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DL&A EXHIBIT 10.1
EMPLOYMENT AGREEMENT
BY AND BETWEEN
CMP MEDIA INC. AND XXXXXXX X. XXXXX
NOVEMBER, 27, 1996
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EMPLOYMENT AGREEMENT
TABLE OF CONTENTS
PAGE
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ARTICLE I - EMPLOYMENT
SECTION 1.1 Services.......................................... 2
SECTION 1.2 Term.............................................. 2
SECTION 1.3 Representations and Warranties.................... 3
SECTION 1.4 Intellectual Property............................. 3
ARTICLE II - COMPENSATION
SECTION 2.1 Base Salary....................................... 4
SECTION 2.2 Incentive Bonus................................... 4
SECTION 2.3 Stock............................................. 4
SECTION 2.4 Fringe Benefits................................... 5
SECTION 2.5 Reimbursement of Expenses......................... 5
ARTICLE III - CONFIDENTIALITY; NON-COMPETITION
SECTION 3.1 Protection of Company's Business Interests........ 6
SECTION 3.2 Non-Disclosure and Non-Use of Confidential
Information..................................... 6
SECTION 3.3 Protection from Unfair Competition................ 7
SECTION 3.4 Prior Notice; Opportunity to Cure................. 10
SECTION 3.5 Other Post-Employment Covenants................... 11
SECTION 3.6 Confidentiality of Agreement...................... 13
SECTION 3.7 Relief for Breach................................. 14
SECTION 3.8 Separate Covenants................................ 15
ARTICLE IV - TERMINATION OF EMPLOYMENT
SECTION 4.1 Dismissal Without Cause or Resignation For
Good Reason..................................... 15
SECTION 4.2 Other Termination................................. 16
SECTION 4.3 Retirement........................................ 16
ARTICLE V - PROCEDURE TO BE FOLLOWED IN CASE OF RESIGNATION FOR
GOOD REASON OR DISMISSAL FOR CAUSE
SECTION 5.1 Resignation for Good Reason....................... 17
SECTION 5.2 Dismissal For Cause............................... 18
ARTICLE VI - RESOLUTION OF DISPUTES
SECTION 6.1 Arbitration....................................... 19
SECTION 6.2 Equitable Remedies................................ 19
ARTICLE VII - DEFINITIONS............................................... 19
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ARTICLE VIII - MISCELLANEOUS
SECTION 8.1 Entire Agreement; Binding Effect................. 23
SECTION 8.2 Amendment........................................ 23
SECTION 8.3 Applicable Law................................... 23
SECTION 8.4 Severability..................................... 23
SECTION 8.5 No Waiver........................................ 24
SECTION 8.6 Notices.......................................... 24
SECTION 8.7 Assignment....................................... 25
SECTION 8.8 Survival......................................... 25
SECTION 8.9 Headings......................................... 26
SECTION 8.10 Counterparts..................................... 26
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EMPLOYMENT AGREEMENT
This Agreement, made and entered into as of the 27th day of November,
1996, by and between CMP Media Inc., a Delaware corporation (the "Company") and
Xxxxxxx X. Xxxxx ("Xxxxxxx").
W I T N E S S E T H :
WHEREAS, Xxxxxxx is a key senior executive of the Company; and
WHEREAS, from his long employment with the Company, Xxxxxxx possesses
substantial knowledge, experience and expertise in the businesses in which the
Company is engaged; and
WHEREAS, the parties desire to set forth the terms under which Michael's
employment with the Company will continue and upon which he will refrain from
competing against the Company after the termination of his employment;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by each of the parties, the parties
hereto hereby covenant and agree as follows:
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ARTICLE I
EMPLOYMENT
SECTION 1.1. SERVICES.
The Company shall employ Xxxxxxx, and Xxxxxxx shall serve the Company, as
its President and chief executive officer or in such other position as may be
assigned to him from time to time, and he shall perform such services and duties
as are commensurate with such position or as may be from time to time specified
by the Company, consistent with the other terms of this Agreement. At all times
during his employment with the Company, Xxxxxxx shall use his best efforts to
promote the interests of the Company and shall devote his full time and energies
to the business and affairs of the Company. Xxxxxxx shall not, without his
consent, be obligated to perform duties that would require him to report
regularly to an office located more than fifty (50) miles from Manhasset, New
York; provided, however, that Xxxxxxx shall undertake all such travel as may be
necessary or appropriate to the performance of his duties hereunder.
SECTION 1.2. TERM.
Michael's employment by the Company shall be deemed employment at will and
shall not be subject to a fixed term. Either Xxxxxxx or the Company may
terminate his employment at any time and for any reason, with or without cause,
by delivering written notice to the other party. If Xxxxxxx terminates his
employment by Voluntary Resignation, he shall give the Company not less than
ninety (90) days' prior written notice. In such event, the Company shall have
the right to waive all or part of such notice-period and accept Michael's
Voluntary Resignation effective as of any date prior to the expiration of such
90-day period.
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SECTION 1.3. REPRESENTATIONS AND WARRANTIES.
(a) Xxxxxxx represents and warrants to the Company that (i) he has full
legal right, power and authority to enter into this Agreement and to consummate
the transactions herein contemplated; (ii) this Agreement constitutes the valid
and binding obligation of Xxxxxxx, enforceable in accordance with its terms,
except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency or similar laws affecting creditors' rights generally and
by general principles of equity; and (iii) neither this Agreement nor the
consummation of the transactions herein contemplated will conflict with, violate
or infringe any legal restriction, contract or instrument to which Xxxxxxx is
subject or by which he is bound.
(b) The Company represents and warrants to Xxxxxxx that (i) it has full
legal right, power and authority to enter into this Agreement and to consummate
the transactions herein contemplated; (ii) the execution and delivery of this
Agreement has been duly authorized by all necessary corporate action; (iii) this
Agreement constitutes the valid and binding obligation of the Company,
enforceable in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency or similar laws
affecting creditors' rights generally and by general principles of equity; and
(iv) neither this Agreement nor the consummation of the transactions herein
contemplated will conflict with, violate or infringe any legal restriction,
contract or instrument to which the Company is subject or by which it is bound.
SECTION 1.4. INTELLECTUAL PROPERTY.
All ideas, designs, plans and materials developed by Xxxxxxx during the
period of his employment with the Company which relate to any business of the
CMP Group shall be the exclusive property of the Company. Xxxxxxx shall
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disclose all such ideas, designs, plans and materials to the Company and shall
not, without the Company's prior written consent, use them except for the
benefit of the Company. At the Company's request and cost, Xxxxxxx shall take
all such actions and shall execute, acknowledge and deliver all such documents
as the Company may deem necessary or advisable in order to secure to the Company
the rights thereto by patent, copyright, trademark or otherwise.
ARTICLE II
COMPENSATION
SECTION 2.1. BASE SALARY.
As compensation for his services hereunder, the Company shall pay Xxxxxxx
a base salary at a rate to be determined on an annual basis.
SECTION 2.2. INCENTIVE BONUS.
In addition to his base salary, Xxxxxxx shall be entitled to participate
in an annual incentive bonus program based on the Company's achievement of its
financial goals and other objectives. The terms of such plan shall be as
determined by the Compensation Committee of the Board of Directors.
SECTION 2.3. STOCK.
In addition to his base salary and incentive bonus, Xxxxxxx shall have the
right, pursuant to and subject to the provisions of the Share Purchase Agreement
and the Option Agreement, to purchase restricted shares and option shares of the
Company's Class A Common Stock.
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SECTION 2.4. FRINGE BENEFITS.
During his employment Xxxxxxx shall be entitled to participate in all
employee benefit plans which now or hereafter may be in effect for the benefit
of employees of the Company generally and for which he may qualify, subject to
and in accordance with the provisions of such plans as in effect from time to
time.
SECTION 2.5. REIMBURSEMENT OF EXPENSES.
The Company shall reimburse Xxxxxxx for all reasonable out-of-pocket
expenses actually incurred by him in the performance of his services hereunder
in accordance with the Company's standard travel and business
expense-reimbursement policy as in effect from time to time.
ARTICLE III
CONFIDENTIALITY; NON-COMPETITION
In consideration of the Company's agreement to make post-employment
payments to Xxxxxxx under Article IV, which payments Xxxxxxx acknowledges and
agrees will provide full and sufficient income to support himself and his
dependents during the period in which such payments are made, and as a specific
inducement to the Company to enter into this Agreement, the Stockholders'
Agreement and the Option Agreement, Xxxxxxx hereby accepts and agrees to the
provisions of this Article III and acknowledges that such provisions are
necessary and appropriate for the reasonable protection of the Company's
property, investments, business relationships, economic advantages and goodwill.
SECTION 3.1. PROTECTION OF COMPANY'S BUSINESS INTERESTS.
As a key senior executive of the Company, Xxxxxxx has been intimately
involved in the management of all aspects of the business of the Company and its
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Affiliates and has been a major strategist in planning and implementing its
business expansion. In the course of his long employment with the Company,
Xxxxxxx has developed special skills, knowledge and abilities in the publishing
field which are of a uniquely personal nature. He has also acquired detailed
knowledge of the internal operations of the Company and its Affiliates and
highly confidential information concerning the national and international
business of the Company and its Affiliates. In addition, he has been afforded
the opportunity to develop special relationships of confidence and trust with
the customers, suppliers, consultants, employees, officers, directors and
stockholders of the Company and its Affiliates. Because of his continuing
responsibilities with the Company and its Affiliates, including his involvement
in strategic planning and the evaluation of proposed investments, it is expected
that Xxxxxxx will continue to be entrusted with confidential information and
will continue to have the opportunity to develop such special relationships. The
parties acknowledge and agree that the Company would be unfairly and irreparably
damaged if Xxxxxxx were to take any of such skills, knowledge, information or
relationships, which he has acquired and developed during the course of his
employment with the Company, and use them to the detriment of the Company and
its Affiliates.
SECTION 3.2. NON-DISCLOSURE AND NON-USE OF CONFIDENTIAL INFORMATION.
(a) Xxxxxxx represents, warrants, covenants and agrees that, without the
Company's express or implied consent while employed or, after termination,
without the prior written consent of the Company's chief executive officer or
the Board of Directors, he will not willfully or knowingly at any time directly
or indirectly disclose, communicate or divulge, or use for the benefit of
himself or of any third party, any of the business or trade secrets or other
confidential information of the CMP Group including, solely by way of
illustration but not of limitation, their business strategies, business plans,
budgets, pricing, selling
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techniques, marketing techniques, operating systems, financial systems,
financial data, procedures, manuals, confidential reports, personnel records,
potential acquisitions, potential business expansions, credit and financial data
of their suppliers and of their present and prospective customers, data about
competitors, new product-development initiatives, custom research and new
product or service concepts and marketing strategy.
(b) Any and all materials of or concerning the CMP Group or their business
or affairs, including without limitation files, memoranda, notes,
correspondence, lists, records, video reproductions, computer tapes and disks,
design and other documents, and data storage and retrieval materials (and all
copies, compilations and summaries thereof), and any and all property of the CMP
Group, including without limitation equipment, software, keys, business cards
and credit cards, that are in Michael's custody or control shall be delivered to
the Company at the time Michael's employment with the Company terminates for any
reason. Xxxxxxx shall not destroy any such materials or property, shall not
retain any copies thereof and shall certify in writing to the Company upon
request that all such materials and property have been delivered to the Company.
SECTION 3.3. PROTECTION FROM UNFAIR COMPETITION.
(a) For as long as Xxxxxxx is employed by the CMP Group and through the
period ending on the earlier of (i) the third anniversary of the date of his
termination of employment (or, if the Company elects to pay him for an
additional period of time under Section 4.1(b), through the end of such
additional period) or (ii) the date Xxxxxxx attains the age of sixty-five (65),
Xxxxxxx shall not engage in competition with the CMP Group. For the purposes of
this Agreement, Xxxxxxx shall be deemed to engage in competition with the CMP
Group if Xxxxxxx does any of the following, whether or not in exchange for
consideration, without the
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Company's express or implied consent while employed or without the Company's
prior written consent after termination:
(A) On his own behalf or on behalf of any other person or entity,
(1) participates or is involved in or has direct responsibility for the
day-to-day management or operation of a Directly Competitive Business, an
Indirectly Competitive Business or any material function thereof (E.G.,
advertising, circulation, production and the like); (2) owns, in whole or in
part, beneficially or of record, directly or indirectly, an equity interest (or
an interest convertible into equity) in a Directly Competitive Business or a
Direct Competitor; (3) renders services as a director, officer, employee,
consultant, advisor, agent or independent sales representative to a Direct
Competitor; or (4) renders services as a director, officer, employee,
consultant, advisor, agent or independent sales representative to an Indirect
Competitor unless Xxxxxxx has no responsibility for or participation or
involvement in any Indirectly Competitive Business of such Indirect Competitor,
provided, however, that Xxxxxxx xxx have supervisory, advisory, consulting or
sales-representative responsibility over an Indirectly Competitive Business if
the revenue of all Indirectly Competitive Businesses of such Indirect Competitor
over which Xxxxxxx has such responsibility represents no more than fifteen
percent (15%) of the total revenue over which Xxxxxxx has such responsibility.
(B) Solicits the service of any employee of the CMP Group for
Michael's own benefit or for the benefit of any person or entity other than the
CMP Group, or induces or helps to induce any such employee to leave employment
with the CMP Group.
(C) Assists, induces or helps any employee or former employee of the
CMP Group or any other person or entity to engage in competition with the CMP
Group or any of its business activities, provided that the giving of a favorable
reference by Xxxxxxx on behalf of such former employee shall not be prohibited
by this clause (C).
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(D) Employs or causes any person or entity other than the CMP Group
to employ any former employee of the CMP Group within one (1) year after the
resignation of such former employee from the CMP Group.
(E) Willfully induces or attempts to induce any customer, supplier
or contractor of the Company to terminate any agreement or arrangement with the
Company, or willfully induces or attempts to induce any customer, supplier or
contractor, or any potential customer, supplier or contractor, of the Company
not to enter into any agreement or arrangement with the Company.
(F) Communicates publicly (other than pursuant to subpoena in a
legal proceeding) or to the press, or writes or produces for publication in any
medium, on the subject of, or with express or implied reference to, the CMP
Group or any of their former, current or future stockholders, directors,
officers or employees in their capacities as such. For the purpose hereof,
"implied reference" shall mean a reference that does not expressly name the CMP
Group or any of their former, current or future stockholders, directors,
officers or employees but that nevertheless would be understood by the average
reader or audience-member to refer thereto. It shall not be deemed a violation
of this clause (F) if, after the termination of his employment with the Company,
Xxxxxxx responds to inquiries from the public or the press solely by stating, in
form or substance, "I do not discuss any matters relating to CMP; please address
your inquiries directly to the company" or Xxxxxxx communicates the fact that he
was formerly employed by the Company and identifies the positions he held and
the dates thereof.
(b) Notwithstanding the provisions of paragraph (a) of this Section 3.3,
Xxxxxxx shall not be deemed to be engaged in competition with the CMP Group
solely by reason of Michael's ownership of (i) an equity interest of less than
one-half of one percent (0.5%) in the securities of a Direct Competitor or
Indirect Competitor listed for trading on a national securities exchange or
quoted in the National Market List of NASDAQ or (ii) an interest in a mutual or
other
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investment fund which owns an interest in a Direct Competitor or Indirect
Competitor, provided that Xxxxxxx has no influence or control over the selection
of such fund's investment decisions.
SECTION 3.4. PRIOR NOTICE; OPPORTUNITY TO CURE.
(a) Xxxxxxx shall give the Company written notice at least twenty (20)
Business Days before entering into any relationship, transaction or business, or
engaging in any activity, or taking or omitting to take any action, which might
reasonably be deemed a breach of any provision of Section 3.2 or Section 3.3,
such notice to include full and complete particulars as to the proposed
relationship, transaction, activity, action or omission, the services or duties
contemplated and such other facts and circumstances as are reasonably necessary
for the Company to make an informed decision. The Company shall advise Xxxxxxx
in writing, within ten (10) Business Days after such notice is given, of the
Board of Directors' determination as to whether such relationship, transaction,
business, activity, action or omission would materially breach any of the
provisions of Section 3.2 or Section 3.3. In the event that, for reasons not
within his control, Xxxxxxx gives the Company less than twenty (20) Business
Days' prior written notice, the Company will endeavor in good faith to advise
Xxxxxxx of the Board of Directors' determination in less than ten (10) Business
Days after such notice is given, provided that the Company's failure to advise
Xxxxxxx in less than ten (10) Business Days shall not be deemed to constitute
consent to such relationship, transaction, business, activity, action or
omission and shall not give rise to any liability of the Company to Xxxxxxx or
to any third party.
(b) Once the Company has advised Xxxxxxx in writing that the Board of
Directors has determined that a proposed relationship, transaction, business,
activity, action or omission would not materially breach any of the provisions
of Section 3.2 or Section 3.3, and Xxxxxxx has thereupon entered into such
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relationship, transaction or business or has begun to engage in such activity or
to take or omit to take such action, the Board of Directors shall have no right
to reverse or otherwise modify its determination; provided, however, that if the
nature, scope or terms of such relationship, transaction, business, activity,
action or omission are to be modified after such determination is made, then in
accordance with paragraph (a) hereof Xxxxxxx shall give the Company prior
written notice of such modification and the Company shall advise him as to
whether such relationship, transaction, business, activity, action or omission,
as so modified, would materially breach any of the provisions of Section 3.2 or
Section 3.3.
(c) In the event that, without having given the Company prior notice
pursuant to paragraphs (a) or (b) hereof, Xxxxxxx enters into any relationship,
transaction or business or begins to engage in any activity or to take or omit
to take any action, or there is a modification of the nature, scope or terms of
such relationship, transaction, business, activity, action or omission that the
Board of Directors determines is a material breach of any of the provisions of
Section 3.2 or Section 3.3, the Company shall give Xxxxxxx written notice of
such determination and, if such breach is continuing, an opportunity to cure
such breach before the Company seeks remedy or relief by judicial process or
arbitration. The opportunity to cure shall be sixty (60) days to the extent such
continuing breach consists of holding an ownership interest in a competitive
business and fifteen (15) days with respect to any other continuing breach.
SECTION 3.5. OTHER POST-EMPLOYMENT COVENANTS.
(a) During the period in which the Company is making payments to Xxxxxxx
pursuant to Article IV, Xxxxxxx shall not willfully take any action materially
adverse to the interests of the Company, even if such action is in technical
compliance with the other provisions of this Article III, but shall at all
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times conduct himself in the same manner and with the same degree of loyalty to
the Company as if he were still an employee of the Company.
(b) During the period in which the Company is making payments to Xxxxxxx
pursuant to Article IV, Xxxxxxx shall make himself available to the Company for
consultation and advice at such times as it may reasonably request and as do not
unreasonably interfere with Michael's other permitted business activities or
commitments. Xxxxxxx shall not be required to be physically present at any
office of the Company or to allocate regular time to making himself available
for such consultation or advice, provided that he shall respond timely to any
requests by the Company for consultation. Xxxxxxx shall maintain, at his own
expense, an office at his home with all furniture and equipment necessary to
carry out his obligations under this Section 3.5(b). The Company shall reimburse
Xxxxxxx for all reasonable out-of-pocket expenses he incurs in rendering such
consultation or advice (other than expenses of maintaining his home office).
(c) Both during the period in which the Company is making payments to
Xxxxxxx pursuant to Article IV and thereafter, Xxxxxxx shall, if requested by
the Company, provide information, testimony and assistance in connection with
the prosecution or defense of any claims by or against the Company arising out
of matters of which he acquired knowledge while an employee of the Company. The
Company shall reimburse Xxxxxxx for all reasonable out-of-pocket expenses he
incurs in rendering such assistance.
(d) Both during the period in which the Company is making payments to
Xxxxxxx pursuant to Article IV and thereafter, Xxxxxxx shall not willfully make
any oral or written statement which reflects adversely upon the character,
honesty, credit, efficiency or business practices of the CMP Group or its
former, current or future stockholders, directors, officers or employees in
their capacities as such.
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SECTION 3.6. CONFIDENTIALITY OF AGREEMENT.
The terms and conditions of this Agreement shall be kept confidential by
the parties, and neither of the parties shall disclose them to any non-party
unless such disclosure is necessitated by (a) legal and/or financial
requirements of the Company, in which case the form of such disclosure shall
first be mutually agreed upon by the Company and Xxxxxxx, or (b) any arbitration
or other legal proceeding contesting or seeking to enforce any provision or
interpretation of this Agreement (including any deposition or testimony that
either party provides in connection therewith), regardless of whether such
proceeding is initiated by Xxxxxxx or the Company. Except as provided in the
preceding sentence, and without limiting the generality of the foregoing,
Xxxxxxx shall not respond to or in any way participate in or contribute to any
public discussion, notice or other publicity concerning or in any way relating
to execution of this Agreement or the events (including any negotiations) which
led to its execution, and Xxxxxxx specifically agrees that he shall not disclose
information regarding this Agreement to any current or former employees of the
Company other than those expressly authorized by the Company to have knowledge
hereof. Without limiting the comprehensive confidentiality agreed to, Xxxxxxx
xxx disclose this Agreement to his attorneys, financial advisors and members of
his and his spouse's immediate families, provided he informs them of this
confidentiality provision and they agree to abide by it. Xxxxxxx hereby agrees
that any disclosure by him of any of the terms and conditions of this Agreement
in violation of the foregoing shall constitute and be treated as a material
breach of this Agreement and Xxxxxxx shall be responsible for damages occasioned
thereby, including but not limited to reasonable attorneys' fees incurred by the
Company to enforce this Section 3.6.
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SECTION 3.7. RELIEF FOR BREACH.
(a) Xxxxxxx acknowledges and agrees that any breach or anticipatory breach
by him of any of the provisions of this Article III would cause the Company
irreparable injury not compensable by monetary damages alone and that,
accordingly, in any such event, the Company shall be entitled to injunctions,
both preliminary and permanent, enjoining or restraining such breach or
anticipatory breach (and Xxxxxxx hereby consents to the issuance thereof without
bond by any court of competent jurisdiction), in addition to monetary damages in
such amount as the evidence may show and such other remedies as may be available
at law or in equity.
(b) Xxxxxxx shall not have the power or right to avoid any of his
obligations under this Article III by refusing or failing to accept from the
Company payment of any amounts duly tendered to him by the Company pursuant to
Article IV. It shall not be a valid defense, and Xxxxxxx shall not raise as a
defense, in any proceeding by the Company to enforce its rights under this
Article III that Xxxxxxx shall have refused or failed to accept any such
payments, and no way impaired or affected by Michael's refusal or failure to
accept any such payments from the Company.
SECTION 3.8. SEPARATE COVENANTS.
Xxxxxxx understands and agrees that the covenants contained in this
Article III constitute a series of separate covenants, one for each applicable
state in the United States and the District of Columbia, and one for each
applicable foreign country. If in any judicial proceeding a court shall hold
unenforceable any of the separate covenants included in this Article III, such
unenforceable covenant or covenants shall be deemed limited as necessary or
eliminated from the provisions of this Article III for the purpose of such
proceeding to the extent necessary to
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permit the remaining separate covenants of this Article III to be enforced in
such proceeding, and to permit such unenforceable covenant or covenants to be
enforced as limited.
ARTICLE IV
TERMINATION OF EMPLOYMENT
SECTION 4.1. DISMISSAL WITHOUT CAUSE OR RESIGNATION FOR GOOD REASON.
(a) In the event that Michael's employment with the Company terminates by
reason of his Dismissal Without Cause or his Resignation For Good Reason, the
Company shall, in consideration of Michael's compliance with the restrictive
covenants set forth in Article III and in lieu of any other severance
obligations to Xxxxxxx, pay him through the period ending on the earlier of (i)
the third anniversary of the date of his termination of employment or (ii) the
date Xxxxxxx attains the age of sixty-five (65), an annual amount equal to the
average of (A) his total annual income projected to be paid by the Company for
the calendar year in which such termination of employment occurs and (B) his
total annual income actually paid by, or due from, the Company for the
immediately preceding calendar year, less fifty percent (50%) of (1) any current
cash compensation, and (2) the present value of any deferred cash compensation,
that he earns from other sources as an employee, consultant, partner or
proprietor for each such year in which payments from the Company hereunder are
due. Payments shall be made in bi-weekly installments or on such other periodic
basis as the Company then makes salary payments to its employees generally.
(b) In addition, the Company shall have the right, but not the obligation,
to require Michael's continued compliance with the restrictive covenants set
forth in Article III for up to two (2) years after the expiration of the period
for which the
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Company is obligated to pay Xxxxxxx under paragraph (a) of this Section 4.1, in
consideration of which the Company shall continue to pay Xxxxxxx, during the
period of time elected by the Company, on the same basis and in the same manner
as set forth in paragraph (a) of this Section 4.1.
SECTION 4.2. OTHER TERMINATION.
In the event that Michael's employment with the Company terminates for any
reason other than Dismissal Without Cause or Resignation For Good Reason, no
compensation or other rights shall accrue to Xxxxxxx or his estate under this
Agreement after the date of termination, other than benefits which shall accrue
after such date pursuant to the terms of Company benefit plans in which Xxxxxxx
participated on the date of termination, which benefits shall be paid in
accordance with the terms of such plans. Xxxxxxx or his estate shall be entitled
to receive from the Company any compensation that was earned but unpaid as of
the date of termination of his employment.
SECTION 4.3. RETIREMENT.
In the event that Michael's employment with the Company terminates by
reason of his retirement at or after the date he attains the age of sixty-five
(65), the Company shall have the right, but not the obligation, to require
Michael's continued compliance with the restrictive covenants set forth in
Article III for up to two (2) additional years, in consideration of which the
Company shall continue to pay Xxxxxxx, during the period of time elected by the
Company, on the same basis and in the same manner as set forth in Section 4.1.
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ARTICLE V
PROCEDURE TO BE FOLLOWED IN CASE OF
RESIGNATION FOR GOOD REASON OR DISMISSAL FOR CAUSE
SECTION 5.1. RESIGNATION FOR GOOD REASON.
In the event Xxxxxxx terminates his employment with the Company as a
Resignation For Good Reason, Xxxxxxx shall give the Company at least ten (10)
Business Days' prior written notice specifying in reasonable detail the specific
conduct of the Company that he considers grounds for Resignation For Good Reason
and the specific provision of the definition of "Resignation For Good Reason"
upon which he relies. Michael's employment with the Company shall terminate as
of the tenth Business Day after such notice is given, or such other date as the
parties mutually agree. Should the Company dispute the basis for such
resignation in a written notice given to Xxxxxxx on or before his termination
date, the parties shall meet and endeavor to resolve the dispute amicably within
the twenty (20) Business Days after the Company's notice is given. If they
cannot so resolve the dispute within such twenty (20) Business Days after the
Company's notice is given, Xxxxxxx and the Company shall submit the dispute to
binding arbitration in accordance with Section 6.1. The decision rendered in
such arbitration shall be final and binding on both Xxxxxxx and the Company for
all purposes. If the arbitrators determine that Xxxxxxx did not have a proper
basis on which to terminate his employment as Resignation For Good Reason within
the meaning of this Agreement, the termination of Michael's employment shall be
treated for all purposes of this Agreement as a Voluntary Resignation. In
addition to any other rights which a party may have, the party prevailing in
such arbitration proceeding shall be entitled to recover from the losing party
any and all of the expenses incurred by the prevailing party in such proceeding,
including reasonable attorney's fees.
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SECTION 5.2. DISMISSAL FOR CAUSE.
In the event the Company terminates Michael's employment as a Dismissal
For Cause, the Company shall give Xxxxxxx at least ten (10) Business Days' prior
written notice specifying in reasonable detail the specific conduct of Xxxxxxx
that it considers grounds for Dismissal For Cause and the specific provision of
the definition of "Dismissal For Cause" upon which it relies. Michael's
employment with the Company shall terminate as of the tenth Business Day after
such notice is given, or such other date as the parties mutually agree. Should
Xxxxxxx dispute the basis for such termination in a written notice given to the
Company on or before his termination date, the parties shall meet and endeavor
to resolve the dispute amicably within twenty (20) Business Days after Michael's
notice is given. If they cannot so resolve the dispute within such twenty (20)
Business Days after Michael's notice is given, Xxxxxxx and the Company shall
submit the dispute to binding arbitration in accordance with Section 6.1. The
decision rendered in such arbitration shall be final and binding on both Xxxxxxx
and the Company for all purposes. If the arbitrators determine that the Company
did not have a proper basis on which to terminate Michael's employment as a
Dismissal For Cause within the meaning of this Agreement, the termination of
Michael's employment shall be treated for all purposes of this Agreement as a
Dismissal Without Cause. In addition to any other rights which a party may have,
the party prevailing in such arbitration proceeding shall be entitled to recover
from the losing party any and all of the expenses incurred by the prevailing
party in such proceeding, including reasonable attorney's fees.
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ARTICLE VI
RESOLUTION OF DISPUTES
SECTION 6.1. ARBITRATION.
Except as provided in Section 6.2, all controversies arising out of or
relating to this Agreement or the breach hereof shall be settled by arbitration
in the County of Nassau, State of New York, in accordance with the rules of the
American Arbitration Association, and judgment upon the award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. Any
arbitration hereunder shall be before three (3) arbitrators.
SECTION 6.2. EQUITABLE REMEDIES.
Notwithstanding the provisions of Section 6.1, any proceeding for
injunctive relief or specific performance in connection with this Agreement
shall be commenced in Supreme Court of the State of New York, County of Nassau,
and each of the parties hereby accepts the exclusive jurisdiction of such Court
for such purpose; provided, however, that the petitioner may commence such
proceeding in such other court as may be necessary, in the petitioner's
judgment, in order to more effectively or expeditiously obtain personal
jurisdiction over the respondent.
ARTICLE VII
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"Affiliates" shall mean all entities controlling, controlled by or under
common control with the Company.
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"Board Of Directors" shall mean the Board of Directors of the Company.
"Business Day" shall mean any day on which the Company is scheduled to be
open for business.
"Change In Control" shall mean a direct or indirect transfer of fifty
percent (50%) or more of the voting control of the Company or the sale of
substantially all of the assets of the Company, in one or more transactions, to
(a) one or more persons who are not (i) members of the Leeds Family or (ii)
spouses, children or grandchildren of members of the Leeds Family and/or (b) one
or more entities which are not controlled by (i) one or more members of the
Leeds Family or (ii) one or more of the spouses, children or grandchildren of
members of the Leeds Family.
"CMP Business" shall mean any publication, product, service or business
(a) which the CMP Group publishes, produces, provides or engages in or (b) which
the CMP Group has a bona fide plan or intention to publish, produce, provide or
engage in within the succeeding 12-month period, the research and development of
which the CMP Group has devoted substantive time and attention to, and which
plan or intention Xxxxxxx has actual knowledge of before he engages in any
activity competitive with such CMP Business as contemplated by clause (A) of
Section 3.3(a).
"CMP Group" shall mean the Company or any of its Affiliates.
"Direct Competitor" shall mean a business enterprise that produces or
operates, or owns directly or indirectly an interest of twenty percent (20%) or
more in, one or more Directly Competitive Businesses.
"Directly Competitive Business" shall mean any competitive publication,
product, service or business (a) the target audience of which is substantially
the same as the target audience of a CMP Business or (b) forty percent (40%) or
more of the annual revenue of which is derived from substantially the same
customers as a CMP Business derives twenty percent (20%) or more of its annual
revenue.
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"Dismissal For Cause" shall mean the termination of Michael's employment
with the Company by the Board of Directors for (i) the willful and continued
failure of Xxxxxxx substantially to perform his duties as an officer and
employee of the Company or comply with the written policies of the Company after
the Company has delivered to Xxxxxxx a written demand for substantial
performance or compliance that specifies such failure in reasonable detail; (ii)
illegal conduct or gross misconduct by Xxxxxxx, in either case that is willful
and results (or is reasonably likely to result) in material damage to the
business or reputation of the Company; or (iii) the resignation by Xxxxxxx from
his employment following his act or omission which would constitute grounds for
Dismissal For Cause hereunder. No act or failure to act on the part of Xxxxxxx
(other than non-compliance with lawful instructions given to Xxxxxxx by the
Company) shall be considered "willful" unless it is done or omitted to be done
by him in bad faith or without reasonable belief that his action or omission was
in the best interests of the Company. Any act or failure to act that is pursuant
to resolution duly adopted by the Board of Directors shall be conclusively
presumed to be done or omitted to be done by Xxxxxxx in good faith and in the
best interests of the Company.
"Dismissal Without Cause" shall mean the termination of Michael's
employment by the Company on any grounds other than grounds for Dismissal For
Cause or as a result of his Permanent Disability.
"Indirect Competitor" shall mean a business enterprise that does not
produce or operate, or own directly or indirectly an interest in, any Directly
Competitive Businesses but produces or operates, or owns directly or indirectly
an interest of twenty percent (20%) or more in, one or more Indirectly
Competitive Businesses.
"Indirectly Competitive Business" shall mean any competitive or
potentially competitive publication, product, service or business which derives
from twenty percent (20%) to but not including forty percent (40%) of its annual
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revenue from substantially the same customers as a CMP Business derives twenty
percent (20%) or more of its annual revenue.
"Leeds Family" shall mean Xxxxxx X. Xxxxx, Xxxxxxxxx X. Xxxxx, Xxxxxxx X.
Xxxxx, Xxxxxxx X. Leeds, Xxxxxx X. Xxxxx, Xxxx Xxxxx-Leeds and Xxxxxxxx
Xxxxx-Xxxxxxxx.
"Option Agreement" shall mean that certain Option Agreement entered into
as of the date hereof by and between the Company and Xxxxxxx.
"Permanent Disability" shall mean a physical or mental impairment, as a
result of which Xxxxxxx shall have been unable, with or without reasonable
accommodation, to perform the essential functions of his employment position for
a period of at least sixteen (16) weeks during any 12-month period.
"Resignation For Good Reason" shall mean Michael's resignation from his
employment with the Company (a) after the Company has, without his consent (i)
materially reduced his package of compensation and benefits, (ii) materially
diminished his position, authority, duties or responsibilities, or (iii)
required him to report regularly to an office located more than fifty (50) miles
from Manhasset, New York or (b) within three (3) years after a Change In Control
occurs. Any reduction in Michael's compensation package made pursuant to the
written compensation plan between Xxxxxxx and the Company dated as of the date
hereof shall not be deemed grounds for Resignation For Good Reason.
"Share Purchase Agreement" shall mean that certain Share Purchase
Agreement entered into as of the date hereof by and among Xxxxxx X. Xxxxx,
Xxxxxxxxx X. Xxxxx and Xxxxxxx.
"Voluntary Resignation" shall mean Michael's resignation from his
employment with the Company on any grounds other than grounds for Resignation
For Good Reason or as a result of his Permanent Disability.
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ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. ENTIRE AGREEMENT; BINDING EFFECT.
This Agreement contains all of the terms agreed upon by the parties with
respect to the subject matter hereof and replaces and supersedes any and all
prior agreements, written or oral, between the parties relating to the terms of
Michael's employment with the Company. No promises, agreements or
representations with respect to the matters herein contained shall be binding
upon any of the parties unless set forth herein. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective heirs,
representatives, successors and permitted assigns.
SECTION 8.2. AMENDMENT.
No provision of this Agreement may be amended or waived except by a
writing making reference to this Agreement and signed by the party against whom
the enforcement of such amendment or waiver is sought.
SECTION 8.3. APPLICABLE LAW.
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York, without reference to its
principles regarding choice or conflicts of law.
SECTION 8.4 SEVERABILITY.
Wherever possible, each provision of this Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provisions hereof shall be prohibited by or invalid under any such law, such
provision shall be ineffective to the extent of such prohibition or invalidity,
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without invalidating or nullifying the remainder of such provision or any other
provision of this Agreement.
SECTION 8.5. NO WAIVER.
No delay or omission by any party in exercising or enforcing any right
hereunder shall operate as a waiver of such right, and a waiver on one occasion
shall not be construed as a waiver of any right or remedy on any future
occasion.
SECTION 8.6. NOTICES.
All notices, requests, consents, designations and demands required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) when personally delivered to an individual
party or to an authorized officer of a corporate party, whether by messenger,
courier or other person, (b) on the second Business Day after the date it is
sent by certified or registered mail, return receipt requested, or (c) on the
next Business Day after the date it is sent via telefacsimile (provided it is
actually received and is not materially illegible), as follows:
If to the Company:
CMP Media Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: President
Fax: (000) 000-0000
with a copy to:
CMP Media Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Attention: General Counsel
Fax: (000) 000-0000
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If to Xxxxxxx:
Xxxxxxx X. Xxxxx
c/o CMP Media Inc.
000 Xxxxxxxxx Xxxxx
Xxxxxxxxx, Xxx Xxxx 00000
Fax: (000) 000-0000
with a copy to Xxxxxxx at his last known address as reflected on the records of
the Company or to such other mail or facsimile address as the recipient party
shall have last designated by notice given to the other in accordance herewith.
SECTION 8.7. ASSIGNMENT.
This Agreement is a contract for personal services and, without the
Company's prior written consent, Xxxxxxx xxx not assign, delegate or transfer
any of his rights or obligations hereunder. The Company may not, without
Michael's prior written consent, assign any of its rights or delegate any of its
obligations or liabilities under this Agreement to any person or entity other
than an entity that controls, is controlled by or is under common control with
the Company; provided, however, that no such assignment or delegation shall
relieve the Company from its obligations or liabilities hereunder.
SECTION 8.8. SURVIVAL
This Agreement shall survive any merger, sale or other disposition of the
Company and shall survive the termination of Michael's employment with the
Company.
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SECTION 8.9. HEADINGS.
The headings herein are for convenience of reference only and shall not be
considered in construing this Agreement.
Section 8.10. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be deemed as an original and all of which shall together constitute
one and the same instrument.
IN WITNESS WHEREOF, Xxxxxxx has executed this Agreement and the Company
has caused this Agreement to be executed by an officer thereunto duly authorized
on the day and year first above written.
CMP MEDIA INC.
By /s/ LILO J. LEEDS
--------------------------------
Name: Lilo J. Leeds
Title:
Attest:
/s/ XXXXXX X. XXXXXXXXX
----------------------------------------------
(CORPORATE SEAL)
/s/ XXXXXXX X. XXXXX
------------------------------
XXXXXXX X. XXXXX
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