Exhibit 10.16
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement ") is made as of October 8, 2001,
by and between Ziff Xxxxx Publishing Inc. ("Publishing"), a Delaware
corporation, and Xxxxxxx Xxxxxx ("Executive"). Certain definitions are set
forth in Section 9 of this Agreement.
Executive desires to be employed by Publishing, and Publishing desires to
employ Executive and to be assured of its right to have the benefit of
Executive's services on the terms and conditions hereinafter set forth.
NOW, THEREFORE, the parties hereto agree as follows:
1. Employment. Publishing shall employ Executive, and Executive hereby
accepts employment with Publishing, upon the terms and conditions set forth in
this Agreement for the period beginning on the date hereof and ending as
provided in Section 4 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as an Executive Vice
President of Publishing and shall have the normal duties, responsibilities and
authority of an executive vice president.
(b) Executive shall report to the Chairman, Chief Executive Officer or
President of Publishing, and Executive shall devote Executive's best efforts
and Executive's full business time and attention (except for permitted vacation
periods, periods of illness or other incapacity, reasonable time spent with
respect to civic and charitable activities and serving on the boards of
directors of other companies (provided that none of such activities shall
interfere with Executive's duties to Publishing), and other permitted absences
for which senior executive employees of Publishing are generally eligible from
time to time under Publishing's policies) to the business and affairs of
Publishing and its Affiliates. Executive shall perform Executive's duties and
responsibilities to the best of Executive's abilities in a diligent,
trustworthy, businesslike and efficient manner.
3. Base Salary; Benefits and Bonuses.
(a) During the Employment Period, Executive's base salary shall be not less
than $300,000 per annum, subject to an annual cost of living increase at the
beginning of each fiscal year beginning January 1, 2002 at a rate equal to the
increase in the Consumer Price Index--All Urban for the New York area during
the prior year, or such higher rate as the Board of Publishing may designate
from time to time (the "Base Salary"), which salary shall be payable in regular
installments in accordance with Publishing's general payroll practices and
shall be subject to customary withholding.
(b) In addition to the Base Salary, during the Employment Period, Executive
shall be eligible to receive an annual bonus (the "Bonus") in an amount
determined in accordance with Publishing's bonus plan, payable at the
discretion of the Board of the Company; provided that Executive's annual Bonus
target shall be $300,000 for the first year of the Employment Period, and
provided that Executive shall receive a minimum payment of 50% of the yearly
Bonus target during each year of the Employment Period. Any such Bonus, if
determined by the Board of the Company to be payable, shall be payable within
90 days following the end of each fiscal year during the Employment Period.
(c) During the Employment Period, Executive shall be entitled to participate
in all of Publishing's employee benefit plans and programs for which senior
executive employees of Publishing are generally eligible, which shall include,
but shall not be limited to, health insurance, dental insurance, life
insurance, disability insurance and participation in Publishing's 401(k) plan.
Executive's right to participate in any employee benefit plans or programs of
Publishing shall be subject to Publishing's right to amend, modify or terminate
any such plan or program in accordance with its terms and applicable law and
subject in each case to any applicable
waiting periods or other restrictions contained in such benefit plans or
programs. During the Employment Period, Executive shall be eligible for paid
vacation in accordance with the policies of Publishing for senior executive
employees of Publishing.
(d) Publishing shall reimburse Executive for all reasonable business
expenses incurred by Executive in the course of performing Executive's duties
under this Agreement which are consistent with Publishing's policies in effect
from time to time for senior executive employees of Publishing with respect to
travel, entertainment and other business expenses, subject to Publishing's
requirements with respect to reporting and documentation of such expenses.
(e) Publishing's parent company, Ziff Xxxxx Holdings Inc. ("Holdings"),
anticipates that it will consummate an equity restructuring in the near future,
and Holdings intends, promptly following the consummation of such
restructuring, to grant to Executive options to purchase shares of capital
stock pursuant to the terms of an executive stock agreement between Executive
and Holdings. The vesting commencement date under such executive stock
agreement shall be the date of the commencement of the Employment Period.
4. Term; Termination; Severance.
(a) The Employment Period shall be for a period of three years commencing on
October 8, 2001; provided that (i) the Employment Period shall terminate prior
to such date upon Executive's death or Incapacity; (ii) the Employment Period
may be terminated by Publishing at any time prior to such date with Cause or
without Cause; and (iii) the Employment Period may be terminated by Executive
at any time for any reason (a "Voluntary Termination"). Any termination of the
Executive's employment with Publishing shall be a "Termination." The date of
any termination of Executive's employment with Publishing shall be the
"Termination Date."
(b) Upon any Termination, Executive shall be entitled to receive Executive's
Base Salary earned through Executive's Termination Date, prorated on a daily
basis together with all accrued but unpaid vacation time earned by Executive
during the fiscal year in which such Termination occurs. Except as set forth in
Section 4(d), Executive shall not be entitled to receive Executive's Base
Salary or any bonuses or other benefits from Publishing for any period after
the Termination Date.
(c) In the event Executive's employment is terminated by Publishing with
Cause, upon a Voluntary Termination or upon Executive's death or Incapacity,
Publishing shall have no obligation to make any severance or other similar
payment to or on behalf of Executive.
(d) In the event that Executive's employment is terminated by Publishing
without Cause, or in the event that Executive is demoted from his position
without cause to a position in which Executive's responsibilities are
materially reduced from his current position, following such Termination or
demotion, and upon execution by Executive of a general release in favor of
Publishing and its Affiliates, in form satisfactory to Publishing, Publishing
shall pay Executive his annual Base Salary (as in effect on the Termination
Date) until (i) the 18 month anniversary of the Termination Date if Executive's
employment is so terminated prior to the 18 month anniversary of the date
hereof and (ii) one-year anniversary of the Termination Date if Executive's
employment is so terminated after the 18 month anniversary of the Employment
Period and prior to the expiration of the Employment Period. Each severance
payment hereunder shall be payable in accordance with Publishing's normal
payroll procedures and cycles and shall be subject to withholding of applicable
taxes and governmental charges in accordance with federal and state law. After
payment of the severance amounts described in this Section 4(d), Publishing
shall have no obligation to make any further severance or other payment to or
on behalf of Executive except as otherwise expressly contemplated hereby.
Notwithstanding the foregoing, in the event that Executive shall breach any of
Executive's obligations under Sections 5, 6 or 7 of this Agreement, then, in
addition to any other rights that Publishing may have under this Agreement or
otherwise, Publishing shall be relieved from and shall have no further
obligation to pay Executive any amounts to which Executive would otherwise be
entitled pursuant to this Section 4.
5. Confidential Information. Executive acknowledges that by reason of
Executive's duties to and association with the Publishing and its Affiliates,
Executive will have access to and will become informed of
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Confidential Information (as defined in Section 9 below) which is a competitive
asset of Publishing and/or its Affiliates. Executive agrees to keep in strict
confidence and not, directly or indirectly, make known, disclose, furnish, make
available or use, any Confidential Information, except for use in Executive's
regular authorized duties on behalf of Publishing and its Affiliates. Executive
acknowledges that all documents and other property including or reflecting
Confidential Information furnished to Executive by Publishing or any of its
Affiliates or otherwise acquired or developed by Publishing or any of its
Affiliates or Executive or known by Executive shall at all times be the
property of the Publishing and its Affiliates. Executive shall take all
necessary and appropriate steps to safeguard Confidential Information and
protect it against disclosure, misappropriation, misuse, loss and theft.
Executive shall deliver to Publishing at the termination of the Employment
Period, or at any other time Publishing may request, all memoranda, notes,
plans, records, reports, computer tapes, printouts and software and other
documents and data (and copies thereof) relating to the Confidential
Information, Work Product (as defined in Section 9 below) or the business of
Publishing or any of its Affiliates which Executive may then possess or have
under Executive's control.
6. Inventions and Patents.
(a) Executive acknowledges that all Work Product (as defined in Section 9
below) is the exclusive property of Publishing. Executive hereby assigns all
right, title and interest in and to all Work Product to Publishing. Any
copyrightable works that fall within the Work Product will be deemed "works
made for hire" under Section 201(b) of the 1976 Copyright Act, and Publishing
shall own all of the rights comprised in the copyright therein; provided,
however, that to the extent such works may not, by operation of law, constitute
"works made for hire," Executive hereby assigns to Publishing all right, title
and interest therein.
(b) Executive shall promptly and fully disclose all Work Product to
Publishing and shall cooperate and perform all actions reasonably requested by
Publishing (whether during or after the Employment Period) to establish,
confirm and protect Publishing's right, title and interest in such Work
Product. Without limiting the generality of the foregoing, Executive agrees to
assist Publishing, at Publishing's expense, to secure Publishing's rights in
the Work Product in any and all countries, including the execution of all
applications and all other instruments and documents which Publishing shall
deem necessary in order to apply for and obtain rights in such Work Product and
in order to assign and convey to Publishing the sole and exclusive right, title
and interest in and to such Work Product. If Publishing is unable because of
Executive's mental or physical incapacity or for any other reason (including
Executive's refusal to do so after request therefor is made by Publishing) to
secure Executive's signature to apply for or to pursue any application for any
United States or foreign patents or copyright registrations covering Work
Product belonging to or assigned to Publishing pursuant to paragraph 6(a)
above, then Executive hereby irrevocably designates and appoints Publishing and
its duly authorized officers and agents as Executive's agent and
attorney-in-fact to act for and in Executive's behalf and stead to execute and
file any such applications and to do all other lawfully permitted acts to
further the prosecution and issuance of patents or copyright registrations
thereon with the same legal force and effect as if executed by Executive.
Executive agrees not to apply for or pursue any application for any United
States or foreign patents or copyright registrations covering any Work Product
other than pursuant to this paragraph in circumstances where such patents or
copyright registrations are or have been or are required to be assigned to
Publishing.
7. Non-Compete, Non-Solicitation.
(a) In further consideration of the compensation to be paid to Executive
hereunder, Executive acknowledges that in the course of Executive's employment
with the Publishing and its Affiliates, he will during the Employment Period
become familiar with Publishing's and its Affiliates' (and their predecessors')
trade secrets, business plans and business strategies and with other
Confidential Information concerning Publishing and its predecessors and its
Affiliates and that Executive's services shall be of special, unique and
extraordinary value to the Publishing and its Affiliates. Therefore, Executive
agrees that, during the Employment Period and for a period of 18 months
thereafter (such period, the "Noncompete Period"), Executive shall not directly
or indirectly own any interest in, manage, control, participate in (whether as
an officer, director, employee, partner, agent, representative or otherwise),
consult with, render services for, or in any other manner engage in, any of the
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businesses (i) of International Data Group, Inc., CMP Media, Inc. (a subsidiary
of United News & Media PLC), or CNET Networks, Inc. (the "Restricted Persons"),
(ii) of any successor, assignee, partner, joint venture or collaboration
partner, subsidiary, division or Affiliate of any of the Restricted Persons, or
(iii) in which any of the Restricted Persons owns an interest or participates,
which any of the Restricted Persons manages or controls (whether as an officer,
director, employee, partner, agent, representative or otherwise), or with which
any of the Restricted Persons consults or to which any of the Restricted
Persons otherwise provides management or financial support. Nothing herein
shall prohibit Executive from being an owner, indirectly through a mutual fund
or other similar pooled investment vehicle, of a passive investment in the
stock of a corporation which is publicly traded, so long as Executive has no
other participation in the business of any such corporation.
(b) During the Employment Period and for a period of 18 months thereafter,
Executive shall not directly or indirectly through another Person (i) induce or
attempt to induce any employee of Publishing or any Affiliate to leave the
employ of Publishing or such Affiliate, or in any way interfere with the
relationship between Publishing or any Affiliate and any employee thereof, (ii)
hire any person who was an employee of Publishing or any Affiliate at any time
during the one year period prior to the termination of the Employment Period,
(iii) call on, solicit or service any customer, supplier, licensee, licensor,
franchisee or other business relation of Publishing or any Affiliate in order
to induce or attempt to induce such Person to cease or reduce doing business
with Publishing or such Affiliate, or in any way interfere with the
relationship between any such customer, supplier, licensee or business relation
and Publishing or any Affiliate (including, without limitation, making any
negative statements or communications about Publishing or its Affiliates) or
(iv) directly or indirectly acquire or attempt to acquire any business in the
United States of America to which Publishing or any of its Affiliates has made
an acquisition proposal prior to the Termination Date relating to the possible
acquisition of such business (an "Acquisition Target") by Publishing or any of
its Affiliates, or take any action to induce or attempt to induce any
Acquisition Target to consummate any acquisition, investment or other similar
transaction with any Person other than Publishing or any of its Affiliates.
8. Enforcement. If, at the time of enforcement of Sections 5, 6 or 7 of
this Agreement, a court shall hold that the duration, scope, or area
restrictions stated herein are unreasonable under circumstances then existing,
the parties hereto agree that the maximum period, scope or geographical area
reasonable under such circumstances shall be substituted for the stated period,
scope or area and that the court shall be allowed and directed to revise the
restrictions contained herein to cover the maximum period, scope and area
permitted by law. Because Executive's services are unique and because Executive
has access to Confidential Information and Work Product, the parties hereto
agree that money damages would not be an adequate remedy for any breach of this
Agreement. Therefore, in the event a breach or threatened breach of this
Agreement, Publishing or its successors or assigns may, in addition to other
rights and remedies existing in their favor, apply to any court of competent
jurisdiction for specific performance and/or injunctive or other relief in
order to enforce, or prevent any violations of, the provisions hereof (without
posting a bond or other security). In addition, in the event of an alleged
breach or violation by Executive of Section 7, the Period set forth in such
Section shall be tolled until such breach or violation has been duly cured.
Executive agrees that the restrictions contained in Section 7 are reasonable
and that Executive has received consideration in exchange therefor.
9. Definitions.
"Affiliate" of a Person means any other person, entity or investment fund
controlling, controlled by or under common control with the Person and, in the
case of a Person which is a partnership, any partner of the Person.
"Board" means the board of directors of the specified Person.
"Cause" means (i) the commission of a felony or a crime involving moral
turpitude or the commission of any other act or omission involving dishonesty
or fraud with respect to Publishing, any of its Affiliates or any of their
customers or suppliers, (ii) intentional or willful conduct which conduct
brings Publishing or any of its Affiliates into public disgrace or disrepute in
any material respect, (iii) substantial failure to perform (other than
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due to Incapacity) duties of the office held by Executive as reasonably
directed by the Chief Executive Officer or Board of Publishing which is not
cured within 15 days after notice thereof to Executive or which is incapable of
cure, (iv) gross negligence or willful misconduct with respect to Publishing or
any of its Affiliates, including but not limited to claims of sexual harassment
or inappropriate conduct for an executive, or (v) any breach of this Agreement
which is not cured within 15 days after notice thereof to Executive or which is
incapable of cure.
"Confidential Information" means all information of a confidential or
proprietary nature (whether or not specifically labeled or identified as
"confidential"), in any form or medium, that is or was disclosed to, or
developed or learned by, Executive in connection with Executive's relationship
with the Company or any of its Affiliates prior to the date hereof or during
the Employment Period and that relates to the business, products, services,
financing, research or development of the Company or any of its Affiliates or
their respective suppliers, distributors or customers. Confidential Information
includes, but is not limited to, the following: (i) internal business
information (including information relating to strategic and staffing plans and
practices, business, training, marketing, promotional and sales plans and
practices, cost, rate and pricing structures, accounting and business methods);
(ii) identities of, individual requirements of, specific contractual
arrangements with, and information about, any of the Company' or any of its
Affiliates' suppliers, distributors and customers and their confidential
information; (iii) trade secrets, know-how, compilations of data and analyses,
techniques, systems, formulae, research, records, reports, manuals,
documentation, models, data and data bases relating thereto; (iv) inventions,
innovations, improvements, developments, methods, designs, analyses, drawings,
reports and all similar or related information (whether or not patentable); and
(v) Acquisition Targets and potential acquisition candidates. Confidential
Information shall not include information that Executive can demonstrate: (a)
is or becomes publicly known through no wrongful act or breach of obligation of
confidentiality; (b) was rightfully received by Executive from a third party
(other than ZD, Inc. or any of its Affiliates) without a breach of any
obligation of confidentiality by such third party; (c) was known to Executive
prior to his employment with the Publishing and its Affiliates and prior to his
employment with ZD, Inc. or any of it Affiliates; or (d) is required to be
disclosed pursuant to any applicable law or court order; provided, however,
that Executive provides Publishing with prior written notice of the requirement
for disclosure that details the Confidential Information to be disclosed and
cooperates with Publishing to preserve the confidentiality of such information
to the extent possible.
"Incapacity" means the disability of Executive caused by any physical or
mental injury, illness or incapacity as a result of which Executive is unable
to effectively perform the essential functions of Executive's duties as
determined by the Board of Publishing in good faith, for a period of 90
consecutive days or a period of 120 days during any 180-day period; provided
that any determination of Incapacity shall be made in compliance with the
provisions of the Family Medical Leave Act.
"Person" means an individual or a corporation, partnership, limited
liability company, trust, unincorporated organization, association or other
entity.
"Work Product" means all inventions, innovations, improvements,
developments, methods, processes, designs, analyses, drawings, reports and all
similar or related information (whether or not patentable or reduced to
practice or comprising Confidential Information) and any copyrightable work,
trade xxxx, trade secret or other intellectual property rights (whether or not
comprising Confidential Information) and any other form of Confidential
Information, any of which relate to Publishing's or any of its Affiliates'
actual or anticipated business, research and development or existing or future
products or services and which were or are conceived, reduced to practice,
contributed to, developed, made or acquired by Executive (whether alone or
jointly with others) while employed (both before and after the date hereof) by
Publishing (or its predecessors, successors or assigns) and its Affiliates.
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10. Notices. Any notice provided for in this Agreement must be in writing
and must be either personally delivered, mailed by first class mail (postage
prepaid and return receipt requested) or sent by reputable overnight courier
service (charges prepaid) to the recipients at the address indicated below:
If to Executive: Xxxxxxx X. Xxxxxx
00 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
If to the Company: c/o Ziff Xxxxx Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Chief Executive Officer
with a copy to: Ziff Xxxxx Holdings Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: General Counsel
and Xxxxxx, Xxxxx & Partners II, L.P.
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxxxxx
and Xxxxxxxx & Xxxxx
000 Xxxx Xxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Breach
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 shall be deemed to have been given when so
delivered or sent or, if mailed, five days after deposit in the U.S. mail.
11. General Provisions.
(a) 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.
(b) Complete Agreement; Executive Stock Agreement. This Agreement, those
documents expressly referred to herein and other documents of even date
herewith embody the complete agreement and understanding among the parties and
supersede and preempt any prior understandings, agreements or representations
by or among the parties, written or oral, which may have related to the subject
matter hereof.
(c) Counterparts. This Agreement may be executed in separate counterparts,
each of which is deemed to be an original and all of which taken together
constitute one and the same agreement.
(d) Successors and Assigns. Except as otherwise provided herein, this
Agreement shall bind and inure to the benefit of and be enforceable by
Executive and Publishing and their respective successors and assigns; provided
that the rights and obligations of Executive under this Agreement shall not be
assignable.
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(e) Governing Law. All issues concerning this Agreement shall be governed
by and construed in accordance with the laws of the State of New York without
giving effect to any choice of law or conflict of law provision or rule
(whether of the State of New York or any other jurisdiction) that would cause
the application of the law of any jurisdiction other than the State of New York.
(f) Remedies. Each of the parties to this Agreement shall be entitled to
enforce its rights under this Agreement specifically, to recover damages and
costs (including reasonable attorney's fees) caused by any breach of any
provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that money damages would not be
an adequate remedy for any breach of the provisions of this Agreement and that
any party may in its sole discretion apply to any court of law or equity of
competent jurisdiction (without posting any bond or deposit) for specific
performance and/or other injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.
(g) Survival. The provisions set forth in Sections 5 through 10 shall
survive and continue in full force and effect in accordance with their terms
notwithstanding any termination of the Employment Period.
(h) Amendment and Waiver. The provisions of this Agreement may be amended
and waived only with the prior written consent of Publishing and Executive.
(i) Third-Party Beneficiary. The parties hereto acknowledge and agree that
the Company is a third party beneficiary of this Agreement. This Agreement will
inure to the benefit of and be enforceable by the Company and its successors
and assigns, subject to amendment or waiver as provided in subparagraph (h)
foregoing.
IN WITNESS WHEREOF, the parties hereto have executed this Executive
Agreement on the date first written above.
ZIFF XXXXX PUBLISHING INC.
By: _______________________
Chief Executive Officer
Its: ______________________
EXECUTIVE:
_____________________________
Xxxxxxx Xxxxxx
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