company
irreparable injury not compensable by monetary damages alone and that,
accordingly, in any such event, the Company shall be entitled to injunctions,
both preliminary and permanent, enjoining or restraining such breach or
anticipatory breach (and Xxx hereby consents to the issuance thereof without
bond by any court of competent jurisdiction), in addition to monetary damages in
such amount as the evidence may show and such other remedies as may be available
at law or in equity.
(b) Xxx shall not have the power or right to avoid any of his obligations
under this Article III by refusing or failing to accept from the Company payment
of any amounts duly tendered to him by the Company pursuant to Article IV. It
shall not be a valid defense, and Xxx shall not raise as a defense, in any
proceeding by the Company to enforce its rights under this Article III that Xxx
shall have refused or failed to accept any such payments, and the right of the
Company to equitable relief under this Article III shall be in no way impaired
or affected by Ken's refusal or failure to accept any such payments from the
Company.
14
18
SECTION 3.8. SEPARATE COVENANTS.
Xxx understands and agrees that the covenants contained in this Article
III constitute a series of separate covenants, one for each applicable state in
the United States and the District of Columbia, and one for each applicable
foreign country. If in any judicial proceeding a court shall hold unenforceable
any of the separate covenants included in this Article III, such unenforceable
covenant or covenants shall be deemed limited as necessary or eliminated from
the provisions of this Article III for the purpose of such proceeding to the
extent necessary to permit the remaining separate covenants of this Article III
to be enforced in such proceeding, and to permit such unenforceable covenant or
covenants to be enforced as limited.
ARTICLE IV
TERMINATION OF EMPLOYMENT
SECTION 4.1. DEATH.
In the event of Ken's death, his employment with the Company shall
immediately terminate, and no compensation or other rights shall accrue to Xxx
or his estate under this Agreement after the date of termination, other than
benefits which shall accrue after such date pursuant to the terms of Company
benefit plans in which Xxx participated on the date of termination, which
benefits shall be paid in accordance with the terms of such plans. Xxx or his
estate shall be entitled to receive from the Company any compensation that was
earned but unpaid as of the date of termination of his employment.
SECTION 4.2. PERMANENT DISABILITY.
(a) In the event that Ken's employment with the Company terminates by
reason of his Permanent Disability, no compensation or other rights shall accrue
to
15
19
Xxx under this Agreement after the date of termination, other than benefits
which accrue after such date pursuant to the terms of Company benefit plans in
which Xxx participated on the date of termination, which benefits shall be paid
in accordance with the terms of such plans. Xxx shall be entitled to receive
from the Company any compensation that was earned but unpaid as of the date of
termination of his employment.
(b) In the event that, within five (5) years after such termination of his
employment, Xxx recovers from such Permanent Disability to the extent that he is
able to resume his former position as a Key Senior Executive of the Company, he
shall so notify the Company, and the Company shall have the right to have him
examined by its designated medical doctor. If the Company determines that Xxx is
able, with or without reasonable accommodation, to perform the essential
functions of such former position, it may re-hire him or, if it declines to
re-hire him, the Company shall, in consideration of Ken's compliance with the
restrictive covenants set forth in Article III, pay him through the period
ending on the earlier of (a) the fifth anniversary of the date of his
termination of employment or (b) the date Xxx attains the age of sixty-five
(65), the amount of $750,000 per year (pro rated for partial years) less fifty
percent (50%) of (i) any current cash compensation, and (ii) the present value
of any deferred cash compensation, that he earns from other sources as an
employee, consultant, partner or proprietor during each such year. Payments
shall be made in bi-weekly installments or on such other periodic basis as the
Company then makes salary payments to its employees generally.
(c) In the event that the Company determines that Xxx is not able, with or
without reasonable accommodation, to perform the essential functions of his
former position as a Key Senior Executive of the Company, the Company shall not
be obligated to re-hire Xxx or to pay him any monies hereunder. Xxx shall
16
20
continue to be subject to the provisions of Section 3.4, however, and shall duly
give the Company any notices he is required to give thereunder; provided,
however, that the Company shall not be entitled to enforce any of its other
rights under Article III hereof, or its rights under Section 3.4(b) or Section
4.5 of the Stockholders' Agreement or under Section 6.6(b) of the Option
Agreement, unless the Company pays him in accordance with the provisions of
paragraph (b) of this Section 4.2 with effect from the date such notice is given
through the earlier of (i) the fifth anniversary of the date of his termination
of employment or (ii) the date Xxx attains the age of sixty-five (65), and the
willful failure by the Company so to pay Xxx hereunder shall constitute a waiver
of such rights by the Company.
SECTION 4.3. DISMISSAL WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON.
In the event that Ken's employment with the Company terminates by reason
of his Dismissal Without Cause or his Resignation For Good Reason, the Company
shall, in consideration of Ken's compliance with the restrictive covenants set
forth in Article III and in lieu of any other severance obligations to Xxx, pay
him through the period ending on the earlier of (a) the fifth anniversary of the
date of his termination of employment or (b) the date Xxx attains the age of
sixty-five (65), the amount of $1,500,000 per year (pro rated for partial years)
less fifty percent (50%) of (i) any current cash compensation, and (ii) the
present value of any deferred cash compensation, that he earns from other
sources as an employee, consultant, partner or proprietor during each such year.
Payments shall be made in bi-weekly installments or on such other periodic basis
as the Company then makes salary payments to its employees generally.
17
21
SECTION 4.4. VOLUNTARY RESIGNATION OR DISMISSAL FOR CAUSE.
In the event that Ken's employment with the Company terminates as a result
of his Voluntary Resignation or Dismissal For Cause, the Company shall , in
consideration of Ken's compliance with the restrictive covenants set forth in
Article III and in lieu of any other severance obligations to Xxx, pay him
through the period ending on the earlier of (a) the fifth anniversary of the
date of his termination of employment or (b) the date Xxx attains the age of
sixty-five (65), the amount of $750,000 per year (pro rated for partial years)
less fifty percent (50%) of (i) any current cash compensation, and (ii) the
present value of any deferred cash compensation, that he earns from other
sources as an employee, consultant, partner or proprietor during each such year.
Payments shall be made in bi-weekly installments or on such other periodic basis
as the Company then makes salary payments to its employees generally.
SECTION 4.5. RETIREMENT.
In the event that Ken's employment with the Company terminates by reason
of his retirement at or after the date Xxx attains the age of sixty-five (65),
the Company shall have the right, but not the obligation, to require Ken's
continued compliance with the restrictive covenants set forth in Article III for
such period of time (not to exceed five (5) years) as the Company may elect, in
consideration of which the Company shall pay Xxx, during the period of time so
elected by the Company, the amount of $750,000 per year (pro rated for partial
years) less fifty percent (50%) of (i) any current cash compensation, and (ii)
the present value of any deferred cash compensation, that he earns from other
sources as an employee, consultant, partner or proprietor during each such year.
Payments shall be made in bi-weekly installments or on such other periodic basis
as the Company then makes salary payments to its employees generally.
18
22
ARTICLE V
PROCEDURE TO BE FOLLOWED IN CASE OF
RESIGNATION FOR GOOD REASON OR DISMISSAL FOR CAUSE
SECTION 5.1. RESIGNATION FOR GOOD REASON.
In the event Xxx terminates his employment with the Company as a
Resignation For Good Reason, Xxx shall give the Company at least ten (10)
Business Days' prior written notice specifying in reasonable detail the specific
conduct of the Company that he considers grounds for Resignation For Good Reason
and the specific provision of the definition of "Resignation For Good Reason"
upon which he relies. Ken's employment with the Company shall terminate as of
the tenth Business Day after such notice is given, or such other date as the
parties mutually agree. Should the Company dispute the basis for such
resignation in a written notice given to Xxx on or before his termination date,
the parties shall meet and endeavor to resolve the dispute amicably within the
twenty (20) Business Days after the Company's notice is given. If they cannot so
resolve the dispute within such twenty (20) Business Days after the Company's
notice is given, Xxx and the Company shall submit the dispute to binding
arbitration in accordance with Section 6.1. The decision rendered in such
arbitration shall be final and binding on both Xxx and the Company for all
purposes. If the arbitrators determine that Xxx did not have a proper basis on
which to terminate his employment as Resignation For Good Reason within the
meaning of this Agreement, the termination of Ken's employment shall be treated
for all purposes of this Agreement as a Voluntary Resignation. In addition to
any other rights which a party may have, the party prevailing in such
arbitration proceeding shall be entitled to recover from the losing party any
and all of the expenses incurred by the prevailing party in such proceeding,
including reasonable attorney's fees.
19
23
SECTION 5.2. DISMISSAL FOR CAUSE.
In the event the Company terminates Ken's employment as a Dismissal For
Cause, the Company shall give Xxx at least ten (10) Business Days' prior written
notice specifying in reasonable detail the specific conduct of Xxx that it
considers grounds for Dismissal For Cause and the specific provision of the
definition of "Dismissal For Cause" upon which it relies. Ken's employment with
the Company shall terminate as of the tenth Business Day after such notice is
given, or such other date as the parties mutually agree. Should Xxx dispute the
basis for such termination in a written notice given to the Company on or before
his termination date, the parties shall meet and endeavor to resolve the dispute
amicably within twenty (20) Business Days after Ken's notice is given. If they
cannot so resolve the dispute within such twenty (20) Business Days after Ken's
notice is given, Xxx and the Company shall submit the dispute to binding
arbitration in accordance with Section 6.1. The decision rendered in such
arbitration shall be final and binding on both Xxx and the Company for all
purposes. If the arbitrators determine that the Company did not have a proper
basis on which to terminate Ken's employment as a Dismissal For Cause within the
meaning of this Agreement, the termination of Ken's employment shall be treated
for all purposes of this Agreement as a Dismissal Without Cause. In addition to
any other rights which a party may have, the party prevailing in such
arbitration proceeding shall be entitled to recover from the losing party any
and all of the expenses incurred by the prevailing party in such proceeding,
including reasonable attorney's fees.
20
24
ARTICLE VI
RESOLUTION OF DISPUTES
SECTION 6.1. ARBITRATION.
Except as provided in Section 6.2, all controversies arising out of or
relating to this Agreement or the breach hereof shall be settled by arbitration
in the County of Nassau, State of New York, in accordance with the rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. Any
arbitration hereunder shall be before three (3) arbitrators.
SECTION 6.2. EQUITABLE REMEDIES.
Notwithstanding the provisions of Section 6.1, any proceeding for
injunctive relief or specific performance in connection with this Agreement
shall be commenced in Supreme Court of the State of New York, County of Nassau,
and each of the parties hereby accepts the exclusive jurisdiction of such Court
for such purpose; provided, however, that the petitioner may commence such
proceeding in such other court as may be necessary, in the petitioner's
judgment, in order to more effectively or expeditiously obtain personal
jurisdiction over the respondent.
ARTICLE VII
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliates" shall mean all entities controlling, controlled by or under
common control with the Company.
"Board of Directors" shall mean the Board of Directors of the Company.
21
25
"Business Day" shall mean any day on which the Company is scheduled to be
open for business.
"CMP Business" shall mean any publication, product, service or business
(a) which the CMP Group publishes, produces, provides or engages in or (b) which
the CMP Group has a bona fide plan or intention to publish, produce, provide or
engage in within the succeeding 12-month period, the research and development of
which the CMP Group has devoted substantive time and attention to, and which
plan or intention Xxx has actual knowledge of before he engages in any activity
competitive with such CMP Business as contemplated by clause (A) of Section
3.3(a).
"CMP Group" shall mean the Company or any of its Affiliates.
"Direct Competitor" shall mean a business enterprise that produces or
operates, or owns directly or indirectly an interest of twenty percent (20%) or
more in, one or more Directly Competitive Businesses.
"Directly Competitive Business" shall mean any competitive publication,
product, service or business (a) the target audience of which is substantially
the same as the target audience of a CMP Business or (b) forty percent (40%) or
more of the annual revenue of which is derived from substantially the same
customers as a CMP Business derives twenty percent (20%) or more of its annual
revenue.
"Dismissal For Cause" shall mean the termination of Ken's employment with
the Company by the Board of Directors for (i) the willful and continued failure
of Xxx substantially to perform his duties as an officer and employee of the
Company or comply with the written policies of the Company after the Company has
delivered to Xxx a written demand for substantial performance or compliance that
specifies such failure in reasonable detail; (ii) illegal conduct or gross
misconduct by Xxx, in either case that is willful and results (or is reasonably
likely to result) in material damage to the business or reputation of the
Company; or (iii)
22
26
the resignation by Xxx from his employment following his act or omission which
would constitute grounds for Dismissal For Cause hereunder. No act or failure to
act on the part of Xxx (other than non-compliance with lawful instructions given
to Xxx by the Company) shall be considered "willful" unless it is done or
omitted to be done by him in bad faith or without reasonable belief that his
action or omission was in the best interests of the Company. Any act or failure
to act that is pursuant to resolution duly adopted by the Board of Directors
shall be conclusively presumed to be done or omitted to be done by Xxx in good
faith and in the best interests of the Company.
"Dismissal Without Cause" shall mean the termination of Ken's employment
by the Company on any grounds other than grounds for Dismissal For Cause or as a
result of his Permanent Disability.
"Indirect Competitor" shall mean a business enterprise that does not
produce or operate, or own directly or indirectly an interest in, any Directly
Competitive Businesses but produces or operates, or owns directly or indirectly
an interest of twenty percent (20%) or more in, one or more Indirectly
Competitive Businesses.
"Indirectly Competitive Business" shall mean any competitive or
potentially competitive publication, product, service or business which derives
from twenty percent (20%) to but not including forty percent (40%) of its annual
revenue from substantially the same customers as a CMP Business derives twenty
percent (20%) or more of its annual revenue.
"Option Agreement" shall mean that certain Option Agreement entered into
as of the date hereof by and between the Company and Xxx.
"Permanent Disability" shall mean a physical or mental impairment, as a
result of which Xxx shall have been unable, with or without reasonable
23
27
accommodation, to perform the essential functions of his employment position for
a period of at least sixteen (16) weeks during any 12-month period.
"Resignation For Good Reason" shall mean Ken's resignation from his
employment with the Company after the Company has (i) materially reduced his
package of compensation and benefits, (ii) materially diminished his position,
authority, duties or responsibilities, or (iii) required him to report regularly
to an office located more than fifty (50) miles from Manhasset, New York. Any
reduction in Ken's compensation package made pursuant to the written
compensation plan between Xxx and the Company dated as of the date hereof shall
not be deemed grounds for Resignation For Good Reason.
"Share Purchase Agreement" shall mean that certain Share Purchase
Agreement entered into as of the date hereof by and among Xxxxxx X. Xxxxx,
Xxxxxxxxx X. Xxxxx and Xxx.
"Voluntary Resignation" shall mean Ken's resignation from his employment
with the Company on any grounds other than grounds for Resignation For Good
Reason or as a result of his Permanent Disability.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. ENTIRE AGREEMENT; BINDING EFFECT.
This Agreement contains all of the terms agreed upon by the parties with
respect to the subject matter hereof and replaces and supersedes any and all
prior agreements, written or oral, between the parties relating to the terms of
Ken's employment with the Company. No promises, agreements or representations
with respect to the matters herein contained shall be binding upon any of the
parties unless set forth herein. This Agreement shall be binding upon and inure
to the benefit of the parties and their respective heirs, representatives,
successors and permitted assigns.
24
28
SECTION 8.2. AMENDMENT.
No provision of this Agreement may be amended or waived except by a
writing making reference to this Agreement and signed by the party against whom
the enforcement of such amendment or waiver is sought.
SECTION 8.3. APPLICABLE LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without reference to its
principles regarding choice or conflicts of law.
SECTION 8.4. SEVERABILITY.
Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provisions hereof shall be prohibited by or invalid under any such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
without invalidating or nullifying the remainder of such provision or any other
provision of this Agreement.
SECTION 8.5. NO WAIVER.
No delay or omission by any party in exercising or enforcing any right
hereunder shall operate as a waiver of such right, and a waiver on one occasion
shall not be construed as a waiver of any right or remedy on any future
occasion.
SECTION 8.6. NOTICES.
All notices, requests, consents, designations and demands required or
permitted to be given under this Agreement shall be in writing and shall be
deemed
25
29
to have been duly given (a) when personally delivered to an individual
party or to an authorized officer of a corporate party, whether by messenger,
courier or other person, (b) on the second Business Day after the date it is
sent by certified or registered mail, return receipt requested, or (c) on the
next Business Day after the date it is sent via telefacsimile (provided it is
actually received and is not materially illegible), as follows:
If to the Company:
CMP Media Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
CMP Media Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
If to Xxx:
Xxxxxxx X. Xxxx
x/x Xxxxxxxx, Xxxxxxx, Xxxxxx & Xxxxxxx
Xxx Xxxxxxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxx, Esq.
Fax: (000)000-0000
with a copy to Xxx at his last known address as reflected on the records of
the Company
26
30
or to such other mail or facsimile address as the recipient party shall have
last designated by notice given to the other in accordance herewith.
SECTION 8.7. ASSIGNMENT.
This Agreement is a contract for personal services and, without the
Company's prior written consent, Xxx xxx not assign, delegate or transfer any of
his rights or obligations hereunder. The Company may not, without Ken's prior
written consent, assign any of its rights or delegate any of its obligations or
liabilities under this Agreement to any person or entity other than an entity
that controls, is controlled by or is under common control with the Company;
provided, however, that no such assignment or delegation shall relieve the
Company from its obligations or liabilities hereunder.
SECTION 8.8. SURVIVAL
This Agreement shall survive any merger, sale or other disposition of the
Company and shall survive the termination of Ken's employment with the Company.
SECTION 8.9. HEADINGS.
The headings herein are for convenience of reference only and shall not be
considered in construing this Agreement.
SECTION 8.10. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed as an original and all of which shall together constitute
one and the same instrument.
27
31
IN WITNESS WHEREOF, Xxx has executed this Agreement and the Company has
caused this Agreement to be executed by an officer thereunto duly authorized on
the day and year first above written.
CMP MEDIA INC.
By /s/XXXXXXX X. XXXXX
---------------------------
Name: Xxxxxxx X. Xxxxx
Title: President
Attest:
/s/XXXXXX X. XXXXXXXXX
---------------------------------
(CORPORATE SEAL)
/s/XXXXXXX X. XXXX
-------------------------------
XXXXXXX X. XXXX
28
