EXHIBIT 10.34
EMPLOYMENT AGREEMENT
Agreement, dated as of March 1, 2000, between Xxxx-Xxxxx Inc., a Delaware
corporation (the "Employer" or "Xxxx-Xxxxx"), and Xxxxxxx X. Xxxxx (the
"Executive").
WHEREAS, ZD Events Inc., a Delaware corporation ("ZD Events"), is a wholly
owned subsidiary of Xxxx-Xxxxx engaged in the business of conducting trade
shows, conferences and other events (the "Events Business"); and
WHEREAS, Xxxx-Xxxxx intends to (a) contribute the stock of all of its
subsidiaries engaged in the Events Business, including ZD Events, ZD Events Pty
Ltd., an Australian corporation, ZD Events S.A., a Mexican corporation and ZD
Events S.A., a French corporation, and any other assets primarily used in the
Events Business, to a newly formed Delaware corporation ("Newco"), (b) assign to
Newco, and cause Newco to assume, all of Xxxx-Xxxxx' rights and obligations
under this Agreement, after which Newco will be considered to be the Employer
hereunder (such assignment and assumption, the "Newco Assumption"), (c)
guarantee the performance of this Agreement by Newco until the Spin Off
(described below) is effectuated, (d) cause Newco, directly or through its
subsidiaries, to borrow cash from bank lenders or the capital markets (or a
combination thereof) in
an aggregate amount not to exceed $425 million and to distribute that cash to
Xxxx-Xxxxx (which will in turn pay out all or some of that cash as a dividend)
and (e) distribute all of the stock of Newco to the holders of Xxxx-Xxxxx Inc.
-- ZD Common Stock ("ZD Common Stock") as a dividend (the "Spin Off"); and
WHEREAS, Xxxx-Xxxxx wishes to have the Executive immediately assume
leadership of the Events Business while it is still owned by Xxxx-Xxxxx and
thereafter following the Spin Off; and
WHEREAS, the Board of Directors of Xxxx-Xxxxx has determined that it is in
the best interests of Xxxx-Xxxxx and its stockholder to enter into this
Agreement.
THEREFORE, in consideration of the premises and the respective covenants
and agreements herein contained, the parties hereto agree as follows:
1. Employment
Until the Newco Assumption is formed, Executive shall be employed by Ziff
Xxxxx in the capacity of "Chairman of the events business." Upon the Newco
Assumption, the Executive shall be employed as the Chairman of the Board and
Chief Executive Officer of Newco. No executive or other employee of Newco shall
hold a position, stature, title or powers higher or greater than or equal to
those of
-2-
Executive. The Executive will devote his full business time, and use his best
efforts, to serve the Employer in the described capacities, on the terms and
conditions set forth herein. The Executive will have full authority and power to
manage the Events Business consistent with his position and the reasonable
directions of the Board of Directors of Newco (the "Board") and, prior to the
Spin Off, the chief executive officer of Xxxx-Xxxxx. Executive may continue his
memberships on the boards of directors of the corporations listed on Schedule 1
as well as on additional boards with the consent of the Board, which shall not
be unreasonably withheld.
2. Term
Unless sooner terminated as contemplated herein, the term of employment of
the Executive under this Agreement will commence on the date hereof and end on
February 28, 2005.
3. Place of Performance
The Executive's employment will be based in the Los Angeles area.
4. Compensation and Related Matters
(a) Salary. During the term of the Executive's employment, the Employer
will pay to the Executive a base
-3-
salary of not less than $1,500,000 on an annualized basis, payable no less
frequently than monthly.
(b) Performance Bonus. (i) With respect to the term of employment
commencing after December 31, 2000, the Executive will receive an annual
performance bonus based upon the growth in the EBITDA of the Events Business.
For these purposes, "EBITDA" for any year means the consolidated reported
earnings of Newco for that year, as adjusted to (w) add back interest, taxes,
depreciation and amortization, all as determined by the independent auditors of
the Employer applying generally accepted accounting principles, (x) exclude
unusual non-recurring items, such as gains or losses on the sale of a major
business unit, (y) exclude charges related to this performance bonus and any
substantially similar performance bonus granted to the president, chief
operating officer, chief financial officer, chief technology officer or general
counsel of Newco, or any other earnings-related bonuses exceeding $150,000 on an
annualized basis, and (z) exclude any charges to earnings attributable to
payments to affiliates which are in excess of fair market value of goods sold or
services rendered. EBITDA for 2000 shall be adjusted by the Compensation
Committee of the Board to reflect a normalized situation,
-4-
taking into account special costs and expenses which may be incurred in that
year.
(ii) The amount of performance bonus for each year will be based on the
incremental growth in EBITDA for that year over the prior year (or earlier prior
year if there has been an interim decrease in EBITDA) where the increments are
as follows:
Incremental growth Applicable
in EBITDA Percentage
less than or equal to 8% 0
greater that 8%, but less
than or equal to 10% 2%
greater than 10%, but less
than or equal to 15% 4%
more than 15% 5%
The performance bonus will then be determined by multiplying the incremental
growth in EBITDA by the Applicable Percentage.
The bonus formula is illustrated by the following examples: Assume EBITDA
is $100 in 2000 and $113 in 2001. The percentage increase is therefore 13% and
the amount of increase is $13. The performance bonus is calculated as 4% times
$13 = $0.52, the 13% growth yielding an Applicable Percentage of 4%. Assume
EBITDA for 2002 is $140. The percentage increase is 140 - 113 = 23.9%, and
amount of ---------
113
-5-
increase is $27. The performance bonus is calculated 5% times $27 = $1.35.
(iii) If there is a change in fiscal year, the computation and payment of
the performance bonus shall be adjusted on an allocable and equitable basis to
reflect such change, including payment of the performance bonus for a short
fiscal year.
(iv) The performance bonus will be paid as soon as is practicable in the
year following the year to which it relates, but with at least 75% paid by March
1st and the balance by April 15th.
(v) If the Events Business acquires a major business unit, the performance
bonus formula will include EBITDA of the acquired business but also will be
debited for interest charges directly attributable to the acquisition of such
business.
(c) Year 2000 Performance Bonus. With respect to the year 2000, the Board
will, in its discretion, pay a performance bonus to Executive.
(d) Discretionary Bonus. During the term of his employment, the Board (or
the Compensation Committee if the Board so determines) may grant discretionary
bonuses to the Executive in cash or stock whether or not Executive receives a
performance bonus.
-6-
(e) Stock Options. Effective as of the date of the Spin Off, Newco will
grant options to the Executive to acquire shares of its common stock in
accordance with an Incentive Compensation Plan to be adopted by the Board. Such
Plan will include all provisions typically found in an incentive plan for senior
executives of a public company including SEC registration at the expense of
Newco.
(i) Number of Shares. The number of shares of the common stock of Newco
which may be acquired by the Executive upon exercise of the options shall be
equal to 10% times the total number of shares of common stock of Newco on the
date of the Spin Off determined on a fully diluted basis, including private
equity infusions.
(ii) Exercise Price. The exercise price for one-half of the shares subject
to option shall be equal to (x) $640 million plus the amount of any equity
infusion described in paragraph (i) above less the consolidated debt of Newco
(as set forth in the third WHEREAS clause) as of the date of the Spin Off
divided by (y) the number of issued and outstanding shares of stock of Newco as
of the date of the Spin Off, including any shares issued as a result of the
equity infusion. For example, if the consolidated debt is $395 million and 100
million shares are outstanding, the option price will be $2.45 per share. The
exercise price
-7-
for the other half of the shares subject to option shall be the exercise price
determined pursuant to the preceding sentence times 5.50 divided by 2.45.
(iii) Vesting. Vesting occurs if Executive is employed by the Employer on
the relevant date. No option may be exercised until vested in accordance with
the following schedule or as otherwise provided in this Agreement:
Portion of ... Which Vest
Options on:
---------- ---------------------
1/16 May 31, 2000
1/16 August 31, 2000
1/16 November 30, 2000
1/16 February 28, 2001
1/48 at the end of each month
beginning March 31, 2001
It is recognized that some options may be fully vested when granted if the Spin
Off does not occur before May 31, 2000. Notwithstanding the Terms of the
Incentive Compensation Plan the options will fully vest immediately and become
immediately exercisable upon a Change of Control, which means:
(A) individuals who, on the date of the Spin Off, are members of the
Board (the "Incumbent Directors") cease for any reason following the date
of the Spin Off, to constitute at least a majority of the Board; provided,
that any new
-8-
director who is approved by a vote of at least a majority of the Incumbent
Directors shall be treated as an Incumbent Director;
(B) the stockholders of Newco approve a merger, consolidation,
statutory share exchange or any manner of corporate transaction in which
Newco is not the surviving corporation or entity or more than 50% of the
value of Newco is affected by a merger or acquisition; provided, however,
that such approval shall not be a Change in Control if immediately
following such transaction, Executive is the highest ranking officer of the
surviving entity; or
(C) the stockholders of Newco approve a plan of complete liquidation
or dissolution or a sale of all or substantially all of the assets.
(iv) Expiration. Options shall expire at the earliest of:
(A) The 10th anniversary of the Spin Off; or
(B) The 3rd anniversary of termination of employment for any reason
except Cause (as defined below); or
(C) Immediately upon termination of employment for Cause; or
(D) Under conditions specified in Section 6(d)
(v) Exercise. The exercise price of each share as to which a stock option
is exercised shall be paid in full at the time of such exercise in cash, by
tender of shares of common stock owned by the Executive valued at fair
-9-
market value as of the date of exercise (subject to such guidelines as the
Compensation Committee of the Board may establish), by a "sale to cover" broker
transaction or other cashless exercise method permitted under Regulation T of
the Federal Reserve Board, or by a combination of cash, shares of common stock
and other consideration as the Compensation Committee deems appropriate.
In the event of a Change of Control, the Executive may elect to receive in
cancellation of his outstanding and unexercised stock options, a cash payment in
an amount equal to the difference between the exercise price of such stock
options and (A) in the event the Change of Control is the result of a tender
offer or exchange offer for the common stock, the final offer price per share
paid for the common stock multiplied by the number of shares of common stock
covered by such stock options, or (B) in the event the Change of Control is the
result of any other occurrence, the aggregate value of the Common Stock covered
by such stock options, as reasonably determined by the Compensation Committee at
such time.
(vi) Adjustments of and Changes in Stock. In the event of any change in the
outstanding shares of common stock by reason of any stock dividend or split,
recapitalizatiOn, merger, consolidation, spinoff,
-10-
combination or exchange of shares or other corporate change, or any
distributions (including stock or stock rights distributions) to common
shareholders other than regular cash dividends, the Compensation Committee shall
make a substitution or appropriate adjustment which preserves the aggregate
option value and ratio of exercise price to fair market value of the property
subject to option.
(f) Benefits and Perquisites. During the term of his employment, the
Executive will be entitled to benefits and perquisites as set forth on Schedule
4(f).
5. Termination
The Executive's employment shall terminate upon his death. The Employer may
terminate the Executive's employment for Disability or Cause, or without Cause,
and the Executive may terminate such employment at any time for Good Reason (all
as defined below). Any termination of such employment shall be subject to the
following conditions:
(a) Regardless of the reason for such termination, the Employer will pay
the Executive his base salary through the date of termination and any amounts
owed to the Executive pursuant to the terms and conditions of the benefit plans
of the Employer at the time such payments are due.
(b) If such employment is terminated as a result of the Executive's
Disability or death, the Employer will
-11-
pay (i) one year's worth of base compensation in a lump sum plus (ii) following
the determination of such award, the prorated portion of any annual incentive
bonus the Executive would have received for the year of such termination. These
payments will be made to the Executive or his legal representatives or to
Executive's estate or as may be directed by the legal representatives of such
estate, as the case may be.
(c) If such employment is terminated by the Employer for Cause or prior to
the end of the Initial Term by the Executive voluntarily for other than Good
Reason, the Employer will have no additional obligations to the Executive under
this Agreement.
(d) If the Spin Off does not occur before December 31, 2000 and either the
Executive terminates his employment after that date but before February 28, 2001
(the "Window Period"), or the Employer terminates the Executive's employment
during the Window Period, assuming such termination is not for Cause, the
Employer shall pay the Executive $750,000 in satisfaction of all obligations
under this agreement.
(e) If the Employer terminates the Executive's employment after the Window
Period other than for Disability or Cause or the Executive terminates such
employment for Good Reason, then during the period commencing on the
-12-
Executive's termination of employment and ending on the date 24 months later (or
February 28, 2005, if earlier) the Employer will (i) pay the Executive his base
salary at the level in effect as of the date of termination (at the time such
payments would normally be made), (ii) pay the Executive 2 times his most recent
performance bonus, spread in monthly payments and (iii) fully vest all options.
(f) For purposes of this Agreement, the following terms shall have the
meanings specified below:
(i) "Disability" will mean the Executive's absence from his full-time
duties hereunder by reason of physical or mental illness for a period of
six consecutive months.
(ii) Termination for "Cause" will mean termination of the Executive's
employment by the Employer following the Executive's:
(A) gross misconduct that is materially injurious to the Employer
that, if correctable, is not corrected as soon as practicable (but in
no event not more than 30 days), following a written demand by the
Employer that specifically identifies the manner in which the Employer
believes the Executive has engaged in such misconduct;
-13-
(B) conviction of, or plea of nolo contendere to, a felony or any
crime involving financial impropriety by or before any criminal
tribunal;
(C) willful and continuing failure to substantially perform his
reasonable duties (other than as a result of physical or mental
illness) that is not corrected within 30 days following a written
demand by the Employer that specifically identifies the manner in
which the Employer believes the Executive has not substantially
performed his duties.
Notwithstanding the foregoing, the Executive shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered
to the Executive a copy of a resolution duly adopted by the Board at a
meeting of the Board called and held for such purpose (after reasonable
notice to the Executive and an opportunity for the Executive, together with
the Executive's counsel, to be heard before the Board) finding that in the
good faith opinion of the Board, the Executive was guilty of the conduct
set forth in clause (i), (ii) or (iii) of this section and specifying the
particulars thereof.
(iii) Termination for "Good Reason" shall mean termination by the
Executive following a material
-14-
breach of this Agreement by the Employer or a diminution of Executive's
responsibilities or status that is not corrected within 30 days of the
Executive's notifying the Employer in writing of such breach or diminution.
6. Confidentiality; Non-Competition
(a) In consideration for any severance that may be due to the Executive
after termination of employment (but regardless of whether and for how long any
severance is in fact due) and for allowing the Executive's stock options to be
exercised for a period of two years (or if as a result of any securities law,
the time required to exercise options and sell the stock acquired pursuant to
such exercise is longer than two years, then such longer period, but in no event
more than 3 years) after termination of employment (except for Cause), and in
return for other valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, for a period of two years commencing upon the termination
of his employment hereunder (regardless of the reason for the termination), the
Executive shall not, without written consent of the Employer, engage, as a
stockholder, director, officer, consultant or otherwise, in any enterprise which
competes with the Employer or any business of its subsidiaries, or directly or
indirectly employ, contract for or solicit the services in any capacity
-15-
of any executive or management person who is, or within the prior three months
has been, employed by the Employer or any such business. The Executive will not
be deemed to be engaged in a competing enterprise if (A) less than 10% of the
gross receipts of such enterprise are derived from businesses that compete with
the Employer or businesses of its affiliates that were under the Employer's
management control, and (B) the Executive's engagement does not involve such
competing businesses. This paragraph shall not bar Executive from owning up to
5% of the outstanding securities of any publicly-held company.
(b) The Executive shall keep secret and confidential and not use (except in
connection with the business of the Employer and its affiliates or pursuant to
applicable law or court order) any confidential information with respect to the
business or affairs of the Employer or its subsidiaries. This obligation will be
in effect while the Executive is employed by the Employer and for 36 months
after he ceases to be so employed, but it will not apply at any time to
information that is or becomes generally known to the public (other than through
a breach of this Section 6(b)).
(c) The Executive acknowledges that the remedy at law for breach of his
covenants under this Section 6 will be inadequate and, accordingly, in the event
of any breach or
-16-
threatened breach by the Executive of the provisions of this Section 6 the
Employer will be entitled (without the necessity of showing economic loss or
other actual damage), in addition to all other remedies to an injunction
restraining any such breach, without any bond or other security being required.
The Executive and the Employer recognize and agree that the duration and scope
for which the covenants not to compete and solicit set forth in this Section 6
are to be effective are reasonable. In the event that any court determines that
the time period or the area, or both of them, are unreasonable and that such
covenants are to that extent unenforceable, the parties agree that the covenants
shall remain in full force and effect for the greatest time period and in the
greatest area that would not render them unenforceable.
(d) In the event of a breach by the Executive of any covenant under this
Section 6, the Executive agrees that, notwithstanding anything to the contrary
in this Agreement or any award of or letter agreement for any options to acquire
common stock of the Employer, all remaining obligations of the Employer
hereunder and under such options shall thereupon automatically be extinguished
and all such options shall thereupon automatically expire. No breach shall be
deemed to occur under this Section 6(d) until Employer delivers a written
allegation to Executive
-17-
setting forth in reasonable detail the facts or events constituting the breach;
and further, no breach shall be deemed to have occurred if Executive cures said
breach within 30 days of such notice, unless such breach was of such magnitude
as to be incapable of being cured.
7. Inventions
All copyrights, trademarks, proprietary processes and analytical models or
formulas and other intangible or intellectual property rights that may be
invented, conceived, developed or enhanced by the Executive during the term of
his employment under this Agreement that relate to the business or operations of
the Employer or any affiliate thereof of which the Executive has served as an
officer, or that result from any work performed by the Executive for the
Employer or any such affiliate, will be the sole property of the Employer or
such affiliate, as the case may be, and the Executive hereby waives any right or
interest that he may otherwise have in respect thereof. Upon the reasonable
request of the Employer, the Executive will execute and deliver any instrument
or document reasonably necessary or appropriate to give effect to this Section 7
and do all other acts and things reasonably necessary to enable the Employer or
such affiliate, as the case may be, to exploit the same or to obtain patents or
similar protection with respect thereto.
-18-
8. Nontransferability; Forfeiture
No amount payable hereunder shall be assignable or transferable, and no
right or interest of the Executive shall be subject to any lien, obligation or
liability of the Executive, except by will or the laws of descent and
distribution. Notwithstanding the immediately preceding sentence, the
Compensation Committee may, subject to the terms and conditions it may specify,
permit Executive to transfer any stock options (other than incentive stock
options) granted to him pursuant to the Incentive Compensation Plan to one or
more of his immediate family members or to trusts, limited liability companies
or family partnerships (collectively "family entities") established in whole or
in part for the benefit of the Executive and/or one or more of such immediately
family members. During the lifetime of the Executive, stock options shall be
exercisable only by the Executive or by the immediate family member or family
entity to whom such stock options have been transferred in accordance with this
Section 8. For purposes of this Plan, (a) "immediate family" shall mean the
Executive's spouse and issue (including adopted and stepchildren) and (b)
"immediate family members and family entity established in whole or in part for
the benefit of the Executive and/or one more of such immediate family members"
shall be further limited, if necessary, so that
-19-
neither the transfer of a stock option to such immediate family member or family
entity, nor the ability of Executive to make such transfer, shall have adverse
consequences to the Employer or the Executive by reason of Section 162(m) of the
Code.
9. No Obligation to Mitigate Damages; Other Rights
The Executive shall not be required to mitigate damages or any amount
payable under this Agreement by seeking other employment or otherwise, nor shall
any such amount be reduced by any compensation received by the Executive from
another employer after the date of resignation or termination, or otherwise. The
provisions of this Agreement, and any payment provided for hereunder, shall not,
to the extent permitted by law, reduce any amounts otherwise payable, or in any
way diminish the Executive's rights under any other employee benefit plan,
contract or arrangement.
10. Successors; Binding Agreement
(a) The Employer will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Employer, by agreement in form and substance
satisfactory to the Executive, to expressly assume and agree to perform this
Agreement in the same
-20-
manner and to the same extent that the Employer would be required to perform it
if no such succession had taken place.
(b) This Agreement and all rights of the Executive hereunder will inure to
the benefit of and be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die following his termination of
employment while any amounts would still be payable to him pursuant to the
provisions of Section 5 or Section 8 if he had continued to live, all such
amounts will be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
11. Notices
For the purposes of this Agreement, notices, demands and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States certified or registered mail, return receipt requested,
postage prepaid, addressed as follows:
-21-
If to the Executive:
Xx. Xxxxxxx X. Xxxxx
000 Xxxxxx Xx.
Xxxxxxx Xxxxx XX 00000
Fax 000 000 0000
with a copy to:
Xxxxxxx X. Xxxx
Xxxxxx & Samor, P.C.
0000 Xxxx Xxxx
Xxxxxxxxx, XX 00000
If to the Employer:
Xxxx-Xxxxx Inc.
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
with a copy to:
SOFTBANK Holdings Inc.
00 Xxxxxxx Xxxx, Xxxxx 000
Xxxxxx Xxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxx
Vice Chairman
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
12. Modification; Waiver
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by the
Executive and the Employer and a duly authorized member of the Board.
-22-
No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement to
be performed by such other party will be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied,
with respect to the subject matter hereof have been made by either party which
are not set forth expressly in this Agreement.
13. Certain Taxes
In the event of termination of the Executive's employment as a result of a
Change in Control, the Company shall pay to the Executive an amount which, on an
after-tax basis (including federal income and excise taxes, and state and local
income taxes) equals the excise tax, if any, imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended, upon the executive by reason of
amounts payable under this Agreement (including this Section 8). For purposes of
this Section 13, the Executive shall be deemed to pay federal, state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the gross up payment is to be made, taking into account the maximum
reduction in federal income taxes which could be obtained from deduction of
state and local income taxes.
-23-
14. Entire Agreement
This Agreement and the related documents referred to herein set forth the
entire agreement of the parties in respect of the subject matter contained
herein, and upon the effectiveness of this Agreement shall supersede all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto.
15. Validity
The invalidity or unenforceability of any provision or provisions of this
Agreement will not affect the validity or enforceability of any other provision
of this Agreement, which will remain in full force and effect.
16. Governing Law
This Agreement will be governed by, and construed in accordance with, the
laws of the State of New York. Each of the parties consents to personal
jurisdiction in any action brought in any court in New York City having subject
matter jurisdiction over matters arising under this Agreement.
17. Counterparts
This Agreement may be signed in two counterparts, each of which shall be
deemed an original agreement, but
-24-
both of which together shall constitute one and the same instrument.
18. Withholding taxes
All payments made pursuant to this Agreement are subject to withholding of
applicable income employment taxes. The Employer shall have the right to require
the Executive to pay to the Employer such amount required to be withheld prior
to the issuance or delivery of any shares of common stock deliverable upon
exercise of a stock option. The Compensation Committee may, in its discretion,
permit the Executive to elect to satisfy such withholding obligation by having
the Employer retain the number of shares of common stock whose fair market value
equals the amount required to be withheld.
19. Expenses
Subject to documentation the Employer shall reimburse Executive for his
reasonable out-of-pocket expenses incurred in (i) entering into this Agreement
and (ii) as a result of Executive's earlier efforts with respect to the failed
"Pritzker deal" not to exceed $125,000.
20. Indemnification
The Employer shall indemnify Executive if he is made, or threatened to be
made, a party to an action or proceeding, to the full extent permitted by
applicable law, including an action by or in the right of the Employer to
-25-
procure a judgment in its favor, by reason of the fact that Executive is or was
an officer, director or employee of the Employer, against all costs and expenses
resulting from or related to such action or proceeding, or any appeal thereof,
if Executive acted in good faith for a purpose which he reasonably believed to
be in the best interests of the Employer. The termination of any such action or
proceeding by judgment, settlement, conviction or upon a plea of nolo
contendere, or its equivalent, shall not in itself create the presumption that
Executive did not act in good faith for a purpose which he reasonably believed
to be in the best interests of the Employer. As used in this Section 20, (i)
"costs and expenses" means any and all costs, expenses and liabilities incurred
by Executive, including but not limited to (A) attorney fees, (B) amounts paid
in settlement of, or in the satisfaction of any order or judgement in, any
action or proceeding and (C) fines, penalties and assessments asserted or
adjudged in any action or proceeding, and (ii) "action or proceeding" means any
and all suits, claims, actions, investigations or proceedings whether civil,
criminal or administrative, heretofore or hereafter instituted or asserted. For
purposes of this Section 20, "Employer" means Newco or Xxxx-Xxxxx, as
applicable.
-26-
21. Possible Sale of Equity Securities
Xxxx-Xxxxx acknowledges that, depending on the terms, it may be in the best
interest of Xxxx-Xxxxx, ZD Events and their respective stockholders for ZD
Events to sell common stock or some other equity security of ZD Events to
Executive and certain other persons at or around the time of the Spin Off.
Accordingly, Xxxx-Xxxxx and the Executive agree to discuss in good faith the
terms on which such a sale might be accomplished and, if the parties mutually
agree, to use reasonable efforts to consummate such a sale on such terms,
including a price intended to reflect fair value of the stock at the time of
Spin Off.
22. Xxxx-Xxxxx Guarantee
Xxxx-Xxxxx guarantees the performance of this Agreement by Newco until the
Spin Off is effectuated.
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
and year first above written.
XXXX-XXXXX INC.
/s/ XXXXXXX X. XXXXX By: /s/ XXXX XXXXXXX
------------------------- ----------------------
Xxxxxxx X. Xxxxx
-27-
SCHEDULE 1
TO EMPLOYMENT AGREEMENT
BETWEEN
XXXX-XXXXX, INC.
And
XXXXXXX XXXXX
CURRENT BOARD MEMBERSHIPS
Casden Properties, Inc.
Engage Technology, Inc.
Dreamlife, Inc.
Charity and Educational Boards - various
Schedule 4(f)
Benefits and Perquisites
(a) Expenses. Executive shall be entitled to receive prompt reimbursement
for all documented business expenses incurred by him in the performance of his
duties hereunder consistent with reimbursements accorded to CEO's and other
senior executives provided that Executive properly accounts therefor in
accordance with the Company's reimbursement policy.
(b) Fringe Benefits. Executive shall be entitled to participate in and
receive benefits under all of the company's benefit plans or programs generally
available to senior management of the Company, including, but not limited to any
retirement plan, medical, dental or disability insurance plans and all other
similar plans or programs. Nothing paid to Executive under any benefit plan
presently in effect or made available in the future shall be deemed to be in
lieu of compensation payable to Executive under this Agreement.
(c) Life Insurance. So long as Executive is insurable, the Company agrees
to maintain in effect during the term hereof insurance on Executive's life
payable to his estate or his named beneficiary or beneficiaries in the amount of
$5,000,000. The ownership of such insurance policies may, at the sole discretion
of the Executive, be transferred to a Trust for the benefit of his spouse or
family.
(d) Vacations. During the term hereof, Executive shall be entitled to sick
leave and paid holidays consistent with the Company's sick leave and holiday
policy for senior management and up to six (6) weeks paid vacation during each
year. Any vacation time that is not taken in a given year shall be carried
forward to the following year or years, as the case may be but in no event more
than two (2) weeks, on a cumulative basis. The Executive shall not receive
additional compensation for vacation time not taken.
(e) Tax and Financial Advisor. The Company shall pay the reasonable
expenses of Executive's investment advisor and tax advisor, and all related
reasonable expenses pertaining to financial planning and tax return preparation,
up to a total expense of $25,000 per year.
