1
Exhibit 10.16
EMPLOYMENT AGREEMENT
--------------------
This EMPLOYMENT AGREEMENT ("AGREEMENT") made as of January 1, 1999, between
Penton Media, Inc. (formerly known as Penton Publishing, Inc.), a Delaware
corporation (the "COMPANY"), and Xxxxx X. Xxxxxxx ("EXECUTIVE")
In consideration of the mutual covenants contained herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. EMPLOYMENT. The Company shall employ Executive, and Executive accepts
continued employment with the Company as of the date hereof, upon the terms and
conditions set forth in this Agreement for the period beginning on the date
hereof and ending as provided in paragraph 5 hereof (the "EMPLOYMENT PERIOD").
2. POSITION AND DUTIES.
(a) During the Employment Period, Executive shall serve as a Group
President of the Company, with initial responsibility for the Company's
Design/Engineering, Foodservice/Hospitality, Manufacturing Groups, and
A/E/C/SYSTEMS (the "Division"), and shall have the normal duties,
responsibilities and authority of an executive serving in such position, subject
to the power of the Board of Directors of the Company (the "BOARD") or the Chief
Executive Officer of the Company to expand or limit such duties,
responsibilities and authority, either generally or in specific instances.
(b) Executive shall report to the Chief Executive Officer or the President
and Chief Operating Officer of the Company.
(c) During the Employment Period, Executive shall devote his best efforts
and his full business time and attention (except for permitted vacation periods,
reasonable periods of illness or other incapacity, and, provided such activities
do not have more than a DE MINIMIS effect on Executive's performance of his
duties under this Agreement, participation in charitable and civic endeavors and
management of Executive's personal investments and business interests) to the
business and affairs of the Company and the Division. Executive shall perform
his duties and responsibilities to the best of his abilities in a diligent,
trustworthy, businesslike and efficient manner.
(d) Executive shall perform his duties and responsibilities principally in
the Cleveland, Ohio metropolitan area, and shall not be required to travel
outside that area any more extensively than he has done in the past in the
ordinary course of the business of the Company.
2
3. COMPENSATION AND BENEFITS.
(a) SALARY. The Company agrees to pay Executive a salary during the
Employment Period, in semi-monthly installments. Executive's initial salary
shall be $265,000 per year. The Compensation Committee of the Board (or, if
there is no such Committee, the Board) shall review Executive's salary from time
to time and may, in its sole discretion, increase it.
(b) BONUS(ES). Effective January 1, 1999 and for subsequent years,
Executive will be eligible for an annual bonus based on the achievement of
specified Company goals (the "Target Bonus") (as determined by the Compensation
Committee of the Board (or, if there is no such Committee, the Board)). Any
bonus payable pursuant to this subparagraph (b) may, at the discretion of the
Compensation Committee of the Board (or, if there is no such Committee, the
Board), after considering any preference expressed by Executive, be paid in the
form of cash, in a Performance Shares Award related to shares of the Company's
Common Stock or in a combination of both.
(c) STOCK OPTIONS. The Company has adopted a plan (the "1998 STOCK OPTION
PLAN") pursuant to which options to purchase shares of the Company's Common
Stock, and other equity-based incentive compensation awards, may be granted to
Executive and other officers of the Company. Executive shall be eligible to
receive grants of options and other awards under the 1998 Stock Option Plan, at
the discretion of the Compensation Committee of the Board (or, if there is no
such Committee, the Board). Under the terms of the 1998 Stock Option Plan, the
Compensation Committee of the Board (or, if there is no such Committee, the
Board) has the right to amend the 1998 Stock Option Plan. If, at the time of the
grant of any option pursuant to this paragraph (c), the issuance of shares upon
exercise thereof has not been registered under the Securities Act of 1933, as
amended, it shall be a condition to such grant that Executive execute and
deliver to the Company a certificate confirming that Executive is an accredited
investor (as such term is used in Regulation D under such Act) and including
transfer restrictions and other provisions customary in connection with grants
under such circumstances. Each option to be granted as set forth above shall be
substantially in the form of EXHIBIT 1 attached to this Agreement, except that
it is understood that reference to any then existing registration statement or
related plan information document in EXHIBIT 1, or its equivalent, shall be
included if and only if the same exists at the time of grant and is relevant to
such option.
(d) EXPENSE REIMBURSEMENT. The Company shall reimburse Executive for all
reasonable expenses incurred by him during the Employment Period in the course
of performing his duties under this Agreement that are consistent with the
Company's policies in effect from time to time with respect to travel,
entertainment and other business expenses, subject to the Company's requirements
applicable generally with respect to reporting and documentation of such
expenses. Executive acknowledges that under the Company's current air travel
reimbursement policy, reimbursement is limited to coach fare (plus Executive's
cost of any upgrade certificates used to upgrade to first class) on travel
within the United States and is limited to business class fare on travel to and
from foreign cities.
(e) STANDARD EXECUTIVE BENEFITS PACKAGE. In addition to the salary,
bonus(es), stock options and expense reimbursements payable to Executive
pursuant to this paragraph, Executive shall be entitled during the Employment
Period to participate, on the same basis as other
3
executives of the Company, in the Company's Standard Executive Benefits Package.
The Company's "STANDARD EXECUTIVE BENEFITS PACKAGE" means those benefits
(including insurance, vacation, Company car or car allowance, equity-based
benefits, and other benefits) for which substantially all of the executives of
the Company are from time to time generally eligible, as determined from time to
time by the Board.
(f) INDEMNIFICATION. With respect to Executive's acts or failures to act
during the Employment Period in his capacity as a director, officer, employee or
agent of the Company, Executive shall be entitled to indemnification from the
Company, and to liability insurance coverage (if any), on the same basis as
other directors and officers of the Company.
4. ADJUSTMENTS. Notwithstanding any other provision of this Agreement, it
is expressly understood and agreed that if there is a significant reduction in
the level of the business to which Executive's duties under this Agreement
relate, or if all or any significant part of such business is disposed of by the
Company and/or its subsidiaries or affiliates during the Employment Period but
Executive thereafter remains an employee of the Company, the Compensation
Committee of the Board (or, if there is no such Committee, the Board) may make
adjustments in Executive's duties, responsibility and authority, and in
Executive's compensation, as the Compensation Committee of the Board (or, if
there is no such Committee, the Board) deems appropriate to reflect such
reduction or disposition.
5. EMPLOYMENT PERIOD.
(a) Except as hereinafter provided, the Employment Period shall continue
until, and shall end upon, the second anniversary of the date on which the
Employment Period begins.
(b) On each anniversary of the date on which the Employment Period begins
which precedes Executive's sixty-fifth birthday by more than one year, unless
the Employment Period shall have ended early pursuant to (c) below or either
party shall have given the other party written notice that the extension
provision in this sentence shall no longer apply, the Employment Period shall be
extended for an additional year (unless Executive's sixty-fifth birthday occurs
during such additional year, in which event the Employment Period shall be
extended only until such birthday). In no event shall the Employment Period be
extended beyond Executive's sixty-fifth birthday except by mutual written
agreement of the Company and Executive.
(c) Notwithstanding (a) and (b) above, the Employment Period shall end
early upon the first to occur of any of the following events:
(i) Executive's death;
(ii) Executive's retirement upon or after reaching age 65 ("RETIREMENT");
(iii) the Company's termination of Executive's employment on account of
Executive's having become unable (as determined by the Board in good faith) to
regularly perform his duties hereunder by reason of illness or incapacity
4
for a period of more than six (6) consecutive months ("TERMINATION FOR
DISABILITY");
(iv) the Company's termination of Executive's employment for Cause
("TERMINATION FOR CAUSE");
(v) the Company's termination of Executive's employment other than a
Termination for Disability or a Termination for Cause ("TERMINATION
WITHOUT CAUSE");
(vi) Executive's termination of Executive's employment for Good Reason, by
means of advance written notice to the Company at least thirty (30)
days prior to the effective date of such termination identifying such
termination as a Termination by Executive for Good Reason and
identifying the Good Reason ("TERMINATION BY EXECUTIVE FOR GOOD
REASON") (it being expressly understood that Executive's giving notice
that the extension provision in the first sentence of paragraph 5(b)
hereof shall no longer apply shall not constitute a Termination by
Executive for Good Reason);
(vii)Executive's termination of Executive's employment for any reason
other than Good Reason, by means of advance written notice to the
Company at least one hundred twenty (120) days prior to the effective
date of such termination identifying such termination as a Termination
by Executive with Advance Notice ("TERMINATION BY EXECUTIVE WITH
ADVANCE NOTICE") (it being expressly understood that Executive's
giving notice that the extension provision in the first sentence of
paragraph 5(b) hereof shall no longer apply shall not constitute a
Termination by Executive with Advance Notice); or
(viii) the termination of Executive's employment (A) on account of a
Termination without Cause before the second anniversary of a Change of
Control, (B) on account of a Termination by Executive for Good Reason
before the second anniversary of a Change of Control or (C) in
connection with but prior to a Change of Control and following the
commencement of any discussion with any third party that (i) requests
or suggests that Executive's employment be terminated, and (ii)
ultimately engages in a Change of Control (collectively, "TERMINATION
FOLLOWING A CHANGE OF CONTROL").
(d) For purposes of this Agreement, "CAUSE" shall mean:
(i) the commission by Executive of a felony or a crime involving moral
turpitude;
(ii) the commission by Executive of a fraud;
5
(iii)the commission by Executive of any act involving dishonesty or
disloyalty with respect to the Company or any of its subsidiaries or
affiliates that xxxxx or damages any of them to any extent;
(iv) conduct by Executive that brings the Company or any of its
subsidiaries or affiliates into substantial public disgrace or
disrepute;
(v) gross negligence or willful misconduct by Executive with respect to
the Company or any of its subsidiaries or affiliates;
(vi) repudiation of this Agreement by Executive or Executive's abandonment
of his employment with the Company (it being expressly understood that
a Termination by Executive for Good Reason or a Termination by
Executive with Advance Notice shall not constitute such a repudiation
or abandonment);
(vii)breach by Executive of any of the agreements in paragraph 8 hereof
prior to the end of the Employment Period; or
(viii) any other breach by Executive of this Agreement which is material
and which is not cured within thirty (30) days after written notice
thereof to Executive from the Company.
(e) For purposes of this Agreement, "GOOD REASON" shall mean:
(i) a reduction by the Company in Executive's salary to an amount less
than "EXECUTIVE'S REFERENCE SALARY" (i.e., Executive's initial salary
or, in the event the Employment Period has been extended pursuant to
paragraph 5(b) hereof, Executive's salary on the date on which the
most recent such extension occurred) or any downward adjustment in
Executive's Target Bonus; or
(ii) the Company's giving notice that the extension provision in the first
sentence of paragraph 5(b) hereof shall no longer apply; or
(iii)any breach by the Company of this Agreement which is material and
which is not cured within thirty (30) days after written notice
thereof to the Company from Executive.
(f) For purposes of this Agreement, "CHANGE OF CONTROL" shall mean the
occurrence of any of the following events during the Employment
Period:
(i) The acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 40% or more of either: (A) the then-outstanding
shares of common stock of the Company (the "Company Common Stock") or
(B) the combined voting
6
power of the then-outstanding voting securities of the Company
entitled to vote generally in the election of directors ("Voting
Stock"); PROVIDED, HOWEVER, that for purposes of this subparagraph
(i), the following acquisitions shall not constitute a Change of
Control: (A) any acquisition directly from the Company, (B) any
acquisition by the Company, a subsidiary of the Company or the Xxxxxx
Group, (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any subsidiary of the
Company, or (D) any acquisition by any Person pursuant to a
transaction which complies with clauses (A), (B) and (C) of
subparagraph (iii) of this paragraph 5(f); or
(ii) Individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason (other than death or
disability) to constitute at least a majority of the Board; PROVIDED,
HOWEVER, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the
Company's shareholders, was approved by a vote of at least a majority
of the directors then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement of the Company in
which such person is named as a nominee for director, without
objection to such nomination) shall be considered as though such
individual were a member of the Incumbent Board, but excluding for
this purpose, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest (within
the meaning of Rule 14a-11 of the Exchange Act) with respect to the
election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other
than the Board; or
(iii) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets
of the Company (a "Business Combination"), in each case, unless,
following such Business Combination, (A) all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the Company Common Stock and Voting Stock immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than a majority of, respectively, the
then-outstanding shares of common stock and the combined voting power
of the then-outstanding voting securities entitled to vote generally
in the election of directors, as the case may be, of the entity
resulting from such Business Combination (including, without
limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either
directly or through one or more subsidiaries) in substantially the
same proportions relative to each other as their ownership,
immediately prior to such Business Combination, of the Company Common
Stock and Voting Stock of the Company, as the case may be, (B) no
Person (excluding any entity resulting from such Business Combination,
the Xxxxxx Group or any employee benefit plan (or related trust)
sponsored or maintained by the Company, a subsidiary of the Company or
such entity resulting from such Business Combination) beneficially
owns, directly or indirectly, 40% or more of, respectively, the
then-outstanding shares of common stock of the entity resulting from
such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation except to the
extent that such ownership existed prior to the Business Combination
and (C) at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination were
members of the
7
Incumbent Board at the time of the execution of the initial agreement,
or of the action of the Board, providing for such Business
Combination; or
(iv) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
(v) For purposes of this paragraph 5(f), the "Xxxxxx Group" shall
mean Messrs. Xxxxxx X. Xxxxxx, Xxxxxx Xxxxxx, Xxxx Xxxxxx, Xxxxxxx X.
Xxxxxx and June X. Xxxxxxx, and their respective spouses, descendants
and spouses of descendants, trustees of trusts established for the
benefit of such persons (acting in their capacity as trustees of such
trusts), and executors of estates of such persons (acting in their
capacity as executors of such estates), and each person of which any
of the foregoing owns (i) more than fifty percent (50%) of the voting
stock or other voting interests and (ii) stock or other interests
representing more than fifty percent (50%) of the total value of the
stock or other interests of such person.
6. POST-EMPLOYMENT PERIOD PAYMENTS.
--------------------------------
(a) If the Employment Period ends on the date on which (without
any extension thereof) it is then scheduled to end pursuant to
paragraph 5 hereof, or if the Employment Period ends early pursuant to
paragraph 5 hereof for any reason, Executive shall cease to have any
rights to salary, bonus (if any), options, expense reimbursements or
other benefits other than: (i) any salary which has accrued but is
unpaid, any reimbursable expenses which have been incurred but are
unpaid, and any unexpired vacation days which have accrued under the
Company's vacation policy but are unused, as of the end of the
Employment Period, (ii) any option rights or plan benefits which by
their terms extend beyond termination of Executive's employment (but
only to the extent provided in any option theretofore granted to
Executive or any benefit plan in which Executive has participated as
an employee of the Company), (iii) any benefits to which Executive is
entitled under Part 6 of Subtitle B of Title I of the Employee
Retirement Income Security Act of 1974, as amended ("COBRA") and (iv)
any other amount(s) payable pursuant to the succeeding provisions of
this paragraph 6.
(b) If the Employment Period ends pursuant to paragraph 5 hereof
on Executive's sixty-fifth birthday, or if the Employment Period ends
early pursuant to paragraph 5 hereof on account of Executive's death,
Retirement (provided such Retirement is not a Termination Following a
Change of Control) or Termination for Disability, the Company shall
make no further payments to Executive except as contemplated in
(a)(i), (ii) and (iii) above.
(c) If the Employment Period ends early pursuant to paragraph 5
hereof on account of Termination for Cause, the Company shall pay
Executive an amount equal to that amount Executive would have received
as salary (based on Executive's salary then in effect) had the
Employment Period remained in effect until the later of the effective
date of the Company's termination of Executive's employment or the
date thirty days after the Company's notice to Executive of such
termination. The Company shall make no further payments to Executive
except as contemplated in (a)(i), (ii) and (iii) above.
8
(d) If the Employment Period ends early pursuant to paragraph 5
hereof on account of a Termination without Cause or a Termination by
Executive for Good Reason, and such termination does not constitute a
Termination Following a Change of Control, the Company shall pay to
Executive amounts equal to the amounts Executive would have received
as salary (based on Executive's salary then in effect or, if greater,
Executive's Reference Salary) had the Employment Period remained in
effect for a period of twenty-four (24) months after the last day of
the month in which the Employment Period ends (in the event Executive
is entitled during the payment period to any payments under any
disability benefit plan or the like in which Executive has
participated as an employee of the Company, less such payments),
payable at the times such amounts would have been paid; PROVIDED,
HOWEVER, that if Executive so chooses, in his sole discretion, such
payment under this subparagraph (d) shall be made in a lump sum. In
addition, the Company shall reimburse Executive (net after taxes on
the receipt of such reimbursement) for any premiums paid by Executive
for health insurance provided to Executive (for Executive and his
dependents) by the Company subsequent to the end of the Employment
Period pursuant to the requirements of COBRA as in effect on the date
of this Agreement. The Company shall make no further payments to
Executive except as contemplated in (a)(i), (ii) and (iii) above. It
is expressly understood that the Company's payment obligations under
this subparagraph (d) shall cease in the event Executive breaches any
of his agreements in paragraph 7 or 8 hereof.
(e) If the Employment Period ends early pursuant to paragraph 5
hereof on account of a Termination by Executive with Advance Notice,
and such termination does not constitute a Termination Following a
Change of Control, the Company shall make no further payments to
Executive except as contemplated in (a)(i), (ii) and (iii) above.
(f)(i) If the Employment Period ends early pursuant to paragraph
5 hereof on account of a Termination Following a Change
of Control, Executive shall be entitled to receive an
amount equal to two times the sum of (A) Executive's base
salary at the time of such termination (or, if higher,
Executive's Reference Salary) and (B) Executive's Target
Bonus for the year in which such termination occurs (or,
if higher, Executive's Target Bonus for the preceding
year or the year in which the Change of Control occurs),
payable at the times such amounts would have been paid;
PROVIDED, HOWEVER, that if Executive so chooses, in his
sole discretion, such payment under this subparagraph
(f)(i) shall be made in a lump sum. In addition, the
Company shall reimburse Executive (net after taxes on the
receipt of such reimbursement) for any premiums paid by
Executive for health insurance provided to Executive (for
Executive and his dependents) by the Company subsequent
to the end of the Employment Period pursuant to the
requirements of COBRA as in effect on the date of this
Agreement.
(ii) Notwithstanding any provision of this Agreement to the
contrary, if any amount or benefit to be paid or provided
under this Agreement or otherwise pursuant to or by
reason of any other agreement, policy, plan, program or
arrangement, including without limitation any bonus,
stock option, performance share, performance unit, stock
appreciation right or similar right, or the lapse or
termination of any restriction on or the vesting or
9
exercisability of any of the foregoing would be an "Excess
Parachute Payment," within the meaning of Section 280G of
the Code, or any successor provision thereto, but for the
application of this sentence, then the payments and benefits
to be paid or provided under this Agreement shall be reduced
to the minimum extent necessary (but in no event to less
than zero) so that no portion of any such payment or
benefit, as so reduced, constitutes an Excess Parachute
Payment; provided, however, that the foregoing reduction
shall be made only if and to the extent that such reduction
would result in an increase in the aggregate payment and
benefits to be provided to Executive, determined on an
after-tax basis (taking into account the excise tax imposed
pursuant to Section 4999 of the Code, or any successor
provision thereto, any tax imposed by any comparable
provision of state law, and any applicable federal, state
and local income taxes). The determination of whether any
reduction in such payments or benefits to be provided under
this Agreement is required pursuant to the preceding
sentence shall be made at the expense of the Company, if
requested by the Executive or the Company, by the Company's
independent accountants. The fact that the Executive's right
to payments or benefits may be reduced by reason of the
limitations contained in this paragraph 6(f) shall not of
itself limit or otherwise affect any other rights of the
Executive other than pursuant to this Agreement. In the
event that any payment or benefit intended to be provided
under this Agreement is required to be reduced pursuant to
this paragraph 6(f), the Executive shall be entitled to
designate the payments and/or benefits to be so reduced in
order to give effect to this paragraph 6(f). The Company
shall provide the Executive with all information reasonably
requested by the Executive to permit the Executive to make
such designation. In the event that the Executive fails to
make such designation within 10 business days of the Date of
Termination, the Company may effect such reduction in any
manner it deems appropriate.
(g) Without limiting the rights of the Executive at law or in equity, if
the Company fails to make any payment or provide any benefit required to be made
or provided hereunder on a timely basis, the Company will pay interest on the
amount or value thereof at an annualized rate of interest equal to the so-called
composite "prime rate" as quoted from time to time during the relevant period in
the Midwest Edition of THE WALL STREET JOURNAL. Such interest will be payable as
it accrues on demand. Any change in such prime rate will be effective on and as
of the date of such change.
(h) Executive shall not be required to mitigate the amount of any payment
or benefit provided for in this Agreement by seeking other employment or
otherwise.
7. CONFIDENTIAL INFORMATION. Executive acknowledges that the information,
observations and data obtained by him while employed by the Company pursuant to
this Agreement, as well as those obtained by him while employed by the Company
or any of its subsidiaries or affiliates or any predecessor thereof prior to the
date of this Agreement, concerning the business or affairs of the Company or any
of its subsidiaries or affiliates or any predecessor thereof (unless and
10
except to the extent the foregoing become generally known to and available for
use by the public other than as a result of Executive's acts or omissions to
act, "CONFIDENTIAL INFORMATION") are the property of the Company or such
subsidiary or affiliate. Therefore, Executive agrees that during the Employment
Period and for two years thereafter he shall not disclose any Confidential
Information without the prior written consent of the Chief Executive Officer of
the Company unless and except to the extent that such disclosure is (i) made in
the ordinary course of Executive's performance of his duties under this
Agreement or (ii) required by any subpoena or other legal process (in which
event Executive will give the Company prompt notice of such subpoena or other
legal process in order to permit the Company to seek appropriate protective
orders), and that he shall not use any Confidential Information for his own
account without the prior written consent of the Chief Executive Officer of the
Company. Executive shall deliver to the Company at the termination of the
Employment Period, or at any other time the Company may reasonably request, all
memoranda, notes, plans, records, reports, computer tapes and software and other
documents and data (and copies thereof) relating to the Confidential
Information, or to the work product or the business of the Company or any of its
subsidiaries or affiliates which he may then possess or have under his control.
8. NON-COMPETE, NON-SOLICITATION.
(a) Executive acknowledges that in the course of his employment with the
Company pursuant to this Agreement he will become familiar, and during the
course of his employment by the Company or any of its subsidiaries or affiliates
or any predecessor thereof prior to the date of this Agreement he has become
familiar, with trade secrets and customer lists of and other confidential
information concerning the Company and its subsidiaries and affiliates and
predecessors thereof and that his services have been and will be of special,
unique and extraordinary value to the Company.
(b) Executive agrees that during the Employment Period and for a period of
two years after termination of his employment with the Company, he shall not in
any manner, directly or indirectly, through any person, firm or corporation,
alone or as a member of a partnership or as an officer, director, shareholder,
investor or employee of or in any other corporation or enterprise or otherwise,
engage in or be engaged in, or assist any other person, firm, corporation or
enterprise in engaging or being engaged in, any business then actively being
conducted by the Company or any of its subsidiaries or affiliates.
(c) Executive further agrees that during the Employment Period and for a
period of two years after termination of his employment with the Company, he
shall not in any manner, directly or indirectly, induce or attempt to induce any
employee of the Company or of any of its subsidiaries or affiliates to quit or
abandon his employ.
(d) Nothing in this paragraph 8 shall prohibit Executive from being: (i) a
shareholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than 5% of the outstanding equity securities of any
class of a corporation or other entity which is publicly traded, so long as
Executive has no active participation in the business of such corporation or
other entity.
11
(e) If, at the time of enforcement of this paragraph, a court holds that
the 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 to revise
the restrictions contained herein to cover the maximum period, scope and area
permitted by law.
9. ENFORCEMENT. Because Executive's services are unique and because
Executive has access to Confidential Information and work product, the parties
hereto agree that the Company would be damaged irreparably in the event any of
the provisions of paragraph 8 hereof were not performed in accordance with their
specific terms or were otherwise breached and that money damages would be an
inadequate remedy for any such non-performance or breach. Therefore, the Company
or its successors or assigns shall be entitled, in addition to other rights and
remedies existing in their favor, to an injunction or injunctions to prevent any
breach or threatened breach of any of such provisions and to enforce such
provisions specifically (without posting a bond or other security).
10. EXECUTIVE REPRESENTATIONS. Executive represents and warrants to the
Company that (i) the execution, delivery and performance of this Agreement by
Executive does not and will not conflict with, breach, violate or cause a
default under any contract, agreement, instrument, order, judgment or decree to
which Executive is a party or by which he is bound, (ii) Executive is not a
party to or bound by any employment agreement, noncompete agreement or
confidentiality agreement with any other person or entity, and (iii) upon the
execution and delivery of this Agreement by the Company, this Agreement shall be
the valid and binding obligation of Executive, enforceable in accordance with
its terms.
11. SURVIVAL. Subject to any limits on applicability contained therein,
paragraphs 7 and 8 hereof shall survive and continue in full force in accordance
with their terms notwithstanding any termination of the Employment Period.
12. NOTICES. Any notice provided for in this Agreement shall be in writing
and shall be either personally delivered, sent by reputable overnight carrier or
mailed by first class mail, return receipt requested, to the recipient at the
address below indicated:
NOTICES TO EXECUTIVE:
---------------------
Xxxxx X. Xxxxxxx
23214 Xxxxxxxx'x Pt.
Xxx Xxxxxxx, XX 00000
NOTICES TO THE COMPANY:
-----------------------
Xx. Xxxxxx X. Xxxx
Chief Executive Officer
Penton Media, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
12
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 will be deemed to have been given when so delivered,
sent or mailed.
13. 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.
14. PAYMENT OF CERTAIN COSTS AND EXPENSES.
(a) PREVAILING PARTY'S LITIGATION EXPENSES. In the event of litigation
between the Company and Executive related to this Agreement, the non-prevailing
party shall reimburse the prevailing party for any costs and expenses (including
without limitation attorneys' fees) reasonably incurred by the prevailing party
in connection therewith.
(b) CHANGE OF CONTROL OF THE COMPANY. Without limiting the generality of
(a) above, in the event that there is a Change of Control of the Company, if it
should appear to Executive that the Company has failed to comply with any of its
obligations under this Agreement or in the event that the Company or any other
person takes or threatens to take any action to declare this Agreement void or
unenforceable, or institutes any litigation or other action or proceeding
designed to deny, or to recover from, Executive the benefits provided or
intended to be provided to Executive hereunder, the Company irrevocably
authorizes Executive from time to time to retain counsel of Executive's choice,
at the expense of the Company as hereafter provided, to advise and represent
Executive in connection with any such interpretation, enforcement or defense,
including without limitation the initiation or defense of any litigation or
other legal action, whether by or against the Company or any Director, officer,
shareholder or other person affiliated with the Company, in any jurisdiction.
Notwithstanding any existing or prior attorney-client relationship between the
Company and such counsel, the Company irrevocably consents to Executive's
entering into an attorney-client relationship with such counsel, and in that
connection the Company and Executive agree that a confidential relationship will
exist between Executive and such counsel. Without respect to whether Executive
prevails, in whole or in part, in connection with any of the foregoing, the
Company will pay and be solely financially responsible for any and all
attorneys' and related fees and expenses incurred by Executive in connection
with any of the foregoing.
(c) SOURCE OF PAYMENTS. Except as otherwise specified herein, in the event
a Change of Control occurs, any payments to Executive pursuant to this Agreement
and the performance of the Company's obligations hereunder shall be secured by
amounts deposited or to be deposited in a trust established by the Company for
the benefit of Executive (and, at the Company's option, for the benefit of other
executives of the Company who are entitled to payments similar to those provided
in this Agreement) (the "Trust"). The Company shall transfer to such Trust
assets from which all or a portion of the payments provided under this Agreement
are to be paid,
13
provided that such assets of the Trust shall at all times be subject to the
claims of general unsecured creditors of the Company and that neither Executive
nor any other person entitled to payments through the Trust shall at any time
have a prior claim to such assets. Any payments to Executive under this
Agreement that are not paid through the Trust shall be paid from the Company's
general assets, and Executive shall have the status of a general unsecured
creditor with respect to the Company's obligations to make payments under this
Agreement.
15. COMPLETE AGREEMENT. This Agreement embodies the complete agreement and
understanding between the parties with respect to the subject matter hereof and
effective as of its date supersedes and preempts any prior understandings,
agreements or representations by or between the parties, written or oral, which
may have related to the subject matter hereof in any way.
16. COUNTERPARTS. This Agreement may be executed in separate counterparts,
each of which shall be deemed to be an original and both of which taken together
shall constitute one and the same agreement.
17. SUCCESSORS AND ASSIGNS. This Agreement shall bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
heirs, executors, personal representatives, successors and assigns, except that
neither party may assign any of his or its rights or delegate any of his or its
obligations hereunder without the prior written consent of the other party.
Executive hereby consents to the assignment by the Company of all of its rights
and obligations hereunder to any successor to the Company by merger or
consolidation or purchase of all or substantially all of the Company's assets,
provided such transferee or successor assumes the liabilities of the Company
hereunder.
18. CHOICE OF LAW. This Agreement shall be governed by the internal law,
and not the laws of conflicts, of the State of Ohio.
19. AMENDMENT AND WAIVER. The provisions of this Agreement may be amended
or waived only with the prior written consent of the Company and Executive, and
no course of conduct or failure or delay in enforcing the provisions of this
Agreement shall affect the validity, binding effect or enforceability of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date written below.
PENTON MEDIA, INC.
Date: February 5, 1999 By /s/ XXXXXX X. XXXX
---------------------
Xxxxxx X. Xxxx
Chief Executive Officer
Date: February 14, 1999 /s/ XXXXX X. XXXXXXX
---------------------
