EXHIBIT 10.32
CONFIDENTIAL
EXECUTIVE AGREEMENT
THIS EXECUTIVE AGREEMENT (this "Agreement") is made as of June
1, 2003 (the "Effective Date"), by and between Ziff Xxxxx Media Inc., a Delaware
corporation (the "Company") and Xxxxx Xxxxx ("Executive"). Certain definitions
are set forth in the Appendix to this Agreement.
In consideration of the representations and covenants set
forth herein, the parties hereby agree as follows:
1. Employment. The Company shall employ Executive, and Executive
hereby accepts employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning June 1, 2003 and ending May 31,
2006 or earlier pursuant to Section 4 hereof (the "Employment Period").
2. Position and Duties.
(a) During the Employment Period, Executive shall serve as the
Senior Vice President - General Manager, Ziff Xxxxx Internet of the Company and
shall have the normal duties, responsibilities and authority implied by such
positions. Executive shall hold similar positions with any Affiliate of the
Company to the extent (i) Executive may be so appointed by the Company in its
sole discretion and (ii) Executive accepts such additional appointment, in
writing.
(b) Executive shall report directly to each of the Company's Chief
Executive Officer ("CEO") and Chief Operating Officer ("COO") or to the
President or such other senior Company executive as the CEO may direct, and
shall devote his best efforts and substantially all of his business time and
attention to the business and affairs of the Company (and to the extent
applicable, 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
$250,000 per annum, subject to an annual cost of living increase at the
beginning of each calendar year beginning January 1, 2004 at a rate equal to the
increase in the Consumer Price Index - All Urban Consumers for the New York area
during the prior year, or such higher rate as the Company may designate from
time to time (the "Base Salary"), which salary shall be payable by the Company
in regular installments in accordance with the Company'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 by the Company based upon the achievement of performance
targets for such year (which targets will include both quantitative and
qualitative objectives), payable at the Company's discretion. Any such Bonus, if
determined by the Company to be payable, shall be payable within ninety (90)
days following the end of each fiscal year during the Employment Period.
(c) During the Employment Period, (i) Executive shall be entitled
to participate in all of the Company's employee benefit plans and programs for
which senior executive employees of
1
CONFIDENTIAL
the Company are generally eligible, which currently include, but shall not be
limited to, health insurance, dental insurance, life insurance, short-term and
long-term disability insurance and participation in the Company's 401(k) plan
and (ii) Executive shall be eligible for four (4) weeks of paid vacation per
year of the Employment Period in accordance with the policies of the Company.
Executive's right to participate in any employee benefit plans or programs of
the Company shall be subject to the Company'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.
(d) The Company 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 the Company's policies in
effect from time to time for senior executive employees of the Company with
respect to travel, entertainment and other business expenses, subject to the
Company's requirements with respect to reporting and documentation of such
expenses.
4. Termination; Severance.
(a) The Employment Period (i) shall terminate upon Executive's
death or Incapacity; (ii) may be terminated by the Company at any time with
Cause or without Cause; and (iii) may be terminated by Executive at any time for
Good Reason or other than for Good Reason. Executive acknowledges and agrees
that nothing contained herein or in any other agreement or document shall
entitle Executive to remain in the employment of the Company or any of its
Affiliates. "Termination" means such time as of which Executive ceases to be
Employed by the Company, for any reason, whether on account of termination by
the Company, resignation by Executive, Executive's death or Incapacity or
otherwise; "Termination Date" means the date on which Termination occurs; and
"Termination Fiscal Year" means the Company's fiscal year in which the
Termination Date occurs. Upon any Termination, the parties shall have the
respective rights and obligations set forth in this Agreement.
(b) Upon any Termination, Executive shall be entitled to receive
Executive's Base Salary earned through the Termination Date, prorated on a daily
basis together with all accrued but unpaid vacation time earned by Executive
during the calendar year in which such Termination occurs and any Bonus in
respect of a prior, completed calendar year which is then due and owing and has
not been paid. 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 the Company for any period after the Termination Date.
(c) In the event Executive's employment is terminated (i) by the
Company with Cause, (ii) by Executive other than for Good Reason, or (iii) upon
Executive's death or Incapacity, or upon any Termination on or after May 31,
2006, the Company 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 (i) by
the Company without Cause or (ii) by Executive for Good Reason (in either case
prior to the May 31, 2006), following such Termination and upon execution and
delivery by Executive within thirty (30) calendar days after the Termination
Date of a general release of all claims (except for claims alleging a right to
receive indemnification from the Company or its Affiliates in connection with
any claim brought against you by a third party by virtue of your role as an
officer or director of the Company or its Affiliates) n favor of the Company and
its Affiliates and its and their
2
CONFIDENTIAL
respective officers, directors, employees, representatives, agents and
attorneys, and the successors and assigns of each of the foregoing, in form and
substance satisfactory to the Company, the Company shall (A) through the first
(1st) anniversary of the Termination Date, (x) pay Executive his annual Base
Salary (as in effect on the Termination Date) to the extent (but only to the
extent) attributable to the Specified Line(s) of Business (as defined below), in
regular installments in accordance with the Company's general payroll practices
and (y) if Executive elects under COBRA to maintain health insurance benefits
through the Company's group plan (if any), pay that portion of the premium for
such benefits that the Company would have paid had Executive remained an
employee of the Company for such period; and (B) pay Executive, within ninety
(90) days following the end of the Termination Fiscal Year, the Termination
Bonus (as defined below), if any. The "Termination Bonus" shall be the product
obtained by multiplying (1) the Bonus that the Company paid to Executive for the
fiscal year immediately preceding the Termination Fiscal Year to the extent (but
only to the extent) attributable to the Specified Line(s) of Business, by (2)
the ratio obtained by dividing (X) the number of days Executive was employed by
the Company during the Termination Fiscal Year up to the Termination Date by (Y)
three hundred and sixty-five (365); provided, however, that to the extent the
Company has paid Executive prior to the Termination Date any amounts with
respect to the Bonus for the Termination Fiscal Year, to the extent (but only to
the extent) attributable to the Specified Line(s) of Business (e.g. if payments
toward such Bonus were made in semimonthly, monthly or quarterly installments or
otherwise), the Termination Bonus shall be reduced by such amounts already paid
(but shall not be reduced to a number less than zero (0)). After payment of the
severance amounts described in this Section 4(d), the Company shall have no
obligation to make any further severance or other payment or provide any other
benefit to or on behalf of Executive. Such severance payments shall not be
subject to reduction for any income earned by Executive from other sources after
Termination (and, consequently, Executive shall have no duty to mitigate the
Company's severance obligations). Notwithstanding the foregoing, in the event
that Executive breaches any of Executive's obligations under Section 5 of this
Agreement (except any breach which Executive carries the burden of proving is
solely of a technical nature, immaterial and inadvertent), then, in addition to
any other rights that the Company may have under this Agreement or otherwise,
the Company 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. Noncompete, 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 Company and any applicable Affiliate thereof, Executive will
during the Employment Period become familiar with the trade secrets, business
plans and business strategies and with other Confidential Information (as
defined on the Appendix hereto) concerning the Company and any applicable
Affiliate of the Company (and their respective predecessors, successors and
assigns) and that Executive's services have been and shall be of special, unique
and extraordinary value to the Company and any applicable Affiliate of the
Company. Therefore, Executive agrees that, during the Employment Period and for
one (1) year thereafter (such period, the "Noncompete Period"), Executive shall
not directly or indirectly (whether for Executive or for any other Person) (A)
operate, manage, control, engage in, participate in (whether as an officer,
director, employee, partner, agent, representative or otherwise), permit
Executive's name to be used by, consult with, advise, render services for (alone
or in association with any other Person), or otherwise assist in any manner
(collectively, to "Participate" in) or (B) own any interest in, lend to or
invest in, (i)
3
CONFIDENTIAL
International Data Group, Inc., CMP Media, Inc. (a subsidiary of United News &
Media PLC); or CNET Networks, Inc.; (ii) any Person which, to Executive's
knowledge, International Data Group, Inc., CMP Media, Inc. (a subsidiary of
United News & Media PLC) or CNET Networks, Inc. owns an interest in, lends or
otherwise provides financial support to, manages, controls or is party to one or
more agreements that are singly or in the aggregate are material to either party
thereto; (iii) any successor, assignee, partner, joint venturer, subsidiary,
division or Affiliate of any of the Persons referenced in clause (i) or (ii) of
this sentence; (iv) any Person that engages in, operates, manages or controls
any venture or enterprise which directly or indirectly engages in the Specified
Line(s) of Business; or (v) any successor, assignee, partner, joint venturer,
subsidiary, division or Affiliate of any of the Persons referenced in clause
(iv) of this sentence.
(b) Notwithstanding the foregoing, (i) Executive may Participate
in any business of any entity listed in clause (iv) or clause (v) of Section
5(a) to the extent such business is not directly related to the Specified
Line(s) of Business and (ii) for purposes of Section 5(a), Executive shall not
be considered to "own any interest in, lend to or invest in" any corporation
with respect to which (x) Executive owns, indirectly through a mutual fund or
other similar pooled investment vehicle, a passive investment in the
publicly-traded stock of such corporation. Also notwithstanding the foregoing,
or (y) Executive owns (either as shareholder of record or as beneficial owner)
publicly-traded stock of such corporation, provided that the Specified Line(s)
of Business are not material to such corporation's financial condition or
results of operations. Without limiting the foregoing and for avoidance of
doubt, (A) it would constitute a breach of Section 5(a) if Executive during the
Noncompete Period performs services (whether in a sales or management or other
capacity) for America Online, Inc., Yahoo! Inc., The Microsoft Network L.L.C. or
eBay Inc. or their respective affiliates, which services are primarily related
to the creation or display of content focused on technology news, products or
services or the sale of advertising or subscriptions related to such content and
(B) it would not constitute a breach of Section 5(a) if Executive during the
Noncompete Period performs other services for America Online, Inc., Yahoo! Inc.,
The Microsoft Network L.L.C. or eBay Inc. or their respective affiliates.
(c) During the Employment Period and for one (1) year thereafter,
Executive shall not directly or indirectly through another Person (i) induce or
attempt to induce any employee of the Company or any Affiliate of the Company to
leave the employ of the Company or such Affiliate, or in any way interfere with
the relationship between the Company or any Affiliate of the Company and any
employee thereof, (ii) hire any person who was an employee of the Company or any
Affiliate of the Company at any time during the one (1) year period prior to the
termination of the Employment Period, (iii) call on, solicit or service any
licensee, licensor, customer, supplier, franchisee or other business relation of
the Company or any Affiliate of the Company (each a "Company Business Relation")
in order to induce or attempt to induce such Company Business Relation to cease
or reduce doing business with the Company or such Affiliate, or in any way
interfere with the relationship between any such Company Business Relation and
the Company or any Affiliate of the Company, (iv) make any negative statements
or communications about the Company or any of its Affiliates or their respective
directors, officers, employees, agents, products or services, or compare the
Company or any of its Affiliates or their respective directors, officers,
employees, agents, products or services to any third party or the directors,
officers, employees, agents, products or services of any third party, or (v)
directly or indirectly acquire or attempt to acquire any business in the United
States of America to which the Company 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 the Company or
4
CONFIDENTIAL
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 the Company or any of the Company's
Affiliates.
(d) Notwithstanding anything in Section 5(c)(iii) to the contrary,
it shall not be deemed a violation of Section 5(c)(iii) for Executive to call on
or solicit business from any existing customer or supplier of the Company, so
long as Executive is not performing duties or services prohibited by Section
5(a) or violating clauses (i), (ii), (iv) or (v) of Section 5(c). By way of
illustration, and without limiting the generality of the foregoing (i) it would
constitute a breach of the Agreement if Executive during the Noncompete Period
solicits business from Dell Computer Corporation or its affiliates
(collectively, "Dell") while Executive is employed as the Vice President of
Technology Sales for Yahoo! Inc. or as the General Manager of Sales for AOL
Technology and (ii) it would not constitute a breach of the Agreement if
Executive solicits business from Dell while Executive is employed as Vice
President of Sales for Yahoo! Inc. or as the Publisher of Time Magazine,
provided that (x) Executive did not violate clauses (i), (ii), (iv) or (v) of
Section 5(c) and (y) at the time Executive solicited the business from Dell, the
business of Yahoo! Inc. or Time Magazine, as the case may be, was not primarily
related to the creation or display of content focused on technology news,
products or services or the sale of advertising or subscriptions related to such
content.
(e) If, at the time of enforcement of Section 5 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 (as defined on the Appendix hereto), the parties
hereto agree that money damages would not be an adequate remedy for any breach
of this Agreement. Therefore, in the event of a breach or threatened breach of
this Agreement, the Company 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 bond or other security). In addition, in the event of a breach
or violation by Executive of Section 5 hereof, 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 5 are reasonable and
that Executive has received consideration in exchange therefor.
(f) As used herein, "Specified Line(s) of Business" shall mean any
business that is primarily related to the creation or display of content focused
on technology news, products or services or the sale of advertising or
subscriptions related to such content. Without limiting the foregoing and for
avoidance of doubt, (i) as of the Effective Date the Company's Specified Line(s)
of Business specifically excludes the Company's operations to the extent related
to content focused on electronic gaming news, products or services and (ii) the
parties expressly acknowledge and agree that in the event the Company acquires
or develops any operations after the Effective Date for which Executive becomes
responsible and which are not directly related to the Specified Line(s) of
Business ("Other Line(s) of Business'), (x) Executive may from and after the
Termination Date compete with the Company in the Other Line(s) of Business in
accordance with Section 5(b)(i) and (y) to the extent that Executive's Base
Salary and/or Bonus reflect compensation related to the Other Line(s) of
Business (i.e., to the extent such Base Salary and
5
CONFIDENTIAL
Bonus is higher than it would have been had Executive not had responsibility for
operations related to such Other Line(s) of Business), such portion of
Executive's Base Salary and Bonus shall be excluded from the calculation of
amounts payable pursuant to Section 4(d). The parties may, but shall not be
under any obligation to, agree to amend the definition of Specified Line(s) of
Business in the future.
6. Interrelated Nature of Obligations. The parties acknowledge
and agree that (i) each of the Company's obligations under this Agreement
(including without limitation the obligation to make payments to Executive
pursuant to Section 4(d)) and each of Executive's obligations under this
Agreement (including without limitation Executive's noncompete and
non-solicitation obligations pursuant to Section 5) are inextricably intertwined
with the obligations owed by the other party and (ii) in the event of a
bankruptcy or insolvency of either party, if such party rejects its ongoing
obligations under this Agreement then this entire Agreement shall be deemed
unenforceable from and after the effective date of such rejection, without the
necessity of further demand or action by either party. In addition, the parties
agree that in the event the Company fails to pay Executive any amount owing to
Executive pursuant to this Agreement when due and fails to make such payment
within ten (10) days of the date ("Notice Date") Executive gives the Company
written notice describing the amount due and the reason such amount is due, then
this entire Agreement shall be deemed unenforceable from and after the Notice
Date without the necessity of further demand or action by either party.
7. Other Terms and Conditions. The terms and conditions set forth
on the Appendix attached hereto are incorporated herein by reference as if fully
set forth herein and constitute an integral part of this Agreement.
* * * *
IN WITNESS WHEREOF, the parties hereto have executed this
Executive Agreement on the date first written above.
ZIFF XXXXX MEDIA INC.
BY: /s/ Xxxx X. Xxxxxxxx
--------------------------------
ITS: Chief Operating Officer and CFO
EXECUTIVE:
/s/ Xxxxx Xxxxx
------------------------------------
XXXXX XXXXX
6
CONFIDENTIAL
APPENDIX TO EXECUTIVE AGREEMENT
1. Notices. Any notice provided for in this Agreement must be in
writing and must be either personally delivered or sent by reputable overnight
courier service (charges prepaid) to the recipients at the address indicated
below or to 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: (a) if to Executive: Xxxxx Xxxxx, 00 Xxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxx
00000, with a copy to Xxxxxxxx X. Xxxxx, Esq., Wildman, Harrold, Xxxxx & Xxxxx,
000 Xxxx Xxxxxx Xxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxx 00000 and (b) if to the
Company: Ziff Xxxxx Holdings, Inc., 00 X. 00xx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: General Counsel. Any notice under this Agreement shall be deemed to
have been given one business day after deposit with a recognized national
courier service for overnight delivery, or otherwise when so delivered.
2. Representations and Warranties.
(a) By the Company. In connection with the execution and delivery
of this Agreement, the Company represents and warrants to Executive as of the
Effective Date that (i) the execution, delivery and performance of this
Agreement have been duly and validly authorized by all necessary corporate
action and (ii) this Agreement constitutes a valid and binding obligation of the
Company.
(b) By Executive. In connection with the execution and delivery of
this Agreement, Executive represents and warrants to the Company as of the
Effective Date that (i) this Agreement constitutes the legal, valid and binding
obligation of Executive, and the execution, delivery and performance of this
Agreement by Executive does not and shall not conflict with, violate or cause a
breach of any agreement, contract or instrument to which Executive is a party or
any judgment, order or decree to which Executive is subject; (ii) Executive is
not a party to or bound by any employment agreement, noncompete agreement or
confidentiality agreements with any person or entity other than the Company;
(iii) Executive has consulted with independent legal counsel regarding his/her
rights and obligations under this Agreement and that Executive fully understands
the terms and conditions contained herein; and (iv) Executive has obtained
advice from persons other than the Company and its counsel regarding the tax
effects of the transaction contemplated hereby.
3. 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. 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 in any way.
7
CONFIDENTIAL
(c) Counterparts; Signatures Received via Facsimile. 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. Signatures received via facsimile shall be deemed originals for all
purposes.
(d) Successors and Assigns. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by
Executive, the Company and their respective successors and assigns; provided
that the rights and obligations of Executive under this Agreement shall not be
assignable.
(e) GOVERNING LAW. THE CORPORATE LAW OF THE STATE OF DELAWARE WILL
GOVERN ALL ISSUES CONCERNING THE RELATIVE RIGHTS OF THE COMPANY AND ITS
STOCKHOLDERS. ALL OTHER 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.
WITHOUT LIMITING THE FOREGOING, IN THE EVENT A BANKRUPTCY PETITION IS FILED BY
OR AGAINST THE COMPANY OR ANY OF ITS AFFILIATES, THEN, REGARDLESS OF THE VENUE
OF SUCH PROCEEDING, THE PARTIES STIPULATE AND AGREE THAT THE LAW OF THE UNITED
STATES COURT OF APPEALS FOR THE SECOND CIRCUIT SHALL GOVERN THE TREATMENT OF
THIS AGREEMENT IN SUCH PROCEEDING.
(f) Jurisdiction. The state and federal courts located in New York
County, New York (the "Permitted Courts"), shall have sole and exclusive
jurisdiction of any dispute arising out of or related to this Agreement
(including without limitation allegations of the breach or attempted breach
thereof) (a "Proceeding"). Notwithstanding the foregoing, nothing in this
paragraph alters any agreement the parties may previously have made or may in
the future make to arbitrate disputes. Each of the parties hereby expressly
consents to the personal jurisdiction of each of the Permitted Courts with
respect to any Proceeding and waives any objection, whether on the grounds of
venue, residence or domicile or on the ground that the Proceeding has been
brought in an inconvenient forum, to any Proceeding brought in a Permitted
Court.
(g) 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 to the prevailing party)
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.
(h) Interpretation. The Article and Section headings used herein
are for convenience only and do not define, limit or construe the content of
such sections. The parties acknowledge that they are entering into this
Agreement after consulting with counsel and based upon equal bargaining power,
with each party having the ability to participate in its preparation. The terms
of this Agreement shall not be interpreted in favor of or against any party on
account of the draftsperson, but shall be interpreted solely for the purpose of
fairly effectuating the intent of the parties hereto.
8
CONFIDENTIAL
(i) Survival. The provisions set forth in Section 4 and Section 5
of the Agreement and the provisions set forth in this Appendix shall survive and
continue in full force and effect in accordance with their terms notwithstanding
any termination of the Employment Period.
(j) Amendment and Waiver. The provisions of this Agreement may be
amended and waived only by means of a written instrument signed by each of the
Company and Executive.
4. Certain Definitions
(a) "Affiliate" of a Person means any other Person, entity or
investment fund controlling, controlled by or under common control with the
first-mentioned Person and, without limiting the foregoing, in the case of a
partnership, any partner thereof is deemed to be an Affiliate of the
partnership.
(b) "Cause" means (i) the commission by Executive of a felony or a
crime involving moral turpitude, (ii) the commission of any other act or
omission by Executive constituting fraud against the Company or any of its
Subsidiaries, or the violation of the duty of loyalty to the Company and/or its
Subsidiaries under applicable law, (iii) substantial failure by Executive to act
as reasonably and lawfully directed by the CEO or COO of the Company, which
failure, if curable, is not cured within fifteen (15) calendar days after notice
thereof to Executive, (iv) willful or reckless misconduct or, if curable, gross
negligence by Executive which is not cured within fifteen (15) days after
written notice thereof to Executive, with respect to the Company or any of its
Subsidiaries, or (v) any other material breach by Executive of this Agreement or
Company policy established by the CEO or COO of the Company, which breach, if
curable, is not cured within fifteen (15) calendar days after written notice
thereof to Executive.
(c) "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's 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 successors or Affiliates)
without a breach of any obligation of confidentiality by such third party; (c)
was known to Executive prior to his employment with the Company and its
Affiliates, or (d) is
9
CONFIDENTIAL
required to be disclosed pursuant to any applicable law or court order;
provided, however, that Executive provides the Company with prior written notice
of the requirement for disclosure that details the Confidential Information to
be disclosed and cooperates with the Company to preserve the confidentiality of
such information to the extent possible.
(d) "Good Reason" means the occurrence, without Executive's
consent, of any of the following: (i) unless corrected within fifteen (15)
calendar days after written notice by Executive to the CEO and COO of the
Company of objection thereto, the assignment to Executive of any significant
duties materially inconsistent with Executive's status as the Senior Vice
President - General Manager, Ziff Xxxxx Internet of the Company or a diminution
of Executive's title(s), or a substantial adverse alteration in the nature or
status of Executive's responsibilities; (ii) a reduction in Executive's annual
Base Salary as contemplated hereby, except for across-the-board salary
reductions similarly affecting all senior executives of the Company; (iii) the
Company requires Executive to relocate from the New York metropolitan area; or
(iv) the CEO or COO of the Company requests the Executive to engage in unlawful
conduct, if such request is repeated after Executive has notified the CEO in
writing that he is declining to engage in such conduct due to Executive's belief
that such conduct is unlawful.
(e) "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 Company in good faith, for a period of ninety (90)
consecutive calendar days or a period of one hundred and twenty (120) calendar
days during any one hundred and eighty (180) calendar day period.
(f) "Person" means an individual or a corporation, partnership,
limited liability company, trust, unincorporated organization, association or
other entity.
(g) "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 the Company'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
Effective Date) by the Company (or its successors or assigns) and its
Affiliates.
10
