EXHIBIT 10.7
EMPLOYMENT AGREEMENT
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THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
April 19, 1999 by and between Advanstar, Inc., a Delaware corporation (the
"Company") and Xxxxxx X. ("Skip") Xxxxxx ("Executive").
WHEREAS, the Company currently operates certain trade exposition and
publishing businesses; and
WHEREAS, the Company wishes to continue to employ Executive and Executive
is prepared to continue to serve in those capacities required by the Company.
NOW, THEREFORE, the parties agree as follows:
1. Position and Authority. The Company agrees to employ the Executive,
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and the Executive accepts such employment and agrees to serve the Company as
Executive Vice President of the Company and any of its respective Subsidiaries
as may from time to time be requested by the Company, for the compensation and
benefits detailed in Sections 3 and 4 hereof. It is understood that the
Executive will report to the Chairman of the Board of Directors and Chief
Executive Officer or to the Vice Chairman of the Company. A "Subsidiary" shall
be any company in which the Company beneficially owns more than 50% of the
voting power of such company's outstanding voting securities.
2. Duties. Executive shall devote substantially all of his business time
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(subject to four weeks of vacation, or such greater amount as is authorized by
the Board of Directors) to the affairs of the Company during the employment
term, except as may be consented to by the Board of Directors. Executive shall
perform such duties and responsibilities as the Board of Directors or Chief
Executive Officer of the Company may determine from time to time. Executive
will not be required to relocate his permanent residence outside of greater
Boston, Massachusetts; provided that, if Executive and the Company agree that
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Executive will relocate his permanent residence to another city (a "New
Location") and perform his duties and responsibilities pursuant to the terms of
this contract at the Company's offices in the New Location, then Executive will
not be required to relocate his permanent residence outside the New Location.
3. Base Compensation and Bonus.
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(a) Base Composition. Executive will be compensated at a base salary
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rate of $310,000.00 per year (or such higher rate as may be set from time to
time by the Chief Executive Officer in his discretion) during the employment
term. Base compensation will be paid in installments on the same schedule as
the Company's Subsidiaries generally pay their employees. All compensation and
benefits will be subject to reduction by all federal, state, local and other
withholdings and similar taxes and payments required by applicable law.
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(b) Bonus for any Fiscal Year. The Executive shall be eligible to
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receive an annual bonus as determined by the Chief Executive Officer of the
Company in accordance with the Company's bonus plan, if any, that may be in
effect at such time; provided that any bonus payable under this Section 3(c)
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upon a termination of this Agreement by the Company without Cause (as defined
below) or by the Executive for Good Reason (as defined below) will be a Pro Rata
Bonus Amount (as defined below). Any bonus payable will be paid after the end
of the applicable fiscal year at the same time as other bonuses to senior
management are payable as determined by the Chief Executive Officer.
4. Benefits.
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(a) During Executive's employment by the Company, Executive will
receive the same (or substantially similar) employee benefits to those provided
by the Company or its Subsidiaries to other executive vice presidents from time
to time.
(b) During and after the employment term the Company agrees that if
Executive is made a party, or compelled to testify or otherwise participate in,
any action, suit or proceeding (a "Proceeding"), by reason of the fact that he
is or was a director or officer of the Company or any of its Subsidiaries,
Executive shall be indemnified by the Company as provided in Section 145 of the
Delaware General Corporation Law or (but not to any lesser extent) as authorized
by the Company's certificate of incorporation or bylaws or resolutions of the
company's Board of Directors against all cost, expense, liability, damage and
loss reasonably incurred or suffered by Executive in connection therewith, and
such indemnification shall continue as to Executive even if he has ceased to be
a director or officer of the Company or Subsidiary for the period of any
applicable statute of limitations or, if longer, for the period in which any
such Proceeding which commenced within the period of any such statute of
limitations is pending. The Company shall advance to Executive all reasonable
costs and expenses incurred by him in connection with a Proceeding within 20
days after receipt by the Company of a written request for such advance. Such
request shall include an itemized list of the costs and expenses and an
undertaking by Executive to repay the amount of such advance if it shall
ultimately be determined, in a final judgment for which the time to appeal has
expired, that, pursuant to applicable law, he is not entitled to be indemnified
against such costs and expenses.
(c) The Company will reimburse Executive for his reasonable and
customary business expenses, including travel, accommodations and meals.
5. Stock Options. Executive shall be eligible to be granted non-
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qualified stock options to purchase shares of the Common Stock, on such terms
and conditions as are customary for such grants by the Company; provided that
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nothing herein shall entitle Executive to any stock option grant.
6. Term. This Agreement shall have a term of three years from the
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Effective Date (the "Employment Term"), provided that Sections 9 and 10 shall
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survive such expiration in accordance with their terms.
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7. Termination.
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(a) This Agreement may be terminated by the Company at any time for
Cause upon written notice to Executive, which notice shall specify the reason
for termination. Such notice shall be given at any time prior to termination in
the case of matters described in clauses (B) or (C), and shall be given not less
than 30 days prior to the date of termination, in the case of matters described
in clauses (A), (D) or (E), and in the case of matters described in clauses (A),
(D) or (E) shall be rescinded if the Executive cures any misconduct, negligent
act, breach or failure giving rise to such notice to the reasonable satisfaction
of the Board of Directors, including curing any damage suffered by the Company
as a result thereof. As used herein, "Cause" shall mean (A) willful misconduct
or gross negligence by Executive in respect of his material obligations under
this Agreement, (B) commission of a felony involving moral turpitude, (C) theft
of Company property or other disloyal or dishonest conduct of the Executive that
materially xxxxx the Company or its business or (in the case of dishonest
conduct) undermines the confidence of the Board or the Chief Executive Officer
in the Executive, (D) willful breach of this Agreement, or (E) willful failure
to observe Company policies or carry out the directives of the Board of
Directors or the Chief Executive Officer of the Company.
(b) Executive may terminate this Agreement for Good Reason by giving
thirty (30) days prior written notice to the Company. "Good Reason" shall exist
only if (i) Executive is removed or is not re-appointed as one of the Company's
executive vice presidents, except in connection with termination of this
Agreement by the Company for Cause or due to death or Disability (as defined
below) or (ii) breach by the Company of any material obligation of the Company
under this Agreement.
(c) Should the Executive terminate this Agreement for Good Reason, or
should the Company terminate this Agreement without Cause, then the Executive
shall be entitled to receive, for a period of one year, the base salary provided
for in Section 3(a) and such bonus payable under Section 3(b) hereof, provided
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that any bonus under Section 3(b) will be payable only with respect to that
portion of the fiscal year in which Executive's employment was terminated (or
any prior fiscal year for which bonus remains unpaid)); bonus for any partial
fiscal year shall be determined by multiplying the bonus Executive would have
received had he continued to work for the Company during the entire fiscal year
by a fraction, the numerator of which is the number of days in the fiscal year
during which Executive was employed by the Company, and the denominator of which
is 365 (such amount the "Pro Rata Bonus Amount"). The Company shall have no
obligation to Executive under this Section 7(c) if Executive breaches the
provisions of the letter agreement referred to in Section 9. This clause (c)
shall not apply to a termination under clause (d) below.
(d) This Agreement shall terminate automatically upon Executive's
death. This Agreement may be terminated by the Company upon written notice to
Executive, or by Executive upon written notice to the Company, upon Executive's
Disability. For purposes of this Agreement, "Disability" means the Executive's
suffering of a disability which shall have prevented him from performing his
obligations hereunder for a period of at least 90 consecutive days or 120 non-
consecutive days in any 365 day period. In the event of termination of this
Agreement due to Executive's death or Disability, in addition to any salary due
to Executive as of
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the date of death or Disability and remaining unpaid, Executive shall be
entitled to receive, at such time as Executive would otherwise would have
received such sum, the Pro Rata Bonus Amount for the portion of the fiscal year
in which Executive's death or Disability occurred during which Executive was
employed by the Company.
(e) If the Company terminates this Agreement with Cause or if the
Executive terminates this Agreement without Good Reason, or if this Agreement is
terminated under clause (d) above, then the Executive shall, from the date of
such termination, no longer be entitled to any compensation or any bonus under
Sections 3 or 4 (other than, in the case of termination for Disability,
disability benefits as provided pursuant to Section 4 and, in the case of
termination for death or Disability, any bonus payable pursuant to clause (d)
above). Nothing in this clause (e) shall affect Executive's rights under
Company health and disability plans in which Executive participates to the
extent such plans provide for benefits to be paid following the termination of
employment.
(f) Termination of this Agreement shall not discharge any liability
(of either the Company or the Executive) existing at the date of termination.
Further, notwithholding any termination, the provisions of Sections 9 and 10
shall survive in accordance with their terms.
8. Effective Date. This Agreement shall take effect upon consummation of
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an underwritten public offering of the Company's equity securities under the
Securities Act of 1933, as amended (the "Effective Date").
9. Non-Competition and Confidentiality. Executive shall execute and
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deliver a letter agreement in the form of Exhibit A hereto.
10. Arbitration. Any claim arising out of or relating to this Agreement
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(including disputes regarding the presence or absence of "Cause" or "Good
Reason" in the event of a termination), or otherwise arising out of or relating
to the Executive's employment by the Company, will be subject to arbitration in
Boston, Massachusetts, in accordance with the Federal Arbitration Act and the
rules of the American Arbitration Association relating to commercial disputes.
The prevailing party in any such arbitration shall be entitled to recover from
the other party its reasonable expenses incurred in connection with such
arbitration, including the reasonable fees and expenses of counsel.
11. Severability. If any provision of this Agreement is determined to be
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invalid or unenforceable, it shall be adjusted rather than voided, to achieve
the intent of the parties to the extent possible, and the remainder of the
Agreement shall be enforced to the maximum extent possible.
12. Entire Agreement. This Agreement constitutes the entire agreement
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between Executive and the Company with respect to the terms and conditions of
the employment of Executive by the Company, and supersedes all prior or
concurrent arrangements, discussions, agreements or understandings with respect
to your employment.
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13. Governing Law. This Agreement shall be governed by the laws of the
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Commonwealth of Massachusetts without regard to principles of conflicts of law.
14. Notice. Any notice, or other written communication to be given
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pursuant to this Agreement for whatever reason shall be deemed duly given and
received (a) if delivered personally, from the date of delivery, or (b) by
certified mail, postage pre-paid, return receipt requested, three (3) days after
the date of mailing, addressed to the above parties as follows:
If to the Company:
Advanstar, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
with a copy to:
Xxxxxxx & Xxxxxxxx
Xxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxx
and
Xxxxx, Xxxxxxx & Xxxxxxxxx, LLP
High Street Tower
000 Xxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attn: F. Xxxxxx Xxxxxx, Esq.
If to Executive:
Skip Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
date and year first above written.
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ADVANSTAR, INC.
By: /s/ Xxxxxx. X. Xxxxxxx
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Xxxxxx. X. Xxxxxxx
Chairman and Chief Executive Officer
/s/ Skip Xxxxxx
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Xxxxxx X. ("Skip") Xxxxxx
Exhibit A
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Advanstar, Inc.
April 19, 1999
Xxxxxx X. ("Skip") Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
Dear Xx. Xxxxxx:
You are to be employed by Advanstar, Inc. (the "Company" and, together with
its subsidiaries "Advanstar"). In consideration of your employment with the
Company, you and the Company agree as follows:
1. Non-Competition. You agree that you will not, during the course of
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your employment with the Company or for the Non-Compete Period following the
termination of such employment, compete with Advanstar, as defined in paragraph
4 below. As used herein "Non-Compete Period" means (a) if your employment is
terminated by the Company without Cause (as defined therein) or by you for Good
Reason (as defined therein), six months or (b) if your employment is terminated
for any other reason, one year. If there is any conflict between the provisions
of this letter agreement and the provisions of any other agreement between you
and the Company in respect of the subject matter hereof, the provisions of this
agreement shall govern.
2. Confidentiality. You acknowledge that your association with Advanstar
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will bring you into close contact with many confidential affairs of Advanstar,
including information about costs, profits, markets, sales, publications, key
personnel, pricing policies, operational methods, other business affairs,
methods and other information not readily available to the public, and plans for
future development. In recognition of the foregoing, you covenant and agree
that you will keep confidential all material confidential to Advanstar that is
not otherwise in the public domain and that you will not intentionally disclose
any such information to anyone outside Advanstar or make any use thereof for
your own benefit or for any purpose other than the advancement of the business
of Advanstar at any time except with the prior written consent of Advanstar as
evidenced by a certified resolution of the Chief Executive Officer or the Board
of Directors of the Company. For purposes of this Agreement, the following
information shall be deemed not to constitute confidential information of
Advanstar:
(a) Any information developed independently by you;
(b) Information that was received by you from a third-party, which,
to your knowledge, is not bound by an agreement of
confidentiality with Advanstar; or
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(c) Any information that is in the public domain or generally
available to the public.
3. No Solicitation of Employees. You covenant that, for the duration of 1
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year after any termination of your employment for any reason, you will not, and
no person, corporation, partnership, or other entity over which you exercise
control (whether as an officer, director, sole proprietor, holder, debt or
equity securities, consultant, partner, or otherwise) will, directly or
indirectly (a) enter into any written or oral agreement or understanding
relating to the services of any person who is then employed by Advanstar or, in
the case of any employee other than secretaries, clerks and similar employees
fulfilling merely clerical functions, who has been so employed within the
preceding six months, or (b) solicit, or bid against Advanstar in an attempt to
be awarded, any trade show or exposition business, or any publishing contract,
from any party sponsoring or arranging any trade show or exposition, or
publishing or sponsoring any publication, in either case with which Advanstar
then has such a relationship or contract. If there is any conflict between the
provisions of this letter agreement and the provisions of any other agreement
between you and the Company in respect of the subject matter hereof, the
provisions of this agreement shall govern.
4. Certain Definitions. For purposes of this Letter Agreement,
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competition with Advanstar shall include carrying on any business that is
competitive with the business of Advanstar, in the United States or in any other
country in which Advanstar conducts business as of the termination of your
employment. For purposes of this Letter Agreement, (a) the business of
Advanstar will be deemed to include (without limitation) the organization of
trade shows and expositions of the type and with respect to the industries held
by Advanstar as of the termination of your employment (it being understood that
industry shall be analogized to the categories of the category system of the
Standard Rate Data Service) and the publication (including electronic
publication) of trade journals and other magazines aimed at the particular
businesses, industries or professions (as defined by category according to the
category system of the Standard Rate Data Service) at which Advanstar's
operations are aimed, and (b) each of the following activities (without
limitation) will be deemed to constitute to carrying on business: to engage in,
work with, have interest in, advise, lend money to, guarantee the debts or
obligations of, or permit one's name or any part thereof to be used in
connection with, an enterprise or endeavor either individually, in partnership,
or in conjunction with any person, firm, association, company, or corporation,
whether as principal, agent, shareholder (other than holding of less than 1% of
the voting securities of any public company or 5% of the voting securities of
any private company), employee, director, consultant, or in any other capacity
or manner whatsoever.
5. Severability. The scope and effect of the terms and provisions
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contained in this Letter Agreement (including the noncompetition covenant
contained in Section 1) will be as broad in time (but not beyond the time
periods specified herein), geography, and all other respects as is permitted by
applicable law. If arbitrators, a court, or another body of competent
jurisdiction determine that any term or provision of this Agreement is excessive
in scope, then if possible such term or provision will be adjusted (rather than
voided) in accordance with the purpose stated in the preceding sentence and with
applicable law, but in such a manner as to minimize the change in the provision.
If such term or provision cannot be so adjusted, then it
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will be struck. All other terms and provisions of this Letter Agreement will be
deemed valid and enforceable to the full extent possible.
6. Remedies. If any of the covenants or agreements in Sections 1, 2 or 3
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are violated or threatened to be violated, you agree and acknowledge that such
violation or threatened violation will cause irreparable injury to Advanstar,
and that the remedy at law of Advanstar for any such violation or threatened
violation will be inadequate and that Advanstar will be entitled to obtain any
injunction prohibiting a continuance or occurrence of such violations or
threatened violations in addition to (not in limitation of) any other rights or
remedies available at law or in equity. Your services hereunder are of a
special, unique, unusual, extraordinary character which gives them peculiar
value, the loss of which cannot be reasonably or adequately computed in damages.
The provisions of this Letter Agreement will be binding upon and inure to
the benefit of our respective heirs, executives, administrators, successors and
assigns. This Letter Agreement will be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.
Very truly yours,
ADVANSTAR, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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ACCEPTED AND AGREED:
/s/ Skip Xxxxxx
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Xxxxxx X. ("Skip") Xxxxxx
