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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549-1004
------------------------------------------------------------
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-14337
PENTON MEDIA, INC.
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(Exact Name of Registrant as Specified in its Charter)
DELAWARE 36-2875386
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(State of Incorporation) (I.R.S. Employer Identification No.)
1100 Superior Avenue, Cleveland, OH 44114
----------------------------------- -----
(Address of Principal Executive Offices) (Zip Code)
216/696-7000
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(Registrant's Telephone Number, Including Area Code)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
----- ------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date (October 31,1998).
Common Stock 22,781,713
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PENTON MEDIA, INC.
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FORM 10-Q
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QUARTER ENDED SEPTEMBER 30, 1998
--------------------------------
INDEX
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<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page
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<S> <C> <C>
ITEM 1. Financial Statements
Consolidated Statement of Income -
Three and Nine Months Ended
September 30, 1998 and 1997 3
Consolidated Balance Sheet -
September 30, 1998 and December 31, 1997 4 - 5
Consolidated Statement of Cash Flows -
Nine Months Ended September 30, 1998 and 1997 6
Notes to Consolidated Financial Statements 7 - 10
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10 - 20
ITEM 3. Quantitative and Qualitative Disclosures
about Market Risk N/A
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 21-22
SIGNATURES 22
</TABLE>
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PENTON MEDIA, INC.
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CONSOLIDATED STATEMENT OF INCOME
--------------------------------
FOR THE THREE MONTHS AND NINE MONTHS
------------------------------------
ENDED SEPTEMBER 30, 1998 AND 1997
---------------------------------
(Unaudited; Dollars in Thousands, Except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES............................ $ 52,800 $ 50,729 $164,471 $153,449
-------- -------- -------- --------
OPERATING EXPENSES:
Editorial, production and
circulation..................... 24,635 24,414 74,806 71,284
Selling, general and
administrative.................. 21,266 18,923 67,036 58,008
Depreciation and amortization..... 2,160 1,684 6,316 5,047
-------- -------- -------- --------
48,061 45,021 148,158 134,339
-------- -------- -------- --------
OPERATING INCOME.................... 4,739 5,708 16,313 19,110
-------- -------- -------- --------
OTHER INCOME (EXPENSE):
Interest expense.................. (811) (208) (2,164) (622)
Miscellaneous, net................ (9) 6 76 8
--------- -------- -------- --------
(820) (202) (2,088) (614)
--------- -------- -------- --------
INCOME BEFORE INCOME TAXES.......... 3,919 5,506 14,225 18,496
PROVISION FOR INCOME TAXES.......... 1,671 2,288 5,956 7,685
-------- -------- -------- --------
NET INCOME.......................... $ 2,248 $ 3,218 $ 8,269 $ 10,811
======== ======== ======== ========
NET INCOME PER SHARE BASIC AND
DILUTED...................... $ .10 $ .15 $ .38 $ .51
======== ======== ======== ========
AVERAGE NUMBER OF SHARES OUTSTANDING
(in thousands) 22,268 21,240 21,583 21,240
</TABLE>
See accompanying notes.
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PENTON MEDIA, INC.
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CONSOLIDATED BALANCE SHEET
--------------------------
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
----------------------------------------
(Unaudited; Dollars in Thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and equivalents..................... $ 7,273 $ 2,419
Accounts and notes receivable, less
allowance for doubtful accounts of
$2,190 and $2,406...................... 33,166 29,363
Inventories.............................. 2,971 2,429
Deferred tax assets...................... 3,230 2,851
Prepayments, deposits and other.......... 8,024 3,886
-------- --------
54,664 40,948
-------- --------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Buildings................................ 6,170 6,168
Machinery and equipment.................. 65,338 60,493
-------- --------
71,508 66,661
Less: Accumulated depreciation........... 44,476 39,845
-------- --------
27,032 26,816
Land..................................... 426 426
-------- --------
27,458 27,242
OTHER ASSETS:
Goodwill, less accumulated
amortization of $7,684 and $6,192...... 97,111 65,460
Other intangibles, less accumulated
amortization of $5,747 and $5,382...... 6,074 6,362
Deferred tax assets...................... 3,533 4,067
Due from parent company.................. - 12,212
Miscellaneous............................ 88 135
-------- --------
106,806 88,236
-------- --------
$188,928 $156,426
======== ========
</TABLE>
See accompanying notes.
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PENTON MEDIA, INC.
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CONSOLIDATED BALANCE SHEET
--------------------------
SEPTEMBER 30, 1998 AND DECEMBER 31, 1997
----------------------------------------
(Unaudited; Dollars in Thousands)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Revolving credit facility................. $ 38,900 $ -
Notes payable............................. 2,550 34,170
Accounts payable.......................... 9,727 9,427
Accrued compensation and benefits......... 10,021 9,081
Other accrued expenses.................... 8,557 8,383
Unearned income, principally trade
show and conference deposits............ 14,035 5,203
-------- --------
83,790 66,264
-------- --------
LONG-TERM LIABILITIES AND DEFERRED CREDITS:
Net deferred pension credits.............. 18,592 19,592
Other..................................... 985 957
-------- --------
19,577 20,549
-------- --------
STOCKHOLDERS' EQUITY:
Preferred stock, none issued.............. - -
Common stock.............................. 237 212
Capital in excess of par value............ 55,041 29,630
Retained earnings......................... 30,360 39,771
Cumulative foreign currency translation
adjustment.............................. (77) -
--------- -------
85,561 69,613
-------- --------
$188,928 $156,426
======== ========
</TABLE>
See accompanying notes.
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PENTON MEDIA, INC.
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CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
FOR THE NINE MONTHS ENDED SEPTEMBER 30 1998 AND 1997
----------------------------------------------------
(Unaudited; Dollars in Thousands)
<TABLE>
<CAPTION>
1998 1997
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<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Income from operations........................... $ 8,269 $10,811
Adjustments to reconcile income from
operations to net cash provided by
operating activities:
Depreciation and amortization.................. 6,316 5,047
Deferred income taxes.......................... 137 686
Retirement and deferred compensation plans..... (1,000) (1,500)
Provision for losses on accounts receivable.... 485 676
Change in assets and liabilities, excluding
effects from acquisitions and dispositions:
Increase in accounts and notes receivable.... (4,280) (2,318)
Increase in inventories...................... (542) (812)
Increase in prepayments and deposits......... (4,033) (661)
Increase in accounts payable and accrued
expenses .................................. 2,314 3,222
Increase (decrease) in unearned income....... 8,791 (1,311)
Other changes, net............................. 138 (200)
-------- --------
Net cash provided by operating activities........ 16,595 13,640
-------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures............................. (4,311) (3,270)
Acquisitions, net of cash........................ (6,894) (14,045)
-------- --------
Net cash used for investing activities........... (11,205) (17,315)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of notes payable, net.................. (33,900) 14,000
Proceeds from revolving line of credit........... 38,900 -
Distributions to parent company.................. (4,785) (10,299)
Cash dividends................................... (683) -
-------- ------
Net cash provided by(used for)financing activities (468) 3,701
--------- -------
EFFECT OF EXCHANGE RATE CHANGES ON CASH............ (68) -
-------- ------
NET INCREASE IN CASH AND EQUIVALENTS............... 4,854 26
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD........ 2,419 1,571
-------- -------
CASH AND EQUIVALENTS AT END OF PERIOD.............. $ 7,273 $ 1,597
========= =======
</TABLE>
See accompanying notes.
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PENTON MEDIA, INC.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Unaudited; Dollars in Thousands)
NOTE 1 -- BASIS OF PRESENTATION
The consolidated financial statements include the accounts of Penton
Media, Inc. (formerly known as Penton Publishing, Inc.) and its subsidiaries
("Penton" or the "Company"). The Company was a wholly owned subsidiary of
Pittway Corporation ("Pittway" or "Parent Company") until August 7, 1998, when
it was spun off as a separate entity (See Note 2).
The accompanying unaudited interim consolidated financial statements
have been prepared pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, certain information and footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been omitted.
In the opinion of management, the interim consolidated financial
statements reflect all adjustments necessary for a fair presentation of the
interim periods. The results of operations for the interim periods are not
necessarily indicative of the results of operations to be expected for the full
year.
NOTE 2 - SPIN-OFF FROM PITTWAY AND SUBSEQUENT ACQUISITION
On August 7, 1998 Pittway distributed 100% of the Company's Common
Stock on a share-for-share basis to holders of Pittway stock. Immediately
thereafter, the Company completed the acquisition of Donohue Meehan Publishing
Company.
Donohue Meehan Publishing Company ("DM Publishing") was acquired for $7
million in cash, 6.76% (1,541,638 shares) of the Company's stock to be
outstanding immediately after the acquisition, and up to an additional $4
million in cash based on DM Publishing's pre-tax income for the years 1998 and
1999. The Company also agreed to make a contingent cash payment to the extent,
if any, that the shares issued in the acquisition have an average aggregate
market value less than $29 million during either of two 30-day periods in the
year 2000. The contingent payment is subject to certain limitations as to any of
such shares sold prior to the
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payment. A portion of the contingent payment may be made with Common Stock
rather than cash under certain conditions.
NOTE 3 - PRO FORMA FINANCIAL INFORMATION
The following unaudited supplemental pro forma operating data is
presented for the nine months ended September 30, 1998 as if the DM Publishing
acquisition and the issuance of Common Stock pursuant to the DM Publishing
acquisition had occurred on January 1, 1998.
The following unaudited supplemental pro forma operating data is
presented for the nine months ended September 30, 1997 as if the 1998 DM
Publishing acquisition and issuance of Common Stock pursuant to the DM
Publishing acquisition and the 1997 acquisitions of the INDEX companies and ISOA
had each occurred on January 1, 1997.
<TABLE>
<CAPTION>
Nine Month Period Ended
-----------------------
(in thousands, except Per Share Data)
1998 1997
---- ----
<S> <C> <C>
Pro forma revenues $170,363 $161,590
======== ========
Pro forma operating income $ 19,206 $ 19,466
======== ========
Pro forma net income applicable
to common shareholders $ 10,192 $ 9,873
======== ========
Pro forma net income applicable
to common shareholders:
Basic and Diluted $0.47 $0.46
===== =====
</TABLE>
NOTE 4 - RELATIONSHIP AND TRANSACTIONS WITH PITTWAY
Included in the consolidated statement of income is an allocation of
corporate expenses related to services provided to the Company by Pittway.
Certain of the Company's employees participated in Pittway's 1990 Stock Awards
Plan, for which Pittway has allocated costs to the Company totaling $1,412 and
$443 in the nine months ended September 30, 1998 and 1997, respectively. The
allocated costs from Pittway to the Company total $1,291 and $361 for the third
quarters ended September 30, 1998 and 1997, respectively.
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In August 1998, the Company and Pittway agreed to discharge the
majority of the amount due from the parent company by a charge to stockholders'
equity in the amount of approximately $17.0 million.
NOTE 5 - INVENTORIES
The LIFO reserve balances of $585 and $462 at September 30, 1998 and
December 31, 1997, respectively, represent the excess of current replacement
cost over the LIFO value of inventory, which consists principally of raw
materials.
NOTE 6 - NOTES PAYABLE AND REVOLVING CREDIT FACILITY
The Company's short-term note payable at September 30, 1998 represents
foreign indebtedness, is denominated in British pounds and bears interest at
8.1%. The note, due in December 1998, is convertible into Common Stock at fair
market value.
Concurrent with the spin-off from Pittway, the short-term notes payable
of $27,800 of foreign debt, including accrued interest, denominated in British
pounds and bearing interest at 8.1% and the $5,000 domestic note bearing
interest at 6% were refinanced with a new revolving credit facility. The new
facility, which provides for the availability of up to $75 million, bears
interest at LIBOR plus a margin of between 0.5% and 0.875% (currently at 6.125%
domestic and 8.1% foreign), and includes a commitment fee for the unused portion
of the facility of between 0.125% and 0.250%.
NOTE 7 - NET INCOME PER SHARE
Net income per share reflects net income divided by the average number
of shares outstanding, including the shares issued in the acquisition of Donohue
Meehan Publishing Company in August 1998.
NOTE 8 - SUBSEQUENT EVENT
On October 8, 1998, the Company signed a definitive merger agreement to
acquire Mecklermedia Corporation ("Meckler"). On October 15, 1998, the Company
commenced a tender offer to acquire all outstanding shares of Meckler
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for $29 per share. It is anticipated that the tender offer will be completed in
late November 1998.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
accompanying unaudited consolidated financial statements and the notes thereto.
Impact of Acquisition
As noted above, the Company was spun off from Pittway and acquired DM
Publishing in August 1998. As the Company acquires additional companies, its
sales mix, market focus, cost structure, operating leverage and the seasonality
of the business may change significantly. Consequently, the Company's historical
and future results of operations reflect and will reflect the impact of
acquisitions, and period-to-period comparisons may not be meaningful in certain
respects. Historical information for companies subsequent to their acquisition
may include integration and other costs that are not expected to continue in the
future.
RESULTS OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED WITH THE NINE MONTHS ENDED
SEPTEMBER 30, 1997
Revenues
Total revenues, after elimination of inter-segment sales, increased
$11.1 million, or 7%, from $153.4 million to $164.5 million.
Media services revenues increased $9.4 million, or 7%, to $145.6
million. Advertising revenues from Penton's publishing operations accounted for
$5.4 million of the increase, primarily due to the following; (1) the
publication of Hydraulics and Pneumatics' Fluid Power Handbook and Directory,
which is published every other year, (2) two new publications launched in the
first quarter, IW Growing Companies and Penton's Embedded Systems Development,
(3) the Donohue Meehan acquisition in August 1998, and (4) higher pricing on
other advertising business. The remaining $4.0 million increase resulted from an
increase in trade show and conference revenues. The increase is due to the
first-time inclusion of the operations of Independent
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Expositions, Ltd. ("INDEX") -- specifically, the Service Management Europe Show
in March -- and Industrial Shows of America ("ISOA") -- 10 regional shows in the
second quarter. Both INDEX and ISOA were acquired in December 1997. In addition,
1998 includes an increase in the Wireless Symposium & Exhibition/Portable by
Design Show. These increases were partially offset by lower exhibition revenues
for certain other shows.
Printing revenues increased $1.5 million, or 5%, bringing total segment
revenue to $30.1 million. Sales to external customers increased $1.0 million or
12%, to $8.8 million.
Direct-mail marketing revenues increased $0.6 million, or 6%, to $10.0
million. The increase was primarily in the segment's printing operations.
Cost of Production
Total cost of production, after elimination of inter-segment charges,
grew to $74.8 million in 1998 compared with $71.3 million in 1997, representing
an increase of $3.5 million, or 5%.
Media services production costs grew 3%, due to the inclusion of the
INDEX and ISOA trade shows acquired in late 1997, and also to the publication of
the biannual Fluid Power Handbook and Directory, which was not published in
1997.
Cost of production for the Printing segment increased $1.5 million due
to volume-related growth of total business (including inside and outside).
Direct-mail marketing cost of production decreased by 2%, compared with
the 6% increase in revenue, due largely to productivity improvements.
Selling, General, and Administrative
Total selling, general, and administrative expenses grew $9.0 million,
or 16%, to $67.0 million.
Media services selling, general, and administrative expenses increased
$9.0 million, or 17%. The increase was due to; (1) expenses of the INDEX and
ISOA trade shows held to date in 1998, (2) period costs of the remainder of the
newly acquired trade shows for which revenues will not be recognized until those
trade shows are held in future
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periods, (3) costs related to launching two new publications in the first
quarter, IW Growing Companies and Penton's Embedded Systems Development, (4) the
Donohue Meehan acquisition (in August 1998), (5) one time spin off costs of
approximately $0.5 million, (6) costs related to the biannual Fluid Power
Handbook and Directory, (7) sales volume growth, and (7) higher charges related
to Pittway stock appreciation rights held by Penton employees. Total costs
charged to the Company by Pittway for the nine months ended September 30, 1998
and 1997 were $1.5 million and $1.0 million, respectively.
Selling, general, and administrative expenses of the printing and the
direct-mail marketing segments were level with the prior year.
Depreciation and Amortization
Depreciation and amortization increased $1.3 million to $6.3 million.
The higher expense was primarily the result of the amortization of intangible
assets associated with trade show company acquisitions completed in December
1997, and the Donohue Meehan acquisition in August 1998.
Operating Income
Overall, the Company's operating income for the nine months decreased
$2.8 million, or 15%, to $16.3 million from $19.1 million in the prior year.
Media services operating income decreased $2.9 million, or 15%. The
first three quarters of 1998 were negatively impacted by the period costs of the
trade shows acquired in 1997, start-up costs associated with the two magazine
launches, and higher amortization expense as noted above.
Operating income of the printing segment decreased by $0.4 million to
$0.5 million.
The Direct-mail marketing operations recorded an operating loss of $0.3
million compared with the prior year's operating loss of $0.8 million. The
improvement was largely due to the increase in revenue of this segment's
printing operations and lower production costs due to the elimination of certain
programs in 1998.
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Interest Expense
Interest expense increased $1.5 million, due to additional borrowings
used to finance the two trade show company acquisitions in December 1997, and
the Donohue Meehan acquisition in August 1998.
Effective Tax Rates
The effective tax rates were 41.9% and 41.6%, for the first three
quarters of 1998 and 1997, respectively.
THREE MONTHS ENDED SEPTEMBER 30, 1998 COMPARED WITH THE THREE MONTHS ENDED
SEPTEMBER 30, 1997
Revenues
Total revenues, after elimination of inter-segment sales, increased
$2.1 million, or 4%, from $50.7 million to $52.8 million.
Media services revenues increased $2.6 million, or 6%, to $46.3
million. Advertising revenues from Penton's publishing operations accounted for
$1.2 million of the increase, primarily due to advertising revenues from the
Donohue Meehan acquisition (in August 1998) and two new publications launched in
the first quarter, IW Growing Companies and Penton's Embedded Systems
Development. Trade show and conference revenues increased $1.4 million. The
increase is due largely to the first-time inclusion of the operations of ISOA
and INDEX (both acquired in December 1997).
Printing revenues decreased $0.3 million, or 3%, bringing total segment
revenue to $10.1 million. Sales to external customers decreased $0.4 million or
13%, to $2.9 million, primarily due to the loss of a significant customer. These
revenues were partially off-set by the addition of one time catalog and
directory related business as well as several new customers.
Direct-mail marketing revenues were level with prior year.
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Cost of Production
Total cost of production, after elimination of inter-segment charges,
grew to $24.6 million compared with $24.4 million, an increase of $0.2 million,
or 1%.
Media services production costs grew approximately 1%, due largely to
the Donohue Meehan acquisition (in August 1998), the two new publications
launched in the first quarter, IW Growing Companies and Penton's Embedded
Systems Development, and the inclusion of the ISOA and INDEX trade shows
acquired in late 1997.
Cost of production for the printing and direct mail marketing segments
were level with prior year.
Selling, General, and Administrative
Total selling, general, and administrative expenses grew $2.3 million,
or 12%, to $21.3 million.
Media services selling, general, and administrative expenses increased
$2.4 million, or 14%. The increase was due to; (1) expenses of the ISOA and
INDEX trade shows held to date in 1998, (2) period costs of other newly acquired
ISOA and INDEX trade shows for which revenues will not be recognized until those
trade shows are held in the fourth quarter, (3) the Donohue Meehan acquisition
(in August 1998), (4) one time spin off costs of approximately $0.5 million, and
(5) costs related to the two new publications launched in the first quarter, IW
Growing Companies and Penton's Embedded Systems Development. Total costs charged
to the company by Pittway for the third quarter were $0.1 million and $0.6
million for 1998 and 1997 respectively, primarily related (in both periods) to
Pittway stock appreciation rights held by Penton employees.
Selling, general, and administrative expenses of the printing and the
direct-mail marketing segments were level with the prior year.
Depreciation and Amortization
Depreciation and amortization increased $0.5 million to $2.2 million.
The higher expense was primarily the result of the amortization of intangible
assets associated with trade shows acquired in December 1997, and the Donohue
Meehan acquisition in August 1998.
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Operating Income
Overall, the Company's operating income for the three months decreased
$1.0 million, or 17%, to $4.7 million from $5.7 million in the prior year.
Media services operating income decreased $0.6 million, or 11%. The
third quarter of 1998 was negatively impacted by the period costs of the trade
shows acquired in 1997, minor seasonal operating losses associated with the two
new magazine launches, and higher amortization expense as noted above.
Operating income of the printing segment decreased $0.2 million to $0.1
million, due to lower revenues.
Direct-mail marketing operated at break even, compared with prior
year's profit of $0.1 million.
Interest Expense
Interest expense increased $0.6 million, due to additional borrowings
to finance the two trade show company acquisitions completed in December 1997,
and the Donohue Meehan acquisition in August 1998.
Effective Tax Rates
The effective tax rates were 42.6% and 41.6%, for the third quarters of
1998 and 1997, respectively. The Company's acquisition of Donohue Meehan
resulted in the recording of goodwill. The amortization of such goodwill is
recognized for financial statement purposes but not deductible for tax purposes
due to the structure of the purchase transaction. Accordingly, the Company's
effective tax rate has increased. The Company's effective tax rate would have
been 41.3% for the third quarter of 1998, had such goodwill been deductible for
tax purposes.
EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION
Earnings before interest expense, taxes, depreciation and amortization
("EBITDA") is a widely used and commonly reported standard measure utilized by
analysts and investors in the analysis of the media industry. EBITDA is not a
measure of performance under GAAP because it excludes those items listed above
which are significant components in understanding and evaluating the Company's
financial performance. However, the following EBITDA information can provide
additional information for determining the ability
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of the company to meet its debt service requirements and for other comparative
analyses of the Company's operating performance relative to other publishing
companies. The Company's calculation of EBITDA is as follows (in thousands):
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1998 1997
---- ----
<S> <C> <C>
Net income $8,269 $10,811
Interest expense 2,164 622
Provision for income taxes 5,956 7,685
Depreciation and amortization 6,316 5,047
Miscellaneous, net (76) (8)
------- --------
EBITDA $22,629 $24,157
======= =======
</TABLE>
The Company's EBITDA decreased $1.5 million, or 6.0%, to $22.6 million
for the nine months ended September 30, 1998 from $24.1 million for the nine
months ended September 30, 1997. Increased period costs of the trade shows
acquired in 1997, start-up costs associated with the two magazine launches and
one time spin off costs were the primary contributing factors to the decrease in
EBITDA.
FOREIGN CURRENCY
The functional currency of the Company's foreign operations acquired in
December 1997 is the local currency. Accordingly, assets and liabilities of
foreign operations are translated to U.S. Dollars at the rates of exchange on
the balance sheet date; income and expense are translated at the average rates
of exchange prevailing during the year. There were no significant foreign
currency transaction gains or losses during 1997 or the nine months ended
September 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
Historically, cash flow generated by the Company's operations has been
used to invest in capital assets, finance acquisitions, and reduce debt. Excess
cash was used to pay dividends to Pittway Corporation, its former parent
company.
For the first nine months of 1998, cash flow provided by operations was
$16.6 million, up $3.0 million from $13.6 million for the first nine months of
1997. The increase in 1998 was primarily due to an increase in unearned income
(primarily advance deposits related to fourth quarter trade shows) which was
partially off-set by a lower net income and
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increases in accounts receivable and prepayments and deposits.
Cash from operating activities was used for capital expenditures ($4.3
million and $3.3 million in the first three quarters of 1998 and 1997,
respectively) and to make cash distributions to Pittway, including final
settlement of intercompany balances existing at the spin-off date.
On August 7, 1998, the Company entered into a five-year, $75.0 million
unsecured revolving credit agreement, which includes an option to increase the
facility to $100 million. The Company's short-term notes payable were refinanced
with this facility, which was also utilized to finance the cash portion of the
acquisition price of Donohue Meehan Publishing Company. At September 30, 1998,
$38.5 million was outstanding under the revolving credit facility.
Penton's management anticipates that Penton's long-term financing
needs will be met with internally generated cash flows and financing
arrangements with lenders, if necessary.
SEASONALITY
Historically, the Company has not experienced significant seasonality
in its business. The acquisitions of ISOA and INDEX in late 1997, however,
changed the seasonal pattern of revenue and profit, as both companies have
pronounced seasonal patterns in their businesses. The majority of the trade
shows owned by ISOA are held in the second and fourth quarters and, accordingly,
the majority of their revenue is recognized in these quarters. As explained
above, a portion of the Company's revenue growth in the second quarter was due
to the newly acquired ISOA shows. Further, the majority of the INDEX shows have
historically been held in the fourth quarter. Accordingly, the Company
anticipates that these acquisitions will have a positive impact on revenue and
profit as approximately 70% of the annual revenues for these combined shows are
expected to be generated in the fourth quarter of the year.
ACCOUNTING CHANGES
In June 1998, the FASB issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). This statement is required to
be adopted by the Company in the first quarter of 1999. The Company currently
has no derivative instruments and, as such, this statement will not have a
material impact on the Company.
17
<PAGE> 18
YEAR 2000
General:
The "Year 2000 Issue" is the result of computer programs that were
written using two digits rather than four to define the applicable year. If the
Company's computer programs with date-sensitive functions are not Year 2000
compliant, they may recognize a date using "00" as the Year 1900 rather than the
Year 2000. This could result in a system failure or miscalculations causing
disruptions of operations, including, among other things, a temporary inability
to process transactions, send invoices or engage in similar normal business
activities.
Penton's Year 2000 Project ("Project") is proceeding as scheduled. Some
of our systems and related software are already Year 2000 compliant, however the
Project is designed to bring the remaining software and systems into Year 2000
compliance in time to minimize any significant detrimental effects on
operations. The Project covers information systems infrastructure, financial and
administrative systems, production and circulation operating systems and
significant vendors and customers.
Project:
The first component of the Projects it to identify the internal
business systems of the Company and its operating subsidiaries that are
susceptible to system failures or processing errors as a result of the Year 2000
issue. This effort is substantially complete with all business systems
identified and priorities established for repair or replacement. Those systems
considered most critical to continuing operations are being given the highest
priority.
The second component of the Project involves the actual remediation and
replacement of the various business systems. The Company and its operating
subsidiaries are using both internal and external resources to complete this
process. Systems ranked highest in priority have either been remediated or
replaced or scheduled for remediation or replacement including the replacement
of the primary general ledger and accounts payable systems with programs from a
national software vendor. The implementation of the new systems is in its final
stages and is expected to be completed by year-end. The Company's objective is
to complete substantially all remediation and replacement of internal systems by
July 1999, and to complete final testing
18
<PAGE> 19
and certification for readiness by the end of the third quarter of 1999.
As part of the second component of the Project, significant service
providers, vendors, suppliers and customers that are believed to be critical to
business operations after January 1, 2000, have been identified and steps are
being undertaken in an attempt to reasonably ascertain their state of Year 2000
readiness through questionnaires, inquiries and other available means. This
process is progressing according to plan.
Costs:
It is currently estimated that the aggregate incremental cost of the
Company's Project efforts will be approximately $0.3 million to $0.8 million, of
which approximately $0.1 million has been spent. These costs are being expensed
as they are incurred and are being funded through operating cash flow. These
amounts do not include any costs associated with the implementation of
contingency plans, which are in the process of being developed to supplement the
Company's existing Disaster Recovery Plan. The costs associated with the
replacement of computerized systems, hardware or equipment is currently
estimated to be approximately $0.5 million, substantially all of which would be
capitalized, are not included in the above estimates.
Risks:
The failure to correct a material Year 2000 problem could result in an
interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the company's
results of operations, liquidity and financial condition. Due to the general
uncertainty inherent in the Year 2000 problem, resulting in part from the
uncertainty of the Year 2000 readiness of third-party suppliers and customers,
the company is unable to determine at this time whether the consequences of Year
2000 failures will have a material impact on the company's results of
operations, liquidity or financial condition. The Year 2000 Project is expected
to significantly reduce the company's level of uncertainty about the Year 2000
problem and, in particular, about the Year 2000 compliance and readiness of its
material external agents. The company believes that, with the implementation of
new business systems and completion of the Project as scheduled, the possibility
of significant interruptions of normal operations should be reduced.
19
<PAGE> 20
The company's Project readiness program is an ongoing process and the
estimates of costs and completion dates for various components of the Project
readiness program described above are subject to change.
* * *
This quarterly report, other than historical financial information,
contains forward-looking statements, as defined in the Private Securities
Litigation Reform Act of 1995, that involve a number of risks and uncertainties.
Important factors that could cause actual results to differ materially from
those indicated by such forward-looking statements include pending litigation,
government regulation, competition and technological change, intellectual
property rights, capital spending, international operations, and the Company's
acquisition strategies.
20
<PAGE> 21
Part II. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
2.1 Agreement and Plan of Merger, dated as of October 7, 1998, by and
among the Registrant, Mecklermedia Corporation, a Delaware
corporation ("Mecklermedia"), Internet World Media, Inc., a Delaware
corporation ("Merger Sub"), and Alan M. Meckler (incorporated by
reference to Exhibit 2.1 to the Registrant's Form 8-K filed with
the Commission on October 15, 1998 (the "Form 8-K")). The Registrant
agrees to furnish supplementally a copy of any omitted schedule to
the Commission upon request.
10.1 Credit Agreement, dated as of August 7, 1998, among the Registrant
and Penton Media, Ltd. as Borrowers, the Lenders from time to time
party thereto, Key Corporate Capital Inc., as Co-Agent, and First
Union, as Administrative Agent.
10.2 Employment Agreement, dated as of August 7, 1998, between the
Registrant and William C. Donohue.
10.3 Employment Agreement, dated as of August 7, 1998, between the
Registrant and John J. Meehan.
10.4 Employment Agreement, dated as of July 16, 1998, between the
Registrant and David Nussbaum.
10.5 Penton Media, Inc. 1998 Equity and Performance Incentive Plan.
10.6 Penton Media, Inc. 1998 Director Stock Option Plan.
10.7 Penton Media, Inc. Retirement Savings Plan (incorporated by
reference to Exhibit 4.3 of the Registrant's Form S-8 filed with the
Commission on August 27, 1998).
10.8 Penton Media, Inc. Retirement Plan.
10.9 Penton Media, Inc. Supplemental Executive Retirement Plan.
27.1 Financial Data Schedule.
21
<PAGE> 22
99.1 Tender, Voting and Option Agreement, dated as of October 7, 1998, by
and among the Registrant, Mecklermedia, Merger Sub and Alan M.
Meckler (incorporated by reference to Exhibit 99.1 to the Form 8-K).
(B) REPORTS ON FORM 8-K
Date of Report Items Reported
-------------- --------------
October 7, 1998 Item 5. Other Events
Item 7. Financial Information
and Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Penton Media, Inc.
-----------------------
(Registrant)
By: /s/Joseph G. NeCastro
-----------------------
Joseph G. NeCastro
Chief Financial
Officer
(Duly Authorized
Officer and
Principal Financial
Officer)
Date: November 13, 1998
22
<PAGE> 23
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
- ------ -----------------------
<S> <C>
2.1 Agreement and Plan of Merger, dated as of October 7, 1998, by and
among the Registrant, Mecklermedia Corporation, a Delaware
corporation ("Mecklermedia"), Internet World Media, Inc., a Delaware
corporation ("Merger Sub"), and Alan M. Meckler (incorporated by
reference to Exhibit 2.1 to the Registrant's Form 8-K filed with
the Commission on October 15, 1998 (the "Form 8-K")). The Registrant
agrees to furnish supplementally a copy of any omitted schedule to
the Commission upon request.
10.1 Credit Agreement, dated as of August 7, 1998, among the Registrant
and Penton Media, Ltd. as Borrowers, the Lenders from time to time
party thereto, Key Corporate Capital Inc., as Co-Agent, and First
Union, as Administrative Agent.
10.2 Employment Agreement, dated as of August 7, 1998, between the
Registrant and William C. Donohue.
10.3 Employment Agreement, dated as of August 7, 1998, between the
Registrant and John J. Meehan.
10.4 Employment Agreement, dated as of July 16, 1998, between the
Registrant and David Nussbaum.
10.5 Penton Media, Inc. 1998 Equity and Performance Incentive Plan.
10.6 Penton Media, Inc. 1998 Director Stock Option Plan.
10.7 Penton Media, Inc. Retirement Savings Plan (incorporated by
reference to Exhibit 4.3 of the Registrant's Form S-8 filed with the
Commission on August 27, 1998).
10.8 Penton Media, Inc. Retirement Plan.
10.9 Penton Media, Inc. Supplemental Executive Retirement Plan.
27.1 Financial Data Schedule.
</TABLE>
23
<PAGE> 24
<TABLE>
<S> <C>
99.1 Tender, Voting and Option Agreement, dated as of October 7, 1998, by
and among the Registrant, Mecklermedia, Merger Sub and Alan M.
Meckler (incorporated by reference to Exhibit 99.1 to the Form 8-K).
</TABLE>
25
<PAGE> 1
Exhibit 10.1
CREDIT AGREEMENT
Dated as of August 7, 1998
among
PENTON MEDIA, INC.,
and
PENTON MEDIA LIMITED,
as Borrowers,
THE SUBSIDIARY GUARANTORS
FROM TIME TO TIME PARTY HERETO,
THE LENDERS
FROM TIME TO TIME PARTY HERETO,
KEY CORPORATE CAPITAL INC.,
as Co-Agent,
and
FIRST UNION NATIONAL BANK,
as Administrative Agent
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
SECTION 1. DEFINITIONS......................................................................1
1.1 Defined Terms..................................................................1
1.2 Other Definitional Provisions.................................................21
1.3 Accounting Terms..............................................................22
SECTION 2. THE LOANS; AMOUNT AND TERMS.....................................................22
2.1 Revolving Loans...............................................................22
2.2 Foreign Currency Loan Subfacility.............................................25
2.3 Default Rate..................................................................26
2.4 Extension and Conversion......................................................27
2.5 Reductions and Increase in Commitments and Prepayments........................27
2.6 Replacement of Lenders under Certain Circumstances............................29
2.7 Fees..........................................................................30
2.8 Eurocurrency Reserve Compensation.............................................30
2.9 Capital Adequacy..............................................................30
2.10 Unavailability...............................................................31
2.11 Illegality...................................................................31
2.12 Requirements of Law..........................................................32
2.13 Taxes........................................................................34
2.14 Indemnity....................................................................37
2.15 Pro Rata Treatment...........................................................37
2.16 Sharing of Payments..........................................................38
2.17 Payments, Computations, Etc..................................................39
2.18 Change of Currency...........................................................41
SECTION 3. REPRESENTATIONS AND WARRANTIES..................................................42
3.1 Financial Condition...........................................................42
3.2 No Change.....................................................................42
3.3 Existence; Compliance with Law................................................42
3.4 Power; Authorization; Enforceable Obligations.................................42
3.5 No Legal Bar; No Default......................................................43
3.6 No Material Litigation........................................................43
3.7 Investment Company Act........................................................44
3.8 Federal Regulations...........................................................44
3.9 ERISA.........................................................................44
3.10 Environmental Matters........................................................44
3.11 Purpose of Loan..............................................................45
3.12 Subsidiaries.................................................................46
3.13 Intellectual Property Rights.................................................46
3.14 No Burdensome Restrictions...................................................47
3.15 Taxes........................................................................47
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
3.16 No Interest in Real Estate...................................................47
SECTION 4. CONDITIONS PRECEDENT............................................................47
4.1 Conditions to Closing Date....................................................47
4.2 Conditions to All Loans.......................................................50
SECTION 5. AFFIRMATIVE COVENANTS..........................................................50
5.1 Financial Statements..........................................................50
5.2 Certificates; Other Information...............................................51
5.3 Payment of Obligations........................................................52
5.4 Conduct of Business and Maintenance of Existence..............................52
5.5 Maintenance of Property; Insurance............................................52
5.6 Inspection of Property; Books and Records; Discussions........................53
5.7 Certain Notices...............................................................53
5.8 Environmental Laws............................................................54
5.9 Financial Covenants...........................................................54
5.10 Covenants Regarding Patents, Trademarks and Copyrights.......................55
5.11 Fees, Etc....................................................................55
5.12 Subsidiaries.................................................................55
5.13 Payment of Taxes and Other Indebtedness......................................56
5.14 Year 2000 Compatibility......................................................56
SECTION 6. NEGATIVE COVENANTS.............................................................56
6.1 Indebtedness..................................................................56
6.2 Liens.........................................................................57
6.3 Guaranty Obligations..........................................................58
6.4 Lines of Business.............................................................58
6.5 Consolidation, Merger, Sale or Purchase of Assets, etc........................58
6.6 Advances, Investments and Loans...............................................59
6.7 Transactions with Affiliates..................................................59
6.8 Ownership of Subsidiaries.....................................................60
6.9 Fiscal Year...................................................................60
6.10 Prepayments of Indebtedness, etc.............................................60
6.11 Restricted Payments..........................................................60
6.12 Partnership and Corporate Documents..........................................61
SECTION 7. EVENTS OF DEFAULT...............................................................61
SECTION 8. THE ADMINISTRATIVE AGENT........................................................64
8.1 Appointment...................................................................64
8.2 Delegation of Duties..........................................................64
8.3 Exculpatory Provisions........................................................64
8.4 Reliance by Administrative Agent..............................................65
8.5 Notice of Default.............................................................65
8.6 Non-Reliance on Administrative Agent and Other Lenders........................66
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C> <C>
8.7 Indemnification...............................................................66
8.8 Administrative Agent in Its Individual Capacity...............................67
8.9 Successor Administrative Agent................................................67
SECTION 9. MISCELLANEOUS...................................................................67
9.1 Amendments, Waivers and Release of Collateral.................................67
9.2 Notices.......................................................................68
9.3 No Waiver; Cumulative Remedies................................................69
9.4 Survival of Representations and Warranties....................................70
9.5 Payment of Expenses and Taxes.................................................70
9.6 Successors and Assigns; Participations; Purchasing Lenders....................71
9.7 Adjustments; Set-off..........................................................74
9.8 Table of Contents and Section Headings........................................75
9.9 Counterparts..................................................................75
9.10 Severability.................................................................75
9.11 Integration..................................................................75
9.12 Governing Law................................................................75
9.13 Consent to Jurisdiction and Service of Process...............................76
9.14 Arbitration..................................................................76
9.15 Confidentiality..............................................................77
9.16 Acknowledgments..............................................................78
SECTION 10. GUARANTY......................................................................78
10.1 The Guaranty.................................................................78
10.2 Bankruptcy...................................................................79
10.3 Nature of Liability..........................................................79
10.4 Independent Obligation.......................................................80
10.5 Authorization................................................................80
10.6 Reliance.....................................................................80
10.7 Waiver.......................................................................80
10.8 Limitation on Enforcement....................................................82
10.9 Confirmation of Payment......................................................82
</TABLE>
iii
<PAGE> 5
Schedules
---------
<TABLE>
<S> <C> <C>
Schedule 1.1 Schedule of Existing Liens.
Schedule 2.1 (a) Schedule of Lenders and Commitments
Schedule 2.1 (b)(i) Form of Notice of Borrowing/Revolving Loans
Schedule 2.1 (b)(iii) Form of Notice of Account Designation
Schedule 2.2 (b)(i) Form of Notice of Borrowing/Foreign Currency Loans
Schedule 2.1 (e) Form of Revolving Note
Schedule 2.2 (d) MLA Cost
Schedule 2.4 Form of Notice of Conversion/Extension
Schedule 3.6 Litigation
Schedule 3.12 Subsidiaries
Schedule 3.13 Intellectual Property
Schedule 3.16 Real Property
Schedule 4.1 (d) Form of Secretary's Certificate
Schedule 4.1 (f)(ii) Form of Solvency Certificate
Schedule 5.12 Form of Joinder Agreement
Schedule 6.1 (b) Indebtedness
Schedule 9.6 (c) Form of Commitment Transfer Supplement
</TABLE>
iv
<PAGE> 6
CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of August 7, 1998, among PENTON MEDIA, INC.,
a Delaware corporation ("PENTON USA"), and PENTON MEDIA LIMITED, an English
limited liability company ("PENTON UK") (Penton USA and Penton UK being each a
"BORROWER", and collectively, the "BORROWERS"), the subsidiaries of the
Borrowers listed on the signature pages hereto and such other subsidiaries of
the Borrowers as may from time to time become guarantors in accordance with the
provisions hereof (each a "SUBSIDIARY Guarantor", and collectively, the
"SUBSIDIARY GUARANTORS"), the several banks, financial institutions and other
investors from time to time parties to this Agreement (the "LENDERS"), KEY
CORPORATE CAPITAL INC., as Co-Agent, and FIRST UNION NATIONAL BANK, as
administrative agent for the Lenders (in such capacity, the "AGENT" or the
"ADMINISTRATIVE AGENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Borrowers have requested the Lenders to make revolving
loans in an amount up to $75,000,000 as more particularly described herein;
WHEREAS, the Lenders are willing to make such loans on the terms and
conditions contained herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS.
As used in this Agreement, terms defined in the preamble to this
Agreement have the meanings therein indicated, and the following terms have the
following meanings:
"ACQUIRED ASSETS": the assets and/or stock of DM Publishing to
be acquired pursuant to the Combination Agreement.
"ACQUISITION": the acquisition by either Borrower (or one of
such Borrower's wholly-owned Subsidiaries) of the Acquired Assets
pursuant to the Combination Agreement.
"ADJUSTED EBITDA": of any Person for any period, EBITDA for
such period ("UNADJUSTED EBITDA") PLUS (i) if such Person made any
acquisition permitted by
<PAGE> 7
Section 6.5(b) during such period, EBITDA generated from such
acquisitions ("Acquired EBITDA") as if such acquisitions occurred at
the beginning of the applicable period except to the extent such
Acquired EBITDA has already been included in the calculation of
Unadjusted EBITDA for such period, MINUS (ii) if such Person has sold
or otherwise divested any businesses permitted by Section 6.5(a) during
such period, EBITDA generated from such sold or divested businesses as
if such sales or divestitures occurred at the beginning of the
applicable period.
"AFFILIATE": as to any Person, any other Person (excluding any
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, a Person shall be deemed to be "controlled
by" a Person if such Person possesses, directly or indirectly, power
either (a) to vote 10% or more of the securities having ordinary voting
power for the election of directors of such Person or (b) to direct or
cause the direction of the management and policies of such Person
whether by contract or otherwise.
"AGGREGATE REVOLVING COMMITTED AMOUNT": the aggregate amount
of all of the Revolving Commitments in effect from time to time, as
reduced from time to time as provided in Section 2.5.
"AGREEMENT" OR "CREDIT AGREEMENT": this Credit Agreement, as
amended, supplemented or modified from time to time in accordance with
its terms.
"APPLICABLE COMMITMENT FEE PERCENTAGE": for any day, the rate
per annum set forth below opposite the applicable Leverage Ratio then
in effect:
===========================================================
Leverage
Ratio Percentage
-----------------------------------------------------------
greater than 3.00 0.250%
-----------------------------------------------------------
less than or equal to 3.00 but greater than 2.50 0.1875%
-----------------------------------------------------------
less than or equal to 2.50 0.125%
============================================================
The Applicable Commitment Fee Percentage shall, in each case, be
determined and adjusted (a) quarterly on the date three (3) Business
Days after the date of receipt by the Administrative Agent of the
quarterly compliance certificate and financial information provided in
accordance with Sections 5.1(b) and 5.2(b) and (b) on each date that
the Borrowers make an acquisition pursuant to Section 6.5(b) (iii)
hereof (each a COMMITMENT FEE DETERMINATION DATE").
Such Applicable Commitment Fee Percentage shall be effective from such
Commitment Fee Determination Date until the next such Commitment Fee
Determination Date. The
2
<PAGE> 8
initial Applicable Commitment Fee Percentage shall be 0.125% until the
first Commitment Fee Determination Date occurring after Closing Date.
"APPLICABLE INTEREST RATE PERCENTAGE": for any day, the rate
per annum set forth below as the "Eurocurrency Margin" opposite the
applicable Leverage Ratio then in effect:
=================================================================
Leverage Eurocurrency
Ratio Margin
-----------------------------------------------------------------
greater than 3.00 .875%
-----------------------------------------------------------------
less than or equal to 3.00 but greater than 2.50 .750%
-----------------------------------------------------------------
less than or equal to 2.50 but greater than 2.00 .625%
-----------------------------------------------------------------
less than or equal to 2.00 .500%
=================================================================
The Applicable Interest Rate Percentage shall, in each case, be
determined and adjusted (a) quarterly on the date three (3) Business
Days after the date of receipt by the Administrative Agent of the
quarterly compliance certificate and financial information provided in
accordance with Sections 5.1(b) and 5.2(b) and (b) on each date that
the Borrowers make an acquisition pursuant to Section 6.5(b) (iii)
hereof (each an "INTEREST DETERMINATION DATE").
Such Applicable Interest Rate Percentage shall be effective from such
Interest Determination Date until the next such Interest Determination
Date. The initial Applicable Interest Rate Percentage shall be 0.50%
until the first Interest Determination Date occurring after the Closing
Date.
"ASSET DISPOSITION": any sale, lease, transfer or other
disposition (including any such transaction effected by way of merger,
amalgamation or consolidation) by either of the Borrowers or any of
such Borrower's Subsidiaries subsequent to the Closing Date of any
asset (including stock or other equity interests in Subsidiaries of a
Borrower), including without limitation any sale leaseback transaction
(whether or not involving a Capital Lease), but excluding Specified
Sales.
"AUTHORIZED SIGNATORY": the Chief Executive Officer,
President, Chief Financial Officer, Senior Vice President or Secretary
of a Borrower or any director of Penton UK and such other senior
personnel of a Borrower as may be hereafter duly authorized and
designated in writing to execute documents, agreements and instruments
on such Borrower's behalf.
"BANKRUPTCY CODE": the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
3
<PAGE> 9
"BASE RATE": for any day, a rate per annum equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal
Funds Effective Rate in effect on such day plus 1/2 of 1%. For purposes
hereof: "PRIME RATE" shall mean, at any time, the rate of interest per
annum publicly announced from time to time by First Union at its
principal office in Charlotte, North Carolina as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of
business on the day such change in the Prime Rate occurs. The parties
hereto acknowledge that the rate announced publicly by First Union as
its Prime Rate is an index or base rate and shall not necessarily be
its lowest or best rate charged to its customers or other banks; and
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds
brokers, as published on the next succeeding Business Day by the
Federal Reserve Bank of New York, or, if such rate is not so published
on the next succeeding Business Day, the average of the quotations for
the day of such transactions received by the Administrative Agent from
three federal funds brokers of recognized standing selected by it. If
for any reason the Administrative Agent shall have determined (which
determination shall be conclusive in the absence of manifest error)
that it is unable to ascertain the Federal Funds Effective Rate,
including the inability or failure of the Administrative Agent to
obtain sufficient quotations in accordance with the terms thereof, the
Base Rate shall be determined without regard to clause (b) of the first
sentence of this definition, as appropriate, until the circumstances
giving rise to such inability no longer exist. Any change in the Base
Rate due to a change in the Prime Rate or the Federal Funds Effective
Rate shall be effective on the opening of business on the date of such
change.
"BASE RATE LOANS": Revolving Loans that bear interest at an
interest rate based on the Base Rate.
"BORROWER" AND "BORROWERS": such terms as defined in the first
paragraph of this Agreement.
"BORROWING DATE": in respect of any Loan, the date such Loan
is made.
"BUSINESS": such term as defined in Section 3.10(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in Charlotte, North Carolina or
Cleveland, Ohio are authorized or required by law to close; PROVIDED,
HOWEVER, that when used in connection with a rate determination,
borrowing or payment in respect of a Eurocurrency Loan, the term
"Business Day" shall also exclude any day on which banks in London,
England are not open for dealings in Dollar deposits in the London
interbank market.
4
<PAGE> 10
"CAPITAL LEASE": any lease of property, real or personal, the
obligations with respect to which are required to be capitalized on a
balance sheet of the lessee in accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests (including
partnership and limited liability company interests) in a Person (other
than a corporation) and any and all warrants or options to purchase any
of the foregoing.
"CASH EQUIVALENTS": (i) securities issued or directly and
fully guaranteed or insured by the United States of America or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States of America is pledged in support thereof)
having maturities of not more than twelve months from the date of
acquisition ("GOVERNMENT OBLIGATIONS"), (ii) U.S. dollar denominated
(or foreign currency fully hedged) time deposits, certificates of
deposit, Eurodollar time deposits and Eurodollar certificates of
deposit denominated in Dollars or the Foreign Currency of (y) any
domestic commercial bank of recognized standing having capital and
surplus in excess of $250,000,000 or (z) any bank whose short-term
commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Moody's is at least P-1 or the equivalent thereof (any
such bank being an "APPROVED BANK"), in each case with maturities of
not more than 364 days from the date of acquisition, (iii) commercial
paper and variable or fixed rate notes issued by any Approved Bank (or
by the parent company thereof) or any variable rate notes issued by, or
guaranteed by any domestic corporation rated A-1 (or the equivalent
thereof) or better by S&P or P-1 (or the equivalent thereof) or better
by Moody's and maturing within six months of the date of acquisition,
(iv) repurchase agreements with a bank or trust company (including a
Lender) or a recognized securities dealer having capital and surplus in
excess of $500,000,000 for direct obligations issued by or fully
guaranteed by the United States of America, (v) obligations of any
state of the United States or any political subdivision thereof for the
payment of the principal and redemption price of and interest on which
there shall have been irrevocably deposited Government Obligations
maturing as to principal and interest at times and in amounts
sufficient to provide such payment, (vi) auction preferred stock rated
in the highest short-term credit rating category by S&P or Moody's and
(vii) U.S. dollar denominated time and demand deposit accounts or money
market accounts with those domestic banks meeting the requirements of
item (y) or (z) of clause (ii) above and any other domestic commercial
banks insured by the FDIC with an aggregate balance not to exceed
$100,000 in the aggregate at any time at any such bank.
"CHANGE OF CONTROL": any of the following events: (a) any
"person" or "group" (within the meaning of Section 13(d) or 14(d) of
the Exchange Act) has become, directly or indirectly, the "beneficial
owner" (as defined in Rules 13d-3 and 13d-5 under the Exchange Act,
except that a Person shall be deemed to have "beneficial ownership" of
all shares that any such Person has the right to acquire, whether such
right is exercisable immediately or only after the passage of time), by
way of merger, consolidation or otherwise, of 30% or
5
<PAGE> 11
more of the voting power of the Voting Stock of the Borrowers on a
fully-diluted basis, after giving effect to the conversion and exercise
of all outstanding warrants, options and other securities of the
Borrowers (whether or not such securities are then currently
convertible or exercisable), other than pursuant to the Stock
Distribution, or (b) during any period of two consecutive calendar
years, individuals who at the beginning of such period constituted the
board of directors of the Borrowers cease for any reason to constitute
a majority of the directors of the Borrowers then in office unless such
new directors were elected by the directors of the Borrowers who
constituted the board of directors of the Borrowers at the beginning of
such period.
"CLOSING DATE": the date of this Agreement, being also the
date on which each of the conditions specified in Section 4.1 are
satisfied in full or waived in accordance with this Agreement.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COMBINATION AGREEMENT": the agreement among Penton USA, its
acquisition subsidiary, DM Publishing, Pittway, William C. Donohue, and
John J. Meehan dated May 21, 1998.
"COMMITMENT FEE: such term as defined in Section 2.7.
"COMMITMENT LETTER": the letter agreement dated as of July 28,
1998, together with the related term sheet, among the Borrowers, First
Union and First Union Capital Markets.
"COMMITMENT PERIOD": the period from and including the Closing
Date to but not including the Termination Date.
"COMMITMENT TRANSFER SUPPLEMENT": a Commitment Transfer
Supplement, substantially in the form of SCHEDULE 9.6(C).
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with a Borrower within the
meaning of Section 4001 of ERISA or is part of a group which includes a
Borrower and which is treated as a single employer under Section 414(b)
or (c) of the Code, or solely for purposes of Section 302 of ERISA and
Section 412 of the Code, is treated as a single employer under Section
414 of the Code.
"CONSOLIDATED ADJUSTED EBITDA": Adjusted EBITDA of the
Borrowers and their Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"CONSOLIDATED EBITDA": EBITDA of the Borrowers and their
Subsidiaries on a consolidated basis determined in accordance with
GAAP.
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<PAGE> 12
"CONSOLIDATED INTEREST EXPENSE": Interest Expense of the
Borrowers and their Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"CONSOLIDATED TOTAL FUNDED DEBT": Total Funded Debt of the
Borrowers and their Subsidiaries on a consolidated basis determined in
accordance with GAAP.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any material agreement,
instrument or undertaking to which such Person is a party or by which
it or any of its material property is bound.
"COPYRIGHTS": (i) all copyrights in all works, now existing or
hereafter created or acquired, all registrations and recordings
thereof, and all applications in connection therewith, whether in the
United States Copyright Office or in any similar office or agency of
the United States, any State thereof or any other country or any
political subdivision thereof, or otherwise, including, without
limitation, any thereof referred to in SCHEDULE 3.13 to the Credit
Agreement, and (ii) all renewals thereof.
"CREDIT DOCUMENTS": this Agreement, each of the Notes and the
Joinder Agreements.
"CREDIT PARTIES": collectively, the Borrowers and the
Guarantors.
"CURRENT MATURITIES OF TOTAL FUNDED DEBT" means, at any time
and with respect to any item of Total Funded Debt, the portion of such
Total Funded Debt outstanding at such time which by the terms of such
Total Funded Debt or the terms of any instrument or agreement relating
thereto is due on demand or within one year from such time (whether by
sinking fund, other required prepayment or final payment at maturity),
and is not directly or indirectly renewable, extendible or refundable
at the option of the obligor under an agreement or firm commitment in
effect at such time to a date one year or more from such time.
"DEFAULT": any of the events specified in Section 7, whether
or not any requirement for the giving of notice or the lapse of time,
or both, or any other condition, has been satisfied.
"DEFAULTING LENDER": at any time, any Lender that, at such
time (a) has failed to make a Loan required pursuant to the terms of
this Agreement, (b) has failed to pay to the Administrative Agent or
any Lender an amount owed by such Lender pursuant to the terms of this
Agreement, or (c) has been deemed insolvent or has become subject to a
bankruptcy or insolvency proceeding or to a receiver, trustee or
similar official.
"DETERMINATION DATE" means:
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<PAGE> 13
(a) in connection with the origination of any new
Loan, the Business Day which is the earliest of the date such
Loan is extended or the date the rate is set, as applicable;
(b) in connection with any extension or conversion or
continuation of an existing Loan, the Business Day which is
the earlier of the date such credit is extended, converted or
continued, or the date the rate is set, as applicable, in
connection with any extension, conversion or continuation; or
(c) the date of any reduction of the Revolving
Committed Amount pursuant to the terms of Section 2.5; and
in addition to the foregoing, such additional dates not more frequently
than once a month as may be determined by the Agent.
"DM PUBLISHING": Donohue Meehan Publishing Company, an
Illinois corporation.
"DOLLAR AMOUNT": (a) with respect to Dollars or an amount
denominated in Dollars, such amount and (b) with respect to an amount
of Foreign Currency or an amount denominated in such Foreign Currency,
the Dollar Equivalent of such amount on the applicable date
contemplated in this Credit Agreement.
"DOLLAR EQUIVALENT": on any date, with respect to an amount
denominated in a Foreign Currency, the amount of Dollars into which the
Agent could, in accordance with its practice from time to time in the
interbank foreign exchange market, convert such amount of such Foreign
Currency at its spot rate of exchange (inclusive of all reasonable
related costs of conversion, if any are actually incurred) applicable
to the relevant transaction at or about 10:00 A.M., Charlotte, North
Carolina time, on such date.
"DOLLARS" and "$": dollars in lawful currency of the United
States of America.
"DOMESTIC LENDING OFFICE": initially, the office of each
Lender designated as such Lender's Domestic Lending Office shown on
SCHEDULE 2.1(A); and thereafter, such other office of such Lender as
such Lender may from time to time specify to the Administrative Agent
and Penton USA as the office of such Lender at which Base Rate Loans of
such Lender are to be made.
"EBITDA": of any Person for any period, net income for such
period, PLUS (i) Interest Expense to the extent deducted in determining
such net income, PLUS (ii) depreciation, amortization and all other
non-cash charges deducted in determining such net income, all
determined in accordance with GAAP consistently applied, MINUS (iii)
extraordinary income (including, for purposes hereof, gain from the
sale of assets in the ordinary course of business, such as obsolete
equipment), PLUS (iv) extraordinary
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<PAGE> 14
expenses (including, for purposes hereof, loss from the sale of the
assets in the ordinary course of business, such as obsolete equipment),
PLUS (v) taxes to the extent deducted to determine net income.
"ENVIRONMENTAL LAWS": any and all applicable foreign, Federal,
state, local or municipal laws, rules, orders, regulations, statutes,
ordinances, codes, decrees or requirements of any Governmental
Authority or other Requirement of Law (including common law)
regulating, relating to or imposing liability or standards of conduct
concerning protection of human health or the environment, as now or may
at any time be in effect during the term of this Agreement.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EUROCURRENCY LENDING OFFICE": initially, the office of each
Lender designated as such Lender's Eurocurrency Lending Office shown on
SCHEDULE 2.1(A); and thereafter, such other office of such Lender as
such Lender may from time to time specify to the Administrative Agent
and the Borrowers as the office of such Lender at which the
Eurocurrency Loans of such Lender are to be made.
"EUROCURRENCY LOAN": any Loan bearing interest at a rate
determined by reference to the Eurocurrency Rate.
"EUROCURRENCY RATE": for any Eurocurrency Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16th of 1%) appearing on Telerate Page 3750
(or any successor page) as London interbank offered rate for deposits
in Dollars or the applicable Foreign Currency, as appropriate, at
approximately 11:00 a.m. (London time) two Business Days prior to the
first day of such Interest Period for a term comparable to such
Interest Period. If for any reason such rate is not available, the term
"Eurocurrency Rate" shall mean, for any Eurocurrency Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/16th of 1%) appearing on Reuters Screen
LIBO Page as the London interbank offered rate for deposits in Dollars
or the applicable Foreign Currency, as appropriate, at approximately
11:00 a.m. (London time) two Business Days prior to the first day of
such Interest Period for a term comparable to such Interest Period;
PROVIDED, HOWEVER, if more than one rate is specified on Reuters Screen
LIBO Page, the applicable rate shall be the arithmetic mean of all such
rates.
"EUROCURRENCY RESERVE PERCENTAGE": for any day, that
percentage (expressed as a decimal) which is in effect from time to
time under Regulation D of the Board of Governors of the Federal
Reserve System ( or other applicable authority or any successor
thereof), as such regulation may be amended from time to time or any
successor regulation, as the maximum reserve requirement (including,
without limitation, any basic, supplemental, emergency, special, or
marginal reserves) applicable with respect to
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<PAGE> 15
Eurocurrency liabilities as that term is defined in Regulation D (or
against any other category of liabilities that includes deposits by
reference to which the interest rate of Eurocurrency Loans is
determined), whether or not Lender has any Eurocurrency liabilities
subject to such reserve requirement at that time. Eurocurrency Loans
shall be deemed to constitute Eurocurrency liabilities and as such
shall be deemed subject to reserve requirements without benefits of
credits for proration, exceptions or offsets that may be available from
time to time to a Lender. The Eurocurrency Rate shall be adjusted
automatically on and as of the effective date of any change in the
Eurocurrency Reserve Percentage.
"EVENT OF DEFAULT": any of the events specified in Section 7;
PROVIDED, HOWEVER, that any requirement for the giving of notice or the
lapse of time, or both, or any other condition, has been satisfied.
"FACILITY FEE": such term as defined in Section 2.7.
"FEDERAL FUNDS EFFECTIVE RATE": such term as defined in the
definition of "Base Rate".
"FEES": the Commitment Fees, the Facility Fee, the Agent Fee
and such other fees as may from time to time become due and owing
hereunder.
"FIRST UNION": First Union National Bank, a national banking
association.
"FOREIGN CURRENCY": British Pounds Sterling and such other
currency as agreed to between the Borrowers and all the Lenders.
"FOREIGN CURRENCY EQUIVALENT": on any date, with respect to an
amount denominated in Dollars, the amount of the applicable Foreign
Currency into which the Agent could, in accordance with its practice
from time to time in the interbank foreign exchange market, convert
such amount of Dollars at its spot rate of exchange (inclusive of all
reasonable related costs of conversion, if any are actually incurred)
applicable to the relevant transaction at or about 10:00 A.M.,
Charlotte, North Carolina time, on such date.
"FOREIGN CURRENCY LOANS": shall have the meaning assigned to
such term in Section 2.2(a).
"GAAP": generally accepted accounting principles in effect in
the United States of America applied on a consistent basis, SUBJECT,
HOWEVER, in the case of determination of compliance with the financial
covenants set out in Section 5.9 to the provisions of Section 1.3.
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<PAGE> 16
"GOVERNMENTAL AUTHORITY": any nation or government, any state
or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which the guaranteeing person has
issued a reimbursement, counterindemnity or similar obligation, in
either case guaranteeing or in effect guaranteeing any Indebtedness,
leases, dividends or other obligations (the "PRIMARY OBLIGATIONS") of
any other third Person (the "PRIMARY OBLIGOR") in any manner, whether
directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase
any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the
purchase or payment of any such primary obligation or (2) to maintain
working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Borrowers in good faith.
"GUARANTORS": Penton USA and any and all Subsidiaries of the
Borrowers identified as a "Subsidiary Guarantor" on the signature pages
hereto and any Subsidiary organized under the laws of any state of the
United States of America acquired or formed subsequent to the Closing
Date.
"INDEBTEDNESS": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money or
for the deferred purchase price of property or services (other than
trade liabilities and other normal accrued liabilities incurred in the
ordinary course of business and payable in accordance with customary
practices), (b) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (c) all
obligations of such Person under Capital Leases, (d) all obligations of
such Person in respect of bankers' acceptances issued or created for
11
<PAGE> 17
the account of such Person, (e) all liabilities secured by any Lien on
any property owned by such Person even though such Person has not
assumed or otherwise become liable for the payment thereof (other than
liabilities securing carriers', warehousemen's, mechanics', repairmen's
or other like nonconsensual statutory Liens arising in the ordinary
course of business), (f) all obligations of such Person under
conditional sale or other title retention agreements relating to
property purchased by such Person (other than customary reservations or
retentions of title under agreements with suppliers entered into in the
ordinary course of business), (g) all obligations of such Person under
take-or-pay or similar arrangements or under commodities agreements
(other than supply agreements and other similar arrangements entered
into in the ordinary course of business), (h) all Guarantee Obligations
of such Person, (i) all obligations of such Person in respect of
interest rate protection agreements, foreign currency exchange
agreements, commodity purchase or option agreements or other interest
or exchange rate or commodity price hedging agreements, and (j) the
maximum amount of all letters of credit issued for the account of such
Person and, without duplication, all drafts drawn thereunder (to the
extent not theretofore reimbursed). For purposes of this Agreement,
Indebtedness shall not include any Indebtedness owing by a Borrower to
any of its Subsidiaries or by any Subsidiary of a Borrower to such
Borrower or by any Subsidiary of a Borrower to any other Subsidiary of
such Borrower or any contingent obligation in respect thereof. It is
understood and agreed that the amount of any Indebtedness described in
clause (e) shall be the lower of the amount of the obligation or the
fair market value of the collateral securing such obligation, and the
amount of any obligation described in clause (i) shall be the
termination payments that would be required to be paid to a
counterparty upon early termination (in accordance with customary
industry standards) rather than any notional amount with regard to
which payments may be calculated.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of such term
as used in Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": such term as defined in Section 3.13.
"INTEREST COVERAGE RATIO": as of the last day of any fiscal
quarter, the ratio of Consolidated Adjusted EBITDA for the four (4)
consecutive quarters then ending to Consolidated Interest Expense for
the four (4) consecutive quarters then ending.
"INTEREST EXPENSE": for any Person for any period, the sum of
all interest and fee expense including amortization of debt discount
and premium and the interest component under Capital Leases for such
Person; PROVIDED that there shall be added to and included in Interest
Expense for purposes hereof the net amount payable (other than amounts
payable in respect of up-front or one-time fees, which shall be
excluded from Interest Expense) by such Person in respect of any
Interest Protection Agreement and Interest
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<PAGE> 18
Expense shall be reduced by the net amount receivable by such Person
under any Interest Protection Agreement in respect of such period.
"INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the
last Business Day of each March, June, September and December to occur
while such Loan is outstanding, (b) as to any Eurocurrency Loan having
an Interest Period of three months or less, the last day of such
Interest Period and (c) as to any Eurocurrency Loan having an Interest
Period longer than three months, each day which is three months after
the first day of such Interest Period and the last day of such Interest
Period.
"INTEREST PERIOD": with respect to any Eurocurrency Loan,
(i) initially, the period commencing on the Borrowing
Date or conversion date, as the case may be, with respect to
such Eurocurrency Loan and ending one, two, three or six
months thereafter, as selected by any Borrower in the notice
of borrowing or notice of conversion given with respect
thereto; and
(ii) thereafter, each period commencing on the last day
of the immediately preceding Interest Period applicable to
such Eurocurrency Loan and ending one, two, three or six
months thereafter, as selected by any Borrower by irrevocable
notice to the Administrative Agent in the notice of conversion
given with respect thereto;
PROVIDED that the foregoing provisions are subject to the following:
(A) if any Interest Period pertaining to a
Eurocurrency Loan would otherwise end on a day that
is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless
the result of such extension would be to carry such
Interest Period into another calendar month in which
event such Interest Period shall end on the
immediately preceding Business Day;
(B) any Interest Period pertaining to a
Eurocurrency Loan that begins on the last Business
Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end
on the last Business Day of the relevant calendar
month;
(C) if the Borrowers shall fail to give
notice as provided above, the Borrowers shall be
deemed to have selected a Eurocurrency Loan with an
Interest Period of one month to replace the affected
Eurocurrency Loan as provided in Section 2.4; and
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(D) any Interest Period in respect of any
Revolving Loan that would otherwise extend beyond the
Termination Date shall end on the Termination Date.
"INTEREST PROTECTION AGREEMENT": any interest rate protection
agreement or interest rate future, option, cap, collar or other hedging
arrangement.
"JOINDER AGREEMENT": a Joinder Agreement substantially in the
form of SCHEDULE 5.12, executed and delivered by a Subsidiary in
accordance with the provisions of Section 5.12.
"LENDERS": such term as defined in the first paragraph of this
Agreement.
"LEVERAGE RATIO": as of the last day of any fiscal quarter,
the ratio (x) of Consolidated Total Funded Debt as of the last day of
such fiscal quarter to (y) Consolidated Adjusted EBITDA for the four
(4) consecutive fiscal quarters then ending.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Capital Lease having substantially the same
economic effect as any of the foregoing).
"LOAN" OR "LOANS": any Revolving Loans, Foreign Currency Loans
or Base Rate Loans.
"MAJORITY LENDERS": Lenders holding in the aggregate more than
66 2/3% of the sum of (i) all Loans then outstanding at such time and
(ii) the aggregate unused Revolving Commitments at such time; PROVIDED,
HOWEVER, that if any Lender shall be a Defaulting Lender at such time,
then there shall be excluded from the determination of Majority Lenders
those Loans owing to such Defaulting Lender and such Defaulting
Lender's Revolving Commitments, or after termination of the Revolving
Commitments, the principal balance of the Loans owing to such
Defaulting Lender.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the business, operations, property, or condition (financial or
otherwise) of the Borrowers and their Subsidiaries taken as a whole,
(b) the ability of the Borrowers and their Subsidiaries to perform
their Obligations under this Agreement or any of the Notes or (c) the
validity or enforceability of this Agreement, any of the Notes or any
of the other Credit Documents or the rights or remedies of the
Administrative Agent or the Lenders hereunder or thereunder.
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<PAGE> 20
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Law,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"MLA COST": an addition to the interest rate on a Loan to
compensate any Lender for the cost imputed to a Lender in respect of
any Loan made in British Pounds Sterling during the term of any Loan
made in British Pounds Sterling resulting from the imposition from time
to time under or pursuant to the Bank of England Act [of] 1998 (the
"Act") and/or by the Bank of England and/or the Financial Services
Authority (the "FSA") (or other United Kingdom governmental authorities
or agencies) of a requirement to place non-interest-bearing cash ratio
deposits or Special Deposits (whether interest bearing or not) with the
Bank of England and/or pay fees to the FSA calculated by reference to
liabilities used to fund the Loan made in British Pounds Sterling, as
determined in accordance with SCHEDULE 2.2(D).
"MOODY'S": Moody's Investors Service, Inc.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NON-EXCLUDED TAXES": such term as defined in Section 2.13.
"NOTE" or "NOTES": a Revolving Note or the Revolving Notes, as
appropriate.
"NOTICE OF ACCOUNT DESIGNATION": such term as defined in
Section 2.1(b)(iii).
"NOTICE OF BORROWING": a written notice of borrowing in
substantially the form of SCHEDULE 2.1(B)(I), as required by Section
2.1(b)(i) in the case of Revolving Loans and SCHEDULE 2.2(B)(I) as
required by Section 2.2(b)(i) in the case of Foreign Currency Loans.
"NOTICE OF CONVERSION": the written notice of extension or
conversion in substantially the form of SCHEDULE 2.4, as required by
Section 2.4.
"OBLIGATIONS": without duplication, (i) all of the obligations
of the Credit Parties to the Lenders and the Agent, whenever arising,
under this Agreement, the Notes or any of the other Credit Documents
(including, but not limited to, any interest accruing after the
occurrence of a filing of a petition of bankruptcy under the Bankruptcy
Code with respect to any Credit Party, regardless of whether such
interest is an allowed claim under the Bankruptcy Code) and (ii) all
liabilities and obligations, whenever arising, owing from the Borrowers
or any of their Subsidiaries to any Lender, or any affiliate of a
Lender, arising under any Interest Rate Protection Agreement.
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<PAGE> 21
"PARTICIPANT": such term as defined in Section 9.6(b).
"PATENTS": (i) all letters patent of the United States or any
other country, now existing or hereafter arising, and all improvement
patents, reissues, reexaminations, patents of additions, renewals and
extensions thereof, including, without limitation, any thereof referred
to in SCHEDULE 3.13 to the Credit Agreement, and (ii) all applications
for letters patent of the United States or any other country, now
existing or hereafter arising, and all provisionals, divisions,
continuations and continuations-in-part and substitutes thereof,
including, without limitation, any thereof referred to in SCHEDULE 3.13
to the Credit Agreement.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED ACQUISITION": such term as defined in Section
6.5(b)(iii).
"PERMITTED INVESTMENTS": (i) cash and Cash Equivalents, (ii)
receivables owing to the Borrowers or any of their Subsidiaries or any
receivables and advances to suppliers, in each case if created,
acquired or made in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms, (iii) loans
and/or investments in and to the Borrowers or any of their
Subsidiaries, (iv) investments (including debt obligations, stock,
securities or other property) received in connection with the
bankruptcy or reorganization of suppliers and customers and in
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business, (v)
investments, acquisitions or transactions permitted under Section
6.5(b), (vi) loans and advances to employees for business-related
travel expenses, costs of replacement homes and similar expenses, in
each case incurred in the ordinary course of business, (vii)
investments in Interest Protection Agreements other than for
speculative purposes and (viii) any endorsement of a check or other
medium of payment for deposit or collection, or any similar transaction
in the ordinary course of business. As used herein, "INVESTMENT" means
all investments, in cash or by delivery of property made, directly or
indirectly in, to or from any Person, whether by acquisition of shares
of capital stock or partnership interest or other equity interest,
property, assets, indebtedness or other obligations or securities or by
loan advance, capital contribution or otherwise.
"PERMITTED LIENS":
(i) Liens created by or otherwise existing under or
in connection with this Agreement or the other Credit
Documents in favor of the Administrative Agent for the benefit
of the Lenders;
(ii) Liens on assets securing purchase money
indebtedness and Capital Leases (and refinancings thereof) to
the extent permitted under subsection (d) of
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<PAGE> 22
Section 6.1 and Liens existing on the date hereof and
described on SCHEDULE 1.1 (together with any replacement,
extension or renewal of any such Liens);
(iii) Liens for taxes, assessments, charges or other
governmental levies not yet due or as to which the period of
grace (not to exceed 60 days), if any, related thereto has not
expired or which are being contested in good faith by
appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrowers
or any of their Subsidiaries, as the case may be, in
conformity with GAAP (or, in the case of Subsidiaries with
significant operations outside of the United States of
America, generally accepted accounting principles in effect
from time to time in their respective jurisdictions of
incorporation);
(iv) carriers', warehousemen's, mechanics',
materialmen's, repairmen's or other like Liens arising in the
ordinary course of business which are not overdue for a period
of more than 60 days or which are being contested in good
faith by appropriate proceedings;
(v) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance
carriers under insurance or self-insurance arrangements;
(vi) deposits to secure the performance of bids,
trade contracts, (other than for borrowed money), leases,
statutory obligations, surety and appeal bonds, performance
bonds and other obligations of a like nature incurred in the
ordinary course of business;
(vii) Liens in connection with attachments or
judgments (including judgment or appeal bonds), provided that
the judgments secured shall, within 60 days after the entry
thereof, have been discharged or execution thereof stayed
pending appeal, or shall have been discharged within 60 days
after the expiration of any such stay;
(viii) easements, rights-of-way, restrictions
(including zoning restrictions), minor defects or
irregularities in title and other similar charges or
encumbrances not, in any material respect, impairing the use
of the encumbered property for its intended purpose;
(ix) leases or subleases of real property granted to
others not interfering in any material respect with the
business of the Borrowers or any of their Subsidiaries;
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<PAGE> 23
(x) any extension, renewal or replacement (or
successive extensions, renewals or replacements) , in whole or
in part, of any Lien referred to in the foregoing clauses;
PROVIDED that such extension, renewal or replacement Lien
shall be limited to all or a part of the property which
secured the Lien so extended, renewed or replaced (plus
improvements on such property); and
(xi) Liens existing on assets or property at the time
acquired in connection with a Permitted Acquisition and not
incurred as a result of, or in connection with or in
anticipation of such Permitted Acquisition; provided that (A)
the principal amount of the Indebtedness secured by any such
Lien immediately prior to such Permitted Acquisition is not
increased or the maturity thereof reduced, (B) any such Lien
is not extended to any other property and (C) immediately
after such Permitted Acquisition, no Default or Event of
Default would exist.
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or
other entity of whatever nature.
"PITTWAY": Pittway Corporation, a Delaware corporation.
"PLAN": at any particular time, any employee benefit plan
which is covered by Title IV of ERISA and in respect of which a
Borrower or a Commonly Controlled Entity is (or, if such plan were
terminated at such time, would under Section 4069 of ERISA be deemed to
be) an "employer" as defined in Section 3(5) of ERISA.
"PRIME RATE": such term as defined in the definition of Base
Rate.
"PROPERTIES": such term as defined in Section 3.10(a).
"PURCHASING LENDERS": such term as defined in Section 9.6(c).
"RECOVERY EVENT": the receipt by the Borrowers or any of their
Subsidiaries of any cash insurance proceeds or condemnation award
payable by reason of theft, loss, physical destruction or damage,
taking or similar event with respect to any property or assets of the
Borrowers or any of their Subsidiaries.
"REGISTER": such term as defined in Section 9.6(d).
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such Plan is in reorganization within the meaning of
such term as used in Section 4241 of ERISA.
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<PAGE> 24
"REPORTABLE EVENT": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day
notice period has been waived pursuant to regulations promulgated by
the PBGC.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-laws, partnership agreement, operating agreement
or other organizational or governing documents of such Person, and each
law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or
binding upon such Person or any of its property or to which such Person
or any of its material property is subject.
"RESTRICTED PAYMENT": (i) any payment by the Borrowers or any
of their Subsidiaries of a payment, distribution or dividend (other
than a dividend or distribution payable solely in stock or equity
interest of a Borrower) on, or any payment on account of the purchase,
redemption, defeasance or retirement of, or any other distribution on,
any partnership interest, limited liability company interest, share of
any class of stock or other ownership interest in the Borrowers or any
of their Subsidiaries (including any such payment or distribution in
cash or in property or obligations of a Borrower or any of its
Subsidiaries), (ii) any loan or advance by a Borrower or any of its
Subsidiaries to any Affiliate of a Borrower or any of its Subsidiaries
other than as permitted by Sections 6.6 or 6.7, or (iii) the payment by
a Borrower or any of its Subsidiaries of any management or
administrative fee to any Affiliate of the Borrower or any of its
Subsidiaries or of any salary, bonus or other form of compensation
other than in the ordinary course of business to any Person who is a
significant partner, shareholder, member, owner or executive officer of
any such Affiliate other than as permitted by Section 6.7.
"REVOLVING COMMITMENT": as to any Lender, the obligation of
such Lender to make Revolving Loans and Foreign Currency Loans to the
Borrowers hereunder in an aggregate principal amount at any one time
outstanding not to exceed the amount set forth opposite such Lender's
name on SCHEDULE 2.1(A), as such amount may be reduced from time to
time in accordance with the provisions of this Agreement.
"REVOLVING COMMITMENT PERCENTAGE": for each Lender, a fraction
(expressed as a percentage) the numerator of which is the Revolving
Commitment of such Lender at such time and the denominator of which is
the Aggregate Revolving Committed Amount at such time. The initial
Revolving Commitment Percentages are set out on SCHEDULE 2.1(A).
"REVOLVING COMMITTED AMOUNT": collectively, the aggregate
amount of all of the Revolving Commitments as referenced in Section
2.1(a) and, individually, the amount of each Lender's Revolving
Commitment as specified in SCHEDULE 2.1(A).
"REVOLVING LOANS": such term as defined in Section 2.1.
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<PAGE> 25
"REVOLVING NOTE" or "REVOLVING NOTES": the promissory notes of
the Borrowers in favor of each of the Lenders evidencing the Revolving
Loans and the Foreign Currency Loans provided pursuant to Section
2.1(e), individually or collectively, as appropriate, as such
promissory notes may be amended, modified, supplemented, extended,
renewed or replaced from time to time.
"S&P": Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"SINGLE EMPLOYER PLAN": any Plan which is not a Multiemployer
Plan.
"SPECIFIED SALES": (i) the sale, transfer, lease or other
disposition of inventory and materials in the ordinary course of
business (including obsolete and/or unnecessary), (ii) the sale,
transfer, lease or other disposition of machinery, parts and equipment
(including obsolete and/or unnecessary equipment) in the ordinary
course of business, (iii) the sale, transfer or other disposition of
articles in the ordinary course of business or the granting of
permission for reprints in the ordinary course of business and (iv) the
sale, lease or disposition of space and related property and assets in
the ordinary course of business.
"STOCK DISTRIBUTION": the distribution to stockholders of
Pittway of the common stock, par value $.01 per share, of Penton USA,
pursuant to the Form S-1 Registration Statement filed with the
Securities and Exchange Commission on June 15, 1998, as amended.
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of a Borrower.
"TERMINATION DATE": the earlier of (a) June 30, 2003 or (b)
the date on which the Revolving Commitments shall terminate in
accordance with the provisions of this Agreement.
"TOTAL FUNDED DEBT": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money
which by its terms or by the terms of any instrument or agreement
relating thereto matures or is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the
option of the obligor in respect thereof to a date one year or more
from the creation thereof; provided that, Total Funded Debt shall
include, at any date of determination, Current Maturities of Total
Funded Debt; (b) all obligations of such Person under Capital Leases;
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<PAGE> 26
(c) all Guarantee Obligations of such Person; and (d) the maximum
amount of all letters of credit issued or bankers' acceptances created
for the account of such Person and, without duplication, all drafts
drawn thereunder (to the extent not theretofore reimbursed).
"TRADEMARKS": (i) all trademarks, trade names, corporate
names, company names, business names, fictitious business names,
service marks, logos and other source or business identifiers, together
with the goodwill of the business symbolized by said marks, names,
logos and identifiers now existing or hereafter adopted or acquired,
all registrations and recordings thereof, and all applications in
connection therewith, whether in the United States Patent and Trademark
Office or in any similar office or agency of the United States, any
State thereof or any other country or any political subdivision
thereof, or otherwise, including, without limitation, any thereof
referred to in SCHEDULE 3.13 to the Credit Agreement, and (ii) all
renewals thereof including, without limitation, any thereof referred to
in SCHEDULE 3.13 to the Credit Agreement.
"TRANSFER EFFECTIVE DATE": such term as defined in each
Commitment Transfer Supplement.
"TYPE": as to any Loan, its nature as a Base Rate Loan,
Eurocurrency Loan or Foreign Currency Loan, as the case may be.
"VOTING STOCK": with respect to any Person, all classes of the
capital stock (or other voting interests) of such Person then
outstanding and normally entitled to vote in the election of directors.
1.2 OTHER DEFINITIONAL PROVISIONS.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the Notes
or other Credit Documents or any certificate or other document made or
delivered pursuant hereto.
(b) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this
Agreement, and Section, subsection, Schedule and Exhibit references are
to this Agreement unless otherwise specified.
(c) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
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<PAGE> 27
1.3 ACCOUNTING TERMS.
Unless otherwise specified herein, all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP applied on a basis consistent (except for changes concurred
with by the Borrowers' independent public accountants) with the most recent
audited financial statements of the Borrowers delivered to the Lenders; PROVIDED
that, if the Borrowers notify the Administrative Agent that they wish to amend
any covenant in Section 5.9 to eliminate the effect of any change in GAAP on the
operation of such covenant (or if the Administrative Agent notifies the
Borrowers that the Majority Lenders wish to amend Section 5.9 for such purpose),
then the Borrowers' compliance with such covenant shall be determined on the
basis of GAAP in effect immediately before the relevant change in GAAP became
effective, until either such notice is withdrawn or such covenant is amended in
a manner satisfactory to the Borrowers and the Majority Lenders.
The Borrowers shall deliver to the Administrative Agent and each Lender
at the same time as the delivery of any annual or quarterly financial statements
given in accordance with the provisions of Section 5.1, (i) a description in
reasonable detail of any material change in the application of accounting
principles employed in the preparation of such financial statements from those
applied in the most recently preceding quarterly or annual financial statements
as to which no objection shall have been made in accordance with the provisions
above and (ii) a reasonable estimate of the effect on the financial statements
on account of such changes in application.
SECTION 2. THE LOANS; AMOUNT AND TERMS
2.1 REVOLVING LOANS.
(a) REVOLVING COMMITMENT. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally
agrees to make revolving credit loans in Dollars ("REVOLVING LOANS") to
Penton USA from time to time in an aggregate amount up to the amount of
such Lender's Revolving Commitment Percentage of such Revolving Loans
for the purposes hereinafter set forth; PROVIDED that (i) with regard
to each Lender individually, the Dollar Amount (determined as of the
most recent Determination Date) of such Lender's Revolving Commitment
Percentage of the sum of Revolving Loans PLUS Foreign Currency Loans
shall not exceed such Lender's Revolving Committed Amount, and (ii)
with regard to the Lenders collectively, the Dollar Amount (determined
as of the most recent Determination Date) of the sum of Revolving Loans
PLUS Foreign Currency Loans shall not exceed the Aggregate Revolving
Committed Amount. Revolving Loans may consist of Base Rate Loans or
Eurocurrency Loans, or a combination thereof, as Penton USA may
request, and may be repaid and reborrowed in accordance with the
provisions hereof.
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<PAGE> 28
(b) REVOLVING LOAN BORROWINGS.
(i) NOTICE OF BORROWING. Penton USA shall request a
Revolving Loan borrowing by written notice (or telephone
notice promptly confirmed in writing) to the Agent not later
than 11:00 A.M. (Charlotte, North Carolina time) on the
Business Day prior to the date of the requested borrowing in
the case of Base Rate Loans, and on the third Business Day
prior to the date of the requested borrowing in the case of
Eurocurrency Loans denominated in Dollars. Each such request
for borrowing shall be irrevocable and shall specify (A) that
a Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing
shall be comprised of Base Rate Loans, Eurocurrency Loans or a
combination thereof, and if Eurocurrency Loans are requested,
the Interest Period(s) therefor. If Penton USA shall fail to
specify in any such Notice of Borrowing (i) an applicable
Interest Period in the case of a Eurocurrency Loan, then such
notice shall be deemed to be a request for an Interest Period
of one month, or (ii) the Type of Revolving Loan requested,
then such notice shall be deemed to be a request for a
Eurocurrency Loan for an Interest Period of one month
hereunder. The Agent shall give notice to each affected Lender
promptly upon receipt of each Notice of Borrowing pursuant to
this Section 2.1(b)(i), the contents thereof and each such
Lender's share of any borrowing to be made pursuant thereto.
(ii) MINIMUM AMOUNTS. Each Revolving Loan made as (A)
a Eurocurrency Loan shall be in a minimum aggregate principal
amount of $1,000,000 and integral multiples of $1,000,000 in
excess thereof and (B) a Base Rate Loan shall be in a minimum
aggregate principal amount of $1,000,000 and integral
multiples of $500,000 in excess thereof (or if less, the
remaining Revolving Committed Amount).
(iii) ADVANCES. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing
available to the Agent for the account of Penton USA as
specified in Section 2.17(b), or in such other account in the
United States as the Agent may specify in writing, by 1:00
P.M. (Charlotte, North Carolina time) on the date specified in
the applicable Notice of Borrowing in Dollars and in funds
immediately available to the Agent. Such borrowing will then
be made available to Penton USA by the Agent by crediting the
account of Penton USA on the books of such office with the
aggregate of the amounts made available to the Agent by the
Lenders and in like funds as received by the Agent together
with any amounts advanced by the Agent under Section 2.15(b).
Penton USA hereby irrevocably authorizes the Administrative
Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.1 in immediately available funds by
crediting such proceeds to a deposit account of Penton USA
maintained with the Administrative Agent or by wire transfer
to any other account
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<PAGE> 29
of Penton USA in each such case as may be specified by Penton
USA from time to time in a written notice in the form attached
hereto as SCHEDULE 2.1(B)(III) (a "NOTICE OF ACCOUNT
DESIGNATION"). Unless otherwise specified by Penton USA, the
Notice of Account Designation most recently provided to the
Administrative Agent shall control.
(c) REPAYMENT. The principal amount of all Revolving Loans
shall be due and payable in full on the Termination Date.
(d) INTEREST. Subject to the provisions of Section 2.3.
(i) BASE RATE LOANS. During such periods as Revolving
Loans shall be comprised in whole or in part of Base Rate
Loans, such Base Rate Loans shall bear interest at a per annum
rate equal to the Base Rate;
(ii) EUROCURRENCY LOANS. During such periods as
Revolving Loans shall be comprised in whole or in part of
Eurocurrency Loans, such Eurocurrency Loans shall bear
interest at a per annum rate equal to the sum of the
Eurocurrency Rate PLUS the Applicable Interest Rate
Percentage.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) REVOLVING NOTES. The Revolving Loans shall be evidenced by
a duly executed Revolving Note in favor of each Lender in substantially
the form of SCHEDULE 2.1(E). Each Lender is hereby authorized to record
the date, Type and amount of each Revolving Loan made by such Lender,
each continuation thereof, each conversion of all or a portion thereof
to another Type, the date and amount of each payment or prepayment of
principal thereof and, in the case of Eurocurrency Loans, the length of
each Interest Period with respect thereto, on the schedule annexed to
and constituting a part of its Revolving Note, and any such recordation
shall constitute prima facie evidence of the accuracy of the
information so recorded absent manifest error; PROVIDED that neither
the failure to make, nor any error in the making of, any such
recordation shall limit or otherwise affect the obligation of the
Borrowers hereunder or under such Revolving Note with respect to any
Revolving Loan and payments of principal or interest on such Revolving
Note. Each Revolving Note shall be dated the Closing Date and provide
for the payment of interest in accordance with subsection 2.1(d).
(f) MAXIMUM NUMBER OF LOANS. The Borrowers will be limited to
the maximum aggregate number of separate Loans outstanding at any time
under Section 2.1 (Revolving Loans) and Section 2.2 (Foreign Currency
Loans) of:
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<PAGE> 30
<TABLE>
<CAPTION>
No. of Loans
------------
<S> <C>
Penton USA 6
Penton UK 6
</TABLE>
For purposes hereof, (i) Loans to different Borrowers will be
considered to be separate Loans, (ii) as to Revolving Loans which are
Base Rate Loans, all such Revolving Loans to a given Borrower will be
considered to be a single Loan, (iii) as to other types of Loans, each
type of Loan will be considered to be a separate Loan and (iv) Loans
with different Interest Periods shall be considered as separate Loans,
even if they shall begin on the same date and have the same duration,
although borrowings, extensions and conversions may, in accordance with
the provisions hereof, be combined at the end of existing Interest
Periods to constitute a new Loan with a single Interest Period.
2.2 FOREIGN CURRENCY LOAN SUBFACILITY.
(a) FOREIGN CURRENCY COMMITMENT. During the Commitment Period,
subject to the terms and conditions hereof, each Lender severally
agrees to make certain foreign currency revolving loans in the
applicable Foreign Currency (the "FOREIGN CURRENCY LOANS") to Penton UK
from time to time in the amount of such Lender's Revolving Commitment
Percentage of such Foreign Currency Loans from time to time for the
purposes hereinafter set forth; PROVIDED, that (i) with regard to each
Lender individually, the Dollar Amount (determined as of the most
recent Determination Date) of such Lender's Revolving Commitment
Percentage of the sum of Revolving Loans PLUS Foreign Currency Loans
shall not exceed such Lender's Revolving Committed Amount, and (ii)
with regard to the Lenders collectively, the Dollar Amount (determined
as of the most recent Determination Date) of the sum of Revolving Loans
PLUS Foreign Currency Loans shall not exceed the Aggregate Revolving
Committed Amount. Foreign Currency Loans shall consist solely of
Eurocurrency Loans and may be repaid and reborrowed in accordance with
the provisions hereof.
(b) FOREIGN CURRENCY LOAN BORROWINGS.
(i) NOTICE OF BORROWING. Penton UK shall request a
Foreign Currency Loan borrowing by written notice (or
telephone notice promptly confirmed in writing) to the Agent
not later than 11:00 A.M. (Charlotte, North Carolina time) on
the fourth Business Day prior to the date of the requested
borrowing. Each such request for borrowing shall be
irrevocable and shall specify (A) that a Foreign Currency Loan
is requested, (B) the requested Foreign Currency, (C) the date
of the requested borrowing (which shall be a Business Day),
(D) the aggregate principal amount to be borrowed and (E) the
Interest Period(s) therefor. If Penton UK shall fail to
specify in any such Notice of Borrowing an applicable Interest
Period, then such notice shall be deemed to be a request for
an Interest Period of one month. The Agent shall give notice
to each Lender promptly upon
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<PAGE> 31
receipt of each Notice of Borrowing, the contents thereof and
each such Lender's share of any borrowing to be made pursuant
thereto.
(ii) MINIMUM AMOUNTS. Each Foreign Currency Loan
shall be in a minimum aggregate principal amount equal to the
applicable Foreign Currency Equivalent of approximately
$1,000,000 and integral multiples of the applicable Foreign
Currency Equivalent of approximately $1,000,000 in excess
thereof.
(iii) ADVANCES. Each Lender will make its Revolving
Commitment Percentage of each Foreign Currency Loan borrowing
available to the Agent by 1:00 P.M., local time in the place
where such deposit is required to be made by the succeeding
terms hereof, on the date specified in the applicable Notice
of Borrowing by deposit with the Agent, at the same place and
same account specified in Section 2.17(b) for payments by
Penton UK in the applicable Foreign Currency, of same day
funds in the applicable Foreign Currency. Such deposit will be
made to such accounts in the primary market for such Foreign
Currency as the Agent shall specify from time to time by
notice to the Lenders. To the extent funds are received from
the Lenders, the Agent shall promptly make such funds
available by wire transfer to such accounts as Penton UK shall
have specified to the Agent together with any amounts advanced
by the Agent under Section 2.15(b).
(c) REPAYMENT. The principal amount of all Foreign Currency
Loans shall be due and payable in full in the applicable Foreign
Currency on the Termination Date.
(d) INTEREST. Subject to the provisions of Section 2.3,
Foreign Currency Loans shall bear interest at a per annum rate equal to
the Eurocurrency Rate PLUS the Applicable Interest Rate Percentage.
Interest on Foreign Currency Loans shall be payable (in the applicable
Foreign Currency) in arrears on each applicable Interest Payment Date
(or at such other times as may be specified herein). Any Foreign
Currency Loan made in British Pounds Sterling shall have added to the
interest otherwise applicable to such Loan the MLA Cost associated with
such Loan.
(e) FOREIGN CURRENCY NOTES. The Foreign Currency Loans shall
be evidenced by a Revolving Note duly executed by Penton UK in favor of
each Lender.
(f) MAXIMUM NUMBER OF LOANS. Penton UK will be limited to a
maximum number of Loans under this Section 2.2 as provided in Section
2.1(f).
2.3 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of
Default, the principal of and, to the extent permitted by law, interest on the
Loans and any other amounts owing hereunder or under the other Credit Documents
shall bear interest, payable on demand, at a per
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<PAGE> 32
annum rate, in the case of overdue principal, equal to the rate that would
otherwise be applicable thereto plus 2% and in the case of all other over due
amounts, equal to the Base Rate plus 2%.
2.4 EXTENSION AND CONVERSION.
Subject to the terms of Section 4.2, a Borrower shall have the option,
on any Business Day, to extend existing Loans into a subsequent permissible
Interest Period or to convert Loans into Loans of another interest rate type;
PROVIDED, HOWEVER, that (i) except as provided in Section 2.11, Eurocurrency
Loans may be converted into Base Rate Loans only on the last day of the Interest
Period applicable thereto, (ii) Eurocurrency Loans may be extended, and Base
Rate Loans may be converted into Eurocurrency Loans, only if no Default or Event
of Default is in existence on the date of extension or conversion and the
conditions set forth in subsections (a), (b), (c) and (d) of Section 4.2 have
been satisfied, (iii) Loans extended as, or converted into, Eurocurrency Loans
shall be subject to the terms of the definition of "INTEREST PERIOD" set forth
in Section 1.1 and shall be in such minimum amounts as provided in, with respect
to Revolving Loans, Section 2.1(b)(ii) or, with respect to Foreign Currency
Loans, Section 2.2(b)(ii), and (iv) any request for extension or conversion of a
Eurocurrency Loan which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month. Each such extension or
conversion shall be effected by a Borrower, by giving a Notice of
Extension/Conversion (or telephone notice promptly confirmed in writing) to the
Agent prior to 11:00 A.M. (Charlotte, North Carolina time) on the Business Day
prior to, in the case of the conversion of a Eurocurrency Loan into a Base Rate
Loan, and on the third Business Day prior to (or fourth Business Day prior to,
in the case of a Foreign Currency Loan), in the case of the extension of a
Eurocurrency Loan as, or conversion of a Base Rate Loan into, a Eurocurrency
Loan, the date of the proposed extension or conversion, specifying the date of
the proposed extension or conversion, the Loans to be so extended or converted,
the types of Loans into which such Loans are to be converted and, if
appropriate, the applicable Interest Periods with respect thereto. Each request
for extension or conversion shall be irrevocable and shall constitute a
representation and warranty by the applicable Borrower of the matters specified
in subsections (a), (b), (c) and (d) of Section 4.2. In the event a Borrower
fails to request extension or conversion of any Eurocurrency Loan in accordance
with this Section, or any such conversion or extension is not permitted or
required by this Section, then (i) in the case of any Eurocurrency Loan which is
not a Foreign Currency Loan, such Eurocurrency Loan shall be automatically
converted into a Eurocurrency Loan for an Interest Period of one month at the
end of the Interest Period applicable thereto, and (ii) in the case of any
Foreign Currency Loan, such Eurocurrency Loan shall be automatically continued
as a Eurocurrency Loan in the same Foreign Currency for an Interest Period of
one month. The Agent shall give each Lender notice as promptly as practicable of
any such proposed extension or conversion affecting any Loan.
2.5 REDUCTIONS AND INCREASE IN COMMITMENTS AND PREPAYMENTS.
(a) VOLUNTARY REDUCTION IN REVOLVING COMMITMENT. The Borrowers
may from time to time permanently reduce the aggregate amount of the
Revolving Commitments in whole or in part without premium or penalty
except as provided in
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<PAGE> 33
Section 2.14 upon three (3) Business Days' prior written notice to the
Agent; PROVIDED that after giving effect to any such voluntary
reduction the Dollar Amount (determined as of the most recent
Determination Date) of Revolving Loans and Foreign Currency Loans then
outstanding shall not exceed the Aggregate Revolving Committed Amount,
as reduced. Partial reductions in the aggregate Revolving Commitments
shall in each case be in a minimum aggregate amount of $1,000,000 and
integral multiples of $1,000,000 in excess thereof.
(b) INCREASE IN REVOLVING LOAN COMMITMENTS. The Borrowers
shall have the right upon at least thirty (30) Business Days' prior
written notice to the Agent and the Lenders to request an increase the
Revolving Committed Amount by up to $25,000,000, in a single increase,
at any time on or after the Closing Date. Approval of such request
shall be in the sole discretion of the Agent and the Lenders and any
such increase shall be subject to the following additional conditions:
(i) no Default or Event of Default shall have
occurred and be continuing on the date on which such Revolving
Committed Amount increase is to become effective;
(ii) the representations and warranties set forth in
Section 3 of this Credit Agreement shall be true and correct
in all material respects on and as of the date on which such
Revolving Committed Amount increase is to become effective;
(iii) on or before the date on which such Revolving
Committed Amount increase is to become effective, the Agent
shall have received, for its own account, the mutually
acceptable fees and expenses required by separate agreement of
the Borrowers and the Agent to be paid in connection with such
increase;
(iv) such Revolving Committed Amount increase shall
be an integral multiple of $5,000,000 and shall in no event be
less than $5,000,000; and
(v) such requested Revolving Committed Amount
increase shall be effective on such date only to the extent
that, on or before such date, the Agent shall have received
and accepted a corresponding amount of additional
Commitment(s) pursuant to a commitment letter(s) acceptable to
the Agent from one or more Lenders acceptable to the Agent
and, with respect to any Lender that is not at such time a
Lender hereunder, to the Borrowers.
(c) MANDATORY PREPAYMENT ON REVOLVING LOANS. If at any time
the Dollar Amount (determined as of the most recent Determination Date)
of Revolving Loans and Foreign Currency Loans then outstanding shall
exceed the Aggregate Revolving Committed Amount, as reduced from time
to time, the Borrowers shall immediately
28
<PAGE> 34
make payment on the Loans in an amount sufficient to eliminate such
excess. Any such mandatory prepayments shall be applied first to Loans
in the currency in which such payment is received, and first to Base
Rate Loans and then to Eurocurrency Loans in direct order of their
Interest Period maturities.
(d) VOLUNTARY PREPAYMENTS. Loans may be prepaid in whole or in
part without premium or penalty; PROVIDED that (i) Eurocurrency Loans
may not be prepaid other than at the end of the Interest Period
applicable thereto and only then on three (3) Business Days' (four (4)
Business Days' in the case of Foreign Currency Loans) prior written
notice to the Agent, (ii) any prepayment of Eurocurrency Loans will be
subject to Section 2.14, and (iii) each such partial prepayment shall
be in a minimum aggregate principal Dollar Amount of $1,000,000 and
integral multiples of $1,000,000 in excess thereof ($500,000 in the
case of Base Rate Loans). Voluntary prepayments on the Revolving Loans
may be reborrowed in accordance with the provisions hereof. Any such
voluntary prepayments shall be applied first to Base Rate Loans and
then to Eurocurrency Loans in direct order of their Interest Period
maturities.
(e) NOTICE. Except as otherwise provided herein, the Borrowers
will provide notice to the Agent of any prepayment by 11:00 A.M.
(Charlotte, North Carolina time) on the day prior to the date of
prepayment.
2.6 REPLACEMENT OF LENDERS UNDER CERTAIN CIRCUMSTANCES.
The Borrowers shall be permitted to replace any Lender which (a)
requests reimbursements for amounts owing pursuant to Section 2.9, 2.12 or 2.13
or (b) defaults in its obligation to make loans under this Agreement, with a
replacement financial institution; provided that (i) such replacement does not
conflict with any applicable Requirement of Law, (ii) no Default of Event of
Default shall have occurred and be continuing, (iii) with respect to clause (a)
hereof, prior to any such replacement, such Lender shall not have eliminated the
continued need for payments of amounts owing pursuant to Section 2.9, 2.12
and/or 2.13, (iv) the replacement financial institution shall purchase, at par,
all Loans and other amounts owing to such replaced Lender on or prior to the
date of replacement, (v) the Borrowers shall be liable to such replaced Lender
under Section 2.14 if any Eurocurrency Loan owing to such replaced Lender shall
be purchased other than on the last day of the Interest Period relating thereto,
(vi) the replacement financial institution, if not already a Lender, shall be
reasonably satisfactory to the Administrative Agent, (vii) the replaced Lender
shall be obligated to make such replacement in accordance with Section 9.6
(provided that the Borrowers or the replacement financial institution shall be
obligated to pay the registration and processing fee referred to therein),
(viii) until such time as such replacement shall be consummated, the Borrowers
shall pay all additional amounts, if any, required pursuant to Section 2.9, 2.12
and/or 2.13, as the case may be, and (ix) in the case of clause (b) above, any
such replacement shall not be deemed to be a waiver of any rights which the
Borrowers, the Administrative Agent or any other Lender shall have against the
replaced Lender.
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2.7 FEES.
(a) COMMITMENT FEE. In consideration of the Revolving
Commitments hereunder, the Borrowers agree to pay to the Agent for the
ratable benefit of the Lenders an aggregate commitment fee (the
"COMMITMENT FEE") equal to the Applicable Commitment Fee Percentage per
annum on the average daily unused amount of the Revolving Committed
Amount for the applicable period. The Commitment Fee shall accrue from
the Closing Date and shall be payable quarterly in arrears on the 15th
day following the last day of each calendar quarter for the immediately
preceding quarter (or portion thereof) beginning with the first such
date to occur after the Closing Date.
(b) FACILITY FEE. The Borrowers agree to pay to the Agent, for
its own account, the facility fee (the "FACILITY FEE"), as referred to
in the Commitment Letter.
2.8 EUROCURRENCY RESERVE COMPENSATION.
For so long as any Lender maintains reserves against "Eurocurrency
liabilities" (or any other category of liabilities which includes deposits by
reference to which the interest rate on any Eurocurrency Loans is determined),
and, as a result, the cost to such Lender of making or maintaining any of its
Eurocurrency Loans is increased, then such Lender may require the Borrowers to
pay, contemporaneously with each payment of interest on such Eurocurrency Loans
of such Lender, additional interest at a rate per annum up to but not exceeding
the excess of (i) (A) the applicable Eurocurrency Rate divided by (B) one MINUS
the Eurocurrency Reserve Percentage OVER (ii) the applicable Eurocurrency Rate.
Any Lender wishing to require payment of such additional interest (x) shall so
notify the Borrowers and the Agent, in which case such additional interest on
the Eurocurrency Loans of such Lender shall be payable to such Lender at the
place indicated in such notice with respect to each Interest Period commencing
at least three (3) Business Days after the giving of such notice and (y) shall
furnish to the Borrowers at least five (5) Business Days prior to each date on
which interest is payable on the Eurocurrency Loans a certificate setting forth
the amount to which such Lender is then entitled under this Section 2.8 (which
shall be consistent with such Lender's good faith estimate of the level at which
the related reserves are maintained by it). Each such certificate shall be
accompanied by such information as the Borrowers may reasonably request as to
the computation set forth therein.
2.9 CAPITAL ADEQUACY.
If any Lender has determined, that the adoption or the becoming
effective of, or any change in, or any change by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, in the interpretation or administration of any
applicable law, rule or regulation regarding capital adequacy, in each case
after the date hereof, or compliance by such Lender or any controlling
corporation of such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Lender's capital or assets (or that of any controlling
corporation of such
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Lender) as a consequence of its commitments or obligations hereunder to a level
below that which such Lender or any controlling corporation of such lender could
have achieved but for such adoption, effectiveness, change or compliance (taking
into consideration such Lender's policies (or those of any controlling
corporation of such Lender) with respect to capital adequacy), then, upon five
Business Days' notice from such Lender to the Borrowers, accompanied by a
certificate from such Lender setting forth the additional amount or amounts to
be paid to it hereunder, the Borrowers shall be obligated to pay to such Lender
such additional amount or amounts as will compensate such Lender or any such
controlling corporation of such Lender for such reduction; provided that the
Borrowers shall not be required to compensate such Lender pursuant to this
Section 2.9 for any reductions incurred more than six months prior to the date
that such Lender notifies the Borrowers of such change in applicable law, rule
or regulation regarding capital adequacy giving rise to such reduction. Each
determination by any such Lender of amounts owing under this Section shall,
absent manifest error, be conclusive and binding on the parties hereto.
2.10 UNAVAILABILITY.
In the event, and on each occasion, that on the day that is two (2)
Business Days prior to the commencement of any Interest Period for a
Eurocurrency Loan of any amount, Interest Period or currency, the Agent shall
have determined or shall have been notified by the Majority Lenders (a) that
deposits in the relevant amount in the relevant currency and for the relevant
Interest Period are not available in the relevant market to any Lender, or that
reasonable means do not exist for ascertaining the Eurocurrency Rate for any
such Loan, or (b) that the rates at which such deposits are being offered will
not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurocurrency Loan during such Interest Period, the Agent shall
promptly give written or telecopy notice of such determination to the Borrowers
and the Lenders. In the event of any such determination, until the Agent shall
have advised the Borrowers and the Lenders that the circumstances giving rise to
such notice no longer exist, any request by a Borrower for a Eurocurrency Loan
of the affected amount, Interest Period or currency, or a conversion to or
continuation of a Eurocurrency Loan of the affected amount, Interest Period or
currency, shall be deemed rescinded. Each determination by the Agent hereunder
shall be conclusive absent manifest error.
2.11 ILLEGALITY.
(a) Notwithstanding any other provision herein, if (i) the
adoption of or any change in any Requirement of Law or in the
interpretation or application thereof occurring after the Closing Date
shall make it unlawful for any Lender to make or maintain any
Eurocurrency Loan or Foreign Currency Loan, or (ii) there shall have
occurred any change in national or international financial, political
or economic conditions (including the imposition of or any change in
exchange controls) or currency exchange rates which would make it
impracticable for any Lender to make Loans denominated in any Foreign
Currency to any Borrower, as contemplated by this Credit Agreement,
then such Lenders, together with Lenders giving notice under Section
2.10
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and 2.12, shall be an "AFFECTED LENDER" and by written notice to the
Borrowers and to the Agent:
(i) such Lender may declare that Eurocurrency Loans
or Foreign Currency Loans (in the affected currency or
currencies), as the case may be, will not thereafter (for the
duration of such unlawfulness or impracticability) be made by
such Lender hereunder, whereupon any request for a
Eurocurrency Loan or Foreign Currency Loan (in the affected
currency or currencies), as the case may be, shall, as to such
Lender only, (A) if such Loan is not a Foreign Currency Loan,
be deemed a request for a Base Rate Loan, unless such
declaration shall be subsequently withdrawn and (B) if such
Loan is a Foreign Currency Loan, be deemed to have been
withdrawn, unless such declaration shall be subsequently
withdrawn; and
(ii) such Lender may require that all outstanding
Eurocurrency Loans or Foreign Currency Loans (in the affected
currency or currencies), as the case may be, made by it be (A)
if such Loans are not Foreign Currency Loans, converted to
Base Rate Loans, in which event all such Eurocurrency Loans
shall be automatically converted to Base Rate Loans as of the
effective date of such notice as provided in paragraph (b)
below or (B) if such Loans are Foreign Currency Loans, repaid
immediately, in which event all such Foreign Currency Loans
(in the affected currency or currencies) shall be required to
be repaid in full by the Borrowers as of the effective date of
such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under (i) or (ii)
above with respect to any Loans which are not Foreign Currency Loans,
all payments and prepayments of principal which would otherwise have
been applied to repay the Eurocurrency Loans that would have been made
by such Lender or the converted Eurocurrency Loans of such Lender shall
instead be applied to repay the Base Rate Loans made by such Lender in
lieu of, or resulting from the conversion, of such Eurocurrency Loans.
(b) For purposes of this Section 2.11, a notice to the
Borrowers by any Lender shall be effective as to each such Loan, if
lawful, on the last day of the Interest Period currently applicable to
such Loan; in all other cases such notice shall be effective on the
date of receipt by the Borrowers.
2.12 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof applicable to
any Lender, or compliance by any Lender with any request or directive (whether
or not having the force of law) from any central bank or other Governmental
Authority, in each case made subsequent to the Closing Date (or, if later, the
date on which such Lender becomes a Lender):
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(a) shall subject such Lender to any additional tax of any
kind whatsoever with respect to any Eurocurrency Loans made by it or
its obligation to make Eurocurrency Loans, or change the basis of
taxation of payments to such Lender in respect thereof (except for (i)
Non-Excluded Taxes covered by Section 2.13 (including Non-Excluded
Taxes imposed solely by reason of any failure of such Lender to comply
with its obligations under Section 2.13(b)) and (ii) changes in taxes
measured by or imposed upon the overall net income, or franchise tax
(imposed in lieu of such net income tax), of such Lender or its
applicable lending office, branch, or any affiliate thereof));
(b) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the Eurocurrency Rate
hereunder or any additional interest payable under Section 2.8; or
(c) shall impose on such Lender any other similar condition
(excluding any tax of any kind whatsoever);
and the result of any of the foregoing is to increase the cost to such
Lender, by an amount which such Lender reasonably deems to be material,
of making, converting into, continuing or maintaining Eurocurrency
Loans or to reduce any amount receivable hereunder in respect thereof,
then, in any such case, upon notice to the Borrowers from such Lender,
through the Agent, in accordance herewith, each Borrower shall be
obligated to promptly pay such Lender, upon its demand, any additional
amounts necessary to compensate such Lender for such increased cost or
reduced amount receivable, PROVIDED that, in any such case other than
as set forth in clause (b) above, any Borrower may elect to convert the
Eurocurrency Loans (other than Foreign Currency Loans) made by such
Lender hereunder to Base Rate Loans by giving the Agent at least one
Business Day's notice of such election, in which case the applicable
Borrower shall promptly pay to such Lender, upon demand, without
duplication, such amounts, if any, as may be required pursuant to
Section 2.14. If any Lender becomes entitled to claim any additional
amounts pursuant to this subsection, it shall provide prompt notice
thereof to the Borrowers, through the Agent, certifying (x) that one of
the events described in this Section 2.12 has occurred and describing
in reasonable detail the nature of such event, (y) as to the increased
cost or reduced amount resulting from such event and (z) as to the
additional amount demanded by such Lender and a reasonably detailed
explanation of the calculation thereof; provided that the Borrowers
shall not be required to compensate such Lender pursuant to this
Section 2.12 for any increased costs incurred more than six months
prior to the date that such Lender notifies the Borrowers of such
change in such Requirement of Law giving rise to such increased costs.
Such a certificate as to any additional amounts payable pursuant to
this subsection submitted by such Lender,
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through the Agent, to the Borrowers shall be conclusive and binding on
the parties hereto in the absence of manifest error. This covenant
shall survive the termination of this Credit Agreement and the payment
of the Loans and all other amounts payable hereunder.
2.13 TAXES.
(a) Except as provided below in this subsection, all payments
made by any Borrower under this Credit Agreement and any Notes shall be
made free and clear of, and without deduction or withholding for or on
account of, any present or future income, stamp or other taxes, levies,
imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any
court, or governmental body, agency or other official, excluding: (i)
taxes measured by or imposed upon the overall net income of any Lender
or its applicable lending office, or any branch or affiliate thereof,
and (ii) all franchise taxes, branch taxes, taxes on doing business or
taxes on the overall capital or net worth of any Lender or its
applicable lending office, or any branch or affiliate thereof, in each
case imposed in lieu of net income taxes, imposed (A) by the
jurisdiction under the laws of which such Lender, applicable lending
office, branch or affiliate is organized or is located, or in which its
principal executive office is located, or any nation within which such
jurisdiction is located or any political subdivision thereof, or (B) by
reason of any connection between the jurisdiction imposing such tax and
such Lender, applicable lending office, branch or affiliate other than
a connection arising solely from such Lender having executed, delivered
or performed its obligations, or received payment under or enforced,
this Credit Agreement or any Notes. If any such non-excluded taxes,
levies, imposts, duties, charges, fees, deductions or withholdings
("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to the Agent or any Lender hereunder or under any Notes, (1)
the amounts so payable to the Agent or such Lender shall be increased,
subject to subsection (c) of this Section 2.13 to the extent necessary
to yield to the Agent or such Lender (after payment of all Non-Excluded
Taxes) interest or any such other amounts payable hereunder at the
rates or in the amounts specified in this Credit Agreement and any
Notes, PROVIDED, HOWEVER, that a Borrower shall be entitled to deduct
and withhold any Non-Excluded Taxes imposed by the United States
federal government and shall not be required to increase any such
amounts payable to any Lender that is not organized under the laws of
the United States of America or a state thereof if such Lender fails to
comply with the requirements of paragraph (b) of this subsection
whenever any such Non-Excluded Taxes are payable by such Borrower, and
(2) as promptly as possible thereafter such Borrower shall send to the
Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt received
by such Borrower showing payment thereof. If a Borrower fails to pay
any Non-Excluded Taxes when due to the appropriate taxing authority or
fails to remit to the Agent the required receipts or other required
documentary evidence, such Borrower shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that may
become payable by the Agent or any Lender as a result of any such
failure. The agreements in this subsection
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shall survive the termination of this Credit Agreement and the payment
of the Loans and all other amounts payable hereunder.
(b) Each Lender that is not incorporated under the laws of the
United States of America or a state thereof shall:
(X)(i) on or before the date of any payment by a
Borrower under this Credit Agreement or Notes to such Lender,
deliver to the Borrowers and the Agent (A) two (2) duly
completed copies of United States Internal Revenue Service
Form 1001 or 4224, or successor applicable form, as the case
may be, certifying that it is entitled to receive payments
under this Credit Agreement and any Notes without deduction or
withholding of any United States federal income taxes and (B)
an Internal Revenue Service Form W-8 or W-9, or successor
applicable form, as the case may be, certifying that it is
entitled to an exemption from United States backup withholding
tax;
(ii) deliver to the Borrowers and the Agent two (2)
further copies of any such form or certification on or before
the date that any such form or certification expires or
becomes obsolete and after the occurrence of any event
requiring a change in the most recent form previously
delivered by it to the Borrowers; and
(iii) obtain such extensions of time for filing and
complete such forms or certifications as may reasonably be
requested by the Borrowers or the Agent; or
(Y) Each Lender or transferee that is not a "bank"
under Section 881(c)(3)(A) of the Internal Revenue Code
thereof shall:
(i) on or before the date it becomes a party to this
Credit Agreement (or, in the case of a participant, on or
before the date such participant becomes a participant
hereunder), deliver to the Borrowers and the Agent (i) a
statement under penalties of perjury that such Lender or
transferee (x) is not a "bank" under Section 881(c)(3)(A) of
the Internal Revenue Code, is not subject to regulatory or
other legal requirements as a bank in any jurisdiction, and
has not been treated as a bank for purposes of any tax,
securities law or other filing or submission made to any
Governmental Authority, any application made to a rating
agency or qualification for any exemption from tax, securities
law or other legal requirements, (y) is not a 10-percent
shareholder within the meaning of Section 811(c)(3)(B) of the
Internal Revenue Code and (z) is not a controlled foreign
corporation receiving interest from a related person within
the meaning of Section 881(c)(3)(C) of the Internal Revenue
Code and (ii) a properly completed and duly executed Internal
Revenue Service Form W-8 or applicable successor form;
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(ii) deliver to the Borrowers and the Agent two
further properly completed and duly executed copies of such
Form W-8 expires or becomes obsolete or after the occurrence
of any event requiring a change in the most recent form
previously delivered by it to the Borrowers or upon the
request of the Borrowers; and
(iii) obtain such extensions of time for filing and
completing such forms or certifications as may be reasonably
requested by the Borrowers or the Agent;
unless in any such case any change in treaty, law or regulation has
occurred after the date such Person becomes a Lender hereunder which
renders all such forms inapplicable or which would prevent such Lender
from duly completing and delivering any such form with respect to it
and such Lender so advises the Borrowers and the Agent.
(c) Each Lender shall, as soon as is reasonably practicable
after the Closing Date, file a form FD 13 with the United States
Internal Revenue Service in relation to payments made or to be made by
Penton UK under this Credit Agreement and any Foreign Currency Loans.
If the United States Internal Revenue Service determines that the form
FD 13 filed by such Lender does not establish that the Lender is
entitled to receive payments made by Penton UK under this Credit
Agreement, the Foreign Currency Loans and the Revolving Note as at the
date of delivery thereof without deduction or withholding of English
withholding taxes or, if the Inland Revenue requires proof of such
entitlement, such Lender shall, within forty-five (45) days after a
written request from Penton UK, offer such reasonable assistance as
Penton UK may request in order to establish such Lender's entitlement
(if any) to receive payments made by Penton UK under this Credit
Agreement, any Foreign Currency Loans and the Revolving Note without
deduction or withholding of English withholding taxes. Penton UK shall
not be required pursuant to subsection (a) of this Section 2.13 to
increase any amounts payable to any Lender because of any deduction or
withholding of English withholding taxes required by English law (and
Penton UK, if required by law to do so, shall be entitled to withhold
such amounts and pay such amounts to the government of England) if the
obligation to make such deduction or withholding would not have arisen
but for the Lender not being entitled (pursuant to any applicable tax
treaty or otherwise) to receive payments made by Penton UK under this
Agreement, any Foreign Currency Loans and the Revolving Note executed
in its favor or the failure by such Lender to provide Penton UK and the
United States Internal Revenue Center with the requested forms or other
reasonable assistance.
(d) Each Lender agrees to make a good faith effort to minimize
any Non-Excluded Taxes by making, funding or maintaining its Foreign
Currency Loans through another lending office located in another
jurisdiction so long as the making, funding or maintenance of such
Foreign Currency Loans through such other office does not, in the
reasonable judgment of such Lender, materially affect such Lender;
provided that any
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Lender which is unable or unwilling to fund its Foreign Currency Loans
through a branch of such Lender in England will so notify the
Borrowers.
(e) Each Person that shall become a Lender or a participant of
a Lender pursuant to subsection 9.6 shall, upon the effectiveness of
the related transfer, be required to provide all of the forms,
certifications and statements required pursuant to this subsection,
PROVIDED that in the case of a participant of a Lender the obligations
of such participant of a Lender pursuant to subsection (b) shall be
determined as if the participant of a Lender were a Lender except that
such participant of a Lender shall furnish all such required forms,
certifications and statements to the Lender from which the related
participation shall have been purchased.
2.14 INDEMNITY.
Each Borrower promises to indemnify each Lender and to hold each Lender
harmless from any loss or expense which such Lender may sustain or incur (other
than through such Lender's gross negligence or willful misconduct and except as
set forth in Sections 2.10 and 2.11) as a consequence of (a) default by such
Borrower in making a borrowing of, conversion into or continuation of
Eurocurrency Loans after such Borrower has given a notice requesting the same in
accordance with the provisions of this Credit Agreement, (b) default by such
Borrower in making any prepayment of a Eurocurrency Loan after such Borrower has
given a notice thereof in accordance with the provisions of this Credit
Agreement or (c) the making of a prepayment of Eurocurrency Loans on a day which
is not the last day of an Interest Period with respect thereto. With respect to
Eurocurrency Loans, such indemnification shall be an amount equal to the excess,
if any, of (i) the amount of interest which would have accrued on the amount so
prepaid, or not so borrowed, converted or continued, for the period from the
date of such prepayment or of such failure to borrow, convert or continue to the
last day of the applicable Interest Period (or, in the case of a failure to
borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Eurocurrency Loans provided for herein (excluding, however, the Applicable
Interest Rate Percentage included therein, if any) over (ii) the amount of
interest (as reasonably determined by such Lender) which would have accrued to
such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurocurrency market. The covenants of
each Borrower set forth in this Section 2.14 shall survive the termination of
this Credit Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.15 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) LOANS. Each of the Revolving Loans and Foreign Currency
Loans and payments of principal, interest and fees (including the
Commitment Fee) on or in respect thereof and each reduction in the
Revolving Commitments relating thereto, and each
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conversion or extension of such Loans and obligations shall be
allocated pro rata among the Lenders in accordance with the respective
principal amounts of their outstanding Revolving Loans and Foreign
Currency Loans.
(b) ADVANCES. Unless the Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not
make the amount that would constitute its ratable share of such
borrowing available to the Agent, the Agent may assume that such Lender
is making such amount available to the Agent, and the Agent may, in
reliance upon such assumption, make available to a Borrower a
corresponding amount. If such amount is not made available to the Agent
by such Lender within the time period specified therefor hereunder,
such Lender shall pay to the Agent, on demand, such amount with
interest thereon (or, in the case of a Foreign Currency Loan interest
on the daily Dollar Equivalent thereof) at a rate equal to the Federal
Funds Effective Rate for the period until such Lender makes such amount
immediately available to the Agent. A certificate of the Agent
submitted to any Lender with respect to any amounts owing under this
subsection shall be conclusive in the absence of manifest error.
2.16 SHARING OF PAYMENTS.
Subject to the terms of Section 2.15 hereof, the Lenders agree among
themselves that, in the event that any Lender shall obtain payment in respect of
any Loan or any other obligation owing to such Lender under this Credit
Agreement through the exercise of a right of setoff, banker's lien or
counterclaim, or pursuant to a secured claim under Section 506 of the Bankruptcy
Code or other security or interest arising from, or in lieu of, such secured
claim, received by such Lender under any applicable bankruptcy, insolvency or
other similar law or otherwise, or by any other means, in excess of its pro rata
share of such payment as provided for in this Credit Agreement, such Lender
shall promptly purchase from the other Lenders a participation in such Loans and
other obligations in such amounts, and make such other adjustments from time to
time, as shall be equitable to the end that all Lenders share such payment in
accordance with their respective ratable shares as provided for in this Credit
Agreement. The Lenders further agree among themselves that if payment to a
Lender obtained by such Lender through the exercise of a right of setoff,
banker's lien, counterclaim or other event as aforesaid shall be rescinded or
must otherwise be restored, each Lender which shall have shared the benefit of
such payment shall, by repurchase of a participation theretofore sold, return
its share of that benefit (together with its share of any accrued interest
payable with respect thereto) to each Lender whose payment shall have been
rescinded or otherwise restored. Each Borrower agrees that any Lender so
purchasing such a participation may, to the fullest extent permitted by law,
exercise all rights of payment, including setoff, banker's lien or counterclaim,
with respect to such participation as fully as if such Lender were a holder of
such Loan or other obligation in the amount of such participation. Except as
otherwise expressly provided in this Credit Agreement, if any Lender or the
Agent shall fail to remit to the Agent or any other Lender an amount payable by
such Lender or the Agent to the Agent or such other Lender pursuant to this
Credit Agreement on the date when such amount is due, such payments shall be
made together with interest thereon for each date from the date such amount is
due until the date such
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amount is paid to the Agent or such other Lender at a rate per annum equal to
the Federal Funds Effective Rate. If under any applicable bankruptcy, insolvency
or other similar law, any Lender receives a secured claim in lieu of a setoff to
which this Section 2.16 applies, such Lender shall, to the extent practicable,
exercise its rights in respect of such secured claim in a manner consistent with
the rights of the Lenders under this Section 2.16 to share in the benefits of
any recovery on such secured claim.
2.17 PAYMENTS, COMPUTATIONS, ETC.
(a) CURRENCY OF PAYMENTS. Each payment on account of an amount
due from any Credit Party hereunder or under any other Credit Document
shall be made by such Credit Party to the Agent for the PRO RATA
account of the Lenders entitled to receive such payment as provided
herein in the currency in which such amount is denominated and in such
funds as are customary at the place and time of payment for the
settlement of international payments in such currency. Without limiting
the terms of the preceding sentence, accrued interest on any Loans
denominated in a Foreign Currency shall be payable in the same Foreign
Currency as such Loan. Upon request, the Agent will give the Credit
Parties a statement showing the computation used in calculating such
amount, which statement shall be conclusive in the absence of manifest
error. The obligation of each Credit Party to make each payment on
account of such amount in the currency in which such amount is
denominated shall not be discharged or satisfied by any tender, or any
recovery pursuant to any judgment, which is expressed in or converted
into any other currency, except to the extent such tender or recovery
shall result in the actual receipt by the Agent of the full amount in
the appropriate currency payable hereunder. Each Credit Party agrees
that its obligation to make each payment on account of such amount in
the currency in which such amount is denominated shall be enforceable
as an additional or alternative claim for recovery in such currency of
the amount (if any) by which such actual receipt shall fall short of
the full amount of such currency payable hereunder, and shall not be
affected by judgment being obtained for such amount.
(b) PLACE AND MANNER OF PAYMENTS. Except as otherwise
specifically provided herein, all payments hereunder shall be made to
the Agent in immediately available funds, without offset, deduction,
counterclaim or withholding of any kind, prior to 12:00 noon, local
time in the place where such payment is required to be made pursuant to
this subsection (b), on the date due at:
with respect to payment in Dollars:
First Union National Bank
One First Union Center, TW-4
Charlotte, North Carolina 28288-0608
Attn: Doug Burnett, Agency Services
Telecopier: (704) 383-0288
Telephone: (704) 374-2698
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with respect to payment in British Pounds Sterling:
<TABLE>
<S> <C>
Royal Bank of Scotland plc
for the account of First Union National Bank, London Branch
London EC2N 3AB
Account No.: 12251333
Attention: Andrew Basten
Reference: Penton Media
Sort Code: 16-56-71
</TABLE>
or at such other place as may be designated by the Agent to the
Borrowers in writing. Any payments received after such time shall be
deemed received on the next succeeding Business Day. The Agent may, but
shall not be obligated to, charge any account of any Borrower at the
Agent for the payment when due of all amounts payable by the Borrowers
hereunder. Each Borrower shall, at the time it makes any payment under
this Credit Agreement, specify to the Agent the Loans, Fees, interest
or other amounts payable by such Borrower hereunder to which such
payment is to be applied (and in the event that it fails so to specify,
or if such application would be inconsistent with the terms hereof, the
Agent shall distribute such payment to the Lenders in such manner as
the Agent may reasonably determine to be appropriate in respect of
obligations owing by such Borrower hereunder, subject to the terms of
Section 2.15(a)). The Agent shall promptly remit in same day funds to
each Lender such Lender's share, if any, of payments received by the
Agent for the account of such Lender. Whenever any payment hereunder
shall be stated to be due on a day which is not a Business Day, the due
date thereof shall be extended to the next succeeding Business Day
(subject to accrual of interest and Fees for the period of such
extension), except that in the case of Eurocurrency Loans, if the
extension would cause the payment to be made in the next following
calendar month, then such payment shall instead be made on the next
preceding Business Day. Except as expressly provided otherwise herein,
all computations of interest and fees shall be made based on a year of
365 or 366 days, as appropriate. All computations of interest on
Eurocurrency Loans and Foreign Currency Loans (other than Loans made in
British Pounds Sterling) shall be based on a year of 360 days for the
actual days elapsed. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
(c) ALLOCATION OF PAYMENTS AFTER EVENT OF DEFAULT.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event
of Default, all amounts collected or received by the Agent or any
Lender on account of the Obligations or any other amounts outstanding
under any of the Credit Documents or in respect of the Collateral shall
be paid over or delivered as follows:
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FIRST, to the payment of all reasonable out-of-pocket costs
and expenses (including without limitation reasonable attorneys' fees)
of the Agent in connection with enforcing the rights of the Lenders
under the Credit Documents;
SECOND, to payment of any fees owed to the Agent;
THIRD, to the payment of all reasonable out-of-pocket costs
and expenses, (including without limitation, reasonable attorneys'
fees) of each of the Lenders in connection with enforcing its rights
under the Credit Documents or otherwise with respect to the Obligations
owing to such Lender;
FOURTH, to the payment of all accrued interest and fees in
respect of the Obligations;
FIFTH, to the payment of the outstanding principal amount of
the Obligations;
SIXTH, to all other Obligations and other obligations which
shall have become due and payable under the Credit Documents or
otherwise and not repaid pursuant to clauses "FIRST" through "FIFTH"
above; and
SEVENTH, to the payment of the surplus, if any, to whoever may
be lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to
the next succeeding category; and (ii) each of the Lenders shall
receive an amount equal to its pro rata share (based on the proportion
that the then outstanding Loans held by such Lender bears to the
aggregate then outstanding Loans) of amounts available to be applied
pursuant to clauses "THIRD", "FOURTH", "FIFTH" and "SIXTH" above.
2.18 CHANGE OF CURRENCY.
(a) If more than one currency or currency unit is at any time
recognized by the Bank of England as the lawful currency of the United
Kingdom, then (i) any reference in the Credit Documents to, and any
obligations arising under the Credit Documents in, British Pounds
Sterling, shall be translated into, or paid in, the currency or
currency unit designated by the Agent on behalf of the Lenders and (ii)
any translation from one currency or currency unit to another shall be
at the official rate of exchange recognized by the Bank of England for
the conversion of that currency or currency unit into the other,
rounded up or down by the Administrative Agent on behalf of the Lenders
acting reasonably.
(b) If a change in British Pounds Sterling occurs (including,
without limitation, in consequence of European monetary union), this
Agreement will be
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amended as specified by the Agent on behalf of the Lenders to reflect
the change in currency and to put the Lenders in the same position, as
far as possible, as they would have been had no change in currency
occurred.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Lenders to enter into this Agreement and to make the
Loans herein provided for, the Borrowers hereby represent and warrant to the
Administrative Agent and to each Lender that:
3.1 FINANCIAL CONDITION.
The financial statements provided to the Administrative Agent and the
Lenders, consisting of an audited balance sheet of the Borrowers dated as of
December 31, 1997, together with related statements of operations and statements
of cash flows, copies of which have heretofore been provided to each of the
Lenders, are complete and correct in all material respects and present fairly in
all material respects in accordance with GAAP the financial condition and pro
forma results from operations of the entities for the periods specified, except
as noted therein and subject to normal year-end adjustments and the footnote
disclosures required by GAAP.
3.2 NO CHANGE.
Since December 31, 1997, there has been no development or event which
has had a Material Adverse Effect.
3.3 EXISTENCE; COMPLIANCE WITH LAW.
Each of the Borrowers and each Subsidiary (a) is organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, (b) has the limited liability company, corporate or partnership
power and authority and the legal right to own and operate all its material
property, to lease the material property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is qualified as a foreign
limited liability company, corporation or partnership and in good standing under
the laws of each jurisdiction where its ownership, lease or operation of
property or the conduct of its business requires such qualification except to
the extent that the failure to so qualify or be in good standing would not, in
the aggregate, have a Material Adverse Effect and (d) is in compliance with all
applicable Requirements of Law except to the extent that the failure to comply
therewith would not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.
3.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each of the Borrowers and each Subsidiary has the corporate, limited
liability company or partnership power and authority and the legal right to
make, deliver and perform the Credit
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Documents to which it is party and has taken all necessary company, corporate or
partnership action to authorize the execution, delivery and performance by it of
the Credit Documents to which it is party. No consent or authorization of,
filing with, notice to or other act by or in respect of, any Governmental
Authority or any other Person is required in connection with the borrowings
hereunder or with the execution, delivery or performance of any Credit Document
by the Borrowers or any Subsidiary (other than those which have been obtained)
or with the validity or enforceability of any Credit Document against the
Borrowers or any Subsidiary (except such filings as are necessary in connection
with the perfection of the Liens created by such Credit Documents) except to the
extent that the failure to obtain any such consent or authorization or to affect
any filing or notice would not in the aggregate, reasonably be expected to have
a Material Adverse Effect. Each Credit Document to which the Borrowers or any
Subsidiary is a party has been duly executed and delivered on behalf of the
Borrowers or such Subsidiary. Each Credit Document to which it is a party
constitutes a legal, valid and binding obligation of the Borrowers or such
Subsidiary enforceable against the Borrowers or such Subsidiary in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
3.5 NO LEGAL BAR; NO DEFAULT.
The execution, delivery and performance of the Credit Documents, the
borrowings thereunder and the use of the proceeds of the Loans will not violate
any Requirement of Law or any Contractual Obligation of the Borrowers or any
Subsidiary (except those as to which waivers or consents have been obtained and
except for any such violation which would not reasonably be expected to have a
Material Adverse Effect), and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or Contractual Obligation other than the
Liens arising under or contemplated in connection with the Credit Documents.
Neither of the Borrowers nor any Subsidiary is in default under or with respect
to any of its Contractual Obligations in any respect which would reasonably be
expected to have a Material Adverse Effect. No Default or Event of Default has
occurred and is continuing.
3.6 NO MATERIAL LITIGATION.
Except as set forth in SCHEDULE 3.6, no litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the best knowledge of the Borrowers, threatened by or against the Borrowers
or any Subsidiary or against any of its or their respective properties or
revenues (a) with respect to the Credit Documents or any Loan or any of the
transactions contemplated hereby, or (b) which could reasonably be expected to
have a Material Adverse Effect.
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<PAGE> 49
3.7 INVESTMENT COMPANY ACT.
Neither of the Borrowers nor any Subsidiary is an "investment company",
or a company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
3.8 FEDERAL REGULATIONS.
No part of the proceeds of any Loan hereunder will be used directly or
indirectly for any purpose which violates, or which would be inconsistent with,
the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect. Neither
of the Borrowers nor any Subsidiary owns "margin stock" except as identified in
the financial statements referred to in Section 3.1 and the aggregate value of
all "margin stock" owned by the Borrowers and the Subsidiaries taken as a group
does not exceed 25% of the value of their assets.
3.9 ERISA.
Neither a Reportable Event nor an "accumulated funding deficiency"
(within the meaning of Section 412 of the Code or Section 302 of ERISA) has
occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code, except to the extent that any such occurrence or failure to comply
would not reasonably be expected to have a Material Adverse Effect. No
termination of a Single Employer Plan has occurred resulting in any liability
that has not been satisfied, and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period which would reasonably be expected to have
a Material Adverse Effect. The present value of all accrued benefits under each
Single Employer Plan (based on those assumptions used to fund such Plans) did
not, as of the last annual valuation date prior to the date on which this
representation is made or deemed made, exceed the value of the assets of such
Plan allocable to such accrued benefits by an amount which, as determined in
accordance with GAAP, would reasonably be expected to have a Material Adverse
Effect. Neither of the Borrowers, nor any Subsidiary, nor any Commonly
Controlled Entity is currently subject to any liability for a complete or
partial withdrawal from a Multiemployer Plan which would reasonably be expected
to have a Material Adverse Effect.
3.10 ENVIRONMENTAL MATTERS.
Except to the extent that all of the following, in the aggregate, would
not reasonably be expected to have a Material Adverse Effect:
(a) To the best knowledge of the Borrowers, the facilities and
properties owned, leased or operated by the Borrowers and their
Subsidiaries (the "PROPERTIES") do not use, store, generate, dispose of
or handle any Materials of Environmental Concern in
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<PAGE> 50
amounts or concentrations which could reasonably be expected to give
rise to liability under any applicable Environmental Law.
(b) To the best knowledge of the Borrowers, the Properties and
all operations at the Properties are in material compliance, and have
in the last five years been in compliance, in all material respects
with all applicable Environmental Laws, and there has been no material
violation of any Environmental Law with respect to the Properties or
the business operated by the Borrowers (the "BUSINESS").
(c) Neither of the Borrowers nor any Subsidiary has received
any notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or compliance
with Environmental Laws with regard to any of the Properties or the
Business, nor do the Borrowers have knowledge that any such notice is
being threatened.
(d) To the best knowledge of the Borrowers, all Materials of
Environmental Concern at, on or under any of the Properties have been
generated, treated, stored or disposed of in accordance with applicable
Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best of the knowledge of the Borrowers,
threatened, under any Environmental Law to which either of the
Borrowers or any Subsidiary is or will be named as a party with respect
to the Properties or the Business or any facility that has received
Materials of Environmental Concern generated by the Borrowers, nor are
there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Properties or the Business.
(f) To the best knowledge of the Borrowers, there has been no
release of Materials of Environmental Concern at or from the Properties
arising from or related to the Business or the operations of the
Borrowers or any Subsidiary in connection with the Properties, in
violation of or in amounts or in a manner that could reasonably be
expected to give rise to liability under applicable Environmental Laws.
3.11 PURPOSE OF LOAN.
The proceeds of the Loans will be used to finance the acquisition of
the Acquired Assets and closing costs incurred in connection therewith, to repay
existing Indebtedness, to pay closing costs incurred in connection herewith and
to provide senior debt capacity to make acquisitions and investments permitted
hereby and to provide general working capital.
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3.12 SUBSIDIARIES.
Set forth on SCHEDULE 3.12 is a complete and accurate list of all
Subsidiaries of the Borrowers as of the Closing Date. As of the Closing Date,
information on the attached Schedule includes state of organization; the number
of shares of each class of capital stock or partnership or other equity
interests (identified by type) outstanding; the number and percentage of
outstanding shares of each class of stock or percentage of ownership interest;
and the number and effect, if exercised, of all outstanding options, warrants,
rights of conversion or purchase and similar rights. The outstanding capital
stock and partnership and other equity interests of all such Subsidiaries are
validly issued, fully paid and non-assessable and are owned, free and clear of
all Liens (other than those arising under or contemplated in connection with the
Credit Documents). As of the Closing Date, except as set forth on SCHEDULE 3.12,
there are no outstanding options or other rights pertaining to the partnership
or other equity interests of the Borrowers, and no voting trusts, shareholders'
or partners' agreements (other than the partnership agreements relating to the
formation, organization, operation and governance of the partnerships, copies of
which have been provided to the Administrative Agent and the Lenders) or similar
agreement affecting either ownership of or the right to vote such partnership
interests.
3.13 INTELLECTUAL PROPERTY RIGHTS.
The Borrowers and their Subsidiaries own or have the right to use,
subject to any of its obligations under any valid and binding license agreement,
the Intellectual Property (as defined below) disclosed in SCHEDULE 3.13 hereto,
which, to the best of their knowledge, represents all Intellectual Property
individually or in the aggregate material to the conduct of the businesses of
the Borrowers and their Subsidiaries taken as a whole on the date hereof. Except
as disclosed in SCHEDULE 3.13 hereto or where the failure shall not have a
Material Adverse Effect, (i) each of the Borrowers or a Subsidiary has the right
to use the Intellectual Property disclosed in SCHEDULE 3.13 hereto in perpetuity
and without payment of royalties, (ii) all registrations with and applications
to Governmental Authorities in respect of such Intellectual Property are valid
and in full force and effect and are not subject to the payment of any taxes or
maintenance fees or the taking of any other actions by the Borrowers or a
Subsidiary to maintain their validity or effectiveness, and (iii) there are no
restrictions on the direct or indirect transfer of any Contractual Obligation,
or any interest therein, held by the Borrowers or any Subsidiary in respect of
such Intellectual Property. Neither the Borrowers nor any Subsidiary of the
Borrowers is in default (or with the giving of notice or lapse of time or both,
would be in default) under any license to use such Intellectual Property the
loss of which would reasonably be expected to have a Material Adverse Effect To
the best of the Borrowers' and their Subsidiaries' knowledge none of the
Intellectual Property is being infringed by any third party the loss of which
may have a Material Adverse Effect, and to the best of the Borrowers' and their
Subsidiaries' knowledge neither the Borrowers nor any Subsidiary of the
Borrowers is infringing any Intellectual Property of any third party the
infringement of which would reasonably be expected to have a Material Adverse
Effect. For purposes of this Section 3.13, "INTELLECTUAL PROPERTY" means patents
and patent rights, trademarks and trademark rights, trade names and trade name
rights, service marks and service mark rights, copyrights and copyright rights,
including the right to sue for past
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infringement, licenses, proprietary information, designs, processes, inventions,
software and related intellectual property rights and all pending applications
for and registrations of any of the foregoing.
3.14 NO BURDENSOME RESTRICTIONS.
No applicable Requirement of Law known to the Borrowers or Contractual
Obligation of the Borrowers could reasonably be expected to have a Material
Adverse Effect.
3.15 TAXES.
The Borrowers and their Subsidiaries have filed, or caused to be filed,
all material tax returns (Federal, state, local and foreign) required to be
filed on or prior to the Closing Date and paid all taxes shown thereon to be due
(including interest and penalties) and have paid all other taxes, fees,
assessments and other governmental charges (including mortgage recording taxes,
documentary stamp taxes and intangibles taxes) owing (or necessary to preserve
any Liens in favor of the Lenders) with respect to taxable periods ending on or
before the Closing Date by them, except for such taxes (i) which are not yet
delinquent, (ii) as are being contested in good faith and by proper proceedings,
and against which adequate reserves are being maintained in accordance with GAAP
or (iii) the nonpayment of which would not, in the aggregate, reasonably be
expected to have a Material Adverse Effect. The Borrowers are not aware of any
proposed material tax assessments against it or any of their Subsidiaries.
3.16 NO INTEREST IN REAL ESTATE.
Other than the fee simple interests and leasehold interests reflected
on SCHEDULE 3.16, neither the Borrowers nor any of their Subsidiaries has any
interest in any real property.
SECTION 4. CONDITIONS PRECEDENT
4.1 CONDITIONS TO CLOSING DATE.
This Agreement shall become effective upon the satisfaction of the
following conditions precedent:
(a) EXECUTION OF AGREEMENT. The Administrative Agent shall
have received (i) multiple counterparts of this Agreement for each
Lender, executed by a duly authorized officer of each party hereto and
(ii) for the account of each Lender a Revolving Note executed by a duly
authorized officer of each of the Borrowers, in each case conforming to
the requirements of this Agreement.
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(b) LIABILITY AND CASUALTY INSURANCE. The Administrative Agent
shall have received copies of insurance policies or certificates of
insurance evidencing liability and casualty insurance meeting the
requirements set forth herein.
(c) CORPORATE DOCUMENTS. The Administrative Agent shall have
received the following:
(i) ARTICLES OF INCORPORATION. Copies of the
certificate of formation, articles of organization, articles
of incorporation or charter documents of the Borrowers and the
Guarantors certified to be true and complete as of a recent
date by the appropriate governmental authority of the state of
its organization or incorporation.
(ii) RESOLUTIONS. Copies of the resolutions taken by
the directors of the Borrowers and the Guarantors approving
and adopting the Credit Documents, the transactions
contemplated therein and authorizing execution and delivery
thereof, certified by a secretary or assistant secretary as of
the Closing Date to be true and correct and in full force and
effect as of such date.
(iii) BYLAWS. A copy of the bylaws or memorandum of
association, as the case may be, of the Borrowers and the
Guarantors certified by a secretary or assistant secretary as
of the Closing Date to be true and correct and in full force
and effect as of such date.
(iv) GOOD STANDING. Copies of (A) certificates of
good standing, existence or its equivalent with respect to the
Borrowers and the Guarantors certified as of a recent date by
the appropriate governmental authorities of the state of
incorporation and each other state in which the failure to so
qualify and be in good standing would have a material adverse
effect on the business or operations of the Borrowers or the
Guarantors in such state and (B) a certificate indicating
payment of all corporate franchise taxes certified as of a
recent date by the appropriate governmental taxing
authorities.
(d) OFFICER'S CERTIFICATE. The Administrative Agent shall have
received a certificate of a duly authorized secretary or assistant
secretary of each of the Borrowers and the Guarantors dated the Closing
Date, substantially in the form of SCHEDULE 4.1(D) with appropriate
insertions and attachments.
(e) LEGAL OPINION OF COUNSEL. The Administrative Agent shall
have received, with a copy for each Lender, opinions of various counsel
for the Borrowers and the Guarantors, dated the Closing Date and
addressed to the Administrative Agent and the Lenders, in form and
substance satisfactory to Administrative Agent and the Lenders.
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(f) COMPLIANCE AND SOLVENCY CERTIFICATES. The Administrative
Agent shall have received from an Authorized Signatory (i) a
certificate regarding the accuracy of representations and warranties
and the absence of Defaults, in form reasonably acceptable to the
Administrative Agent, and (ii) a solvency certificate substantially in
the form of SCHEDULE 4.1(F)(II), demonstrating the solvency of the
Borrowers and each of the Guarantors.
(g) FEES. The Agent shall have received all fees owing to each
of them pursuant to the Commitment Letter.
(h) LITIGATION. There shall not exist any (i) order, decree,
judgment, ruling or injunction which restrains the consummation of the
acquisition of the Acquired Assets in the manner contemplated by the
Purchase Agreement or (ii) any pending or threatened action, suit,
investigation or proceeding against the Borrowers or any Guarantor that
would have or would reasonably be expected to have a Material Adverse
Effect.
(i) STOCK DISTRIBUTION AND ACQUISITION OF ACQUIRED ASSETS. The
Stock Distribution shall be consummated and the Acquired Assets shall
be acquired by Penton USA pursuant to the Combination Agreement no
later than 5:00 p.m., Charlotte, North Carolina time on the Closing
Date (except that the Lenders acknowledge that Penton USA may not have
received a confirmed certificate of merger from the Secretary of State
of the State of Illinois by such time).
(j) NOTICE OF ACCOUNT DESIGNATION. The Borrowers shall have
executed and delivered to the Administrative Agent a Notice of Account
Designation.
(k) SOURCES AND USES; PAYMENT INSTRUCTIONS. The Borrowers
shall have delivered to the Agent (i) a statement of sources and uses
of funds covering all payments reasonably expected to be made by the
Borrowers in connection with the transactions contemplated by the
Credit Documents to be consummated on the Closing Date, including an
itemized estimate of all fees, expenses and other closing costs and
(ii) payment instructions with respect to each wire transfer to be made
by the Agent on behalf of the Lenders or the Borrowers on the Closing
Date setting forth the amount of such transfer, the purpose of such
transfer, the name and number of the account to which such transfer is
to be made, the name and ABA number of the bank or other financial
institution where such account is located and the name and telephone
number of an individual that can be contacted to confirm receipt of
such transfer.
(l) ADDITIONAL MATTERS. All other documents and legal matters
in connection with the transactions contemplated by this Agreement
shall be reasonably satisfactory in form and substance to the
Administrative Agent and its counsel.
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4.2 CONDITIONS TO ALL LOANS.
The obligation of each Lender to make any Loan hereunder (including the
initial Loans to be made hereunder) is subject to the satisfaction of the
following conditions precedent on the date of making such Loan:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties made by the Borrowers and the Subsidiaries herein or which
are contained in any certificate furnished at any time under or in
connection herewith shall be true and correct in all material respects
on and as of the date of such Loan as if made on and as of such date
(except to the extent such representations and warranties expressly
relate to an earlier date).
(b) NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of
Default shall have occurred and be continuing on such date or after
giving effect to the Loan to be made on such date unless such Default
or Event of Default shall have been waived in accordance with this
Agreement.
(c) ADDITIONAL CONDITIONS TO REVOLVING LOANS. If a Loan is
made pursuant to Section 2.1, all conditions set forth therein shall
have been satisfied.
(d) ADDITIONAL CONDITIONS TO FOREIGN CURRENCY LOANS. If a Loan
is made pursuant to Section 2.2, all the conditions set forth therein
shall have been satisfied.
Each request for a Loan and each acceptance by the Borrowers of a Loan
shall be deemed to constitute a representation and warranty by the Borrowers as
of the date of such Loan that the applicable conditions in paragraphs (a), (b),
(c) and (d) have been satisfied.
SECTION 5. AFFIRMATIVE COVENANTS
The Borrowers hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid, and the Loans, together
with interest, fees and all other amounts owing to the Administrative Agent or
any Lender hereunder, are paid in full, the Borrowers shall, and shall cause
each of their Subsidiaries, to:
5.1 FINANCIAL STATEMENTS.
Furnish to the Administrative Agent and each of the Lenders:
(a) ANNUAL FINANCIAL STATEMENTS. As soon as available, but in
any event within 90 days after the end of each fiscal year of Penton
USA, a copy of the consolidated balance sheet of Penton USA and its
consolidated Subsidiaries as at the end of such fiscal
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year and the related consolidated statements of income and retained
earnings and of cash flows of Penton USA and its consolidated
Subsidiaries for such year, audited by Price Waterhouse LLP or any
other firm of independent certified public accountants of nationally
recognized standing reasonably acceptable to the Majority Lenders,
setting forth in each case in comparative form the figures for the
previous year, reported on without a "going concern" or like
qualification or exception, or qualification indicating that the scope
of the audit was inadequate to permit such independent certified public
accountants to certify such financial statements without such
qualification; and
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and
in any event within 45 days after the end of each of the first three
fiscal quarters of Penton USA, a company-prepared consolidating balance
sheet of Penton USA and its consolidated Subsidiaries as at the end of
such period and related company-prepared statements of income and
retained earnings and of cash flows for Penton USA and its consolidated
Subsidiaries for such quarterly period and for the portion of the
fiscal year ending with such period, in each case setting forth in
comparative form consolidating figures for the corresponding period or
periods of (i) the preceding fiscal year and (ii) the annual budget
plan (subject in each case to normal recurring year-end audit
adjustments);
(c) ANNUAL BUDGET PLAN. As soon as available, but in any event
no more than 30 days after the end of fiscal year December 31, 1998 and
each fiscal year thereafter, a copy of the detailed annual budget or
plan for the next fiscal year set out by fiscal quarter, in form and
detail reasonably acceptable to the Administrative Agent and the
Majority Lenders, together with a summary of the material assumptions
made in the preparation of the budget or plan;
all such financial statements to include a breakdown by lines of business to
fairly present in all material respects the financial condition and results from
operations of the entities and for the periods specified (subject, in the case
of interim statements, to normal recurring year-end audit adjustments) and to be
prepared in reasonable detail and, in the case of the annual and quarterly
financial statements provided in accordance with subsections (a) and (b) above,
in accordance with GAAP applied consistently throughout the periods reflected
therein (except as approved by such accountants or Authorized Signatory, as the
case may be, and disclosed therein) and further accompanied by a description of,
and an estimation of the effect on the financial statements on account of, a
change in the application of accounting principles as provided in Section 1.3.
5.2 CERTIFICATES; OTHER INFORMATION.
Furnish to the Administrative Agent and each of the Lenders:
(a) ACCOUNTANT'S CERTIFICATE. Concurrently with the delivery
of the financial statements referred to in Section 5.1(a) above, a
certificate of the independent certified public accountants reporting
on such financial statements stating that in making the
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examination necessary therefor no knowledge was obtained of any Default
or Event of Default, except as specified in such certificate;
(b) COMPLIANCE CERTIFICATE. Concurrently with the delivery of
the financial statements referred to in Sections 5.1(a) and 5.1(b)
above, a certificate of an Authorized Signatory stating that, to the
best of such Authorized Signatory's knowledge, the Borrowers and the
Subsidiaries during such period observed or performed in all material
respects all of their covenants and other agreements, and satisfied in
all material respects every material condition, contained in this
Agreement to be observed, performed or satisfied by them, and that such
Authorized Signatory has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and such certificate
shall include the calculations required to indicate compliance with
Section 5.9 and information as to Restricted Payments made in the
applicable period in accordance with Section 6.11;
(c) OTHER INFORMATION. Promptly, such additional financial and
other information as the Administrative Agent, on behalf of any Lender,
may from time to time reasonably request.
5.3 PAYMENT OF OBLIGATIONS.
Pay, discharge or otherwise satisfy at or before maturity or before
they become delinquent, as the case may be, in accordance with industry practice
(subject, where applicable, to specified grace periods) all obligations in
excess of $1,000,000 of whatever nature and any additional costs that are
imposed as a result of any failure to so pay, discharge or otherwise satisfy
such obligations, except when the amount or validity of such obligations and
costs is currently being contested in good faith by appropriate proceedings and
reserves, if applicable, in conformity with GAAP with respect thereto have been
provided on the books of the Borrowers or their Subsidiaries, as the case may
be.
5.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE.
Preserve, renew and keep in full force and effect its company,
corporate or partnership existence and take all reasonable action to maintain
all rights, privileges and franchises necessary or desirable in the normal
conduct of its business; comply with all Contractual Obligations and
Requirements of Law applicable to it except to the extent that failure to comply
therewith would not, in the aggregate, have a Material Adverse Effect.
5.5 MAINTENANCE OF PROPERTY; INSURANCE.
Keep all material property useful and necessary in its business in
reasonably good working order and condition (ordinary wear and tear and
obsolescence excepted); maintain with financially sound and reputable insurance
companies insurance on all its material property in at least such amounts and
against at least such risks as are usually insured against in the same
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general area by companies engaged in the same or a similar business; and furnish
to the Administrative Agent, upon written request, full information as to the
insurance carried.
5.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all applicable Requirements of Law
shall be made of all dealings and transactions in relation to its businesses and
activities; and permit, during regular business hours and upon reasonable notice
by the Administrative Agent or any Lender (unless a Default or Event of Default
shall have occurred and be continuing, (i) any one inspection in a twelve-month
period by the Administrative Agent to be at the Borrowers' expense, and (ii) any
such inspection by any Lender to be at such Lender's expense), to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records (other than materials protected by the attorney-client
privilege and materials which the Borrowers may not disclose without violation
of a confidentiality obligation binding upon it) at any reasonable time and as
often as may reasonably be desired, and to discuss the business, operations,
properties and financial and other condition of the Borrowers and their
Subsidiaries with officers and employees of the Borrowers and their Subsidiaries
and with its independent certified public accountants.
5.7 CERTAIN NOTICES.
Give notice to the Administrative Agent (which shall promptly transmit
such notice to each Lender) of:
(a) within five Business Days after either of the Borrowers
knows of the occurrence of any material Default or Event of Default;
(b) promptly, any default or event of default under any
Contractual Obligation of the Borrowers or any Subsidiary which would
reasonably be expected to have a Material Adverse Effect;
(c) promptly, any litigation, or any investigation or
proceeding known to either of the Borrowers, affecting either of the
Borrowers or any Subsidiary which, if adversely determined, would
reasonably be expected to have a Material Adverse Effect;
(d) as soon as possible and in any event within 30 days after
either of the Borrowers knows: (i) the occurrence of any Reportable
Event with respect to any Plan, a failure to make any required
contribution to a Plan, the creation of any Lien in favor of the PBGC
or a Plan or any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or a
Borrower, any Subsidiary or any Commonly Controlled Entity or any
Multiemployer Plan with respect to the withdrawal from, or the
terminating, Reorganization or Insolvency of, any Plan; and
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(e) promptly, any other development or event which would
reasonably be expected to have a Material Adverse Effect.
Each notice pursuant to this subsection shall be accompanied by a statement of a
Authorized Signatory setting forth details of the occurrence referred to therein
and stating what action the Borrower proposes to take with respect thereto.
5.8 ENVIRONMENTAL LAWS.
(a) Comply in all material respects with, and take reasonable
actions to ensure compliance in all material respects by all tenants
and subtenants, if any, with, all applicable Environmental Laws and
obtain and comply in all material respects with and maintain, and take
reasonable actions to ensure that all tenants and subtenants obtain and
comply in all material respects with and maintain, any and all
licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws except to the extent that failure to
do so would not reasonably be expected to have a Material Adverse
Effect;
(b) Conduct and complete any investigations, studies, sampling
and testing, and any remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with
all lawful orders and directives of all Governmental Authorities
regarding Environmental Laws except to the extent that the same are
being contested in good faith by appropriate actions and the failure to
do or the pendency of such actions would not reasonably be expected to
have a Material Adverse Effect; and
(c) Defend, indemnify and hold harmless the Administrative
Agent and the Lenders, and their respective employees, agents, officers
and directors, from and against any and all claims, demands, penalties,
fines, liabilities, settlements, damages, costs and expenses of
whatever kind or nature known or unknown, contingent or otherwise,
arising out of, or in any way relating to the violation of,
noncompliance with or liability under, any Environmental Law applicable
to the operations of the Borrowers, their Subsidiaries or the
Properties, or any orders, requirements or demands of Governmental
Authorities related thereto, including, without limitation, reasonable
attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the
extent that any of the foregoing arise out of the misconduct of the
party seeking indemnification therefor. The agreements in this
paragraph shall survive repayment of the Notes and all other amounts
payable hereunder.
5.9 FINANCIAL COVENANTS.
(a) LEVERAGE RATIO. The Borrowers will maintain, as of the end
of each fiscal quarter, a Leverage Ratio of not greater than 3.5 to
1.0.
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(b) INTEREST COVERAGE RATIO. The Borrowers will maintain, as
of the end of each fiscal quarter, an Interest Coverage Ratio of
greater than 2.5 to 1.0.
5.10 COVENANTS REGARDING PATENTS, TRADEMARKS AND COPYRIGHTS.
(a) The Borrowers shall notify the Administrative Agent
promptly if it knows or has reason to know that any application,
letters patent or registration relating to any Patent, Trademark or
Copyright which is material to the business of the Borrowers and their
Subsidiaries taken as a whole may become abandoned, or of any material
adverse determination or development (including, without limitation,
the institution of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or any
court) regarding the Borrowers' or such other Subsidiary's ownership of
any Patent, Trademark or Copyright which is material to the business of
the Borrowers and their Subsidiaries taken as a whole, its right to
patent or register the same, or to enforce, keep and maintain the same.
(b) The Borrowers will take all necessary actions, including,
without limitation, in any proceeding before the United States Patent
and Trademark Office or the United States Copyright Office, to maintain
each letters patent for the Patents or registration of the Trademarks
and Copyrights which are material to the business of the Borrowers and
their Subsidiaries taken as a whole, including, without limitation,
payment of maintenance fees, filing of applications for renewal,
affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings.
(c) In the event that any Trademark, Copyright or Patent is
infringed, misappropriated or diluted by a third party, the Borrowers
shall notify the Administrative Agent promptly after it learns thereof
and shall, unless the Borrowers or the relevant Subsidiary, as the case
may be, shall reasonably determine that such Trademark, Copyright or
Patent is not material to the business of the Borrowers and their
Subsidiaries taken as a whole, promptly sue for infringement,
misappropriation or dilution and to recover any and all damages for
such infringement, misappropriation or dilution, and take such other
actions as the Borrowers or such Subsidiary, as the case may be, shall
reasonably deem appropriate under the circumstances to protect such
Trademark, Copyright or Patent.
5.11 FEES, ETC.
Pay to the Agent the fees and comply with the other agreements provided
for in the Commitment Letter.
5.12 SUBSIDIARIES.
In the event either of the Borrowers shall acquire or otherwise obtain
any Subsidiary on or after the Closing Date, such Borrower shall promptly notify
the Administrative Agent of the
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existence of such Subsidiary, shall provide the Administrative Agent with the
information required by Section 3.12 with respect thereto and shall cause such
Subsidiary to enter into and deliver to the Administrative Agent on behalf of
the Lenders a Joinder Agreement in the form of SCHEDULE 5.12 attached hereto. In
connection therewith, such Borrower shall cause the Subsidiary to deliver to the
Administrative Agent on behalf of the Lenders certified organizational
documents, evidences of authority and opinion letters customary and usual for
transactions of the type contemplated by this Agreement and to take such other
action in connection therewith as the Administrative Agent may reasonably
require.
5.13 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
Each of the Borrowers will, and will cause each of its Subsidiaries to,
pay and discharge all taxes, assessments and governmental charges or levies
imposed upon it, or upon its income or profits, or upon any of its properties,
before they shall become delinquent; PROVIDED, HOWEVER, that the Borrowers and
their Subsidiaries shall not be required to pay any such tax, assessment, charge
or levy which is being contested in good faith by appropriate proceedings and as
to which adequate accruals therefor have been established in accordance with
GAAP, unless the failure to make any such payment (a) would give rise to an
immediate right to foreclose on a Lien securing such amounts or (b) would have a
Material Adverse Effect.
5.14 YEAR 2000 COMPATIBILITY.
The Borrowers will take as soon as reasonably practicable all actions
reasonably necessary to assure that the Credit Parties' computer based systems
are able to operate with respect to and effectively process data which includes
dates on and after January 1, 2000. At the request of the Administrative Agent,
the Credit Parties shall provide reasonable assurances satisfactory to the
Administrative Agent of the Credit Parties' Year 2000 compatibility.
SECTION 6. NEGATIVE COVENANTS
The Borrowers hereby covenant and agree that on the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
have terminated, no Note remains outstanding and unpaid and the Loans, together
with interest, Commitment Fees and all other amounts owing to the Administrative
Agent or any Lender hereunder, are paid in full.
6.1 INDEBTEDNESS.
The Borrowers will not, nor will they permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Indebtedness, except:
(a) Indebtedness arising or existing under this Agreement and
the other Credit Documents;
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(b) other Indebtedness existing as of the Closing Date as set
forth in SCHEDULE 6.1(B)) and renewals, refinancings or extensions
thereof in a principal amount not in excess of that outstanding as of
the date of such renewal, refinancing or extension;
(c) unsecured intercompany Indebtedness among the Borrowers
and the Guarantors;
(d) Capital Leases and purchase money indebtedness for the
financing of equipment which, in the aggregate principal amount at any
time, do not exceed $5,000,000;
(e) other unsecured Indebtedness, so long no Default or Event
of Default then exists or would exist after giving effect to the
incurrence thereof; PROVIDED, HOWEVER, that no such Indebtedness shall
be incurred if the aggregate amount of all such Indebtedness
outstanding would exceed $20,000,000 unless (A) the Borrowers
demonstrate to the reasonable satisfaction of the Majority Lenders that
the Borrowers will be in pro forma compliance with all of the terms and
provisions of this Agreement after giving effect to the incurrence
thereof, and (B) the terms and provisions of such Indebtedness are
satisfactory to the Majority Lenders;
(f) obligations of the Borrowers or any Subsidiary in respect
of Interest Protection Agreements entered into in order to manage
existing or anticipated interest rate or exchange rate risks and not
for speculative purposes;
(g) Guaranty Obligations permitted by Section 6.3;
(h) Indebtedness of any Person that becomes a Subsidiary of
either Borrower after the date hereof pursuant to a Permitted
Acquisition, PROVIDED that such Indebtedness was not incurred solely in
contemplation of such Person becoming a Subsidiary of such Borrower;
and
(i) Indebtedness of the Borrowers to the former shareholders
of DM Publishing relating to contingent payment obligations as contemplated by
the Combination Agreement.
6.2 LIENS.
The Borrowers will not, nor will they permit any Subsidiary to,
contract, create, incur, assume or permit to exist any Lien with respect to any
of their respective property or assets of any kind (whether real or personal,
tangible or intangible), whether now owned or hereafter acquired, except for
Permitted Liens.
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6.3 GUARANTY OBLIGATIONS.
The Borrowers will not, nor will they permit any Subsidiary to, enter
into or otherwise become or be liable in respect of any Guaranty Obligations
(excluding specifically therefrom endorsements in the ordinary course of
business of negotiable instruments for deposit or collection) other than (i)
those in favor of the Lenders in connection herewith, (ii) Guaranty Obligations
by the Borrowers or their Subsidiaries of other Indebtedness permitted under
Section 6.1 (except, as regards Indebtedness under subsection (b) thereof, only
if and to the extent such Indebtedness was guaranteed on the Closing Date), and
(iii) other unsecured Guaranty Obligations which do not exceed $10,000,000 at
any time outstanding.
6.4 LINES OF BUSINESS.
The Borrowers will not, nor will they permit any of their Subsidiaries
to, alter their line or lines of business activity if as a result thereof the
Borrowers and their Subsidiaries would not be predominantly engaged in the
business of (a) the publishing of business magazines, (b) the dissemination of
market research and data service, (c) the provision of electronically
distributed subscription information services, (d) the publication of business
newsletters, (e) the provision of electronic newsletter content services (f) the
provision of the marketing programs, (g) printing magazines and other
publications, (h) operating trade shows and conferences and (i) the providing of
all updated, functional extensions and additional lines of business reasonably
compatible with and related to (a) - (h) above.
6.5 CONSOLIDATION, MERGER, SALE OR PURCHASE OF ASSETS, ETC.
The Borrowers will not, nor will they permit any Subsidiary to,
(a) dissolve, liquidate or wind up its affairs, sell,
transfer, lease or otherwise dispose of all or any substantial part of
its property or assets outside of the ordinary course of business or
agree to do so at a future time except the following, without
duplication, shall be expressly permitted:
(i) Specified Sales;
(ii) the sale, transfer, lease or other disposition
of property or assets not in the ordinary course of business
(other than Specified Sales), where and to the extent that
they are the result of a Recovery Event or otherwise and the
net proceeds therefrom are used to repair or replace damaged
property or to purchase or otherwise acquire new assets or
property provided that such purchase or acquisition is
committed to within 90 days of receipt of the net proceeds and
such purchase or acquisition is consummated within 180 days of
such receipt;
(iii) the sale, transfer, lease or other disposition
of property or assets to the Borrowers or any Guarantor; and
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(iv) the sale of the stock or all or substantially
all of the assets of Curtin & Pease/Peneco, Inc.
As used herein, "SUBSTANTIAL PART" shall mean business, property or assets which
have contributed
(x) 20% or more, in any instance, or
(y) 30% or more, when aggregated with all other such
sales or dispositions which have occurred within a period of
one year,
of Consolidated Adjusted EBITDA for the four (4) consecutive fiscal quarters
most recently ending prior to the date thereof; or
(b) purchase, lease or otherwise acquire (in a single
transaction or a series of related transactions) all or any substantial
part of the property or assets of any Person (other than purchases or
other acquisitions of inventory, leases, materials, property and
equipment in the ordinary course of business, except as otherwise
limited or prohibited herein), or enter into any merger or
consolidation, except for (i) investments or acquisitions permitted
pursuant to Section 6.6, (ii) the acquisition of the Acquired Assets,
(iii) acquisitions of types of businesses permitted to be engaged in by
the Borrowers and their Subsidiaries pursuant to Section 6.4 (the
"PERMITTED ACQUISITIONS") so long as with respect to the acquisition of
each such business, (A) no Default or Event of Default then exists or
would exist after giving effect thereto and (B) the Borrowers
demonstrate to the reasonable satisfaction of the Majority Lenders that
the Borrowers will be in pro forma compliance with all of the terms and
provisions of this Agreement after giving effect thereto, (iv) the
merger or consolidation of any Subsidiary into a Borrower or any
Subsidiary, or a sale, transfer or lease of all or a substantial part
of the properties of any Subsidiary (at fair value) to a Borrower or
any Subsidiary and (v) the merger of any Person into a Borrower or any
Subsidiary, PROVIDED that such Borrower or any Subsidiary shall be the
surviving corporation, and in any such case no Default or Event of
Default would exist after giving effect thereto.
6.6 ADVANCES, INVESTMENTS AND LOANS.
The Borrowers will not, nor will they permit any Subsidiary to, lend
money or extend credit or make advances to any Person, or purchase or acquire
any stock, obligations or securities of, or any other interest in, or make any
capital contribution to, any Person except for Permitted Investments.
6.7 TRANSACTIONS WITH AFFILIATES.
Except (a) as permitted in subsection (vi) of the definition of
Permitted Investments, (b) for the payments and issuances permitted by Section
6.8 and (c) for the payments permitted by
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Section 6.11, the Borrowers will not, nor will they permit any Subsidiary to,
enter into any transaction or series of transactions, whether or not in the
ordinary course of business, with any officer, director, shareholder or
Affiliate other than on terms and conditions substantially as favorable as would
be obtainable in a comparable arm's-length transaction with a Person other than
an officer, director, shareholder or Affiliate.
6.8 OWNERSHIP OF SUBSIDIARIES.
The Borrowers will not, nor will they permit any Subsidiary to, create,
form or acquire a Subsidiary other than any Subsidiary acquired or formed to
acquire assets in connection with any Permitted Acquisition, provided such
Subsidiary guarantees all of the Obligations of the Borrowers hereunder on terms
reasonably satisfactory to the Administrative Agent. Further, the Borrowers will
not, nor will they permit any of its Subsidiaries to, issue, sell, transfer,
pledge or otherwise dispose of any partnership interests, limited liability
company interest, shares of capital stock or other equity or ownership interests
("EQUITY INTERESTS") in themselves or in any of their Subsidiaries, except (a)
Equity Interests that are issued, sold or transferred to either of the Borrowers
or a wholly-owned Subsidiary of a Borrower, (b) in connection with a transaction
permitted under Section 6.5 and (c) in connection with the Stock Distribution.
6.9 FISCAL YEAR.
The Borrowers will not, nor will they permit any Subsidiary to, change
its fiscal year other than a change in fiscal year by any Subsidiary to match
the fiscal year of the Borrowers.
6.10 PREPAYMENTS OF INDEBTEDNESS, ETC.
Neither the Borrowers nor any of their Subsidiaries will (a) after the
issuance thereof, amend or modify (or permit the amendment or modification of),
if materially adverse to the interests of the Lenders (including, without
limitation, any acceleration or shortening of amortization of principal thereof,
or modification of the terms of subordination relating thereto), any of the
terms of any Consolidated Total Funded Debt (other than any Indebtedness
permitted by Section 6.1(e)), or (b) make (or give any notice with respect
thereto) any voluntary or optional payment or prepayment or redemption or
acquisition for value of (including without limitation, by way of depositing
money or securities with the trustee with respect thereto before due for the
purpose of paying when due) or exchange of any Consolidated Total Funded Debt
(other than any Indebtedness permitted by Section 6.1(e)).
6.11 RESTRICTED PAYMENTS.
The Borrowers will not, nor will they permit any of its Subsidiaries
which are not wholly-owned to, make any Restricted Payment; PROVIDED, HOWEVER,
(a) any Subsidiary of a Borrower may make Restricted Payments to such Borrower,
(b) a Borrower may pay customary and reasonable fees to Affiliates of such
Borrower for consulting and other financial and advisory services provided by
such Affiliates, (c) Penton USA may pay ordinary dividends on its common
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stock to its stockholders so long as no Default or Event of Default hereunder
exists immediately prior to or after the payment of any such dividend and (d)
the Borrowers may make the contingent payments contemplated by the Combination
Agreement and the Contingent Convertible Loan Notes and the Vendor's Convertible
Loan Note listed on SCHEDULE 6.1(B).
6.12 PARTNERSHIP AND CORPORATE DOCUMENTS.
The Borrowers will not, nor will they permit any of their Subsidiaries
to, amend or otherwise modify their articles of limited partnership, limited
liability limited partnership, incorporation, limited liability company or other
similar organizational or charter document, or their limited partnership
agreement, limited liability limited partnership agreement, limited liability
company agreement, bylaws, operating agreement or other similar governing
document or the Combination Agreement in a manner which is adverse to the
interest of the Lenders, without the prior written consent of the Administrative
Agent and the Majority Lenders, which consent will not be unreasonably withheld.
SECTION 7. EVENTS OF DEFAULT
Upon the occurrence of any of the following events:
(a) (i) The Borrowers shall fail to pay any principal on any
Note when due in accordance with the terms thereof or hereof; or (ii)
the Borrowers shall fail to pay any interest on any Note or any fee or
other amount payable hereunder when due in accordance with the terms
thereof or hereof and such failure shall continue unremedied for five
(5) Business Days; or
(b) Any representation or warranty made by the Borrowers or
any Subsidiary of the Borrowers herein or in any of the other Credit
Documents or which is contained in any certificate, document or
financial or other statement prepared and furnished by the Borrowers or
any of the Borrowers' Subsidiaries at any time under or in connection
with this Agreement shall prove to have been incorrect, false or
misleading in any material respect on or as of the date made or deemed
made; or
(c) The Borrowers shall
(i) default in the due performance or observance of
Section 5.7(a), Section 5.9, or Sections 6.1 through 6.13 or
(ii) default in any material respect in the
observance or performance of any other term, covenant or
agreement contained in this Agreement (other than as described
in Sections 7(a) or 7(c)(i) above) or any of the other Credit
Documents, and such default shall continue unremedied for a
period of 15 days or more after the earlier of any officer
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of the Borrowers becoming aware of such default or the receipt
by the Borrowers of written notice from the Administrative
Agent thereof; or
(d) The Borrowers or any of the Borrowers' Subsidiaries shall
(i) default in any payment of principal of or interest on any
Indebtedness (other than the Notes) in a principal amount outstanding
of at least $1,000,000 in the aggregate for the Borrowers and the
Borrowers' Subsidiaries or in the payment of any matured Guarantee
Obligation in a principal amount outstanding of at least $1,000,000 in
the aggregate for the Borrowers and the Borrowers' Subsidiaries beyond
the period of grace, if any, provided in the instrument or agreement
under which such Indebtedness or Guarantee Obligation was created; or
(ii) default in the observance or performance of any other agreement or
condition relating to any Indebtedness in a principal amount
outstanding of at least $1,000,000 in the aggregate for the Borrowers
and the Borrowers' Subsidiaries or Guarantee Obligation in a principal
amount outstanding of at least $1,000,000 in the aggregate for the
Borrowers and the Borrowers' Subsidiaries or contained in any
instrument or agreement evidencing, securing or relating thereto, or
any other event shall occur or condition exist, the effect of which
default or other event or condition is to cause, or to permit the
holder or holders of such Indebtedness or beneficiary or beneficiaries
of such Guarantee Obligation (or a trustee or agent on behalf of such
holder or holders or beneficiary or beneficiaries) to cause, with the
giving of notice if required, such Indebtedness to become due prior to
its stated maturity or such Guarantee Obligation to become payable; or
(e) (i) The Borrowers or any of the Borrowers' Subsidiaries
shall commence any case, proceeding or other action (A) under any
existing or future law of any jurisdiction, domestic or foreign,
relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation,
dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian,
conservator or other similar official for it or for all or any
substantial part of its assets, or the Borrowers or any of the
Borrowers' Subsidiaries shall make a general assignment for the benefit
of its creditors; or (ii) there shall be commenced against the
Borrowers or any of the Borrowers' Subsidiaries any case, proceeding or
other action of a nature referred to in clause (i) above which (A)
results in the entry of an order for relief or any such adjudication or
appointment or (B) remains undismissed, undischarged or unbonded for a
period of 60 days; or (iii) there shall be commenced against the
Borrowers or any of the Borrowers' Subsidiaries any case, proceeding or
other action seeking issuance of a warrant of attachment, execution,
distraint or similar process against all or any substantial part of its
assets which results in the entry of an order for any such relief which
shall not have been vacated, discharged, or stayed or bonded pending
appeal within 60 days from the entry thereof; or (iv) the Borrowers or
any of the Borrowers' Subsidiaries shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any
of the acts set forth in clause (i), (ii), or (iii) above; or (v) the
Borrowers or any of the
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Borrowers' Subsidiaries shall admit in writing its inability to, pay
its debts as they become due; or
(f) One or more judgments or decrees shall be entered against
the Borrowers or any of the Borrowers' Subsidiaries involving in the
aggregate a liability (to the extent not paid when due or covered by
insurance) of $1,000,000 or more and all such judgments or decrees
shall not have been paid and satisfied, vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(g) (i) The Borrowers, any Subsidiary of the Borrowers or any
Commonly Controlled Entity shall engage in any "prohibited transaction"
(as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Plan, other than a transaction for which a statutory
exemption is available or an administrative exemption has been
obtained, (ii) any "accumulated funding deficiency" (as defined in
Section 302 of ERISA), whether or not waived, shall exist with respect
to any Single Employer Plan or any Lien in favor of the PBGC or a
Single Employer Plan shall arise on the assets of the Parent, the
Borrowers or any of the Borrowers' Subsidiaries or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect
to, or proceedings shall commence to have a trustee appointed, or a
trustee shall be appointed, to administer or to terminate, any Single
Employer Plan, which Reportable Event or commencement of proceedings or
appointment of a Trustee is, in the reasonable opinion of the Majority
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, or (v) the Parent, the Borrowers or any
of the Borrowers' Subsidiaries or any Commonly Controlled Entity shall,
or in the reasonable opinion of the Majority Lenders is likely to,
incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, any Multiemployer Plan; and in each
case in clauses (i) through (v) above, such event or condition,
together with all other such events or conditions, if any, could have a
Material Adverse Effect; or
(h) Any other Credit Document shall fail to be in full force
and effect or to give the Administrative Agent and/or the Lenders the
rights, powers and privileges purported to be created thereby and such
failure shall have a material adverse effect on the rights and remedies
of the Administrative Agent or the Lenders thereunder; or
(i) A Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in paragraph (e) above, automatically the Commitments shall immediately
terminate and the Loans (with accrued interest thereon), and all other amounts
under the Credit Documents shall immediately become due and payable, and (B) if
such event is any other Event of Default, either or both of the following
actions may be taken: (i) with the written consent of the Majority Lenders, the
Administrative Agent may, or upon the written request of the Majority Lenders,
the Administrative Agent shall, by notice to the Borrowers declare the
Commitments to be
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terminated forthwith, whereupon the Commitments shall immediately terminate; and
(ii) with the written consent of the Majority Lenders, the Administrative Agent
may, or upon the written request of the Majority Lenders, the Administrative
Agent shall, by notice of default to the Borrowers, declare the Loans (with
accrued interest thereon) and all other amounts owing under this Agreement and
the Notes to be due and payable forthwith whereupon the same shall immediately
become due and payable. Except as expressly provided above in this Section 7,
presentment, demand, protest and all other notices of any kind are hereby
expressly waived.
SECTION 8. THE ADMINISTRATIVE AGENT
8.1 APPOINTMENT.
Each Lender hereby irrevocably designates and appoints First Union
National Bank as the Administrative Agent of such Lender under this Agreement,
and each such Lender irrevocably authorizes First Union National Bank, as the
Administrative Agent for such Lender, to take such action on its behalf under
the provisions of this Agreement and to exercise such powers and perform such
duties as are expressly delegated to the Administrative Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the Administrative Agent shall not have any duties or
responsibilities, except those expressly set forth herein and in the other
Credit Documents, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Administrative Agent.
8.2 DELEGATION OF DUTIES.
The Administrative Agent may execute any of its duties under this
Agreement by or through agents or attorneys-in-fact and shall be entitled to
rely on advice of counsel concerning all matters pertaining to such duties. The
Administrative Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it with reasonable care. Without
limiting the foregoing, the Administrative Agent may appoint an affiliate as its
agent to perform the functions of the Administrative Agent hereunder relating to
the advancing of funds to the Borrowers and distribution of funds to the Lenders
and to perform such other related functions of the Administrative Agent
hereunder as are reasonably incidental to such functions. No such appointment
shall relieve the Administrative Agent of its responsibilities hereunder.
8.3 EXCULPATORY PROVISIONS.
Neither the Administrative Agent nor any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates shall be (a) liable for any
action lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement (except for its or such Person's own gross
negligence or willful misconduct) or (b) responsible in any manner to any of the
Lenders for any recitals, statements, representations or warranties made by the
Borrowers or
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any officer thereof contained in this Agreement or in any certificate, report,
statement or other document referred to or provided for in, or received by the
Administrative Agent under or in connection with, this Agreement or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
any of the Credit Documents or for any failure of the Borrowers to perform their
Obligations hereunder or thereunder. The Administrative Agent shall not be under
any obligation to any Lender to ascertain or to inquire as to the observance or
performance by the Borrowers of any of the agreements contained in, or
conditions of, this Agreement, or to inspect the properties, books or records of
the Borrowers.
8.4 RELIANCE BY ADMINISTRATIVE AGENT.
The Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document or conversation reasonably believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrowers), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless (a) a written notice of assignment, negotiation
or transfer thereof shall have been filed with the Administrative Agent and (b)
the Administrative Agent shall have received the written agreement of such
assignee to be bound hereby as fully and to the same extent as if such assignee
were an original Lender party hereto, in each case in form satisfactory to the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Agreement unless it shall
first receive such advice or concurrence of the Majority Lenders as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred it by reason of
taking or continuing to take any such action. The Administrative Agent shall in
all cases be fully protected in acting, or in refraining from acting, under any
of the Credit Documents in accordance with a request of the Majority Lenders,
and such request and any action taken or failure to act pursuant thereto shall
be binding upon all the Lenders and all future holders of the Notes.
8.5 NOTICE OF DEFAULT.
The Administrative Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless the
Administrative Agent has received notice from a Lender or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, the Administrative Agent shall give
prompt notice thereof to each of the Lenders. The Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
directed by the Majority Lenders, including, without limitation, exercise of
remedies and initiation of litigation; PROVIDED, HOWEVER, that unless and until
the Administrative Agent shall have received such directions, the Administrative
Agent may (but shall not be obligated to) take such action, or refrain from
taking
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such action, with respect to such Default or Event of Default as it shall deem
advisable in the best interests of the Lenders.
8.6 NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER LENDERS.
Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its officers, directors, employees, agents, attorneys-in-fact
or affiliates has made any representation or warranty to it and that no act by
the Administrative Agent hereinafter taken, including any review of the affairs
of the Borrowers, shall be deemed to constitute any representation or warranty
by the Administrative Agent to any Lender. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Borrowers and made its own decision to
make its Loans hereunder and enter into this Agreement. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrowers. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of the Borrowers which may come into
the possession of the Administrative Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
8.7 INDEMNIFICATION.
The Lenders agree to indemnify the Administrative Agent in its capacity
hereunder (to the extent not reimbursed by the Borrowers and without limiting
the obligation of the Borrowers to do so), ratably according to their respective
Commitment Percentages in effect on the date on which indemnification is sought
under this subsection, from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind whatsoever which may at any time (including, without
limitation, at any time following the payment of the Notes) be imposed on,
incurred by or asserted against the Administrative Agent in any way relating to
or arising out of any Credit Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
to the extent resulting from the Administrative Agent's gross negligence or
willful misconduct. The agreements in this
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subsection shall survive the termination of this Agreement and payment of the
Notes and all other amounts payable hereunder.
8.8 ADMINISTRATIVE AGENT IN ITS INDIVIDUAL CAPACITY.
The Administrative Agent and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with the Borrowers as
though the Administrative Agent were not the Administrative Agent hereunder.
With respect to its Loans made or renewed by it and any Note issued to it, the
Administrative Agent shall have the same rights and powers under this Agreement
as any Lender and may exercise the same as though it were not the Administrative
Agent, and the terms "Lender" and "Lenders" shall include the Administrative
Agent in its individual capacity.
8.9 SUCCESSOR ADMINISTRATIVE AGENT.
The Administrative Agent may resign or be removed as Administrative
Agent upon 30 days' prior notice to the Borrowers and the Lenders. The
Administrative Agent may be removed by the written consent of the Majority
Lenders. If the Administrative Agent shall resign or be removed as
Administrative Agent under this Agreement and the Notes, then the Majority
Lenders shall appoint from among the Lenders a successor agent for the Lenders,
which successor agent shall be approved by the Borrowers, or if the Majority
Lenders cannot agree on a successor within 30 days from the notice of
resignation by the Administrative Agent, the Administrative Agent, with the
approval of the Borrowers, may appoint a bank or trust company with capital and
surplus of at least $500,000,000 as successor Administrative Agent within 30
days thereafter, whereupon such successor agent shall succeed to the rights,
powers and duties of the Administrative Agent, and the term "Administrative
Agent" shall mean such successor agent effective upon such appointment and
approval, and the former Administrative Agent's rights, powers and duties as
Administrative Agent shall be terminated, without any other or further act or
deed on the part of such former Administrative Agent or any of the parties to
this Agreement or any holders of the Notes. After any retiring Administrative
Agent's resignation or renewal as Administrative Agent, the provisions of this
subsection shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Administrative Agent under this Agreement. Resignation
by the Administrative Agent shall become effective upon appointment of, and
acceptance by, a successor Administrative Agent, or the passage of the
applicable periods without appointment of a successor.
SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS, WAIVERS AND RELEASE OF COLLATERAL.
Neither this Agreement, nor any of the Notes, nor any of the other
Credit Documents, nor any terms hereof or thereof may be amended, supplemented,
waived or modified except in accordance with the provisions of this subsection.
The Majority Lenders affected thereby may,
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or, with the written consent of the Majority Lenders affected thereby, the
Administrative Agent may, from time to time, (a) enter into with the Borrowers
written amendments, supplements or modifications hereto and to the other Credit
Documents for the purpose of adding any provisions to this Agreement or the
other Credit Documents or (b) waive, on such terms and conditions as the
Majority Lenders may specify in such instrument, any of the requirements of this
Agreement or the other Credit Documents or any Default or Event of Default and
its consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
waiver, supplement, modification or release shall (i) reduce the amount or
extend the scheduled final date of maturity of any Loan or Note or any
installment thereon, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitment, in each case
without the written consent of each Lender directly affected thereby, or (ii)
amend, modify or waive any provision of this subsection or reduce the percentage
specified in the definition of Majority Lenders, or consent to the assignment or
transfer by the Borrowers of any of its rights and obligations under this
Agreement, in each case without the written consent of all the Lenders, or (iii)
amend, modify or waive any provision of Section 8 without the written consent of
the then Administrative Agent, or (iv) release all or substantially all of the
collateral, if any, or any Guarantor, without the written consent of all of the
Lenders except to the extent such releases are provided for in this Agreement or
the other Credit Documents, including, without limitation, pursuant to Section
6.5(a) hereof. Any such waiver, any such amendment, supplement or modification
and any such release shall apply equally to each of the Lenders and shall be
binding upon the Borrowers, the Lenders, the Administrative Agent and all future
holders of the Notes. In the case of any waiver, the Borrowers, the Lenders and
the Administrative Agent shall be restored to their former position and rights
hereunder and under the outstanding Loans and Notes and other Credit Documents,
and any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
9.2 NOTICES.
Except as otherwise provided in Section 2, all notices, requests and
demands to or upon the respective parties hereto to be effective shall be in
writing (including by telecopy), and, unless otherwise expressly provided
herein, shall be deemed to have been duly given or made (a) when delivered by
hand, (b) when transmitted via telecopy (or other facsimile device) on a
Business Day between the hours of 10:00 A.M. and 7:00 P.M. (EST or EDT, as
appropriate) (or on the following Business Day if sent after 7:00 P.M.) to the
number set out herein, (c) the day following the day on which the same has been
delivered prepaid to a reputable national overnight air courier service, or (d)
the third Business Day following the day on which the same is sent by certified
or registered mail, postage prepaid, in each case, addressed as follows in the
case of the Borrowers and the Administrative Agent, and as set forth on SCHEDULE
2.1(A) in the case of the Lenders, or to such other address as may be hereafter
notified by the respective parties hereto and any future holders of the Notes:
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The Borrowers: Penton Media, Inc.
Penton Media Limited
1110 Superior Avenue
Cleveland, Ohio 44114
Attn: Joseph NeCastro, CFO
Telecopier: (216) 696-1752
Telephone: (216) 931- 9770
With a copy to: Preston Vice, SVP and Secretary
Penton Media, Inc.
1110 Superior Avenue
Cleveland, Ohio 44114
Telecopier: (216) 696-1752
Telephone: (216) 931- 9581
The Administrative
Agent: First Union National Bank
One First Union Center, TW-4
Charlotte, North Carolina 28288-0608
Attn: Doug Burnett, Agency Services
Telecopier: (704) 383-0288
Telephone: (704) 374-2698
With a copy (other than funding notices) to:
First Union Capital Markets Group
One First Union Center, DC-5
Charlotte, North Carolina 28288-0735
Attn: George Cole, Managing Director
Telecopier: (704) 374-4105
Telephone: (704) 374-4092
9.3 NO WAIVER; CUMULATIVE REMEDIES.
No failure to exercise and no delay in exercising, on the part of the
Administrative Agent or any Lender, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
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9.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
All representations and warranties made hereunder and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans, PROVIDED that all such representations and warranties shall
terminate on the date upon which the Commitments have been terminated and all
amounts owing hereunder and under any Notes have been paid in full.
9.5 PAYMENT OF EXPENSES AND TAXES.
The Borrowers agree (a) to pay or reimburse the Administrative Agent
for all its reasonable out-of-pocket costs and expenses incurred in connection
with the preparation and execution of, and any amendment, supplement or
modification to, the Credit Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, together with the reasonable fees
and disbursements of counsel to the Administrative Agent, (b) to pay or
reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Notes and any such other documents, including,
without limitation, the reasonable fees and disbursements of counsel to the
Administrative Agent and to the Lenders (including reasonable allocated costs of
in-house legal counsel), and (c) on demand, to pay, indemnify, and hold each
Lender and the Administrative Agent harmless from, any and all recording and
filing fees and any and all liabilities with respect to, or resulting from any
delay in paying, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation or administration of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, the Credit Documents and any such other
documents, and (d) to pay, indemnify, and hold each Lender and the
Administrative Agent and their affiliates harmless from and against, any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of the Credit Documents and any such other Documents and the use, or proposed
use, of proceeds of the Loans (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"); PROVIDED, HOWEVER, that the Borrowers shall not have any
obligation hereunder to the Administrative Agent or any Lender with respect to
indemnified liabilities arising from (i) the gross negligence or willful
misconduct of the Administrative Agent or any such Lender, (ii) legal
proceedings commenced against the Administrative Agent or any such Lender by any
security holder or creditor thereof arising out of and based upon rights
afforded such security holder or creditor solely in its capacity as such, (iii)
legal proceedings commenced against the Administrative Agent or any Lender by
any other Lender or the Administrative Agent or its participants or (iv) a
breach of any of the Credit Documents by the Lenders. The agreements in this
subsection shall survive repayment of the Loans, Notes and all other amounts
payable hereunder.
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9.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS; PURCHASING LENDERS.
(a) This Agreement shall be binding upon and inure to the
benefit of the Borrowers, the Lenders, the Administrative Agent, all
future holders of the Notes and their respective successors and
assigns, except that the Borrowers may not assign or transfer any of
its rights or obligations under this Agreement or the other Credit
Documents without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time
sell to one or more banks or other entities ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender, or any other interest of
such Lender hereunder, PROVIDED, HOWEVER, that in the case of any
Participant that is not a bank or savings and loan association, no
transaction described in this Section 9.6(b) may be consummated until
such Participant demonstrates to the reasonable satisfaction of the
Borrowers that such transaction will not constitute a prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code. In
the event of any such sale by a Lender of participating interests to a
Participant, such Lender's obligations under this Agreement to the
other parties to this Agreement shall remain unchanged, such Lender
shall remain solely responsible for the performance thereof, such
Lender shall remain the holder of any such Note for all purposes under
this Agreement, and the Borrowers and the Administrative Agent shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement. No
Lender shall transfer or grant any participation under which the
Participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such
amendment or waiver would (i) extend the final maturity of any Loan or
Note in which such Participant is participating, or reduce the stated
rate or extend the time of payment of interest or Fees thereon (except
in connection with a waiver of interest at the increased post-default
rate) or reduce the principal amount thereof, or increase the amount of
the Participant's participation over the amount thereof then in effect
(it being understood that a waiver of any Default or Event of Default
shall not constitute a change in the terms of such participation, and
that an increase in any Commitment or Loan shall be permitted without
consent of any Participant if the Participant's participation is not
increased as a result thereof), (ii) except as otherwise expressly
provided in a Credit Document, release all or substantially all of the
collateral, if any, or (iii) consent to the assignment or transfer by
the Borrowers of any of its rights and obligations under this
Agreement. In the case of any such participation, the Participant shall
not have any rights under this Agreement or any of the other Credit
Documents (the Participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by
such Lender in favor of the Participant relating thereto) and all
amounts payable by the Borrowers hereunder shall be determined as if
such Lender had not sold such participation, PROVIDED that each
Participant shall be entitled to the benefits of Sections 2.13, 2.14
and 9.5 with respect to its participation in the Commitments and the
Loans outstanding from time to time; PROVIDED, that no
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Participant shall be entitled to receive any greater amount pursuant to
such subsections than the transferor Lender would have been entitled to
receive in respect of the amount of the participation transferred by
such transferor Lender to such Participant had no such transfer
occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking business and in accordance with applicable law, at any time
sell or assign to any Lender or any affiliate thereof and, with the
consent of the Administrative Agent, and, so long as no Event of
Default has occurred and is continuing, with the consent of the
Borrowers (in each case, which consent shall not be unreasonably
withheld), to one or more additional banks or financial institutions
("PURCHASING LENDERS"), all or any part of its rights and obligations
under this Agreement and the Notes in minimum amounts of $5,000,000 and
minimum increments of $1,000,000 in excess thereof (or, if less, the
entire amount of such Lender's obligations) if the Purchasing Lender is
not a Lender hereunder, or with no minimum amount if the Purchasing
Lender is a Lender hereunder, pursuant to a Commitment Transfer
Supplement, executed by such Purchasing Lender, such transferor Lender
(and, in the case of a Purchasing Lender that is not then a Lender or
an affiliate thereof, by the Administrative Agent and, so long as no
Event of Default has occurred and is continuing, by the Borrowers), and
delivered to the Administrative Agent for its acceptance and recording
in the Register; provided that at no time shall there be more than a
total of five (5) Lenders. Each such assignment must be of a constant,
not varying, percentage of all of such Lender's rights and obligations
hereunder. Upon such execution, delivery, acceptance and recording,
from and after the Transfer Effective Date specified in such Commitment
Transfer Supplement, (x) the Purchasing Lender thereunder shall be a
party hereto and, to the extent provided in such Commitment Transfer
Supplement, have the rights and obligations of a Lender hereunder with
a Commitment as set forth therein, and (y) the transferor Lender
thereunder shall, to the extent provided in such Commitment Transfer
Supplement, be released from its obligations under this Agreement (and,
in the case of a Commitment Transfer Supplement covering all or the
remaining portion of a transferor Lender's rights and obligations under
this Agreement, such transferor Lender shall cease to be a party
hereto). Such Commitment Transfer Supplement shall be deemed to amend
this Agreement to the extent, and only to the extent, necessary to
reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Percentages arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of
such transferor Lender under this Agreement and the Notes. On or prior
to the Transfer Effective Date specified in such Commitment Transfer
Supplement, the Borrowers shall execute and deliver to the
Administrative Agent in exchange for the Note delivered to the
Administrative Agent pursuant to such Commitment Transfer Supplement a
new Note to the order of such Purchasing Lender in an amount equal to
the Commitment assumed by it pursuant to such Commitment Transfer
Supplement and, unless the transferor Lender has not retained a
Commitment hereunder, a new Note to the order of the transferor Lender
in an amount equal to the Commitment retained by it hereunder. Such new
Note shall be dated the Closing Date and shall otherwise be in the form
of the Note replaced
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thereby. The Note surrendered by the transferor Lender shall be
returned by the Administrative Agent to the Borrowers marked
"canceled".
(d) The Administrative Agent shall maintain at its address
referred to in Section 9.2 a copy of each Commitment Transfer
Supplement delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the
Commitment of, and principal amount of the Loans owing to, each Lender
from time to time. The entries in the Register shall be conclusive, in
the absence of manifest error, and the Borrowers, the Administrative
Agent and the Lenders may treat each Person whose name is recorded in
the Register as the owner of the Loan recorded therein for all purposes
of this Agreement. The Register shall be available for inspection by
the Borrowers or any Lender at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of a Commitment Transfer Supplement
executed by a transferor Lender and a Purchasing Lender (and, in the
case of a Purchasing Lender that is not then a Lender or an affiliate
thereof, by the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, by the Borrowers) together with
payment to the Administrative Agent (by the transferor Lender or the
Purchasing Lender, as agreed between them) of a registration and
processing fee of $3,000 for each Purchasing Lender listed in such
Commitment Transfer Supplement, and the Notes subject to such
Commitment Transfer Supplement, the Administrative Agent shall (i)
accept such Commitment Transfer Supplement, (ii) record the information
contained therein in the Register and (iii) give prompt notice of such
acceptance and recordation to the Lenders and the Borrowers.
(f) The Borrowers authorize each Lender to disclose to any
Participant or Purchasing Lender (each, a "TRANSFEREE") and any
prospective Transferee any and all financial information in such
Lender's possession concerning the Borrowers and their Affiliates which
has been delivered to such Lender by or on behalf of the Borrowers
pursuant to this Agreement or which has been delivered to such Lender
by or on behalf of the Borrowers in connection with such Lender's
credit evaluation of the Borrowers and its Affiliates prior to becoming
a party to this Agreement; in each case subject to Section 9.15.
(g) At the time of each assignment pursuant to this Section
9.6 to a Person which is not already a Lender hereunder and which is
not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the
respective assignee Lender shall provide to the Borrowers and the
Administrative Agent the appropriate Internal Revenue Service Forms
described in Section 2.13.
(h) Nothing herein shall prohibit any Lender from pledging or
assigning any of its rights under this Agreement (including, without
limitation, any right to payment of
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principal and interest under any Note) to any Federal Reserve Bank in
accordance with applicable laws.
9.7 ADJUSTMENTS; SET-OFF.
(a) Each Lender agrees that if any Lender (a "BENEFITTED
LENDER") shall at any time receive any payment of all or part of its
Loans, or interest thereon, or receive any collateral in respect
thereof (whether voluntarily or involuntarily, by set-off, pursuant to
events or proceedings of the nature referred to in clause (e) of
Section 7, or otherwise) in a greater proportion than any such payment
to or collateral received by any other Lender, if any, in respect of
such other Lender's Loans, or interest thereon, such benefitted Lender
shall purchase for cash from the other Lenders a participating interest
in such portion of each such other Lender's Loan, or shall provide such
other Lenders with the benefits of any such collateral, or the proceeds
thereof, as shall be necessary to cause such benefitted Lender to share
the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders; PROVIDED, HOWEVER, that if all or any portion
of such excess payment or benefits is thereafter recovered from such
benefitted Lender, such purchase shall be rescinded, and the purchase
price and benefits returned, to the extent of such recovery, but
without interest. The Borrowers agree that each Lender so purchasing a
portion of another Lender's Loans may exercise all rights of payment
(including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such
portion.
(b) In addition to any rights and remedies of the Lenders
provided by law (including, without limitation, other rights of
set-off), each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by the Borrowers to
the extent permitted by applicable law, upon the occurrence of any
Event of Default, to setoff and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such
Lender or any branch or agency thereof to or for the credit or the
account of the Borrowers, or any part thereof in such amounts as such
Lender may elect, against and on account of the obligations and
liabilities of the Borrowers to such Lender hereunder and claims of
every nature and description of such Lender against the Borrowers, in
any currency, whether arising hereunder, under the Notes or under any
documents contemplated by or referred to herein or therein, as such
Lender may elect, whether or not such Lender has made any demand for
payment and although such obligations, liabilities and claims may be
contingent or unmatured. The aforesaid right of set-off may be
exercised by such Lender against the Borrowers or against any trustee
in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receiver or execution, judgment or attachment creditor of
the Borrowers, or against anyone else claiming through or against the
Borrowers or any such trustee in bankruptcy, debtor in possession,
assignee for the benefit of creditors, receiver, or execution, judgment
or attachment creditor, notwithstanding the fact that such right of
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set-off shall not have been exercised by such Lender prior to the
occurrence of any Event of Default. Each Lender agrees promptly to
notify the Borrowers and the Administrative Agent after any such
set-off and application made by such Lender; PROVIDED, HOWEVER, that
the failure to give such notice shall not affect the validity of such
set-off and application.
9.8 TABLE OF CONTENTS AND SECTION HEADINGS.
The table of contents and the Section and subsection headings herein
are intended for convenience only and shall be ignored in construing this
Agreement.
9.9 COUNTERPARTS.
This Agreement may be executed by one or more of the parties to this
Agreement on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the copies of this Agreement signed by all the parties shall be lodged with
the Borrowers and the Administrative Agent.
9.10 SEVERABILITY.
Any provision of this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining
provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
9.11 INTEGRATION.
This Agreement, the Notes and the other Credit Documents represent the
agreement of the Borrowers, the Administrative Agent and the Lenders with
respect to the subject matter hereof, and there are no promises, undertakings,
representations or warranties by the Administrative Agent, the Borrowers or any
Lender relative to the subject matter hereof not expressly set forth or referred
to herein or in the Notes. Upon execution and delivery of this Agreement, except
with respect to the payment of Fees, the Commitment Letter shall cease to be of
any further force and effect.
9.12 GOVERNING LAW.
This Agreement and the Notes and the rights and obligations of the
parties under this Agreement and the Notes shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York.
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9.13 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
All judicial proceedings brought against the Borrowers and/or any other
Credit Party with respect to this Agreement, any Note or any of the other Credit
Documents may be brought in the courts of the State of North Carolina in
Mecklenburg County or of the United States for the Western District of North
Carolina and, by execution and delivery of this Agreement, each of the Borrowers
and the other Credit Parties accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive jurisdiction of the
aforesaid courts and irrevocably agrees to be bound by any final judgment
rendered thereby in connection with this Agreement from which no appeal has been
taken or is available. Each of the Borrowers and the other Credit Parties
irrevocably agrees that all service of process in any such proceedings in any
such court may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to it at its
address set forth in Section 9.2 or at such other address of which the Agent
shall have been notified pursuant thereto, such service being hereby
acknowledged by the each of the Borrowers and the other Credit Parties to be
effective and binding service in every respect. Each of the Borrowers, the other
Credit Parties, the Agent and the Lenders irrevocably waives any objection,
including, without limitation, any objection to the laying of venue or based on
the grounds of forum non conveniens which it may now or hereafter have to the
bringing of any such action or proceeding in any such jurisdiction. Nothing
herein shall affect the right to serve process in any other manner permitted by
law or shall limit the right of any Lender or the Agent to bring proceedings
against the Borrowers or the other Credit Parties in the court of any other
jurisdiction.
9.14 ARBITRATION.
(a) Notwithstanding the provisions of Section 9.13 to the
contrary, upon demand of any party hereto, whether made before or after
institution of any judicial proceeding (but in no event more than 90
days after the institution of any such judicial proceeding), any
dispute, claim or controversy arising out of, connected with or
relating to this Agreement and other Credit Documents ("Disputes")
between or among parties to this Agreement shall be resolved by binding
arbitration as provided herein. Institution of a judicial proceeding by
a party does not waive the right of that party to demand arbitration
hereunder. Disputes may include, without limitation, tort claims,
counterclaims, disputes as to whether a matter is subject to
arbitration, claims arising from Credit Documents executed in the
future, or claims arising out of or connected with the transaction
reflected by this Agreement.
Arbitration shall be conducted under and governed by the
Commercial Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and Title 9 of the U.S. Code as
currently in effect. All arbitration hearings shall be conducted in
Charlotte, North Carolina. A hearing shall begin within 90 days of
demand for arbitration and all hearings shall be concluded within 120
days of demand for arbitration. These time limitations may not be
extended unless a party shows cause for extension and then no more than
a total extension of 60 days. The expedited procedures
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set forth in Rule 51 ET SEQ. of the Arbitration Rules shall be
applicable to claims of less than $1,000,000. All applicable statutes
of limitation shall apply to any Dispute. A judgment upon the award may
be entered in any court having jurisdiction. Arbitrators shall be
licensed attorneys selected from the Commercial Financial Dispute
Arbitration Panel of the AAA. The parties hereto do not waive
applicable Federal or state substantive law except as provided herein.
Notwithstanding the foregoing, this arbitration provision does not
apply to disputes under or related to Interest Rate Protection
Agreements.
(b) Notwithstanding the preceding binding arbitration
provisions, the Agent, the Lenders, the Borrowers and the other Credit
Parties agree to preserve, without diminution, certain remedies that
the Agent on behalf of the Lenders may employ or exercise freely,
independently or in connection with an arbitration proceeding or after
an arbitration action is brought. The Agent on behalf of the Lenders
shall have the right to proceed in any court of proper jurisdiction or
by self-help to exercise or prosecute the following remedies, as
applicable (i) all rights of self-help including peaceful occupation of
real property and collection of rents, set-off, and peaceful possession
of personal property; and (ii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and filing an involuntary
bankruptcy proceeding. Preservation of these remedies does not limit
the power of an arbitrator to grant similar remedies that may be
requested by a party in a Dispute. Any claim or controversy with regard
to any party's entitlement to such remedies is a Dispute.
(c) The parties hereto agree that they shall not have a remedy
of punitive or exemplary damages against the other in any Dispute and
hereby waive any right or claim to punitive or exemplary damages they
have now or which may arise in the future in connection with any
Dispute whether the Dispute is resolved by arbitration or judicially.
(d) By execution and delivery of this Agreement, each of the
parties hereto accepts, for itself and in connection with its
properties, generally and unconditionally, the non-exclusive
jurisdiction relating to any arbitration proceedings conducted under
the Arbitration Rules in Charlotte, North Carolina and irrevocably
agrees to be bound by any final judgment rendered thereby in connection
with this Agreement from which no appeal has been taken or is
available.
9.15 CONFIDENTIALITY.
The Administrative Agent and each of the Lenders agrees that it will
use reasonable and customary efforts not to disclose without the prior consent
of the Borrowers (other than to its employees, Subsidiaries, Affiliates,
auditors or counsel or to another Lender) any information with respect to the
Borrowers and their Subsidiaries which is furnished pursuant to this Agreement,
any other Credit Document or any documents contemplated by or referred to herein
or therein and which is designated by the Borrowers to the Lenders in writing as
confidential or as to which it is otherwise reasonably clear such information is
not public, except that any Lender may disclose any such information (a) as has
become generally available to the public
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other than by a breach of this Section 9.15, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or federal regulatory body having or claiming to have jurisdiction over
such Lender or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or the OCC or similar organizations (whether in the United States or
elsewhere) or their successors or the National Association of Insurance
Commissioners, (c) as may be required or appropriate in response to any summons
or subpoena or any law, order, regulation or ruling applicable to such Lender or
(d) to any prospective Participant or assignee in connection with any
contemplated transfer pursuant to Section 9.6, PROVIDED that such prospective
transferee shall have been made aware of this Section 9.15 and shall have agreed
to be bound by its provisions as if it were a party to this Agreement.
9.16 ACKNOWLEDGMENTS.
The Borrowers hereby acknowledge that:
(a) each has been advised by counsel in the negotiation,
execution and delivery of each Credit Document;
(b) neither the Administrative Agent nor any Lender has any
fiduciary relationship with or duty to either of the Borrowers arising
out of or in connection with this Agreement and the relationship
between Administrative Agent and Lenders, on one hand, and the
Borrowers, on the other hand, in connection herewith is solely that of
debtor and creditor; and
(c) no joint venture exists among the Lenders or among either
of the Borrowers and the Lenders.
SECTION 10. GUARANTY
10.1 THE GUARANTY.
In order to induce the Lenders to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be received
by the Guarantors from the Loans hereunder, each of the Guarantors hereby agrees
with the Administrative Agent and the Lenders as follows: each Guarantor hereby
unconditionally and irrevocably jointly and severally guarantees as primary
obligor and not merely as surety the full and prompt payment when due, whether
upon maturity, by acceleration or otherwise, of any and all indebtedness of the
Borrowers to the Administrative Agent and the Lenders and all other Obligations
of the Borrowers and the other Credit Parties hereunder (excluding in the case
of Penton USA, in its capacity as a Guarantor, any obligations of Penton USA
under this Credit Agreement or the Notes, in its capacity as a Borrower). If any
or all of the indebtedness of the Borrowers to the Administrative Agent and the
Lenders becomes due and payable hereunder, each Guarantor unconditionally
promises to pay such indebtedness to the Administrative Agent and the Lenders,
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or order, on demand, together with any and all reasonable expenses which may be
incurred by the Administrative Agent or the Lenders in collecting any of the
indebtedness. The word "indebtedness" is used in this Section 10 in its most
comprehensive sense and includes any and all advances, debts, obligations and
liabilities of the Borrowers arising in connection with this Agreement, in each
case, heretofore, now, or hereafter made, incurred or created, whether
voluntarily or involuntarily, absolute or contingent, liquidated or
unliquidated, determined or undetermined, whether or not such indebtedness is
from time to time reduced, or extinguished and thereafter increased or incurred,
whether the Borrowers may be liable individually or jointly with others, whether
or not recovery upon such indebtedness may be or hereafter become barred by any
statute of limitations, and whether or not such indebtedness may be or hereafter
become otherwise unenforceable.
Notwithstanding any provision to the contrary contained herein or in
any other of the Credit Documents, to the extent the obligations of a Guarantor
shall be adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers) then the obligations of each such Guarantor
hereunder shall be limited to the maximum amount that is permissible under
applicable law (whether federal or state and including, without limitation, the
Bankruptcy Code).
10.2 BANKRUPTCY.
Additionally, each of the Guarantors unconditionally and irrevocably
guarantees jointly and severally the payment of any and all indebtedness of the
Borrowers to the Lenders whether or not due or payable by the Borrowers upon the
occurrence of any of the events specified in Section 7(a), and unconditionally
promises to pay such indebtedness to the Administrative Agent for the account of
the Lenders, or order, on demand, in lawful money of the United States. Each of
the Guarantors further agrees that to the extent that the Borrowers or a
Guarantor shall make a payment or a transfer of an interest in any property to
the Administrative Agent or any Lender, which payment or transfer or any part
thereof is subsequently invalidated, declared to be fraudulent or preferential,
or otherwise is avoided, and/or required to be repaid to the Borrowers or a
Guarantor, the estate of the Borrowers or a Guarantor, a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such avoidance or repayment, the
obligation or part thereof intended to be satisfied shall be revived and
continued in full force and effect as if said payment had not been made.
10.3 NATURE OF LIABILITY.
The liability of each Guarantor hereunder is exclusive and independent
of any security for or other guaranty of the indebtedness of the Borrowers
whether executed by any such Guarantor, any other guarantor or by any other
party, and no Guarantor's liability hereunder shall be affected or impaired by
(a) any direction as to application of payment by the Borrowers or by any other
party, or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the indebtedness of the
Borrowers, or (c) any payment on or in reduction of any such other guaranty or
undertaking, or (d) any dissolution, termination or
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increase, decrease or change in personnel by the Borrowers, or (e) any payment
made to the Administrative Agent or the Lenders on the indebtedness which the
Administrative Agent or such Lenders repay the Borrowers pursuant to court order
in any bankruptcy, reorganization, arrangement, moratorium or other debtor
relief proceeding, and each of the Guarantors waives any right to the deferral
or modification of its obligations hereunder by reason of any such proceeding.
10.4 INDEPENDENT OBLIGATION.
The obligations of each Guarantor hereunder are independent of the
obligations of any other guarantor or the Borrowers, and a separate action or
actions may be brought and prosecuted against each Guarantor whether or not
action is brought against any other guarantor or the Borrowers and whether or
not any other Guarantor or the Borrowers is joined in any such action or
actions.
10.5 AUTHORIZATION.
Each of the Guarantors authorizes the Administrative Agent and each
Lender without notice or demand (except as shall be required by applicable
statute and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to (a) renew, compromise, extend, increase,
accelerate or otherwise change the time for payment of, or otherwise change the
terms of the indebtedness or any part thereof in accordance with this Agreement,
including any increase or decrease of the rate of interest thereon, (b) take and
hold security from any guarantor or any other party for the payment of this
Guaranty or the indebtedness and exchange, enforce waive and release any such
security, (c) apply such security and direct the order or manner of sale thereof
as the Administrative Agent and the Lenders in their discretion may determine
and (d) release or substitute any one or more endorsers, guarantors, the
Borrowers or other obligors.
10.6 RELIANCE.
It is not necessary for the Administrative Agent or the Lenders to
inquire into the capacity or powers of the Borrowers or the officers, directors,
partners or Administrative Agents acting or purporting to act on its behalf, and
any indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
10.7 WAIVER.
(a) Each of the Guarantors waives any right (except as shall
be required by applicable statute and cannot be waived) to require the
Administrative Agent or any Lender to (i) proceed against the
Borrowers, any other guarantor or any other party, (ii) proceed against
or exhaust any security held from the Borrowers, any other guarantor or
any other party, or (iii) pursue any other remedy in the Administrative
Agent's or any Lender's power whatsoever. Each of the Guarantors waives
any defense based on or
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arising out of any defense of the Borrowers, any other guarantor or any
other party other than payment in full of the indebtedness, including
without limitation any defense based on or arising out of the
disability of the Borrowers, any other guarantor or any other party, or
the unenforceability of the indebtedness or any part thereof from any
cause, or the cessation from any cause of the liability of the
Borrowers other than payment in full of the indebtedness. The
Administrative Agent or any of the Lenders may, at their election,
foreclose on any security held by the Administrative Agent or a Lender
by one or more judicial or nonjudicial sales, whether or not every
aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or
remedy the Administrative Agent and any Lender may have against the
Borrowers or any other party, or any security, without affecting or
impairing in any way the liability of any Guarantor hereunder except to
the extent the indebtedness has been paid. Each of the Guarantors
waives any defense arising out of any such election by the
Administrative Agent and each of the Lenders, even though such election
operates to impair or extinguish any right of reimbursement or
subrogation or other right or remedy of the Guarantors against the
Borrowers or any other party or any security.
(b) Each of the Guarantors waives all presentments, demands
for performance, protests and notices, including without limitation
notices of nonperformance, notice of protest, notices of dishonor,
notices of acceptance of this Guaranty, and notices of the existence,
creation or incurring of new or additional indebtedness. Each Guarantor
assumes all responsibility for being and keeping itself informed of the
Borrowers' financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the indebtedness
and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that neither the
Administrative Agent nor any Lender shall have any duty to advise such
Guarantor of information known to it regarding such circumstances or
risks.
(c) Each of the Guarantors hereby agrees it will not exercise
any rights of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
U.S. Bankruptcy Code, or otherwise) to the claims of the Lenders
against the Borrowers or any other guarantor of the indebtedness of the
Borrowers owing to the Lenders (collectively, the "OTHER PARTIES") and
all contractual, statutory or common law rights of reimbursement,
contribution or indemnity from any Other Party which it may at any time
otherwise have as a result of this Guaranty until such time as the
Loans hereunder shall have been paid and the Commitments have been
terminated. Each of the Guarantors hereby further agrees not to
exercise any right to enforce any other remedy which the Administrative
Agent and the Lenders now have or may hereafter have against any Other
Party, any endorser or any other guarantor of all or any part of the
indebtedness of the Borrowers and any benefit of, and any right to
participate in, any security or collateral given to or for the benefit
of the Lenders to secure payment of the indebtedness of the Borrowers
until such time as the Loans hereunder shall have been paid and the
Commitments have been terminated.
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10.8 LIMITATION ON ENFORCEMENT.
The Lenders agree that this Guaranty may be enforced only by the action
of the Administrative Agent acting upon the instructions of the Majority Lenders
and that no Lender shall have any right individually to seek to enforce or to
enforce this Guaranty, it being understood and agreed that such rights and
remedies may be exercised by the Administrative Agent for the benefit of the
Lenders upon the terms of this Agreement. The Lenders further agree that this
Guaranty may not be enforced against any director, officer, employee or
stockholder of the Guarantors.
10.9 CONFIRMATION OF PAYMENT.
The Administrative Agent and the Lenders will, upon request after
payment of the indebtedness and obligations which are the subject of this
Guaranty and termination of the commitments relating thereto, confirm to the
Borrowers, the Guarantors or any other Person that such indebtedness and
obligations have been paid and the commitments relating thereto terminated,
subject to the provisions of Section 10.2.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered by its proper and duly authorized officers as of the
day and year first above written.
BORROWERS: PENTON MEDIA, INC.,
A DELAWARE CORPORATION
BY: /S/ DANIEL J. RAMELLA
NAME: DANIEL J. RAMELLA
TITLE: PRESIDENT AND CHIEF OPERATING OFFICER
PENTON MEDIA LIMITED,
AN ENGLISH LIMITED LIABILITY COMPANY
BY: /S/ DANIEL J. RAMELLA
NAME: DANIEL J. RAMELLA
TITLE: DIRECTOR
SUBSIDIARY GUARANTORS: CURTIN & PEASE/PENECO, INC.
A FLORIDA CORPORATION
BY: /S/ DANIEL J. RAMELLA
NAME: DANIEL J. RAMELLA
TITLE: VICE PRESIDENT
D-M ACQUISITION CORP.,
AN ILLINOIS CORPORATION
BY: /S/ WILLIAM ZIMMERMAN
NAME: WILLIAN ZIMMERMAN
TITLE:SECRETARY
<PAGE> 89
AGENTS AND LENDERS: FIRST UNION NATIONAL BANK,
AS ADMINISTRATIVE AGENT AND AS A LENDER
BY: /S/ BRUCE W. LOFTON
NAME: BRUCE W. LOFTON
TITLE: SENIOR VICE PRESIDENT
KEY CORPORATE CAPITAL INC.,
AS CO-AGENT AND AS A LENDER
BY: /S/ KENNETH J. KEELER
NAME: KENNETH J. KEELER
TITLE: SENIOR PORTFOLIO MANAGER
<PAGE> 1
Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made on August 7, 1998,1998
between Penton Media, Inc., a Delaware corporation (the "COMPANY"), and William
C. Donohue ("EXECUTIVE").
This Employment Agreement is entered into as a condition precedent
to the consummation of the transactions contemplated in a Combination Agreement
dated as of May 21, 1998 by and among the Company, Executive and other parties
(the "COMBINATION AGREEMENT"). Pursuant to the Combination Agreement, Donohue
Meehan Publishing Company, an Illinois corporation, is being merged with and
into D-M Acquisition Corp., an Illinois corporation wholly-owned by the Company
that is changing its name to Donohue Meehan Publishing Company in connection
with the merger. The corporation surviving the merger as Donohue Meehan
Publishing Company is referred to herein as "D.M. PUB."; the original Donohue
Meehan Publishing Company is referred to herein as "D.M. PUB.'S PREDECESSOR".
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 employment with the Company, upon the terms and conditions set forth in
this Agreement, for the period beginning at the Effective Time (as defined in
the Combination Agreement) and ending on the second anniversary of the Effective
Time (the "EMPLOYMENT PERIOD").
2. POSITION AND DUTIES.
(a) During the Employment Period, Executive shall serve as the
President of D.M. Pub., and shall have the normal duties, responsibilities and
authority of an executive serving in such position, under the direction of the
Board of Directors of the Company (the "BOARD"), the Chief Executive Officer and
the Chief Operating Officer of the Company and the Board of Directors of D.M.
Pub.
(b) Until the Company's 2000 annual meeting of stockholders,
Executive shall serve as a director of the Company.
(c) Executive shall report to the Chief Operating Officer of the
Company.
(d) During the Employment Period, Executive shall devote his full
business time and attention (except for permitted vacation periods, reasonable
periods of illness or other incapacity and, provided such activities do not
exceed those in which Executive has engaged in the past while serving as the
President of D.M. Pub.'s predecessor, participation in charitable and civic
endeavors and management of Executive's personal investments and business
interests) to the business and affairs of D.M. Pub.; provided that the Company
may require Executive to devote up to 10% of his
<PAGE> 2
business time to the business and affairs of the Company and its other
subsidiaries and affiliates. Executive shall perform his duties and
responsibilities to the best of his abilities in a diligent, trustworthy,
businesslike and efficient manner.
(e) Executive shall be based at a location in, and shall perform
his duties and responsibilities principally in, the Chicago metropolitan area,
and shall not be required to travel outside that area significantly more
extensively than he has done in the past in the ordinary course of the business
of D.M. Pub.'s predecessor.
(f) Nothing contained in this Paragraph 2 shall constitute a
waiver by either the Company or Executive of any of the provisions of Section
2.4 (g)(iv) of the Combination Agreement.
3. COMPENSATION AND BENEFITS.
(a) SALARY. The Company agrees to pay Executive a salary during
the Employment Period, in semimonthly installments. Executive's salary shall be
$250,000 per annum.
(b) BONUS. If, based on the final determinations of the Surviving
Corporation's Pre- Tax Profits for 1998 and 1999 pursuant to Section 2.4 of the
Combination Agreement, the total Contingent Cash Payments which the D-M
Shareholders, in the aggregate, would have become entitled to receive pursuant
to Section 2.4(g)(i) of the Combination Agreement would have exceeded $4.0
million had there been no $4.0 million limitation on the total amount of such
Contingent Cash Payments, the Company shall pay to Executive, on the date on
which the Employment Period is scheduled to end, an amount equal to (x) one-half
of such excess divided by (y) four and one-half. Notwithstanding the foregoing:
(i) the amount of the bonus shall not exceed $114,000 and (ii) if any event
described in clause (B) of the final sentence of Section 2.4(g)(i) of the
Combination Agreement occurs, the amount of the bonus shall be $114,000. (Thus,
for example, if the total amount of Contingent Cash Payments which the D-M
Shareholders, in the aggregate, become entitled to receive is less than $4.0
million, the amount of the bonus will be zero dollars, and if the total amount
of Contingent Cash Payments which the D-M Shareholders, in the aggregate, become
entitled to receive is $4.0 million but such total amount would have been $5.026
million but for the $4.0 million limitation, the amount of the bonus will be
$114,000). For purposes of this Agreement, any bonus will be deemed earned on
(but not until) the date on which the Employment Period is scheduled to end.
(c) EXPENSE REIMBURSEMENT. The Company shall reimburse Executive
for all reasonable expenses incurred by him in the course of performing his
duties under this Agreement which 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.
(d) STANDARD BENEFITS PACKAGE. In addition to the salary and any
bonus earned, Executive shall be entitled during the Employment Period to
participate in the Company's standard benefits package in effect from time to
time, on the same basis (including sharing of costs) as other
2
<PAGE> 3
executives of the Company having principal responsibility for magazines
comparable in profit contribution to those for which Executive has principal
responsibility; provided that (i) any awards made to Executive under the Penton
1998 Stock Awards Plan (as defined in the Combination Agreement) prior to
January 1, 2000 (or, if earlier, the occurrence of any event described in clause
(B) of the final sentence of Section 2.4(g)(i) of the Combination Agreement)
shall be limited to non-qualified options and (ii) Executive shall be entitled
to vacation at the rate of four weeks per calendar year. In order to be provided
such employee benefits (other than vacation), Executive shall satisfy such
requirements for eligibility and coverage as may be in force from time to time
during the Employment Period taking into account the provisions of the second
sentence of Section 7.8(i) of the Combination Agreement.
4. TERMINATION.
(a) Notwithstanding Paragraph 1 hereof, the Employment Period
shall end early upon the first to occur of any of the following events:
(i) Executive's death;
(ii) 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 for a period of more than six (6)
consecutive months ("TERMINATION FOR DISABILITY");
(iii) the Company's termination of Executive's employment
for Cause ("TERMINATION FOR CAUSE");
(iv) the Company's termination of Executive's employment
other than a Termination for Disability or a
Termination for Cause ("TERMINATION WITHOUT CAUSE");
or
(v) Executive's termination of Executive's employment for
Good Reason, by means of written notice to the
Company identifying such termination as a Termination
by Executive for Good Reason ("TERMINATION BY
EXECUTIVE FOR GOOD REASON").
(b) For purposes of this Agreement, "CAUSE" shall mean:
(i) the commission by Executive of a felony;
(ii) the commission by Executive of any act involving
fraud or dishonesty with respect to the Company or
any of its subsidiaries or affiliates which causes
harm or damage material to them as a whole;
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(iii) gross negligence or willful misconduct by Executive
related to his duties and responsibilities hereunder
which causes harm or damage material to the Company
and its subsidiaries and affiliates as a whole;
(iv) 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 shall not
constitute such repudiation or abandonment);
(v) breach by Executive of any of the agreements in
Paragraph 7 hereof; or
(vi) 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.
(c) For purposes of this Agreement, "GOOD REASON" shall mean 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.
5. POST-EMPLOYMENT PERIOD PAYMENTS.
(a) If the Employment Period ends on the date on which it is
scheduled to end, or if the Employment Period ends early for any reason,
Executive shall thereafter be entitled to (and only to):
(i) any salary or bonus which has been earned but is
unpaid, any reimbursable expenses which have been
incurred but are unpaid, and any vacation days which
have accrued but are unused and unexpired under the
Company's vacation policy, as of the end of the
Employment Period;
(ii) any plan benefits which by their terms extend beyond
termination of Executive's employment;
(iii) any benefits to which Executive is entitled under the
Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"); and
(iv) any other amount(s) payable pursuant to the
succeeding provisions of this Paragraph 5.
(b) In the event of Executive's death during the Employment
Period, the Company shall pay to Executive's estate (or such person or persons
as Executive may designate in a written instrument signed by him) amounts equal
to the amounts Executive would have received as salary and bonus had the
Employment Period remained in effect until the date on which it was scheduled to
end, at the times such amounts would have been paid.
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(c) If the Employment Period ends early on account of
Termination for Cause: (i) the Company shall pay Executive an amount equal to
that Executive would have received as salary 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; and (ii) the Company shall pay to Executive an
amount equal to any amount Executive would have received as bonus had the
Employment Period remained in effect until the date on which it was scheduled to
end, reduced to the fraction thereof of which the numerator is the number of
days during the Employment Period which have elapsed as of the end of the
Employment Period and the denominator is 731, at the time such amount would have
been paid.
(d) If the Employment Period ends early on account of a
Termination without Cause or a Termination by Executive for Good Reason, the
Company: (i) shall pay to Executive amounts equal to the amounts Executive would
have received as salary and bonus had the Employment Period remained in effect
until the date on which it was scheduled to end, at the times such amounts would
have been paid, less payments, if any, to which Executive is entitled during the
payment period under any disability benefit plan or the like in which Executive
has participated as an employee of the Company; and (ii) shall permit Executive
to participate, until the date on which the Employment Period was scheduled to
end, in any medical, dental and life insurance programs included in the
Company's standard benefits package in effect from time to time, on the same
basis (including sharing of costs) as other executives of the Company having
principal responsibility for magazines comparable in profit contribution to
those for which Executive had principal responsibility at the end of the
Employment Period, in the case of each of such programs to the extent
participation by a former employee is permitted by the terms thereof. It is
expressly understood that the Company's payment obligations under this (d) shall
cease in the event Executive breaches any of his agreements in Paragraph 6 or 7
hereof.
6. 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
D.M. Pub.'s predecessor 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 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 three 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,
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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.
7. NON-COMPETE, NON-SOLICITATION.
(a) Executive acknowledges that in the course of his
employment with the Company he will become familiar, and during the course of
his employment by D.M. Pub.'s predecessor 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 three 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,
stockholder, investor or employee of or in any other corporation or enterprise
or otherwise, engage or be engaged in, or assist any other person, firm,
corporation or enterprise in engaging or being engaged in, anywhere in the
world, the publishing or production of any Business Information Product (as
defined in the Combination Agreement) that competes with a Business Information
Product being published or produced by the Company or any of its subsidiaries or
affiliates when the Employment Period ends.
(c) Executive further agrees that during the Employment
Period and for three years thereafter 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/her employ.
(d) Nothing in this Paragraph shall prohibit Executive from
being: (i) a stockholder 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.
(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.
(f) The provisions of (b) of this Paragraph shall not apply
following a Termination without Cause or a Termination by Executive for Good
Reason.
8. 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 6 or 7 hereof were not performed in
accordance with their specific terms or were otherwise breached and that money
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damages would be an inadequate remedy for any such non-performance or breach.
Therefore, the Company or its permitted 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).
9. 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) with the
exception of the Combination Agreement, 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.
10. SURVIVAL. Subject to any limits on applicability
contained therein, Paragraphs 6, 7 and 8 hereof shall survive and continue in
full force in accordance with their terms notwithstanding any termination of the
Employment Period.
11. 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:
William C. Donohue
1300 No. Lakeshore Drive
Chicago, Illinois 60610
Notices to the Company:
Thomas L. Kemp
Chief Executive Officer
Penton Media, Inc.
1100 Superior Avenue
Cleveland, Ohio 44114
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.
12. 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
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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.
13. COMPLETE AGREEMENT. This Agreement embodies the complete
agreement and understanding between the parties with respect to the subject
matter hereof and effective upon the commencement of the Employment Period
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.
14. 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.
15. 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: (i) any subsidiary or affiliate of the
Company in the event all or any substantial part of the business to which
Executive's duties under this Agreement relate are transferred thereto on or
after January 1, 2000 and (ii) any successor to the Company by merger or
consolidation or purchase of all or substantially all of the Company's assets;
in each case provided such transferee or successor assumes the liabilities of
the Company hereunder.
16. CHOICE OF LAW. This Agreement shall be governed by the
internal law, and not the laws of conflicts, of the State of Ohio.
17. 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 on the date
first written above.
PENTON MEDIA, INC.
By: /s/ Thomas L. Kemp
-----------------------------
Thomas L. Kemp
Chief Executive Officer
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EXECUTIVE
By: /s/ William C. Donohue
---------------------------
William C. Donohue
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Exhibit 10.3
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made on August 7, 1998 between Penton
Media, Inc., a Delaware corporation (the "COMPANY"), and John J. Meehan
("EXECUTIVE").
This Employment Agreement is entered into as a condition precedent
to the consummation of the transactions contemplated in a Combination Agreement
dated as of May 21, 1998 by and among the Company, Executive and other parties
(the "COMBINATION AGREEMENT"). Pursuant to the Combination Agreement, Donohue
Meehan Publishing Company, an Illinois corporation, is being merged with and
into D-M Acquisition Corp., an Illinois corporation wholly-owned by the Company
that is changing its name to Donohue Meehan Publishing Company in connection
with the merger. The corporation surviving the merger as Donohue Meehan
Publishing Company is referred to herein as "D.M. PUB."; the original Donohue
Meehan Publishing Company is referred to herein as "D.M. PUB.'S PREDECESSOR".
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 employment with the Company, upon the terms and conditions set forth in
this Agreement, for the period beginning at the Effective Time (as defined in
the Combination Agreement) and ending on the second anniversary of the Effective
Time (the "EMPLOYMENT PERIOD").
2. POSITION AND DUTIES.
(a) During the Employment Period, Executive shall serve as the
Executive Vice President of D.M. Pub., and shall have the normal duties,
responsibilities and authority of an executive serving in such position, under
the direction of the Board of Directors of the Company (the "BOARD"), the Chief
Executive Officer and the Chief Operating Officer of the Company and the Board
of Directors of D.M. Pub.
(b) Until the Company's 2000 annual meeting of stockholders,
Executive shall serve as a director of the Company.
(c) Executive shall report to the Chief Operating Officer of the
Company.
(d) During the Employment Period, Executive shall devote his full
business time and attention (except for permitted vacation periods, reasonable
periods of illness or other incapacity and, provided such activities do not
exceed those in which Executive has engaged in the past while serving as the
Executive Vice President of D.M. Pub.'s predecessor, participation in charitable
and civic endeavors and management of Executive's personal investments and
business interests) to the business and affairs of D.M. Pub.; provided that the
Company may require Executive to devote up to 10% of his business time to the
business and affairs of the Company and its other subsidiaries and
<PAGE> 2
affiliates. Executive shall perform his duties and responsibilities to the
best of his abilities in a diligent, trustworthy, businesslike and efficient
manner.
(e) Executive shall be based at a location in, and shall perform
his duties and responsibilities principally in, the Philadelphia metropolitan
area, and shall not be required to travel outside that area significantly more
extensively than he has done in the past in the ordinary course of the business
of D.M. Pub.'s predecessor.
(f) Nothing contained in this Paragraph 2 shall constitute a
waiver by either the Company or Executive of any of the provisions of Section
2.4 (g)(iv) of the Combination Agreement.
3. COMPENSATION AND BENEFITS.
(a) SALARY. The Company agrees to pay Executive a salary during
the Employment Period, in semimonthly installments. Executive's salary shall be
$250,000 per annum.
(b) BONUS. If, based on the final determinations of the Surviving
Corporation's Pre- Tax Profits for 1998 and 1999 pursuant to Section 2.4 of the
Combination Agreement, the total Contingent Cash Payments which the D-M
Shareholders, in the aggregate, would have become entitled to receive pursuant
to Section 2.4(g)(i) of the Combination Agreement would have exceeded $4.0
million had there been no $4.0 million limitation on the total amount of such
Contingent Cash Payments, the Company shall pay to Executive, on the date on
which the Employment Period is scheduled to end, an amount equal to (x) one-half
of such excess divided by (y) four and one-half. Notwithstanding the foregoing:
(i) the amount of the bonus shall not exceed $114,000 and (ii) if any event
described in clause (B) of the final sentence of Section 2.4(g)(i) of the
Combination Agreement occurs, the amount of the bonus shall be $114,000. (Thus,
for example, if the total amount of Contingent Cash Payments which the D-M
Shareholders, in the aggregate, become entitled to receive is less than $4.0
million, the amount of the bonus will be zero dollars, and if the total amount
of Contingent Cash Payments which the D-M Shareholders, in the aggregate, become
entitled to receive is $4.0 million but such total amount would have been $5.026
million but for the $4.0 million limitation, the amount of the bonus will be
$114,000). For purposes of this Agreement, any bonus will be deemed earned on
(but not until) the date on which the Employment Period is scheduled to end.
(c) EXPENSE REIMBURSEMENT. The Company shall reimburse Executive
for all reasonable expenses incurred by him in the course of performing his
duties under this Agreement which 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.
(d) STANDARD BENEFITS PACKAGE. In addition to the salary and any
bonus earned, Executive shall be entitled during the Employment Period to
participate in the Company's standard benefits package in effect from time to
time, on the same basis (including sharing of costs) as other executives of the
Company having principal responsibility for magazines comparable in profit
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contribution to those for which Executive has principal responsibility; provided
that (i) any awards made to Executive under the Penton 1998 Stock Awards Plan
(as defined in the Combination Agreement) prior to January 1, 2000 (or, if
earlier, the occurrence of any event described in clause (B) of the final
sentence of Section 2.4(g)(i) of the Combination Agreement) shall be limited to
non-qualified options and (ii) Executive shall be entitled to vacation at the
rate of four weeks per calendar year. In order to be provided such employee
benefits (other than vacation), Executive shall satisfy such requirements for
eligibility and coverage as may be in force from time to time during the
Employment Period taking into account the provisions of the second sentence of
Section 7.8(i) of the Combination Agreement.
4. TERMINATION.
(a) Notwithstanding Paragraph 1 hereof, the Employment Period
shall end early upon the first to occur of any of the following events:
(i) Executive's death;
(ii) 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 for a period of more than six (6)
consecutive months ("TERMINATION FOR DISABILITY");
(iii) the Company's termination of Executive's employment
for Cause ("TERMINATION FOR CAUSE");
(iv) the Company's termination of Executive's employment
other than a Termination for Disability or a
Termination for Cause ("TERMINATION WITHOUT CAUSE");
or
(v) Executive's termination of Executive's employment for
Good Reason, by means of written notice to the
Company identifying such termination as a Termination
by Executive for Good Reason ("TERMINATION BY
EXECUTIVE FOR GOOD REASON").
(b) For purposes of this Agreement, "CAUSE" shall mean:
(i) the commission by Executive of a felony;
(ii) the commission by Executive of any act involving
fraud or dishonesty with respect to the Company or
any of its subsidiaries or affiliates which causes
harm or damage material to them as a whole;
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(iii) gross negligence or willful misconduct by Executive
related to his duties and responsibilities hereunder
which causes harm or damage material to the Company
and its subsidiaries and affiliates as a whole;
(iv) 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 shall not
constitute such repudiation or abandonment);
(v) breach by Executive of any of the agreements in
Paragraph 7 hereof; or
(vi) 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.
(c) For purposes of this Agreement, "GOOD REASON" shall mean 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.
5. POST-EMPLOYMENT PERIOD PAYMENTS.
(a) If the Employment Period ends on the date on which it is
scheduled to end, or if the Employment Period ends early for any reason,
Executive shall thereafter be entitled to (and only to):
(i) any salary or bonus which has been earned but is
unpaid, any reimbursable expenses which have been
incurred but are unpaid, and any vacation days which
have accrued but are unused and unexpired under the
Company's vacation policy, as of the end of the
Employment Period;
(ii) any plan benefits which by their terms extend beyond
termination of Executive's employment;
(iii) any benefits to which Executive is entitled under the
Consolidated Omnibus Budget Reconciliation Act of
1985, as amended ("COBRA"); and
(iv) any other amount(s) payable pursuant to the
succeeding provisions of this Paragraph 5.
(b) In the event of Executive's death during the Employment
Period, the Company shall pay to Executive's estate (or such person or persons
as Executive may designate in a written instrument signed by him) amounts equal
to the amounts Executive would have received as salary and bonus had the
Employment Period remained in effect until the date on which it was scheduled to
end, at the times such amounts would have been paid.
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(c) If the Employment Period ends early on account of
Termination for Cause: (i) the Company shall pay Executive an amount equal to
that Executive would have received as salary 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; and (ii) the Company shall pay to Executive an
amount equal to any amount Executive would have received as bonus had the
Employment Period remained in effect until the date on which it was scheduled to
end, reduced to the fraction thereof of which the numerator is the number of
days during the Employment Period which have elapsed as of the end of the
Employment Period and the denominator is 731, at the time such amount would have
been paid.
(d) If the Employment Period ends early on account of a
Termination without Cause or a Termination by Executive for Good Reason, the
Company: (i) shall pay to Executive amounts equal to the amounts Executive would
have received as salary and bonus had the Employment Period remained in effect
until the date on which it was scheduled to end, at the times such amounts would
have been paid, less payments, if any, to which Executive is entitled during the
payment period under any disability benefit plan or the like in which Executive
has participated as an employee of the Company; and (ii) shall permit Executive
to participate, until the date on which the Employment Period was scheduled to
end, in any medical, dental and life insurance programs included in the
Company's standard benefits package in effect from time to time, on the same
basis (including sharing of costs) as other executives of the Company having
principal responsibility for magazines comparable in profit contribution to
those for which Executive had principal responsibility at the end of the
Employment Period, in the case of each of such programs to the extent
participation by a former employee is permitted by the terms thereof. It is
expressly understood that the Company's payment obligations under this (d) shall
cease in the event Executive breaches any of his agreements in Paragraph 6 or 7
hereof.
6. 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
D.M. Pub.'s predecessor 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 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 three 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,
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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.
7. NON-COMPETE, NON-SOLICITATION.
(a) Executive acknowledges that in the course of his
employment with the Company he will become familiar, and during the course of
his employment by D.M. Pub.'s predecessor 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 three 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,
stockholder, investor or employee of or in any other corporation or enterprise
or otherwise, engage or be engaged in, or assist any other person, firm,
corporation or enterprise in engaging or being engaged in, anywhere in the
world, the publishing or production of any Business Information Product (as
defined in the Combination Agreement) that competes with a Business Information
Product being published or produced by the Company or any of its subsidiaries or
affiliates when the Employment Period ends.
(c) Executive further agrees that during the Employment
Period and for three years thereafter 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/her employ.
(d) Nothing in this Paragraph shall prohibit Executive from
being: (i) a stockholder 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.
(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.
(f) The provisions of (b) of this Paragraph shall not apply
following a Termination without Cause or a Termination by Executive for Good
Reason.
8. 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 6 or 7 hereof were not performed in
accordance with their specific terms or were otherwise breached and that money
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damages would be an inadequate remedy for any such non-performance or breach.
Therefore, the Company or its permitted 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).
9. 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) with the
exception of the Combination Agreement, 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.
10. SURVIVAL. Subject to any limits on applicability
contained therein, Paragraphs 6, 7 and 8 hereof shall survive and continue in
full force in accordance with their terms notwithstanding any termination of the
Employment Period.
11. 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:
John J. Meehan
68 Briarwood Drive
Holland, Pennsylvania 18966
Notices to the Company:
Thomas L. Kemp
Chief Executive Officer
Penton Media, Inc.
1100 Superior Avenue
Cleveland, Ohio 44114
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.
12. 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
7
<PAGE> 8
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.
13. COMPLETE AGREEMENT. This Agreement embodies the complete
agreement and understanding between the parties with respect to the subject
matter hereof and effective upon the commencement of the Employment Period
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.
14. 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.
15. 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: (i) any subsidiary or affiliate of the
Company in the event all or any substantial part of the business to which
Executive's duties under this Agreement relate are transferred thereto on or
after January 1, 2000 and (ii) any successor to the Company by merger or
consolidation or purchase of all or substantially all of the Company's assets;
in each case provided such transferee or successor assumes the liabilities of
the Company hereunder.
16. CHOICE OF LAW. This Agreement shall be governed by the
internal law, and not the laws of conflicts, of the State of Ohio.
17. 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 on the date
first written above.
PENTON MEDIA, INC.
By: /s/ Thomas L. Kemp
-------------------------
Thomas L. Kemp
Chief Executive Officer
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EXECUTIVE
By: /s/ John J. Meehan
---------------------------
John J. Meehan
9
<PAGE> 1
Exhibit 10.4
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("AGREEMENT") made as of July 16,
1998, between Penton Media, Inc. (formerly known as Penton Publishing, Inc.), a
Delaware corporation (the "COMPANY"), and David Nussbaum ("EXECUTIVE")
WITNESSETH:
WHEREAS, Executive desires to become an executive employee of
the Company, and the Company desires to employ Executive as an executive
employee;
WHEREAS, pursuant to a Combination Agreement among the Company
and other parties, all of the outstanding capital stock of the Company will be
distributed by Pittway Corporation to the shareholders of Pittway Corporation
(the "SPINOFF");
WHEREAS, as a result of the Spinoff, the Company will become
publicly held;
WHEREAS, the Company recognizes that, as is the case with many
publicly held companies, the possibility of a Change of Control (as that term is
hereinafter defined) will exist;
WHEREAS, the Company wishes to assure itself of both present
and future continuity of management in the event of any Change of Control;
NOW, THEREFORE, 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 employment with the Company, upon the terms and conditions set
forth in this Agreement for the period beginning on the Effective Date (as
defined in paragraph 20) and ending as provided in paragraph 5 hereof (the
"EMPLOYMENT PERIOD").
2. POSITION AND DUTIES.
(a) During the Employment Period, Executive shall serve as the
Group President of the Company's New York Division (the "DIVISION"), with
initial responsibility for the Company's electronics group and independent
exhibitions and shall have the normal duties, responsibilities and authority of
an executive serving in such position with such responsibilities, subject to the
power of the Board of Directors of the Company (the "BOARD") or the Chief
Executive Officer of the Company to reasonably expand or limit such duties,
responsibilities and authority, either generally or in specific instances.
Executive also shall have the title Executive Vice President of the Company.
(b) Executive shall report to the Chief Executive Officer or
the President and Chief Operating Officer of the Company.
<PAGE> 2
(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 have offices at the Company's Hasbrouck
Heights and New York City offices, and shall perform his duties and
responsibilities principally from those locations. In the event the Company and
the Executive agree at any time that the Executive should relocate to the
Cleveland, Ohio area, the Company will reimburse all the normal costs of an
executive relocation.
3. COMPENSATION AND BENEFITS.
(a) SALARY. The Company agrees to pay Executive a salary
during the Employment Period, in semi-monthly installments. Executive's annual
salary for 1998 shall be $300,000. Executive's annual salary for the 1999
calendar year shall be $345,000. 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 in any event no less frequently than annually and may, in its sole
discretion, increase it.
(b) BONUS(ES).
(i) SIGNING BONUS. In order to mitigate any loss
Executive would incur relative to Executive's United
News & Media options as a result of the execution of
this Agreement, Executive shall receive a signing
bonus of $200,000 payable, at the Executive's
election, in either (A) cash (less applicable
withholding taxes) upon the Effective Date, (B) such
number of shares of the Company's Common Stock as is
determined by dividing $200,000 by the average
closing price per share of the Company's Common Stock
on the New York Stock Exchange for the five trading
days preceding the Effective Date, to be delivered to
Executive on the first anniversary of the Effective
Date, or (C) any combination thereof, provided that
Executive shall make appropriate tax withholding
arrangements if he elects payment in shares of the
Company's Common Stock pursuant to the foregoing (B)
or (C).
(ii) ANNUAL BONUS. Subject to approval by the Compensation
Committee of the Board (or if there is no such
Committee, the Board), beginning in the 1998 calendar
year, Executive shall be eligible for an annual bonus
based on the achievement of specified Division and
Company goals. The Division goal shall be based on
the Division's budgeted 1998 contribution profit of
$16,307,000. "Contribution profit" shall mean an
amount equal to the direct revenues of the New York
Division less direct operating expenses before any
allocation of corporate overheads as calculated by
the Company. The Company goal shall be based on the
Company's adjusted budgeted 1998
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earnings before interest, taxes, depreciation and
amortization ("EBITDA"), adjusted to take into
account the Spinoff, the related acquisition of the
operations of Donohue-Meehan Publishing Company for
the remainder of 1998 following the Spinoff, the
costs associated with the changes in the Company's
structure and status resulting from the Spinoff and
the exclusion of the operations of Curtin &
Pease/Peneco, Inc. ("Adjusted Budgeted 1998 EBITDA").
The Company's Adjusted Budgeted 1998 EBITDA is
expected to be determined on or before July 31, 1998,
and shall be used for purposes of determining 1998
annual incentive compensation of the Executive and
other comparable executive officers of the Company.
The total bonus opportunity for 1998 at budget as
adjusted is $150,000, which amount shall be
guaranteed for 1998 regardless of Division or Company
performance. Executive shall receive additional
annual bonus for 1998 as follows: two percent of all
dollar amounts of the Division's contribution profit
in excess of the target specified above; and one
percent of all dollar amounts of the Company's EBITDA
in excess of Adjusted Budgeted 1998 EBITDA. Annual
bonus opportunities for subsequent years shall be
based on principles similar to the foregoing and
shall be comparable to bonus opportunities for
similarly situated Executives of the Company, but
with a minimum bonus opportunity of $200,000 per
year.
(c) LONG TERM INCENTIVE.
Subject to approval by the Compensation Committee of
the Board (or, if there is no such Committee, the
Board), Executive will be granted an award entitling
him to earn additional long-term incentive
compensation over the 1998, 1999 and 2000 calendar
years up to $450,000 (the "PERFORMANCE AWARD"). Such
Performance Award shall become 100% vested on
December 31, 2000, if Executive remains an employee
of the Company until that date and
(A) the Division's cumulative contribution
profit for 1998, 1999 and 2000 attributable
solely to Organic Growth (as hereinafter
defined), equals or exceeds $56,627,000; or
(B) the Division, through a combination of
Organic Growth and Acquisition Growth (as
hereinafter defined), achieves $30,000,000
or more in contribution profit for the year
2000.
For purposes of this Agreement, "ORGANIC GROWTH"
shall mean business generated by employing the
current resources of the Division or Company and
further resources generated by Organic Growth,
including expansion of existing business and creation
of new businesses from the existing operations or
resources of the Division or Company.
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<PAGE> 4
For purposes of this Agreement, "ACQUISITION GROWTH"
shall mean business generated by employing resources
not currently held by the Division that are purchased
or acquired by the Division from unrelated third
parties.
Executive also may become partially vested in such
Performance Award upon the termination of his
employment with the Company for Good Reason (as
hereinafter defined) or the termination of his
employment by the Company other than for Cause (as
hereinafter defined) after December 31, 1998 and
before December 31, 2000, based on the following
schedule, if the following performance targets have
been met or exceeded by the Division:
(X) if the Executive's employment is terminated
in the circumstances described in this
sentence during 1999 and the Division's 1998
contribution profit equaled or exceeded
$16,307,000, Executive shall be vested upon
such termination in 25% of such Performance
Award; and
(Y) if the Executive's employment is terminated
in the circumstances described in this
sentence during 2000 and the Division's
cumulative contribution profit for 1998 and
1999 equaled or exceeded $35,057,000,
Executive shall be vested upon such
termination in 60% of such Performance
Award.
However, if Executive's employment is terminated
prior to December 31, 2000 by the Company for Cause
or by the Executive's voluntary resignation other
than for Good Reason, the Performance Award shall be
forfeited.
Notwithstanding the foregoing, in the case of a
Change of Control (as hereinafter defined) during
1998, 1999 or 2000, if Executive's employment with
the Company is terminated by the Company other than
for Cause or by the Executive for Good Reason during
the two year period following such Change of Control,
Executive shall be 100% vested in such Performance
Award upon such termination of employment.
Any Performance Award that becomes payable shall be
paid to the Executive, at the Executive's election,
as soon as reasonably practicable after the Executive
becomes entitled to the Performance Award, in either
(A) cash (less applicable withholding taxes), or (B)
shares of the Company's Common Stock, provided that
Executive shall make appropriate tax withholding
arrangements if he elects payment in shares of the
Company's Common Stock.
(d) STOCK OPTIONS. In connection with the Spinoff, the Company
expects to adopt 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. In connection with or following the Spinoff, subject to approval
of the Compensation Committee of the Board (or, if there is no such Committee,
the Board),
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<PAGE> 5
Executive shall receive awards under the Company's 1998 Stock Option Plan
during the Employment Period as follows:
(i) INITIAL COMPANY OPTIONS. As soon as reasonably
practicable after the Spinoff, the Executive shall be
granted an option to purchase, at an exercise price
equal to the fair market value of the Company's
Common Stock at the date of grant, such a number of
shares of the Company's Common Stock as is necessary
to generate an expected value for such grant (using
Black- Scholes methodology applied on a basis
consistent with the application of such methodology
in connection with option grants to the other
executive officers of the Company) of $200,000.
(ii) 1999 COMPANY OPTIONS. In 1999, the Executive shall be
granted options to purchase, at an exercise price
equal to the fair market value of the Company's
Common Stock at the date of grant, such a number of
shares of the Company's Common Stock as is necessary
to generate an expected value for such grant (using
Black-Scholes methodology applied on a basis
consistent with the application of such methodology
in connection with option grants to the other
executive officers of the Company) of $100,000, but
in any event, for 1999, for at least the same number
of shares of the Company's Common Stock for which
options are granted to such other executive officer
or officers of the Company who is granted options on
the third highest number of shares of the Company's
Common Stock for such year.
(iii) SUBSEQUENT COMPANY OPTIONS. Annually thereafter,
commencing in 2000, the Executive shall be granted
options to purchase, at an exercise price equal to
the fair market value of the Company's Common Stock
at the date of grant, such a number of shares of the
Company's Common Stock as is necessary to generate an
expected value per annual grant (using Black-Scholes
methodology applied on a basis consistent with the
application of such methodology in connection with
option grants to the other executive officers of the
Company) of $100,000, but in any event, for each
year, for at least the same number of shares of the
Company's Common Stock for which options are granted
to such other executive officer or officers of the
Company who is granted options on the third highest
number of shares of the Company's Common Stock for
such year.
(iv) If for any year subsequent to 1999, the Compensation
Committee of the Board (or, if there is no such
Committee, the Board) elects to grant Executive
options to purchase the Company's Common Stock with
an expected value less than $100,000, or if the
Compensation Committee of the Board (or, if there is
no such Committee, the Board) elects not to grant
options to the Executive, the Company shall provide
the Executive with any combination of cash,
performance shares, or restricted shares in the equal
to the difference between the expected value of the
options granted and $100,000.
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<PAGE> 6
(v) The terms of each stock option (such as length and
exercisability) shall be as set forth in a stock
option agreement between the Company and the
Executive, provided that such agreement shall provide
(A) that each such option shall become exercisable as
to one-third of the shares subject to such option on
each of the first three anniversaries of the date of
grant of each such option if the Executive remains
employed on such anniversary, (B) that each such
option shall become exercisable as to all shares
subject thereto upon a Change of Control and (C) that
each such option that is otherwise exercisable in
accordance with its terms may be exercised by the
Executive for the one- year period following any
termination of the Executive's employment by the
Company not for Cause or by the Executive for Good
Reason.
(vi) If, at the time of the grant of any option pursuant
to this paragraph (d), 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.
(e) 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 which 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.
(f) STANDARD EXECUTIVE BENEFITS PACKAGE. In addition to the
salary, bonus(es), long-term incentive, 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
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 and/or 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.
On the date on which the Employment Period begins, Executive shall be credited
with the number of years of his employment with his prior employer for purposes
of vacation benefits included in the Standard Executive Benefits Package, and
Executive shall be entitled to a minimum of four weeks vacation per year.
(g) ADDITIONAL BENEFITS. In addition to participation in the
Company's Standard Executive Benefits Package pursuant to this paragraph,
Executive shall be entitled during the Employment Period to:
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<PAGE> 7
(i) additional term life insurance coverage in an amount
equal to Executive's annual salary; but only if and
so long as such additional coverage is available at
standard rates from the insurer providing term life
insurance coverage under the Standard Executive
Benefits Package or from a comparable insurer
acceptable to the Company; and
(ii) supplementary long-term disability coverage in an
amount which will increase maximum covered annual
compensation to $330,000 and the maximum monthly
payments to $18,333; but only if and so long as such
supplementary coverage is available at standard rates
from the insurer providing long-term disability
coverage under the Standard Executive Benefits
Package or a comparable insurer acceptable to the
Company.
(h) 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 calendar year (unless Executive's
sixty-fifth birthday occurs during such additional calendar 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;
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(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 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); provided that (A) if the Good Reason
identified in such notice is the Good Reason set
forth in paragraph 5(e)(ii) hereof, the Company may,
at its option, defer the effective date of such
termination for up to ninety (90) additional days and
(B) if the Good Reason identified in such notice is
the Good Reason set forth in paragraph 5(e)(iv)
hereof, Executive must give the written notice
described in this paragraph no later than the second
anniversary of the Change of Control, and such Change
of Control shall cease to be a Good Reason if such
notice is not given by such second anniversary; or
(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).
(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;
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(iii) the commission by Executive of any act involving
dishonesty or disloyalty with respect to the Company
or any of its subsidiaries or affiliates which harms
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; or
(viii) any other breach by Executive of this Agreement which
is material and which is not cured within thirty (30)
days (or if more than thirty (30) days is absolutely
necessary to cure such breach, within such period of
time, not in excess of sixty (60) days, as is
absolutely necessary to cure such breach) 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
(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; or
(iv) a Change of Control.
(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 Company is merged, consolidated or reorganized
into or with another corporation or other legal
person, and as a result of such merger, consolidation
or reorganization less than a majority of the
combined voting
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power of the then-outstanding securities entitled to
vote generally in the election of directors ("VOTING
STOCK") of such corporation or person immediately
after such transaction is held in the aggregate by
the holders of Voting Stock of the Company
immediately prior to such transaction;
(ii) the Company sells or otherwise transfers all or
substantially all of its assets to another
corporation or other legal person, and as a result of
such sale or transfer less than a majority of the
combined voting power of the then-outstanding Voting
Stock of such corporation or person immediately after
such sale or transfer is held in the aggregate by the
holders of Voting Stock of the Company immediately
prior to such sale or transfer;
(iii) there is a report filed on Schedule 13D or Schedule
14D-1 (or any successor schedule, form or report),
each as promulgated pursuant to the Securities
Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), disclosing that any person (as the term
"person" is used in Section 13(d)(3) or Section
14(d)(2) of the Exchange Act) (a "PERSON") has become
the beneficial owner (as the term "beneficial owner"
is defined under Rule 13d-3 or any successor rule or
regulation promulgated under the Exchange Act) of
securities representing 20% or more of the combined
voting power of the then-outstanding Voting Stock of
the Company;
(iv) the Company files a report or proxy statement with
the Securities and Exchange Commission pursuant to
the Exchange Act disclosing in response to Form 8-K
or Schedule 14A (or any successor schedule, form or
report or item therein) that a change in control of
the Company has occurred or will occur in the future
pursuant to any then-existing contract or
transaction; or
(v) if, during any period of two consecutive years,
individuals who at the beginning of any such period
constitute the directors of the Company cease for any
reason to constitute at least a majority thereof;
provided, however, that for purposes of this clause
(v) each director who is first elected, or first
nominated for election by the Company's stockholders,
by a vote of at least two-thirds of the directors of
the Company (or a nominating committee thereof) then
still in office who were directors of the Company at
the beginning of any such period will be deemed to
have been a director of the Company at the beginning
of such period, but excluding, for this purpose, any
such director whose initial assumption of office
occurs as a result of an
actual or threatened election contest (within the
meaning of Rule 14a-1 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.
Notwithstanding the foregoing provisions of paragraph
5(f)(iii) or 5(f)(iv), unless otherwise determined in a specific case by
majority vote of the Board, a Change of Control shall not be deemed to have
occurred for purposes of paragraph 5(f)(iii) or 5(f)(iv) solely because (A) the
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Company, (B) a subsidiary of the Company, (C) the Harris Group or (D) any
Company-sponsored employee stock ownership plan or any other employee benefit
plan of the Company or any subsidiary either files or becomes obligated to file
a report or a proxy statement under or in response to Schedule 13D, Schedule
14D-1, Form 8-K or Schedule 14A (or any successor schedule, form or report or
item therein) under the Exchange Act disclosing beneficial ownership by it of
shares of Voting Stock, whether in excess of 20% or otherwise, or because the
Company reports that a change in control of the Company has occurred or will
occur in the future by reason of such beneficial ownership. For purposes of the
preceding sentence, the "HARRIS GROUP" shall mean Messrs. Irving B. Harris,
Neison Harris, King Harris, William W. Harris and Sydney Barrows, 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) (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) any option rights or plan benefits
which by their terms extend beyond termination of Executive's employment, (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
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.
(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, the
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<PAGE> 12
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, at the times such amounts would have been paid (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), plus, for the year in which such
termination occurs and the following year, the amount the Executive would have
received as an annual bonus if the Division and the Company performed at bonus
target for the year in which such termination occurs, such amount payable first
at the time the annual bonus normally would be paid for the year in which such
termination occurs and again at the time the annual bonus normally would be paid
for the following year; PROVIDED, HOWEVER, that in the event of Executive's
death during the payment period, the Company shall pay any subsequent such
amounts to Executive's estate (or such person or persons as Executive may
designate in a written instrument signed by him and delivered to the Company
prior to his death) or, if so elected by the payee(s) by written notice to the
Company within the period of sixty (60) days after the date of Executive's
death, shall pay to such payee(s) a lump sum amount equivalent to the discounted
present value of such amounts, discounted at the publicly announced reference
rate for commercial lending of the Company's principal lending bank in effect at
the date of notice to the Company of such election, with said amount to be paid
on a date no later than thirty (30) days following the date of notice to the
Company of such election. 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 (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, the
Company shall make no further payments to Executive except as contemplated in
(a)(i), (ii) and (iii) above.
(f) 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 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 three 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
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<PAGE> 13
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
any period following the Employment Period during which the Executive continues
to receive payments pursuant to this Agreement, 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, stockholder, 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, including, without limitation,
the publication or production of any magazine, special issue, catalogue,
directory, newsletter, card deck, electronic/internet product, trade show,
exhibition or ancillary product. Notwithstanding the foregoing, the restrictions
of this subparagraph 8(b) shall not apply if Executive's employment with the
Company is terminated by the Executive for Good Reason during the two year
period following a Change of Control.
(c) Executive further agrees that during the Employment Period
and for two years thereafter 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 stockholder 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.
(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
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<PAGE> 14
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). In the
event that the Company initiates legal proceedings to remedy an alleged
violation of paragraph 8 by Executive but fails to obtain injunctive or other
relief in such action, Executive shall be entitled to reimbursement by the
Company for any costs incurred by Executive in defending such legal proceeding.
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 other than an
agreement dated __________ between Miller Freeman, Inc. and Executive, 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:
Mr. David Nussbaum
7 The Pines
Roslyn Estates, NY 11576
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<PAGE> 15
with a copy to:
Allen Perlstein, Esq.
Jaspan, Schlesinger, Silverman & Hoffman LLP
Attorneys at Law
300 Garden City Plaza
Garden City, New York 11530-3324
NOTICES TO THE COMPANY:
Mr. Thomas L. Kemp
Chief Executive Officer
Penton Media, Inc.
1100 Superior Avenue
Cleveland, OH 44114
with a copy to:
Daniel C. Hagen, Esq.
Jones, Day, Reavis & Pogue
North Point
901 Lakeside Avenue
Cleveland, Ohio 44114
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 RELATING TO A CHANGE
OF CONTROL OF THE COMPANY. In the event that there is a Change of Control of the
Company, if the Company thereafter wrongfully withholds from Executive any
amount payable to Executive pursuant to this Agreement and Executive obtains a
final judgment against the Company for such amount, the Company shall
reimburse Executive for any costs and expenses (including without limitation
attorneys' fees) reasonably incurred by Executive in obtaining such judgment and
shall pay Executive interest on the amount of each such cost or expense from the
date of payment thereof by Executive to the date of reimbursement by the Company
at a floating rate per annum equal to the publicly announced reference rate for
commercial lending of the Company's principal lending bank in effect from time
to time.
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<PAGE> 16
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.
20. COMPANY OPTION. Executive has advised the Company that,
under the terms of the agreement referred to in paragraph 10, unless Miller
Freeman, Inc. agrees otherwise, Executive must give Miller Freeman, Inc. ninety
days' notice in order to terminate his employment thereunder. Executive agrees
to give Miller Freeman, Inc. such notice within seven days of the date hereof.
Such notice shall request that Miller Freeman, Inc. waive the requirement of the
ninety day notice period. Executive shall deliver a copy of such notice to the
Company. In the event Executive shall not have provided the Company with the
copy of such notice within seven days of the date hereof, the Company may, at
its option, declare this Agreement null and void. The Executive shall use his
best efforts to obtain the written agreement of Miller Freeman, Inc. to the
termination of his employment under such agreement at the earliest possible date
after the Executive gives such notice. Executive's employment hereunder shall
commence on the first day after the date on which Miller Freeman, Inc. agrees to
the termination of Executive's employment with Miller Freeman, Inc., or, if
Miller Freeman, Inc. does not so agree, on the first day after the expiration of
the ninety day notice period (the first day of Executive's employment hereunder
being referred to herein as the "EFFECTIVE DATE").
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<PAGE> 17
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
PENTON MEDIA, INC.
Date: July 16, 1998 By /s/ Thomas L. Kemp
-------------------
Thomas L. Kemp
Chief Executive Officer
Date: July 19, 1998 /s/ David Nussbaum
-------------------
David Nussbaum
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<PAGE> 1
Exhibit 10.5
PENTON MEDIA, INC.
1998 EQUITY AND PERFORMANCE INCENTIVE PLAN
1. PURPOSE. The purpose of the Penton Media, Inc. 1998 Equity
and Performance Incentive Plan is to attract and retain officers and other
employees for Penton Media, Inc., a Delaware corporation, and its Subsidiaries
and to provide to such persons incentives and rewards for superior performance.
2. DEFINITIONS. As used in this Plan,
"Appreciation Right" means a right granted pursuant to Section
5 of this Plan, and shall include both Tandem Appreciation Rights and
Free-Standing Appreciation Rights.
"Base Price" means the price to be used as the basis for
determining the Spread upon the exercise of a Free-Standing Appreciation Right
and a Tandem Appreciation Right.
"Board" means the Board of Directors of the Company and, to
the extent of any delegation by the Board to a committee (or subcommittee
thereof) pursuant to Section 15 of this Plan, such committee (or subcommittee).
"Change of Control" shall have the meaning provided in Section
11 of this Plan.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Common Stock" means the Common Stock, par value $.01 per
share, of the Company or any security into which such Common Stock may be
changed by reason of any transaction or event of the type referred to in Section
10 of this Plan.
"Company" means Penton Media, Inc., a Delaware corporation.
"Covered Employee" means a Participant who is, or is
determined by the Board to be likely to become, a "covered employee" within the
meaning of Section 162(m) of the Code (or any successor provision).
"Date of Grant" means the date specified by the Board on which
a grant of Option Rights, Appreciation Rights, Performance Shares or Performance
Units or a grant or sale of Restricted Shares or Deferred Shares shall become
effective (which date shall not be earlier than the date on which the Board
takes action with respect thereto).
"Deferral Period" means the period of time during which
Deferred Shares are subject to deferral limitations under Section 7 of this
Plan.
<PAGE> 2
"Deferred Shares" means an award made pursuant to Section 7 of
this Plan of the right to receive shares of Common Stock at the end of a
specified Deferral Period.
"Director" means a member of the Board of Directors of the
Company.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations thereunder, as such law, rules and
regulations may be amended from time to time.
"Free-Standing Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is not granted in tandem with an
Option Right.
"Incentive Stock Options" means Option Rights that are
intended to qualify as "incentive stock options" under Section 422 of the Code
or any successor provision.
"Management Objectives" means the measurable performance
objective or objectives established pursuant to this Plan for Participants who
have received grants of Performance Shares or Performance Units or, when so
determined by the Board, Option Rights, Appreciation Rights, Restricted Shares
and dividend credits pursuant to this Plan. Management Objectives may be
described in terms of Company-wide objectives or objectives that are related to
the performance of the individual Participant or of the Subsidiary, division,
department, region or function within the Company or Subsidiary in which the
Participant is employed. The Management Objectives may be made relative to the
performance of other corporations. The Management Objectives applicable to any
award to a Covered Employee shall be based on specified levels of or growth in
one or more of the following criteria:
1. cash flow/net assets ratio;
2. debt/capital ratio;
3. return on total capital;
4. return on equity;
5. earnings per share growth;
6. revenue growth; and
7. total return to shareholders.
If the Board determines that a change in the business,
operations, corporate structure or capital structure of the Company, or the
manner in which it conducts its business, or other events or circumstances
render the Management Objectives unsuitable, the Board may in its discretion
modify such Management Objectives or the related minimum acceptable level of
achievement, in whole or in part, as the Board deems appropriate and equitable,
except in the case of a Covered Employee where such action would result in the
loss of the otherwise available exemption of the award under Section 162(m) of
the Code. In such case, the Board shall not make any modification of the
Management Objectives or minimum acceptable level of achievement.
2
<PAGE> 3
"Market Value per Share" means, as of any particular date, the
fair market value of the shares of Common Stock as determined by the Board.
"Optionee" means the optionee named in an agreement evidencing
an outstanding Option Right.
"Option Price" means the purchase price payable on exercise of
an Option Right.
"Option Right" means the right to purchase shares of Common
Stock upon exercise of an option granted pursuant to Section 4 of this Plan.
"Participant" means a person who is selected by the Board to
receive benefits under this Plan and who is at the time an officer, or other
employee of the Company or any one or more of its Subsidiaries, or who has
agreed to commence serving in any of such capacities within 90 days of the Date
of Grant.
"Performance Period" means, in respect of a Performance Share
or Performance Unit, a period of time established pursuant to Section 8 of this
Plan within which the Management Objectives relating to such Performance Share
or Performance Unit are to be achieved.
"Performance Share" means a bookkeeping entry that records the
equivalent of one share of Common Stock awarded pursuant to Section 8 of this
Plan.
"Performance Unit" means a bookkeeping entry that records a
unit equivalent to $1.00 awarded pursuant to Section 8 of this Plan.
"Plan" means this Penton Media, Inc. 1998 Equity and
Performance Incentive Plan.
"Reload Option Rights" means additional Option Rights granted
automatically to an Optionee upon the exercise of Option Rights pursuant to
Section 4(g) of this Plan.
"Restricted Shares" means shares of Common Stock granted or
sold pursuant to Section 6 of this Plan as to which neither the substantial risk
of forfeiture nor the prohibition on transfers referred to in such Section 6 has
expired.
"Rule 16b-3" means Rule 16b-3 under the Exchange Act (or any
successor rule to the same effect) as in effect from time to time.
"Spread" means the excess of the Market Value per Share on the
date when an Appreciation Right is exercised, or on the date when Option Rights
are surrendered in payment of the Option Price of other Option Rights, over the
Option Price or Base Price provided for in the related Option Right or
Free-Standing Appreciation Right, respectively.
3
<PAGE> 4
"Subsidiary" means a corporation, company or other entity (i)
more than 50 percent of whose outstanding shares or securities (representing the
right to vote for the election of directors or other managing authority) are, or
(ii) which does not have outstanding shares or securities (as may be the case in
a partnership, joint venture or unincorporated association), but more than 50
percent of whose ownership interest representing the right generally to make
decisions for such other entity is, now or hereafter, owned or controlled,
directly or indirectly, by the Company except that for purposes of determining
whether any person may be a Participant for purposes of any grant of Incentive
Stock Options, "Subsidiary" means any corporation in which at the time the
Company owns or controls, directly or indirectly, more than 50 percent of the
total combined voting power represented by all classes of stock issued by such
corporation.
"Tandem Appreciation Right" means an Appreciation Right
granted pursuant to Section 5 of this Plan that is granted in tandem with an
Option Right.
"Voting Power" means at any time, the total votes relating to
the then-outstanding securities entitled to vote generally in the election of
Directors.
3. SHARES AVAILABLE UNDER THIS PLAN. (a) Subject to adjustment as
provided in Section 3(b) and Section 10 of this Plan, the number of shares of
Common Stock that may be issued or transferred (i) upon the exercise of Option
Rights or Appreciation Rights, (ii) as Restricted Shares and released from
substantial risks of forfeiture thereof, (iii) as Deferred Shares, (iv) in
payment of Performance Shares or Performance Units that have been earned or (v)
in payment of dividend equivalents paid with respect to awards made under this
Plan shall not exceed in the aggregate 2,500,000 shares of Common Stock, plus
any shares described in Section 3(b). Such shares may be shares of original
issuance or treasury shares or a combination of the foregoing.
(b) The number of shares available in Section 3(a) above shall
be adjusted to account for shares relating to awards that expire, are forfeited
or are transferred, surrendered or relinquished upon the payment of any Option
Price by the transfer to the Company of shares of Common Stock or upon
satisfaction of any withholding amount. Upon payment in cash of the benefit
provided by any award granted under this Plan, any shares that were covered by
that award shall again be available for issue or transfer hereunder.
(c) Notwithstanding anything in this Section 3, or elsewhere
in this Plan, to the contrary and subject to adjustment as provided in Section
10 of this Plan, (i) the aggregate number of shares of Common Stock actually
issued or transferred by the Company upon the exercise of Incentive Stock
Options shall not exceed 2,500,000 shares of Common Stock; (ii) no Participant
shall be granted Option Rights and Appreciation Rights, in the aggregate, for
more than 200,000 shares of Common Stock during any period of 1 year; and (iii)
the number of shares issued as Restricted Shares shall not in the aggregate
exceed 200,000 shares of Common Stock.
(d) Notwithstanding any other provision of this Plan to the
contrary, in no event shall any Participant in any calendar year receive an
award of Performance Shares or
4
<PAGE> 5
Performance Units having an aggregate maximum value as of their respective Dates
of Grant in excess of $1,000,000.
4. OPTION RIGHTS. The Board may, from time to time and upon such terms
and conditions as it may determine, authorize the granting to Participants of
options to purchase shares of Common Stock. Each such grant may utilize any or
all of the authorizations, and shall be subject to all of the requirements
contained in the following provisions:
(a) Each grant shall specify the number of shares of Common
Stock to which it pertains subject to the limitations set forth in Section 3 of
this plan.
(b) Each grant shall specify an Option Price per share. The
Option Price of an Incentive Stock Option may not be less than 100% of the
Market Value per Share on the Date of Grant as set by the Board on such date.
The Option Price of all other Option Rights may not be less than 85% of the
Market Value per Share on the Date of Grant as set by the Board on such date and
may not be less than the par value of a share of Common Stock.
(c) Each grant shall specify whether the Option Price shall be
payable (i) in cash or by check acceptable to the Company, (ii) by the actual or
constructive transfer to the Company of shares of Common Stock owned by the
Optionee for at least 6 months (or other consideration authorized pursuant to
Section 4(d)) having a value at the time of exercise equal to the total Option
Price, or (iii) by a combination of such methods of payment.
(d) The Board may determine, at or after the Date of Grant,
that payment of the Option Price of any Option Right (other than an Incentive
Stock Option) may also be made in whole or in part in the form of Restricted
Shares or other shares of Common Stock that are forfeitable or subject to
restrictions on transfer, Deferred Shares, Performance Shares (based, in each
case, on the Market Value per Share on the date of exercise), other Option
Rights (based on the Spread on the date of exercise) or Performance Units.
Unless otherwise determined by the Board at or after the Date of Grant, whenever
any Option Price is paid in whole or in part by means of any of the forms of
consideration specified in this Section 4(d), the shares of Common Stock
received upon the exercise of the Option Rights shall be subject to such risks
of forfeiture or restrictions on transfer as may correspond to any that apply to
the consideration surrendered, but only to the extent, determined with respect
to the consideration surrendered, of (i) the number of shares or Performance
Shares, (ii) the Spread of any unexercisable portion of Option Rights, or (iii)
the stated value of Performance Units.
(e) Any grant may provide for deferred payment of the Option
Price from the proceeds of sale through a broker on a date satisfactory to the
Company of some or all of the shares to which such exercise relates.
(f) Any grant may provide for payment of the Option Price, at
the election of the Optionee, in installments, with or without interest, upon
terms determined by the Board.
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<PAGE> 6
(g) Any grant may, at or after the Date of Grant, provide for
the automatic grant of Reload Option Rights to an Optionee upon the exercise of
Option Rights (including Reload Option Rights) using shares of Common Stock or
other consideration specified in Section 4(d). Reload Option Rights shall cover
up to the number of shares of Common Stock, Deferred Shares, Option Rights or
Performance Shares (or the number of shares of Common Stock having a value equal
to the value of any Performance Units) surrendered to the Company upon any such
exercise in payment of the Option Price or to meet any withholding obligations.
Reload Options may have an Option Price that is no less than that which
represents the same percentage of the Market Value per Share at the time of
exercise of the Option Rights that the share Option Price represented of the
Market Value per Share at the time the Option Rights being exercised were
granted and shall be on such other terms as may be specified by the Directors,
which may be the same as or different from those of the original Option Rights.
(h) Successive grants may be made to the same Participant
whether or not any Option Rights previously granted to such Participant remain
unexercised.
(i) Each grant shall specify the period or periods of
continuous service by the Optionee with the Company or any Subsidiary that is
necessary before the Option Rights or installments thereof will become
exercisable and may provide for the earlier exercise of such Option Rights in
the event of a Change of Control.
(j) Any grant of Option Rights may specify Management
Objectives that must be achieved as a condition to the exercise of such rights.
(k) Option Rights granted under this Plan may be (i) options,
including, without limitation, Incentive Stock Options, that are intended to
qualify under particular provisions of the Code, (ii) options that are not
intended so to qualify, or (iii) combinations of the foregoing.
(l) The Board may, at or after the Date of Grant of any Option
Rights (other than Incentive Stock Options), provide for the payment of dividend
equivalents to the Optionee on either a current or deferred or contingent basis
or may provide that such equivalents shall be credited against the Option Price.
(m) The exercise of an Option Right shall result in the
cancellation on a share-for-share basis of any Tandem Appreciation Right
authorized under Section 5 of this Plan.
(n) No Option Right shall be exercisable more than 10 years
from the Date of Grant.
(o) Each grant of Option Rights shall be evidenced by an
agreement executed on behalf of the Company by an officer and delivered to the
Optionee and containing such terms and provisions, consistent with this Plan, as
the Board may approve.
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<PAGE> 7
5. APPRECIATION RIGHTS. (a) The Board may authorize the granting (i) to
any Optionee, of Tandem Appreciation Rights in respect of Option Rights granted
hereunder, and (ii) to any Participant, of Free-Standing Appreciation Rights. A
Tandem Appreciation Right shall be a right of the Optionee, exercisable by
surrender of the related Option Right, to receive from the Company an amount
determined by the Board, which shall be expressed as a percentage of the Spread
(not exceeding 100 percent) at the time of exercise. Tandem Appreciation Rights
may be granted at any time prior to the exercise or termination of the related
Option Rights; provided, however, that a Tandem Appreciation Right awarded in
relation to an Incentive Stock Option must be granted concurrently with such
Incentive Stock Option. A Free-Standing Appreciation Right shall be a right of
the Participant to receive from the Company an amount determined by the Board,
which shall be expressed as a percentage of the Spread (not exceeding 100
percent) at the time of exercise.
(b) Each grant of Appreciation Rights may utilize any or all
of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:
(i) Any grant may specify that the amount payable on
exercise of an Appreciation Right may be paid by the Company in cash,
in shares of Common Stock or in any combination thereof and may either
grant to the Participant or retain in the Board the right to elect
among those alternatives.
(ii) Any grant may specify that the amount payable on
exercise of an Appreciation Right may not exceed a maximum specified by
the Board at the Date of Grant.
(iii) Any grant may specify waiting periods before
exercise and permissible exercise dates or periods.
(iv) Any grant may specify that such Appreciation
Right may be exercised only in the event of, or earlier in the event
of, a Change of Control.
(v) Any grant may provide for the payment to the
Participant of dividend equivalents thereon in cash or shares of Common
Stock on a current, deferred or contingent basis.
(vi) Any grant of Appreciation Rights may specify
Management Objectives that must be achieved as a condition of the
exercise of such Rights.
(vii) Each grant of Appreciation Rights shall be
evidenced by an agreement executed on behalf of the Company by an
officer and delivered to and accepted by the Participant, which
agreement shall describe such Appreciation Rights, identify the related
Option Rights (if applicable), state that such Appreciation Rights are
subject to all the terms and conditions of this Plan, and contain such
other terms and provisions, consistent with this Plan, as the Board may
approve.
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<PAGE> 8
(c) Any grant of Tandem Appreciation Rights shall provide that
such Rights may be exercised only at a time when the related Option Right is
also exercisable and at a time when the Spread is positive, and by surrender of
the related Option Right for cancellation.
(d) Regarding Free-standing Appreciation Rights only:
(i) Each grant shall specify in respect of each
Free-standing Appreciation Right a Base Price, which shall be
equal to or greater or less than the Market Value per Share on
the Date of Grant;
(ii) Successive grants may be made to the same
Participant regardless of whether any Free-standing
Appreciation Rights previously granted to the Participant
remain unexercised; and
(iii) No Free-standing Appreciation Right granted
under this Plan may be exercised more than 10 years from the
Date of Grant.
6. RESTRICTED SHARES. The Board may also authorize the grant or sale of
Restricted Shares to Participants. Each such grant or sale may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:
(a) Each such grant or sale shall constitute an immediate
transfer of the ownership of shares of Common Stock to the Participant in
consideration of the performance of services, entitling such Participant to
voting, dividend and other ownership rights, but subject to the substantial risk
of forfeiture and restrictions on transfer hereinafter referred to.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall provide that the Restricted
Shares covered by such grant or sale shall be subject to a "substantial risk of
forfeiture" within the meaning of Section 83 of the Code for a period to be
determined by the Board at the Date of Grant and may provide for the lapse of
such substantial risk of forfeiture in the event of a Change in Control.
(d) Each such grant or sale shall provide that during the
period for which such substantial risk of forfeiture is to continue, the
transferability of the Restricted Shares shall be prohibited or restricted in
the manner and to the extent prescribed by the Board at the Date of Grant (which
restrictions may include, without limitation, rights of repurchase or first
refusal in the Company or provisions subjecting the Restricted Shares to a
continuing substantial risk of forfeiture in the hands of any transferee).
(e) Any grant of Restricted Shares may specify Management
Objectives that, if achieved, will result in termination or early termination of
the restrictions applicable to such
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<PAGE> 9
shares. Each grant may specify in respect of such Management Objectives a
minimum acceptable level of achievement and may set forth a formula for
determining the number of Restricted Shares on which restrictions will terminate
if performance is at or above the minimum level, but falls short of full
achievement of the specified Management Objectives.
(f) Any such grant or sale of Restricted Shares may require
that any or all dividends or other distributions paid thereon during the period
of such restrictions be automatically deferred and reinvested in additional
Restricted Shares, which may be subject to the same restrictions as the
underlying award.
(g) Each grant or sale of Restricted Shares shall be evidenced
by an agreement executed on behalf of the Company by any officer and delivered
to and accepted by the Participant and shall contain such terms and provisions,
consistent with this Plan, as the Board may approve. Unless otherwise directed
by the Board, all certificates representing Restricted Shares shall be held in
custody by the Company until all restrictions thereon shall have lapsed,
together with a stock power or powers executed by the Participant in whose name
such certificates are registered, endorsed in blank and covering such Shares.
7. DEFERRED SHARES. The Board may also authorize the granting or sale
of Deferred Shares to Participants. Each such grant or sale may utilize any or
all of the authorizations, and shall be subject to all of the requirements,
contained in the following provisions:
(a) Each such grant or sale shall constitute the agreement by
the Company to deliver shares of Common Stock to the Participant in the future
in consideration of the performance of services, but subject to the fulfillment
of such conditions during the Deferral Period as the Board may specify.
(b) Each such grant or sale may be made without additional
consideration or in consideration of a payment by such Participant that is less
than the Market Value per Share at the Date of Grant.
(c) Each such grant or sale shall be subject to a Deferral
Period, as determined by the Board at the Date of Grant, and may provide for the
lapse or other modification of such Deferral Period in the event of a Change in
Control.
(d) During the Deferral Period, the Participant shall have no
right to transfer any rights under his or her award and shall have no rights of
ownership in the Deferred Shares and shall have no right to vote them, but the
Board may, at or after the Date of Grant, authorize the payment of dividend
equivalents on such Shares on either a current or deferred or contingent basis,
either in cash or in additional shares of Common Stock.
(e) Each grant or sale of Deferred Shares shall be evidenced
by an agreement executed on behalf of the Company by any officer and delivered
to and accepted by the
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<PAGE> 10
Participant and shall contain such terms and provisions, consistent with this
Plan, as the Board may approve.
8. PERFORMANCE SHARES AND PERFORMANCE UNITS. The Board may also
authorize the granting of Performance Shares and Performance Units that will
become payable to a Participant upon achievement of specified Management
Objectives. Each such grant may utilize any or all of the authorizations, and
shall be subject to all of the requirements, contained in the following
provisions:
(a) Each grant shall specify the number of Performance Shares
or Performance Units to which it pertains, which number may be subject to
adjustment to reflect changes in compensation or other factors; provided,
however, that no such adjustment shall be made in the case of a Covered Employee
where such action would result in the loss of the otherwise available exemption
of the award under Section 162(m) of the Code.
(b) The Performance Period with respect to each Performance
Share or Performance Unit shall be such period of time (not less than 3 years,
except in the event of a Change of Control, if the Board shall so determine;
provided, however, that no such acceleration determination shall be made in the
case of a Covered Employee where such action would result in the loss of the
otherwise available exemption of the award under Section 162(m) of the Code)
commencing with the Date of Grant (as shall be determined by the Board at the
time of grant).
(c) Any grant of Performance Shares or Performance Units shall
specify Management Objectives which, if achieved, will result in payment or
early payment of the award, and each grant may specify in respect of such
specified Management Objectives a minimum acceptable level of achievement and
shall set forth a formula for determining the number of Performance Shares or
Performance Units that will be earned if performance is at or above the minimum
level, but falls short of full achievement of the specified Management
Objectives. The grant of Performance Shares or Performance Units shall specify
that, before the Performance Shares or Performance Units shall be earned and
paid, the Board must certify that the Management Objectives have been satisfied.
(d) Each grant shall specify the time and manner of payment of
Performance Shares or Performance Units that have been earned. Any grant may
specify that the amount payable with respect thereto may be paid by the Company
in cash, in shares of Common Stock or in any combination thereof and may either
grant to the Participant or retain in the Board the right to elect among those
alternatives.
(e) Any grant of Performance Shares may specify that the
amount payable with respect thereto may not exceed a maximum specified by the
Board at the Date of Grant. Any grant of Performance Units may specify that the
amount payable or the number of shares of Common Stock issued with respect
thereto may not exceed maximums specified by the Board at the Date of Grant.
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<PAGE> 11
(f) The Board may, at or after the Date of Grant of
Performance Shares, provide for the payment of dividend equivalents to the
holder thereof on either a current or deferred or contingent basis, either in
cash or in additional shares of Common Stock.
(g) Each grant of Performance Shares or Performance Units
shall be evidenced by an agreement executed on behalf of the Company by any
officer and delivered to and accepted by the Participant, which agreement shall
state that such Performance Shares or Performance Units are subject to all the
terms and conditions of this Plan, and contain such other terms and provisions,
consistent with this Plan, as the Board may approve.
9. TRANSFERABILITY. (a) Except as otherwise determined by the Board, no
Option Right, Appreciation Right or other derivative security granted under this
Plan shall be transferable by a Participant other than by will or the laws of
descent and distribution. Except as otherwise determined by the Board, Option
Rights and Appreciation Rights shall be exercisable during the Optionee's
lifetime only by him or her or by his or her guardian or legal representative.
(b) The Board may specify at the Date of Grant that part or
all of the shares of Common Stock that are (i) to be issued or transferred by
the Company upon the exercise of Option Rights or Appreciation Rights, upon the
termination of the Deferral Period applicable to Deferred Shares or upon payment
under any grant of Performance Shares or Performance Units or (ii) no longer
subject to the substantial risk of forfeiture and restrictions on transfer
referred to in Section 6 of this Plan, shall be subject to further restrictions
on transfer.
10. ADJUSTMENTS. The Board may make or provide for such adjustments in
the numbers of shares of Common Stock covered by outstanding Option Rights,
Appreciation Rights, Deferred Shares, and Performance Shares granted hereunder,
in the Option Price and Base Price provided in outstanding Appreciation Rights,
and in the kind of shares covered thereby, as the Board, in its sole discretion,
exercised in good faith, may determine is equitably required to prevent dilution
or enlargement of the rights of Participants or Optionees that otherwise would
result from (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of the Company, or (b)
any merger, consolidation, spin-off, split- off, spin-out, split-up,
reorganization, partial or complete liquidation or other distribution of assets,
issuance of rights or warrants to purchase securities, or (c) any other
corporate transaction or event having an effect similar to any of the foregoing.
Moreover, in the event of any such transaction or event, the Board, in its
discretion, may provide in substitution for any or all outstanding awards under
this Plan such alternative consideration as it, in good faith, may determine to
be equitable in the circumstances and may require in connection therewith the
surrender of all awards so replaced. The Board may also make or provide for such
adjustments in the numbers of shares specified in Section 3 of this Plan as the
Board in its sole discretion, exercised in good faith, may determine is
appropriate to reflect any transaction or event described in this Section 10;
provided, however, that any such adjustment to the number specified in Section
3(c)(i) shall be made only if and to the extent that such adjustment would not
cause any Option intended to qualify as an Incentive Stock Option to fail so to
qualify.
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<PAGE> 12
11. CHANGE OF CONTROL. For purposes of this Plan, a "Change of Control"
shall mean if at any time any of the following events shall have occurred:
(a) The Company is merged or consolidated or reorganized into
or with another corporation or other legal person, and as a result of such
merger, consolidation or reorganization less than a majority of the combined
voting power of the then-outstanding securities of such corporation or person
immediately after such transaction are held in the aggregate by the holders of
securities entitled to vote generally in the election of Directors immediately
prior to such transaction;
(b) The Company sells or otherwise transfers all or
substantially all of its assets to any other corporation or other legal person,
and less than a majority of the combined voting power of the then-outstanding
securities of such corporation or person immediately after such sale or transfer
is held in the aggregate by the holders of shares of Common Stock immediately
prior to such sale or transfer;
(c) There is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form or report), each as promulgated pursuant to the
Exchange Act, disclosing that any person (as the term "person" is used in
Section 13(d)(3) or Section 14(d)(2) of the Exchange Act) has become the
beneficial owner (as the term "beneficial owner" is defined under Rule 13d-3 or
any successor rule or regulation promulgated under the Exchange Act) of
securities representing 20% or more of the Voting Power;
(d) The Company files a report or proxy statement with the
Securities and Exchange Commission pursuant to the Exchange Act disclosing in
response to Form 8-K or Schedule 14A (or any successor schedule, form or report
or item therein) that a change of control of the Company has or may have
occurred or will or may occur in the future pursuant to any then-existing
contract or transaction; or
(e) If during any period of two consecutive years, individuals
who at the beginning of any such period constitute the Directors cease for any
reason to constitute at least a majority thereof, unless the election, or the
nomination for election by the Company's shareholders, of each Director first
elected during such period was approved by a vote of at least two-thirds of the
Directors then still in office who were Directors at the beginning of any such
period.
Notwithstanding the foregoing provisions of Section 11(c) and
(d) above, unless otherwise determined in a specific case by majority vote of
the Board, a "Change of Control" shall not be deemed to have occurred for
purposes of this Plan (i) solely because (A) the Company; (B) a Subsidiary; (C)
the Harris Group; or (D) any Company-sponsored employee stock ownership plan or
any other employee benefit plan of the Company or any Subsidiary either files or
becomes obligated to file a report or proxy statement under or in response to
Schedule 13D, Schedule 14D-1, Form 8-K or Schedule 14A (or any successor
schedule, form or report or item therein) under the Exchange Act, disclosing
beneficial ownership by it of shares, whether in excess of 20%
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<PAGE> 13
of the Voting Power or otherwise, or because the Company reports that a change
of control of the Company has or may have occurred or will or may occur in the
future by reason of such beneficial ownership or (ii) solely because of a change
of control of any Subsidiary. For purposes of the preceding sentence, the
"Harris Group" shall mean Messrs. Irving B. Harris, Neison Harris, King Harris,
William W. Harris and Sidney Barrows, 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. For purposes of the preceding
sentence, the term "spouses" includes widows and widowers until first remarried.
12. FRACTIONAL SHARES. The Company shall not be required to issue any
fractional shares of Common Stock pursuant to this Plan. The Board may provide
for the elimination of fractions or for the settlement of fractions in cash.
13. WITHHOLDING TAXES. To the extent that the Company is required to
withhold federal, state, local or foreign taxes in connection with any payment
made or benefit realized by a Participant or other person under this Plan, and
the amounts available to the Company for such withholding are insufficient, it
shall be a condition to the receipt of such payment or the realization of such
benefit that the Participant or such other person make arrangements satisfactory
to the Company for payment of the balance of such taxes required to be withheld,
which arrangements (in the discretion of the Board) may include relinquishment
of a portion of such benefit. The Company and a Participant or such other person
may also make similar arrangements with respect to the payment of any taxes with
respect to which withholding is not required.
14. FOREIGN EMPLOYEES. In order to facilitate the making of any grant
or combination of grants under this Plan, the Board may provide for such special
terms for awards to Participants who are foreign nationals or who are employed
by the Company or any Subsidiary outside of the United States of America as the
Board may consider necessary or appropriate to accommodate differences in local
law, tax policy or custom. Moreover, the Board may approve such supplements to
or amendments, restatements or alternative versions of this Plan as it may
consider necessary or appropriate for such purposes, without thereby affecting
the terms of this Plan as in effect for any other purpose, and the Secretary or
other appropriate officer of the Company may certify any such document as having
been approved and adopted in the same manner as this Plan. No such special
terms, supplements, amendments or restatements, however, shall include any
provisions that are inconsistent with the terms of this Plan as then in effect
unless this Plan could have been amended to eliminate such inconsistency without
further approval by the shareholders of the Company.
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<PAGE> 14
15. ADMINISTRATION OF THIS PLAN. (a) This Plan shall be administered by
the Board, which may from time to time delegate all or any part of its authority
under this Plan to a committee of the Board (or subcommittee thereof) consisting
of not less than two Directors appointed by the Board. The members of the
committee shall be "Non-Employee Directors" within the meaning of Rule 16b-3 and
"outside directors" within the meaning of Section 162(m) of the Code. A majority
of the committee (or subcommittee) shall constitute a quorum, and the action of
the members of the committee (or subcommittee) present at any meeting at which a
quorum is present, or acts unanimously approved in writing, shall be the acts of
the committee (or subcommittee). To the extent of any such delegation,
references in this Plan to the Board shall be deemed to be references to any
such committee or subcommittee.
(b) The interpretation and construction by the Board of any
provision of this Plan or of any agreement, notification or document evidencing
the grant of Option Rights, Appreciation Rights, Restricted Shares, Deferred
Shares, Performance Shares or Performance Units and any determination by the
Board pursuant to any provision of this Plan or of any such agreement,
notification or document shall be final and conclusive. No member of the Board
shall be liable for any such action or determination made in good faith.
16. AMENDMENTS, ETC. (a) The Board may at any time and from time to
time amend this Plan in whole or in part; provided, however, that any amendment
which must be approved by the shareholders of the Company in order to comply
with applicable law or the rules of the New York Stock Exchange or, if the
shares of Common Stock are not traded on the New York Stock Exchange, the
principal national securities exchange upon which the shares of Common Stock are
traded or quoted, shall not be effective unless and until such approval has been
obtained. Presentation of this Plan or any amendment hereof for shareholder
approval shall not be construed to limit the Company's authority to offer
similar or dissimilar benefits under other plans without shareholder approval.
(b) The Board may, with the concurrence of the affected
Participant, cancel any agreement evidencing Option Rights or any other award
granted under this Plan. In the event of such cancellation, the Board may
authorize the granting of new Option Rights or other such awards under this Plan
(which may or may not cover the same number of shares of Common Stock that had
been the subject of the prior award) in such manner, at such Option Price and
subject to such other terms, conditions and discretions as would have been
applicable under this Plan had the canceled Option Rights or other awards not
been granted.
(c) The Board also may permit Participants to elect to defer
the issuance of shares of Common Stock or the settlement of awards in cash under
this Plan pursuant to such rules, procedures or programs as it may establish for
purposes of this Plan. The Board also may provide that deferred issuances and
settlements include the payment or crediting of dividend equivalents or interest
on the deferral amounts.
(d) The Board may condition the grant of any award or
combination of awards authorized under this Plan on the surrender or deferral by
the Participant of his or her right to
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<PAGE> 15
receive a cash bonus or other compensation otherwise payable by the Company or a
Subsidiary to the Participant.
(e) In case of termination of employment by reason of death,
disability or normal or early retirement, or in the case of hardship or other
special circumstances, of a Participant who holds an Option Right or
Appreciation Right not immediately exercisable in full, or any Restricted Shares
as to which the substantial risk of forfeiture or the prohibition or restriction
on transfer has not lapsed, or any Deferred Shares as to which the Deferral
Period has not been completed, or any Performance Shares or Performance Units
which have not been fully earned, or who holds shares of Common Stock subject to
any transfer restriction imposed pursuant to Section 9(b) of this Plan, the
Board may, in its sole discretion, accelerate the time at which such Option
Right or Appreciation Right may be exercised or the time at which such
substantial risk of forfeiture or prohibition or restriction on transfer will
lapse or the time when such Deferral Period will end or the time at which such
Performance Shares or Performance Units will be deemed to have been fully earned
or the time when such transfer restriction will terminate or may waive any other
limitation or requirement under any such award.
(f) This Plan shall not confer upon any Participant any right
with respect to continuance of employment or other service with the Company or
any Subsidiary, nor shall it interfere in any way with any right the Company or
any Subsidiary would otherwise have to terminate such Participant's employment
or other service at any time.
(g) To the extent that any provision of this Plan would
prevent any Option Right that was intended to qualify as an Incentive Stock
Option from qualifying as such, that provision shall be null and void with
respect to such Option Right. Such provision, however, shall remain in effect
for other Option Rights and there shall be no further effect on any provision of
this Plan.
17. TERMINATION. No grant shall be made under this Plan more than 10
years after the date on which this Plan is first approved by the shareholders of
the Company, but all grants made on or prior to such date shall continue in
effect thereafter subject to the terms thereof and of this Plan.
15
<PAGE> 1
Exhibit 10.6
PENTON MEDIA, INC.
1998 DIRECTOR STOCK OPTION PLAN
1. PURPOSE. The purpose of the Penton Media, Inc. 1998 Director Stock
Option Plan (the "Plan") is to promote the long-term financial interests of
Penton Media, Inc., a Delaware corporation (the "Company"), and its subsidiaries
by:
(a) providing an incentive for all non-employee members of the Board of
Directors (the "Non-Employee Directors") to maximize the long-term value of the
Company's Common Stock and otherwise act in the best interest of the Company's
stockholders;
(b) providing Non-Employee Directors with the opportunity to acquire a
greater stake in the future of the Company and its subsidiaries through stock
ownership; and
(c) attracting and retaining highly qualified Non-Employee Directors.
2. DEFINITIONS. The following words and phrases have the respective
meanings indicated below unless a different meaning is plainly implied by the
context.
(a) "Board of Directors" means the Board of Directors of the Company.
(b) "Code" means the Internal Revenue Code of 1986, as amended.
(c) "Common Stock" means Common Stock, par value $.01 per share, of the
Company.
(d) "Eligible Director" means any present or future member of the Board
of Directors who, on the date of an award pursuant to the Plan, (1) is a member
of the Board of Directors, and (2) is not an employee of the Company or any of
its subsidiaries.
(e) "Market Value" of Common Stock on any date means, for Options
granted during the first twenty days on which the Common Stock is traded on the
New York Stock Exchange, the fair market value of the shares of Common Stock as
determined by the Board of Directors, and, for any subsequent grant of Options,
on any date, means the most recently reported closing price of such Common Stock
on that date on the New York Stock Exchange Composite Transactions list, as
subsequently reported in THE WALL STREET JOURNAL.
(f) "Option" means a right awarded to a Participant pursuant to the
Plan to purchase a designated number of shares of Common Stock at a stated price
for a stated period of time.
(g) "Participant" means an Eligible Director who has been awarded an
Option.
3. LIMITATION OF AGGREGATE SHARES. Subject to adjustment as provided in
paragraph 5(d), the number of shares of Common Stock which may be issued upon
the exercise of Options
<PAGE> 2
shall not exceed, in the aggregate, 100,000 shares; it being understood that to
the extent any Options expire unexercised or are cancelled, terminated or
forfeited in any manner without the issuance of shares of Common Stock
thereunder, such shares shall again be available under the Plan. Such 100,000
shares of Common Stock may be authorized and unissued shares, treasury shares,
or a combination thereof, as the Board of Directors shall determine.
4. OPTIONS. The Board of Directors may grant Options to Eligible
Directors in accordance with this paragraph 4 and the other provisions of the
Plan.
(a) PROVISIONS.
(i) Options shall not qualify as incentive stock options within the
meaning of Section 422 of the Code or any successor provision.
(ii) Options shall have such terms, not to exceed ten years from the
date of grant, as the Board of Directors shall determine at grant.
(iii) The Option price per share of Common Stock shall be 100% of the
Market Value on the date of grant and not less than the par value of a share of
Common Stock.
(iv) Options shall be exercisable at such time or times as the Board of
Directors shall determine at or subsequent to grant; provided that, except in
the event of death or disability of the Participant, no Option may be exercised
until the Eligible Director has served on the Board of Directors for at least
six months after it is awarded; further provided that an Option may be exercised
only during a period beginning on the third business day following the date of
release of the Company's quarterly or annual summary statement of sales and
earnings and ending on the fifteenth business day following such date; and
further provided that in the event of termination of service of a Participant as
a member of the Board of Directors for any reason (including without limitation
expiration of term without re-election, resignation, retirement, disability or
death), each Option granted to the Participant shall cease to be exercisable not
later than the fifth anniversary of the date of termination or, if earlier, on
the scheduled date of expiration of such Option.
(b) EXERCISE. Shares shall be issued to a Participant pursuant to the
exercise of an Option only upon receipt by the Company from the Participant of
written notice of exercise, specifying the number of shares with respect to
which the Option is being exercised, accompanied by payment in full in cash
(including check, bank draft or money order) or, to the extent permitted by the
Board of Directors, by a single exchange of shares of Common Stock already owned
by the Participant for at least six months in an amount equal to the aggregate
Option price for the shares of Common Stock subject to the Option or portion
thereof being exercised or by a combination of such methods; provided that the
Board of Directors may permit the Participant to elect to pay such aggregate
Option price by authorizing a third party to sell the shares of Common Stock
acquired upon exercise (or a sufficient portion thereof) and thereafter remit to
the Company sale proceeds sufficient to pay such aggregate Option price and any
withholding or other tax resulting from exercise. The value of already owned
shares of Common Stock exchanged in full or partial payment for the shares
purchased upon the exercise of an Option shall be equal to the aggregate Market
Value of such already owned shares on the date of the exercise of such Option.
2
<PAGE> 3
(c) SURRENDER. If so provided by the Board of Directors at or
subsequent to the time of grant, an Option may be surrendered to the Company on
such terms and conditions, and for such consideration, as the Board of Directors
shall determine.
(d) FORM. The form of each Option (and of the documentation evidencing
each Option) shall be determined by the Board of Directors.
5. MISCELLANEOUS PROVISIONS.
(a) ADMINISTRATION. The Plan shall be administered by the Board of
Directors. Subject to the limitations of the Plan, the Board of Directors shall
have the sole and complete authority: (i) to select Participants, (ii) to award
Options in such forms and amounts as it shall determine, (iii) to impose such
limitations, restrictions and conditions upon such Options as it shall deem
appropriate, (iv) to interpret the Plan and to adopt, amend and rescind
administrative guidelines and other rules and regulations relating to the Plan,
(v) to correct any defect or omission or to reconcile any inconsistency in the
Plan or in any Options and (vi) to make all other determinations and to take all
other actions necessary or advisable for the implementation and administration
of the Plan. The Board of Directors' determinations on matters within its
authority shall be conclusive and binding upon the Company and all other
persons. All expenses associated with the Plan shall be borne by the Company.
(b) NON-TRANSFERABILITY. Except as otherwise determined by the Board of
Directors, no Option, and no interest therein, shall be transferable by a
Participant otherwise than by will or the laws of descent and distribution, and
all Options shall be exercisable during a Participant's lifetime only by the
Participant or the Participant's legal representative. Any purported transfer
contrary to this provision will nullify the Option.
(c) ADJUSTMENT. The Board of Directors may make or provide for such
adjustments in the numbers of shares of Common Stock covered by outstanding
Options granted hereunder as the Board of Directors, in its sole discretion,
exercised in good faith, may determine is equitably required to prevent dilution
or enlargement of the rights of Participants that otherwise would result from
(a) any stock dividend, stock split, combination of shares, recapitalization or
other change in the capital structure of the Company, or (b) any merger,
consolidation, spin-off, split-off, spin-out, split-up, reorganization, partial
or complete liquidation or other distribution of assets, issuance of rights or
warrants to purchase securities, or (c) any other corporate transaction or event
having an effect similar to any of the foregoing. Moreover, in the event of any
such transaction or event, the Board of Directors, in its discretion, may
provide in substitution for any or all outstanding awards under the Plan such
alternative consideration as it, in good faith, may determine to be equitable in
the circumstances and may require in connection therewith the surrender of all
awards so replaced. The Board may also make or provide for such adjustments in
the numbers of shares specified in Section 3 of the Plan as the Board in its
sole discretion, exercised in good faith, may determine is appropriate to
reflect any transaction or event described in this Section 5(c).
(d) TAX WITHHOLDING. The Board of Directors shall have the power to
withhold, or to require a Participant to remit to the Company, an amount
sufficient to satisfy any withholding or
3
<PAGE> 4
other tax due with respect to the Participant's exercise of an Option. Subject
to the consent of the Board of Directors, a Participant may make an irrevocable
election to have shares of Common Stock otherwise issuable under an Option
withheld, tender back to the Company shares of Common Stock received pursuant to
an Option or deliver to the Company shares of Common Stock already owned by the
Participant having a Market Value sufficient to satisfy all or part of the
Participant's estimated tax obligations associated with the transaction. Such
election must be made by a Participant prior to the date on which the relevant
tax obligation arises. The Board of Directors may disapprove of any election and
may limit, suspend or terminate the right to make such elections.
(e) TERMINATION; AMENDMENTS. The Board of Directors may terminate the
Plan at any time. The Board of Directors may amend the Plan at any time or from
time to time; provided that no such amendment shall be made without stockholder
approval to the extent such approval is required by law, regulation or the rules
of any exchange upon which the Common Stock is listed.
The Board of Directors may amend an outstanding Option in any
manner to the extent that the Board of Directors would have had the authority
under the Plan to initially grant the Option as so amended.
No termination or amendment of the Plan or amendment of any
outstanding Option shall adversely affect any outstanding Option without the
consent of the Participant who holds it.
(f) RIGHTS OF PARTICIPANTS. Nothing in the Plan shall confer on any
Eligible Director any right to continue to serve as a member of the Board of
Directors or affect in any way the right of the Company to terminate such
service at any time. No Eligible Director shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a Participant.
(g) EFFECTIVE DATE. The effective date of the Plan shall be August 7,
1998.
4
<PAGE> 1
Exhibit 10.8
PENTON MEDIA, INC.
------------------
RETIREMENT PLAN
---------------
<PAGE> 2
PENTON MEDIA, INC. RETIREMENT PLAN
----------------------------------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
PAGE
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<S> <C>
ARTICLE 1....................................................................................................... 1
Introduction........................................................................................... 1
Purpose of the Plan, Effective Date........................................................... 1
Plan Administrator, Plan Year................................................................. 1
The Employers................................................................................. 2
Preservation of Benefits Under Predecessor Plans.............................................. 2
Supplements .................................................................................. 3
ARTICLE 2....................................................................................................... 4
Plan Participants...................................................................................... 4
Eligibility .................................................................................. 4
Eligibility Service........................................................................... 5
Hours of Service.............................................................................. 5
Leave of Absence.............................................................................. 6
Notice of Participation....................................................................... 7
U.S. Foreign Service Employees................................................................ 7
ARTICLE 3....................................................................................................... 8
Retirement Dates, Employment Termination Date.......................................................... 8
Normal Retirement Date........................................................................ 8
Deferred Retirement Date...................................................................... 8
Early Retirement Date......................................................................... 8
Disability Retirement Date.................................................................... 8
Retirement Date............................................................................... 8
Employment Termination Date................................................................... 8
Retirement or Termination While on Leave of Absence........................................... 8
ARTICLE 4....................................................................................................... 9
Benefit Determination Factors.......................................................................... 9
General .................................................................................. 9
Years of Service.............................................................................. 9
Special Rules as to Determinations of Service................................................. 9
Earnings .................................................................................. 10
Determination of Bases of Benefits............................................................ 11
Military Service.............................................................................. 11
</TABLE>
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<TABLE>
<S> <C>
ARTICLE 5....................................................................................................... 12
Retirement Income...................................................................................... 12
Normal or Deferred Retirement................................................................. 12
Early Retirement.............................................................................. 13
Form of Payment............................................................................... 14
ARTICLE 6....................................................................................................... 14
Disability Benefit; Deferred Vested Benefit............................................................ 14
Disability Benefit............................................................................ 14
Disability .................................................................................. 16
Monthly Deferred Vested Benefit............................................................... 16
Early Commencement of Deferred Vested Benefit................................................. 17
Annuity Commencement Date..................................................................... 17
Form of Payment............................................................................... 17
ARTICLE 7....................................................................................................... 17
Payment of Retirement Income and Other Benefits........................................................ 17
Normal Form of Payment of Benefits............................................................ 17
Optional Forms of Payment of Benefits......................................................... 19
Rules as to Wavier of Normal Form of Benefit, Election and
Discontinuance of Optional Forms of Payment of Benefits and
Spousal Consents.................................................................. 20
Pre-Retirement Spouse's Benefit............................................................... 21
Special Pre-Retirement Lump Sum Death Benefit................................................. 22
Special Payment Limitations................................................................... 23
Payment of Small Amounts...................................................................... 24
Payment by Annuity Purchase................................................................... 24
Direct Rollover of Eligible Rollover Distributions............................................ 24
Designated Beneficiaries...................................................................... 25
Missing Persons............................................................................... 26
Payment with Respect to Incapacitated Participants or Beneficiaries........................... 26
ARTICLE 8....................................................................................................... 27
Reemployment........................................................................................... 27
Rehired Employee.............................................................................. 27
Rehired Participant........................................................................... 27
One-Year Break in Service, Five-Year Break in Service, Break-in Service
Period............................................................................ 29
Redetermination of Benefits................................................................... 29
ARTICLE 9....................................................................................................... 30
Maximum Benefits....................................................................................... 30
Benefit Limitations........................................................................... 30
</TABLE>
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<PAGE> 4
<TABLE>
<S> <C>
Total Compensation............................................................................ 30
Participant Covered by Defined Benefit Plan................................................... 30
Participant Covered by Defined Benefit Plan and Defined Contribution Plan..................... 32
Combining of Plans............................................................................ 33
ARTICLE 10...................................................................................................... 33
Plan Administrator..................................................................................... 33
Plan Administrator's Duties................................................................... 33
Action by Plan Administrator.................................................................. 34
Information Required for Plan Administration.................................................. 35
Decision of Plan Administrator Final.......................................................... 35
Review of Benefit Determinations.............................................................. 35
Uniform Rules................................................................................. 36
Plan Administrator's Expenses................................................................. 36
Interested Plan Administrator................................................................. 36
Resignation or Removal of Plan Administrative Committee Members............................... 36
Indemnification............................................................................... 36
ARTICLE 11...................................................................................................... 37
Relating to the Employers.............................................................................. 37
Action by Employers........................................................................... 37
Additional Employers.......................................................................... 37
Restrictions on Reversions.................................................................... 37
ARTICLE 12...................................................................................................... 38
Amendment, Termination or Plan Merger.................................................................. 38
Amendment .................................................................................. 38
Termination .................................................................................. 38
Plan Merger .................................................................................. 39
Continuation by a Successor or Purchaser...................................................... 39
Notice to Participants of Amendments, Terminations or Plan Mergers............................ 40
Vesting and Distribution on Termination....................................................... 40
ARTICLE 13...................................................................................................... 40
Funding of Plan Benefits............................................................................... 40
Employer Contributions........................................................................ 40
Pension Fund.................................................................................. 41
Application of Forfeited Benefits............................................................. 41
ARTICLE 14...................................................................................................... 41
Allocation and Distribution on Termination............................................................. 41
ARTICLE 15...................................................................................................... 42
Restrictions on Benefits............................................................................... 42
</TABLE>
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<TABLE>
<S> <C>
Pre-Termination Restrictions.................................................................. 42
Restriction of Benefits....................................................................... 42
ARTICLE 16...................................................................................................... 43
General Provisions..................................................................................... 43
Examination of Plan Documents................................................................. 43
Notices .................................................................................. 43
Nonalienation of Plan Benefits................................................................ 43
No Employment Guarantee....................................................................... 43
Participant Litigation........................................................................ 44
Actuarial Equivalent.......................................................................... 45
Successors .................................................................................. 45
Adequacy of Evidence.......................................................................... 45
Gender and Number............................................................................. 45
Waiver of Notice.............................................................................. 46
Applicable Law................................................................................ 46
Severability.................................................................................. 46
Fiduciary Responsibilities.................................................................... 46
ARTICLE 17...................................................................................................... 46
Top-Heavy Plan......................................................................................... 46
Top-Heavy Plan Determination.................................................................. 46
Special Top-Heavy Plan Vesting Schedule....................................................... 48
Top-Heavy Minimum Benefits.................................................................... 49
SUPPLEMENT A.................................................................................................. A-1
SUPPLEMENT B.................................................................................................. B-1
</TABLE>
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PENTON MEDIA, INC. RETIREMENT PLAN
----------------------------------
INDEX OF DEFINED TERMS
----------------------
<TABLE>
<CAPTION>
TERMS PAGE
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<S> <C>
$7,500 limitation ...............................................................................................30
Annualized covered compensation..................................................................................13
Annuity commencement date........................................................................................17
Break-in service period..........................................................................................29
Company ................................................................................................1
Covered compensation.............................................................................................12
Covered employee ................................................................................................4
Current accrued benefit..........................................................................................32
Deferred retirement date..........................................................................................8
Defined benefit limitation amount................................................................................32
Defined contribution limitation amount...........................................................................32
Determination date...............................................................................................47
Direct rollover ...............................................................................................25
Disability retirement date........................................................................................8
Distributee ...............................................................................................25
Early retirement date.............................................................................................8
Earnings ...............................................................................................10
Effective date ................................................................................................1
Eligible retirement plan.........................................................................................25
Eligible rollover distribution...................................................................................24
Eligible spouse ...............................................................................................22
Employer ................................................................................................2
Employers ................................................................................................2
Employment termination date.......................................................................................8
ERISA ...............................................................................................42
Five-percent owner...............................................................................................47
Five-year break in service.......................................................................................29
Foreign subsidiary................................................................................................7
Hour of service ................................................................................................5
Key employee ...............................................................................................46
Leave of absence ................................................................................................6
Limitation year ...............................................................................................30
Non-key employee ...............................................................................................47
Normal retirement age.............................................................................................8
Normal retirement date............................................................................................8
One-year break in service........................................................................................29
Pension fund ...............................................................................................41
Permissive aggregation group of plans............................................................................48
</TABLE>
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<PAGE> 7
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Penton Companies ................................................................................................2
Penton Company ................................................................................................2
Plan ................................................................................................1
Plan administrator................................................................................................1
Plan year ................................................................................................2
Predecessor company...............................................................................................9
Predecessor plan ................................................................................................3
Qualified joint and survivor annuity.............................................................................17
Qualified military service...................................................................................... 11
Qualified plan ...............................................................................................37
Related company ................................................................................................2
Required aggregation group of plans..............................................................................48
Restricted employee..............................................................................................43
Retirement date ................................................................................................8
Social Security retirement age...................................................................................31
Subsidiary ................................................................................................2
Top-heavy ...........................................................................................32, 46
Top-heavy plan ...........................................................................................47, 48
Total and permanent disability...................................................................................16
Total compensation...............................................................................................30
Transferred participants......................................................................................... 1
U.S. foreign service employee.....................................................................................7
Year of service ................................................................................................9
</TABLE>
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<PAGE> 8
PENTON MEDIA, INC. RETIREMENT PLAN
----------------------------------
ARTICLE 1
---------
INTRODUCTION
------------
1.1 PURPOSE OF THE PLAN, EFFECTIVE DATE. This Penton Media,
Inc. Retirement Plan (the "plan"), was established effective as of August 7,
1998 (the "effective date") by Penton Media, Inc. (the "company") for the
purpose of providing retirement and other benefits for its eligible employees
and for eligible employees of its subsidiaries and other related companies which
adopt the plan with the consent of the company. The plan represents a
continuation of the Pittway Corporation Retirement Plan (the "Pittway plan") as
to employees or former employees of the company and its current or former
subsidiaries (other than Saddlebrook Resorts, Inc., Saddlebrook International
Tennis, Inc., C & A Investments, Inc. and Pittway Real Estate, Inc)
("transferred participants"). The Combination Agreement dated May 21, 1998,
among the company, Pittway Corporation and other parties (the "Combination
Agreement") provides for a transfer of assets and liabilities attributable to
transferred participants from the Pittway plan to this plan effective as of the
effective date. Subject to the completion of such transfer, all benefit
liabilities with respect to transferred participants attributable to their
covered employment with Pittway Corporation and the employers under the Pittway
plan and attributable to their covered employment under this plan, if any, shall
be provided under this plan, provided that, until the completion of such
transfer, any benefits owed to a transferred participant under this plan shall
be offset by benefits owed to such transferred participant under the Pittway
plan. Benefits provided hereunder as a result of the transfer of assets and
liabilities from the Pittway plan to this plan with respect to periods of
employment prior to the effective date, except as otherwise provided herein,
continue to be governed by the terms of the Pittway plan in effect on the
relevant date. The plan shall be deemed to have become effective on the
effective date following the Distribution described in the Combination
Agreement.
1.2 PLAN ADMINISTRATOR, PLAN YEAR. The plan is administered by
a plan committee (the "plan administrator") consisting of not less than three
persons appointed by the company to carry out the administration of the plan.
The plan is administered on the basis of a
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<PAGE> 9
plan year (the "plan year") which coincides with the calendar year. Article 10
describes certain specific powers, duties and responsibilities of the plan
administrator with respect to the administration of the plan. For purposes of
the 1998 plan year, the plan year shall begin on the effective date and end on
December 31, 1998.
1.3 THE EMPLOYERS. With the consent of the company, the plan
may be adopted in accordance with the provisions of section 11.2 by any
subsidiary of the company or any related company for the benefit of its eligible
employees. The plan is maintained by the company and the related companies that
are set forth in Supplement A to the plan. The company and its subsidiaries and
related companies that adopt the plan are referred to herein collectively as the
"employers" and individually as an "employer." A "subsidiary" means any
corporation 50 percent or more of the voting stock of which is directly or
indirectly owned by the company and a "related company" means any corporation
which directly or indirectly owns 50 percent or more of the voting stock of the
company and any corporation (other than the company and its subsidiaries) 50
percent or more of the voting stock of which is directly or indirectly owned by
any corporation which directly or indirectly owns 50 percent or more of the
voting stock of the company. The term "Penton Companies" includes the employers
and all subsidiaries and related companies that have not adopted the plan (and
each such corporation is sometimes referred to herein individually as a "Penton
Company"). In addition, although only covered employees of an employer that has
adopted the plan may participate in the plan, when determining a participant's
years of service under plan sections 4.3(d), 6.3 or 17.2 or Article 8 solely for
purposes of determining his vested and nonforfeitable interest in his plan
benefits, employment with certain entities that have not adopted the plan will
be taken into account, such that for these purposes, the terms "Penton
Companies" and "employers" shall include any corporation, trade, business or
other separate organization required to be aggregated with the company or other
employer that has adopted the plan under Sections 414(b), (c), (m) or (o) of the
Internal Revenue Code of 1986, as amended (the "Code"), or the regulations
thereunder.
1.4 PRESERVATION OF BENEFITS UNDER PREDECESSOR PLANS. Any
other pension plan maintained by an employer may be continued in effect by its
merger into this plan with the consent of the company. If appropriate, special
provisions relating to employees covered under any such
- 2 -
<PAGE> 10
pension plan when it is merged into this plan may be set forth in a supplement
of certification of eligibility which, by amendment, will be attached to and
form a part of this plan. Any pension plan which is merged into this plan, and
the Pittway plan as to transferred participants, may be referred to below as a
"predecessor plan." As to employees who participate in the plan on the effective
date of any merger of all or a portion of a predecessor plan into the plan, it
is intended that the benefits they earned under the predecessor plan up to the
effective date of its merger into this plan shall be preserved unless limited by
Article 9. If the plan administrator determines that any such benefits have not
been provided for under the terms and provisions of the plan as in effect on and
after the effective date of such merger of all or a portion of a predecessor
plan into the plan, the plan administrator shall direct the payment of such
benefits under the plan to the participant or other person entitled to them.
1.5 SUPPLEMENTS. In addition to the supplements described in
section 1.4, from time to time supplements or other certifications of
eligibility may by amendment be attached to and form a part of this plan. The
provisions of any such supplements shall be given the same effect that such
provisions would have if they were incorporated in the basic text of the plan.
Supplements may modify the provisions of the plan as they apply to particular
groups of participants. Supplements will specify the persons affected by such
supplements or exhibits and shall supersede the other provisions of the plan to
the extent necessary to eliminate inconsistencies between the plan provisions
and the provisions of such supplements. The terms used in such supplements shall
have the same meanings as those terms have for all other purposes under the plan
and all provisions of the plan not inconsistent with such supplements will
continue to apply to the persons affected by such supplements.
- 3 -
<PAGE> 11
ARTICLE 2
---------
PLAN PARTICIPANTS
-----------------
2.1 ELIGIBILITY. Each employee of an employer on the effective
date who was a participant in the Pittway plan immediately prior to the
effective date will be a participant in the plan on and after the effective
date, subject to the conditions and limitations of the plan. Each other employee
of an employer will become a participant in the plan on the effective date or on
any January 1 thereafter if such employee meets all of the following
requirements:
(a) The employee is a "covered employee" (as defined
below),
(b) The employee has been employed by an employer for
at least three full calendar months; provided, however, that
he completes one year of eligibility service (as defined in
section 2.2) following such January 1.
A "covered employee" shall mean any employee of an employer to which the plan
has been and continues to be extended excluding (i) any employee who is included
in a unit of employees covered by a negotiated bargaining agreement which does
not provide for such employee's participation in the plan, provided that there
is evidence that retirement benefits were the subject of good faith bargaining;
(ii) any non-resident alien with no U.S. source income; (iii) seasonal or
temporary employees whose services for the employers are performed solely from
their homes; and (iv) any leased employee (as defined below)
A "leased employee" shall mean any person who, pursuant to an
agreement between an employer and any other person ("leasing organization"), has
performed services for the employer on a substantially full-time basis for a
period of at least one year, and such services are performed under the primary
direction or control of the employer. Contributions or benefits provided a
leased employee by the leasing organization which are attributable to services
performed for an employer will be treated as provided by the employer. A leased
employee will not be considered an employee of an employer, however, if (1)
leased employees do not constitute more than 20 percent of the employer's
nonhighly compensated work force (within the meaning of Section
414(n)(5)(C)(ii)) of the Code, and (2) such leased employee is covered by a
money purchase pension plan maintained by the leasing organization that provides
(i)
- 4 -
<PAGE> 12
a nonintegrated employer contribution rate of at least 10 percent of the
leased employee's compensation, (ii) immediate participation and (iii) full and
immediate vesting.
2.2 ELIGIBILITY SERVICE. An employee of an employer shall be
credited with one year of eligibility service if he completes 1,000 or more
hours of service (as defined in section 2.3) during the twelve-consecutive-month
period commencing on his date of hire by the employers or any plan year
following his date of hire. An employee's date of hire shall be the date on
which the employee first completes an hour of service with the employers or with
an employer under the Pittway Plan.
2.3 HOURS OF SERVICE. An "hour of service" means:
(a) Each hour for which an employee is directly or
indirectly compensated or entitled to be compensated for his
performance of duties for the Penton Companies as an employee
(with each overtime hour being taken into account as if it
were a normal work hour).
(b) Each hour for which an employee is directly or
indirectly compensated or entitled to be compensated by the
Penton Companies with respect to a period of time during which
no duties are performed (irrespective of whether the
employment relationship has terminated) due to vacation,
holiday, illness, incapacitation (including disability),
military duty or leave of absence (as defined in section 2.4);
provided, however, that not more than 501 hours of service
shall be credited to an employee on account of any single
continuous period during which he performs no duties (i) if
his compensation for such period is in the form of payments
made or due under a plan maintained solely for the purpose of
complying with applicable worker's compensation, unemployment
compensation or state disability insurance laws, (ii) if his
compensation for such period constitutes reimbursement for
medical or medically related expenses incurred by the
employee, or (iii) if his compensation for such period is paid
to the employee while on a maternity or paternity leave of
absence (as described in subsection 2.4(b) below).
(c) Each other hour required by federal law to be
counted as an "hour of service," including each such hour for
which back pay, irrespective of mitigation of damages, is
either awarded or agreed to by the Penton Companies; provided,
however, that not more than 501 hours of service shall be
credited for payments of back pay, to the extent that such
back pay is awarded for a period of time during which the
employee did not or would not have performed duties as an
employee.
(d) Each hour for which an employee is on a maternity
or paternity leave of absence in accordance with subsection
2.4(b), but only for purposes of preventing the employee from
incurring a one-year break in service (as defined in
- 5 -
<PAGE> 13
section 8.3) and only if the employee timely furnishes to the
plan administrator such information as it may reasonably
require to establish that his absence from work was due to a
maternity or paternity leave of absence as defined in
subsection 2.4(b) and the number of days for which there was
an absence; provided, however, that not more than 501 hours of
service shall be credited by reason of a maternity or
paternity leave of absence.
Compensated hours described in subsection (b) above shall be determined by
multiplying the number of scheduled work days during the applicable period for
which the employee is compensated by the number of hours in the average
scheduled work day (based on the scheduled work week for his job classification
then in effect, provided, however, that in the case of an employee without a
regular work schedule, such hours shall be computed on the basis of a 40-hour
work week). Hours described in subsection (d) next above for employees on
maternity or paternity leave of absence shall be determined in the same manner
as compensated hours described in subsection (b) next above. In determining
hours of service, hours shall be credited for the period in which such duties
were performed (regardless of when payment is due) or for which such
compensation was paid and for this purpose the rules for crediting hours of
service set forth in section 2530.200b-2 of the Department of Labor regulations
are hereby incorporated by reference; provided that hours of service credited
under subsection (d) next above for a maternity or paternity leave of absence
shall be credited to the year in which such leave begins if such hours are
required to prevent a one-year break in service from occurring in such year, or
if not so required in that year, such hours shall be credited in the immediately
following year. In construing the foregoing provisions of this section,
ambiguities shall be resolved in favor of crediting employees with hours of
service. A transferred participant and any other employee of the Penton
Companies as of the effective date also shall be credited with the same number
of hours of service as were credited to such individual under the Pittway plan
as of the effective date.
2.4 LEAVE OF ABSENCE. A "leave of absence" as used in the plan
means:
(a) A leave of absence required by law or granted by
an employer on account of service in military or governmental
branches described in any applicable statute granting
reemployment rights to employees who enter such branches, or
any other military or governmental branch designated by the
employer.
(b) A leave of absence for any period the employee is
absent from work by reason of the employee's pregnancy, the
birth of the child of the employee, the
- 6 -
<PAGE> 14
placement of a child with the employee in connection with the
adoption of the child by the employee or the caring for the
child for a period beginning immediately after such birth or
placement.
(c) A leave of absence resulting from the
participant's disability (as defined in section 6.2) which is
incurred while he is a covered employee of an employer and any
other absence from active employment with an employer that is
approved by such employer and not treated by it as a
termination of employment.
Leaves of absence granted by an employer will be governed by rules uniformly
applied to all employees of that employer similarly situated.
2.5 NOTICE OF PARTICIPATION. Each employee will be notified of
the date he becomes a plan participant. Each participant and other person
receiving benefits under the plan will be furnished with a copy of a summary
plan description.
2.6 U.S. FOREIGN SERVICE EMPLOYEES. It is intended that a U.S.
foreign service employee (as defined below) may become or remain eligible to
participate in the plan to the same extent as if the employee were employed by
the company. A "U.S. foreign service employee" means a person (i) who is a
citizen of the United States, (ii) who is employed by a subsidiary of the
company incorporated outside the United States that qualifies as a "foreign
subsidiary" as defined in section 406 of the Code, and as to which an employer
has entered into an agreement under section 3121(l) of the Code, and (iii) for
whom contributions under a funded plan of deferred compensation (whether or not
a plan described in section 401(a), 403(a) or 405(a) of the Code) are not
provided by any other person with respect to remuneration paid to such
individual by that subsidiary.
- 7 -
<PAGE> 15
ARTICLE 3
---------
RETIREMENT DATES, EMPLOYMENT TERMINATION DATE
---------------------------------------------
3.1 NORMAL RETIREMENT DATE. A participant's "normal retirement
date" will be the first day of the calendar month coincident with or next
following the date the participant attains age 65 years ("normal retirement
age").
3.2 DEFERRED RETIREMENT DATE. A participant's "deferred
retirement date" will be the first day of the calendar month coincident with or
next following the date of such participant's retirement from the employ of all
of the Penton Companies (as defined in section 1.3) after his normal retirement
date.
3.3 EARLY RETIREMENT DATE. A participant's "early retirement
date" will be the first day of the calendar month coincident with or next
following the date of his retirement from the employ of all of the Penton
Companies before his normal retirement date, but after he has both attained age
55 years and completed 10 years of service.
3.4 DISABILITY RETIREMENT DATE. A participant's "disability
retirement date" will be the first day of the calendar month coincident with or
next following the date such participant's employment with all of the Penton
Companies terminates on account of his total and permanent disability (as
defined in section 6.2) prior to his normal retirement.
3.5 RETIREMENT DATE. Reference to the "retirement date" of a
participant who retires under the plan means his normal retirement date, if his
retirement from the employ of all of the Penton Companies occurs on that date,
but otherwise means his deferred retirement date or his early retirement date,
whichever applies in his case.
3.6 EMPLOYMENT TERMINATION DATE. Reference to the "employment
termination date" of a participant whose employment terminates before he
qualifies for retirement on a retirement date means the date his employment with
all of the Penton Companies ceases.
3.7 RETIREMENT OR TERMINATION WHILE ON LEAVE OF ABSENCE. A
participant who is otherwise eligible to retire under the plan or who will be
entitled to deferred vested benefits under the plan upon his termination of
employment with the Penton Companies may retire or terminate employment without
returning to active employment with the Penton Companies if he is absent from
work because of a leave of absence (as defined in section 2.4).
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<PAGE> 16
ARTICLE 4
---------
BENEFIT DETERMINATION FACTORS
-----------------------------
4.1 GENERAL. A participant's eligibility for, and amount of,
benefits payable under the plan will be based on his years of service, earnings,
covered compensation and annualized covered compensation as determined in
accordance with the provisions of this Article 4, Article 8 and any applicable
supplement to the plan. Years of service, earnings, covered compensation and
annualized covered compensation credited to a transferred participant under the
Pittway plan shall be credited to such transferred participant under this plan.
4.2 YEARS OF SERVICE. Subject to the provisions of section 4.3
and Article 8, a participant will be granted one "year of service" for each
calendar year during which such participant completes 1,000 or more hours of
service.
4.3 SPECIAL RULES AS TO DETERMINATIONS OF SERVICE. Subject to
the final sentence of Section 4.1, determinations of years of service and hours
of service shall be subject to the provisions of Article 8 and the following
provisions:
(a) If a participant had a period or periods of
employment with a Penton Company that has not adopted the
plan, with a Penton Company before it adopted the plan or with
a predecessor company to a Penton Company, such period or
periods of employment will be considered as employment with
the Penton Companies in determining his hours of service under
section 2.1 but will not be considered as employment with the
Penton Companies and will be disregarded in determining his
years of service under section 4.2 unless and to the extent
otherwise required by law or specified by the company;
provided that this subsection shall not be applied so as to
allow an employee to become a participant prior to his actual
employment by an employer and prior to his becoming a covered
employee. A "predecessor company" means any other corporation
or other entity the stock, assets or business of which was
acquired by a Penton Company prior to the effective date or is
acquired by a Penton Company on or after the effective date,
whether by merger, consolidation, purchase of assets or
otherwise, and any predecessor thereto designated by the
company.
(b) A period of concurrent employment with two or
more Penton Companies will be considered as employment with
only one of them during that period.
(c) A leave of absence (as defined in section 2.4)
will not interrupt continuity of employment for purposes of
the plan, but hours of service shall be
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<PAGE> 17
credited with respect to a paid or unpaid leave of absence
only as provided in section 2.3.
(d) Separate periods of an employee's employment
shall be aggregated for purposes of determining his years of
service; provided, however, that if an employee terminates his
employment with the employers before he is either eligible to
retire on a retirement date or entitled to a deferred vested
benefit under section 6.3 and he is reemployed by an employer
after he has incurred five consecutive one-year breaks in
service (as defined in section 8.3) and his number of
consecutive one-year breaks in service exceeds his prior years
of service, his prior years of service shall be disregarded.
4.4 EARNINGS. Subject to the final sentence of Section 4.1,
for purposes of the plan, a participant's "earnings" means his total, regular
cash compensation paid during the plan year for services rendered to the
employers as a covered employee, including overtime, bonuses, commissions,
incentive compensation, unused vacation pay, and income realized for federal
income tax purposes as a result of the grant or exercise of an option or options
to acquire shares of stock of any Penton Company, the receipt of a cash
appreciation payment in lieu of such an option or options, and the disposition
of shares acquired by the exercise of such an option, but excluding:
(a) Any noncash compensation, including any amounts
contributed by the employers for the participant's benefit
under this plan or any other retirement or benefit plan,
arrangement, or policy maintained by the employers; provided,
however, any salary reduction amounts elected by the
participant and credited to a cafeteria plan (as defined in
section 125(c) of the Code) or a qualified cash or deferred
arrangement (as defined in section 401(k) of the Code) shall
be included in his compensation;
(b) Any reimbursements for medical, dental, or travel
expenses, automobile allowances, relocation allowances,
educational assistance allowances, awards and other special
allowances;
(c) Any income realized for federal income tax
purposes as a result of (i) group life insurance, (ii) the
personal use of an employer owned automobile, or
(iii) the transfer of restricted shares of stock or restricted
property of a Penton Company, or the removal of any such
restrictions;
(d) Any severance pay paid as a result of the
participant's termination of employment;
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<PAGE> 18
(e) Any compensation paid or payable to the
participant, or to any governmental body or agency on account
of the participant, under the terms of any state, federal or
foreign law requiring the payment of such compensation because
of the participant's voluntary or involuntary termination of
employment with any Penton Company.
(f) Any compensation paid or payable to the
participant which is in excess of $150,000 as adjusted by the
Commissioner of Internal Revenue for increases in the cost of
living in accordance with Section 401(a)(17)(B) of the Code.
The cost-of-living adjustment in effect for a calendar year
applies to any period, not exceeding 12 months, over which
compensation is determined (determination period) beginning in
such calendar year. If a determination period consists of
fewer than 12 months, the annual compensation limit will be
multiplied by a fraction, the numerator of which is the number
of months in the determination period, and the denominator of
which is 12. Any reference in this plan to the limitation
under section 401 (a)(17) of the Code shall mean the annual
compensation limit set forth in this provision. If
compensation for any prior determination period is taken into
account in determining an employee's benefits accruing in the
current plan year, the compensation for that prior
determination period is subject to the annual compensation
limit in effect for that prior determination period.
4.5 DETERMINATION OF BASES OF BENEFITS. A participant's hours
of service, years of service, earnings, and any other factor relating to
benefits payable to him under the plan shall be determined by the plan
administrator pursuant to the foregoing provisions of this Article 4, Article 9
and any supplement to the plan on the basis of the records of the employers and
on the basis of reasonable estimates where such records are not sufficient to
provide all required data and information.
4.6 MILITARY SERVICE. Notwithstanding any provisions of this
plan to the contrary, contributions, benefits and service credit with respect to
qualified military service will be provided in accordance with Section 414(u) of
the Code. "Qualified military service" means any service in the uniformed
services (as defined in chapter 43 of title 38 of the United States
Code) by any individual if such individual is entitled to reemployment rights
under such chapter with respect to such service.
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<PAGE> 19
ARTICLE 5
---------
RETIREMENT INCOME
-----------------
5.1 NORMAL OR DEFERRED RETIREMENT. Subject to the conditions
and limitations of the plan, if a participant retires on his normal retirement
date or a deferred retirement date he will be entitled to a monthly retirement
income payable for the life of the participant commencing on his retirement date
in an amount equal to one-twelfth of the sum of the participant's accrued
benefits for each plan year that he participated in the plan. Subject to the
conditions and limitations of this section 5.1, each plan year up to 35 years of
plan participation, the participant's accrued benefit shall equal (a) plus (b)
below:
(a) 1.2 percent of his earnings for such plan year up
to covered compensation (as defined below).
(b) 1.85 percent of his earnings for such plan year
in excess of covered compensation.
For purposes of this section 5.1, a participant's "covered compensation" is
equal to the average of the Social Security taxable wage bases in effect for
each calendar year (under Table II of the tables issued each year by the Social
Security Administration) during the 35-year period ending with the last day of
the calendar year in which the participant attains (or will attain) Social
Security retirement age (as defined in Section 415(b)(8) of the Code). If the
participant's employment terminates prior to his Social Security retirement age,
then for purposes of determining the participant's covered compensation amount
it shall be assumed that the taxable wage base for the plan year of the
determination shall continue in effect for each subsequent plan year. If the
participant's employment terminates after his Social Security retirement age,
then a participant's covered compensation for a plan year shall be equal to the
covered compensation as determined for the plan year during which he attained
his Social Security retirement age. For each plan year, a participant's
applicable "covered compensation" shall be based on the applicable Social
Security wage base for individuals born in the year of the participant's birth
as set forth in the foregoing Table II. With respect to a participant who has
completed more than 35 years of plan participation, each plan year of plan
participation that exceeds 35 such years, the participant's accrued benefit for
such plan year shall be an amount equal to:
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<PAGE> 20
1.2 percent of his earnings for such plan year.
A participant's accrued benefit with respect to the plan year in which his
retirement date or employment termination date occurs shall be based on (X) his
actual earnings for such plan year but annualized as though his retirement date
or employment termination date had occurred on the last day of such plan year,
(Y) the amount of such annualized earnings that would constitute the
participant's covered compensation for such plan year had the participant
actually earned such annualized amount (the "annualized covered compensation"),
and (Z) the excess of the participant's annualized earnings over his annualized
covered compensation for such plan year. The participant's accrued benefit for
such plan year shall be an amount equal to the sum of (i) plus (ii) with such
sum multiplied by (iii), where (i), (ii), and (iii) are as follows:
(i) 1.2 percent of annualized earnings up to
annualized covered compensation.
(ii) 1.85 percent of annualized earnings in
excess of annualized covered compensation.
(iii) A fraction the numerator of which is the
number of full months of service the
participant completed in the plan year in
which his retirement date or employment
termination date occurs and the denominator
of which is 12.
With respect to a participant who has completed 35 or more years of plan
participation, the foregoing computation of his accrued benefit for his final
plan year of participation shall be based on 1.2 percent of his annualized
earnings multiplied by the fraction set forth in (iii) above. A participant's
right to his normal retirement benefit shall be nonforfeitable and fully vested
when he attains normal retirement age or when his employment with the employers
terminates by reason of his total and permanent disability (as defined in
Section 6.2).
5.2 EARLY RETIREMENT. Subject to the conditions and
limitations of the plan, if a participant retires on an early retirement date he
will be entitled to a monthly retirement income commencing on his normal
retirement date and payable in the normal form in an amount equal to
his retirement benefit on his early retirement date as determined under section
5.1. However, in lieu of receiving a monthly retirement income commencing on his
normal retirement date, the participant may elect (by filing a written election
with the plan administrator in advance) to
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<PAGE> 21
receive a monthly retirement income commencing at his early retirement date, or
on the first day of any calendar month thereafter that occurs before his normal
retirement date. If such monthly retirement income is to commence prior to the
date the participant attains his normal retirement age, the amount of such
monthly retirement income that he would otherwise be entitled to on his normal
retirement date shall be reduced by 1/180 for each of the first 60 months and
1/360 for each of the next 60 months by which the commencement of the payment of
the retirement income precedes his normal retirement age.
5.3 FORM OF PAYMENT. If a participant becomes entitled to
receive a retirement income benefit under the foregoing provisions of this
Article 5, payment of such benefit shall be made in accordance with, and subject
to, the applicable provisions of Article 7.
ARTICLE 6
---------
DISABILITY BENEFIT; DEFERRED VESTED BENEFIT
-------------------------------------------
6.1 DISABILITY BENEFIT. Subject to the conditions and
limitations of the plan, if a participant's employment with all of the Penton
Companies is terminated before he becomes eligible for early or normal
retirement because of his total and permanent disability (as defined in section
6.2), he will be entitled to a monthly disability benefit commencing on his
disability retirement date regardless of whether he has completed five years of
service as of such date. The amount of his monthly disability benefit will be
computed in accordance with the benefit formula in section 5.1 above (as in
effect as of his disability retirement date) as of his disability retirement
date but shall be actuarially reduced to account for commencement on his
disability retirement date. In lieu of receiving his monthly disability benefit
commencing on his disability retirement date, a participant may elect (by filing
a written election with the plan administrator in advance) to receive his
monthly disability benefit commencing on the first day of any calendar month
commencing on or after his disability retirement date that occurs before his
normal retirement date, subject to actuarial reduction. Notwithstanding anything
in this section 6.1 or the plan to the contrary, no monthly disability benefit
shall be payable for any month for which the participant receives long-term
disability benefits under a disability benefit program maintained by his
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<PAGE> 22
employer. The participant's monthly disability benefit will be payable only to
him, on a life annuity basis, pursuant to the applicable provisions of Article
7, subject to the following:
(a) If the participant recovers from his disability
prior to his normal retirement date, if he should no longer be
entitled to disability insurance benefits under the Social
Security Act or if he should refuse to submit evidence to the
plan administrator of his disability, his entitlement to his
monthly disability benefit shall cease. Unless he then is
reemployed by an employer, he shall be deemed to have
terminated employment on his actual employment termination
date for a reason other than disability. His eligibility for,
and the amount of, benefits payable to him under the plan
after his recovery from his disability shall be determined in
accordance with section 6.3 and the benefit formula in section
5.1 (as in effect as of his actual employment termination date
and as if such date were a retirement date) as of his actual
employment termination date and his accrued benefits under the
plan shall be reduced by the actuarial value of the disability
benefits he previously received under the plan.
(b) If the participant does not recover from his
disability prior to his normal retirement age and is not
married as of his normal retirement age, his monthly
disability benefit shall be payable to him on a life annuity
basis until his attainment of normal retirement age and his
normal retirement benefit (as actuarially reduced to account
for his benefits having commenced prior to his normal
retirement date) shall continue to be payable to him in the
form of a life annuity thereafter (unless the participant
rejects the life annuity form of benefit in accordance with
the provisions of sections 7.1 and 7.3).
(c) If the participant has completed 10 years of
service but has not attained age 55 years as of his disability
retirement date, does not recover from his disability prior to
his attainment of age 55 years, and is married as of the date
he attains age 55 years, his monthly disability benefit (as
actuarially reduced to account for his benefits having
commenced prior to his normal retirement date) shall be
payable to him on a life annuity basis until his attainment of
age 55 years and shall be payable in the form of a qualified
joint and survivor annuity thereafter (unless the participant
and his spouse reject the qualified joint and survivor annuity
form of benefit in accordance with the provisions of sections
7.1 and 7.3). If such a participant dies prior to his
attainment of age 55 years and he has an eligible spouse (as
defined in Section 7.4) as of the date of his death, his
surviving eligible spouse shall be eligible for a
pre-retirement spouse's benefit as set forth in section 7.4.
(d) If the participant has completed five but less
than 10 years of service as of his disability retirement date,
does not recover from his disability prior to his attainment
of normal retirement age, and is married as of the date he
attains his normal retirement age, his monthly disability
benefit (as actuarially reduced to
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<PAGE> 23
account for his benefits having commenced prior to his normal
retirement date) shall be payable to him on a life annuity
basis until his attainment of normal retirement age and his
normal retirement benefit shall be payable in the form of a
qualified joint and survivor annuity thereafter (unless the
participant and his spouse reject the qualified joint and
survivor annuity form of benefit in accordance with the
provisions of sections 7.1 and 7.3). If such a participant
dies prior to his attainment of normal retirement age and he
has an eligible spouse (as defined in section 7.4) as of the
date of his death, his surviving eligible spouse shall be
eligible for a pre-retirement spouse's benefit as set forth in
Section 7.4.
6.2 DISABILITY. A participant shall be considered to have
incurred a "total and permanent disability" for purposes of the plan if he
qualifies for and is receiving disability benefits under the Social Security Act
or he qualifies for and is receiving long-term disability benefits under any
disability benefit program maintained by his employer. For the purpose of
determining whether a participant has incurred a total and permanent disability
or has recovered from a total and permanent disability, the plan administrator
from time to time may require that a participant either verify that he currently
qualifies for and is receiving disability benefits under the Social Security Act
or submit to medical examinations at any reasonable time (but not more
frequently than twice in a twelve-month period) prior to his normal retirement
date. The plan administrator's determination of the existence of a disability
and of the medical evidence necessary and appropriate to determine its existence
shall be conclusive.
6.3 MONTHLY DEFERRED VESTED BENEFIT. Subject to the conditions
and limitations of the plan, if a participant resigns or is dismissed from the
employ of all of the employers before he qualifies for retirement under the plan
after he has completed five or more years of service, or if his employment with
the employers terminates by reason of his disability (as defined in section
6.2), he will be eligible to receive a monthly deferred vested benefit for life
commencing on his normal retirement date. The amount of his monthly deferred
vested benefit will be computed in accordance with the benefit formula described
in section 5.1 (as in effect as of his employment termination date as if such
date were a retirement date) as of his employment termination date.
6.4 EARLY COMMENCEMENT OF DEFERRED VESTED BENEFIT. A
participant who is entitled to a monthly deferred vested benefit may elect (by
filing a written election with the plan administrator in advance) to receive, in
lieu of a monthly deferred vested benefit commencing at
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<PAGE> 24
his normal retirement date, a monthly deferred vested benefit commencing on or
after the first day of any month on or after the date the participant attains
age 55 and has completed 10 years of service and prior to his normal retirement
date. If a participant elects early commencement of his monthly deferred vested
benefit the amount of such monthly deferred vested benefit shall be determined
by reducing the amount of monthly deferred vested benefit to which the
participant is otherwise entitled commencing on his normal retirement date by
1/180 for each of the first 60 months and 1/360 for each of the next 60 months
by which the commencement of his benefits precedes his normal retirement date.
6.5 ANNUITY COMMENCEMENT DATE. A participant's "annuity
commencement date" means the date as of which the initial payment of the
retirement income or deferred vested benefit to which he is entitled under the
plan is payable.
6.6 FORM OF PAYMENT. If a participant becomes entitled to
receive a deferred vested retirement income benefit under the foregoing
provisions of this Article 6, payment of such benefit shall be made in
accordance with, and subject to, the applicable provisions of Article 7.
ARTICLE 7
---------
PAYMENT OF RETIREMENT INCOME AND OTHER BENEFITS
-----------------------------------------------
7.1 NORMAL FORM OF PAYMENT OF BENEFITS. Except as otherwise
specifically provided, payment of participants' monthly retirement income or
deferred vested benefits under Articles 5 and 6 shall be made to them, and
payment of monthly benefits shall be made to their spouses, if eligible for such
benefits, as follows:
(a) QUALIFIED JOINT AND SURVIVOR ANNUITY. If a
participant retires on a normal, early or deferred retirement
date under the plan, or if a participant's employment
terminates before retirement under the plan and he is entitled
to a deferred vested benefit, and if the participant has an
eligible spouse (as defined in section 7.4) immediately
preceding his annuity commencement date, payment of his
monthly benefit shall be in the form of a "qualified joint and
survivor annuity" unless he had elected in lieu thereof to
receive payment either in the form of a life annuity under
subsection (b) next below or under a benefit option described
in section 7.2 (and such option is in effect on his annuity
commencement date). Such qualified joint and survivor annuity
shall consist of a monthly benefit continuing during the
participant's lifetime and if the participant's eligible
spouse is living at the time of the participant's death,
payment of 50 percent of such monthly benefit
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<PAGE> 25
shall be made to his eligible spouse until the eligible
spouse's death occurs. The amount of such monthly benefit
under this subsection shall be calculated so that it is the
actuarial equivalent of the retirement or deferred vested
benefit to which the participant is otherwise entitled. If a
participant who has five or more years of service who retired
on a normal or early retirement date dies prior to his annuity
commencement date, or if a participant who has continued
employment after he has attained normal retirement age dies
before his retirement date, and if such participant has an
eligible spouse at the time of his death, then, unless the
participant had elected that benefits not be paid to his
eligible spouse under this subsection, benefits shall be
payable to the participant's eligible spouse in accordance
with the foregoing provisions of this subsection as if the
participant's annuity commencement date had occurred
immediately prior to the date of his death.
(b) LIFE ANNUITY. A participant shall receive payment
of his monthly benefit during his lifetime on a life annuity
basis if he is not eligible for a qualified joint and survivor
annuity under subsection (a) next above, or, if he is eligible
for a qualified joint and survivor annuity under (a) above,
and prior to his annuity commencement date he had elected not
to receive payment in the form of a qualified joint and
survivor annuity or any of the optional forms of payment of
benefits described in section 7.2.
(c) WRITTEN EXPLANATION OF QUALIFIED JOINT AND
SURVIVOR ANNUITY: The plan administrator shall provide to each
participant, not more than 90 days nor less than 7 days before
the participant's annuity starting date, a written explanation
of (i) the terms and conditions of the qualified joint and
survivor annuity, (ii) the participant's right to make, and
the effect of, an election to waive the qualified joint and
survivor annuity, (iii) the rights of a participant's spouse
under this section, (iv) the right to make, and the effect of,
a revocation of an election to waive the qualified joint and
survivor annuity and (v) a general description of the
eligibility features and relative values of a qualified joint
and survivor annuity, single life annuity and the other
optional forms of benefit under the plan. Each participant
shall have an election period beginning not more than 90 days
before his annuity commencement date and ending on the annuity
commencement date. An election made by the participant under
subsection (a) next above may be revoked by the participant,
and a new election made at any time during the election
period, providing that such a new election meets the
requirements of section 7.3.
7.2 OPTIONAL FORMS OF PAYMENT OF BENEFITS. In lieu of the
normal form and amount of monthly benefit specified in section 7.1, and subject
to the provisions of section 7.3, a participant before his retirement date
(excluding a participant entitled to a monthly disability
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<PAGE> 26
benefit) may elect a retirement income or deferred vested benefit of actuarially
equivalent value in one of the following forms:
(a) FIVE, TEN OR FIFTEEN YEAR CERTAIN OPTION. A
monthly benefit payable to the participant during his lifetime
and, if the participant dies within a period of five, ten or
fifteen years (as selected by the participant) from his
annuity commencement date, a continuing monthly payment of the
same amount to a person or persons designated by the
participant for the balance of such five, ten or fifteen year
period; provided, however, that the ten or fifteen years
option shall not be available if the life expectancy of the
participant or the joint and survivor life expectancy of the
participant and his beneficiary is less than the applicable
five, ten or fifteen years on his annuity commencement date.
(b) JOINT AND SURVIVOR ANNUITY. A monthly benefit
payable to the participant during his lifetime and, if another
person he had designated is living at the time of his death,
payment of 100 percent, 66-2/3 percent or 50 percent of that
amount to such other person as long as such other person
lives; provided, however that if the participant designates
someone other than his spouse, the option shall be designed so
that the lump sum actuarially equivalent value of the monthly
benefit payable to the participant under the option over his
life expectancy shall be greater than 50 percent of the lump
sum actuarially equivalent value of the monthly benefit that
otherwise would be payable to the participant on a life
annuity basis.
(c) LEVEL BENEFIT OPTION. If payment of a
participant's monthly benefit begins before he commences
receiving Old Age Insurance Benefits under the Social Security
Act, a larger monthly retirement income or deferred vested
benefit payable to him until the first to occur of his death
or the earliest date on which he becomes eligible to apply for
and receive Old Age Insurance Benefits under the Social
Security Act, and, where the full actuarial equivalent of the
normal form of the participant's monthly benefit has not been
provided under the option, with a continuance of a smaller
amount of monthly benefit after such date until the
participant's death.
(d) LUMP SUM OPTION. A single lump sum payment of the
actuarially equivalent present value of the participant's
monthly retirement benefit.
(e) FULL CASH REFUND OPTION. A monthly benefit
payable to the participant during his lifetime and, if the
participant dies before he has received payments equal to the
actuarial value of his pension at the earlier of his normal
retirement date or annuity commencement date, then the excess
of such amount over the amount received by the participant
shall be paid in a lump sum or life annuity to a person or
persons designated by the participant.
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<PAGE> 27
Elections under this section shall be in writing on forms prescribed by and
filed with the plan administrator.
7.3 RULES AS TO WAIVER OF NORMAL FORM OF BENEFIT, ELECTION AND
DISCONTINUANCE OF OPTIONAL FORMS OF PAYMENT OF BENEFITS AND SPOUSAL CONSENTS. A
participant's waiver of a normal form of benefit and election of an optional
form of monthly benefit specified in section 7.2 and an eligible spouse's
consent of the participant's waiver and election shall be subject to the
following rules, to the extent appropriate:
(a) A waiver of the normal form of benefit and
election of an optional form of benefit must be in writing,
signed by the participant, and approved by the company. If
payment of the participant's monthly benefit otherwise would
be required pursuant to subsection 7.1(a), the election of an
optional form of benefit will not be valid unless (i) it also
contains the participant's waiver of his right to receive
payment in the form of a qualified joint and survivor annuity
and (ii) the participant's eligible spouse consents, in
writing, to the participant's waiver of the normal form of
benefit, to the optional form of benefit or the plan
administrator determines that a consent cannot be obtained
because the participant is not married or because the eligible
spouse cannot be located or because of such other
circumstances as the Secretary of the Treasury may, by
regulation, prescribe. An eligible spouse's consent is
irrevocable and must be witnessed by a notary public or a plan
representative.
(b) A participant may waive the normal form of
benefit and elect an optional form of benefit, and an eligible
spouse may consent to such a waiver and election, at any time
during the applicable election period. The applicable election
period shall commence on the date which is 90 days prior to
the participant's annuity commencement date and shall end on
the participant's annuity commencement date.
(c) A participant who has elected an option may
revoke it or change it to another option at any time prior to
the participant's annuity commencement date by filing, with
the plan administrator, a superseding election, in accordance
with the foregoing provision of this section 7.3. A revocation
or change of an option may be made without the consent of the
person or persons the participant has designated in the
option. Notwithstanding the immediately preceding provision, a
participant's eligible spouse must consent, in accordance with
the foregoing provision of this section 7.3, to a change of an
optional form of benefit.
(d) If a participant who had elected an option dies
before he attains age 65 and before his annuity commencement
date, such option automatically will be canceled and no
benefits will be paid to any person (or any person's estate)
under
- 20 -
<PAGE> 28
such option. If a participant dies after attaining age 65, but
before his benefit commencement date, such option will
continue in effect as if the participant retired immediately
prior to his death.
(e) If the beneficiary designated by a participant in
his election of an option dies before the participant's
annuity commencement date, the option automatically will be
canceled and the participant's monthly benefit will be paid to
him in the normal form unless a new election can be and is
made by the participant pursuant to the foregoing provisions
of this section.
(f) If after a participant has commenced receiving
monthly benefits under subsections 7.2(a) or (e), but prior to
the participant's death, the person or persons designated by
the participant under that subsection die, the option shall
remain in effect and, unless the participant designates
another beneficiary to receive any benefits payable under that
option after his death, such benefits shall be payable to the
participant's estate. If after a participant has commenced
receiving monthly benefits under subsection 7.2(b), but prior
to the participant's death the beneficiary designated as the
joint annuitant by the participant under that subsection dies,
the option shall remain in effect but no benefits shall become
payable to any person (or any person's estate) upon the
participant's death.
7.4 PRE-RETIREMENT SPOUSE'S BENEFIT. If a participant who has
completed five or more years of service dies before his annuity commencement
date and if he has an eligible spouse at the time of his death, his eligible
spouse shall be entitled to receive a monthly benefit for life. The monthly
benefit payable to the participant's eligible spouse for life shall be an amount
equal to 50 percent of the amount of monthly retirement income or monthly
deferred vested benefit that would have been payable to the participant under
subsection 7.1(a) in the form of the qualified joint and survivor annuity
described therein if he had terminated employment as of the date of his death
(if he had not already so terminated his employment) and his annuity
commencement date was to occur on the first day of the calendar month coincident
with or next following the later of the date of his death or the date the
participant would have attained normal retirement age with the qualified joint
and survivor annuity in effect for him. The first payment to a participant's
eligible spouse under this section shall be made as of the first day of the
calendar month coincident with or next following the later of the date of the
participant's death or the date the participant would have attained age 65
years, and the final payment shall be made as of the first day of the calendar
month during which the eligible spouse's death occurs. In lieu of
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receiving a monthly benefit commencing on the participant's normal retirement
date, an eligible spouse of a participant who had completed 10 years of service
as of the date of his death may elect (by filing a written election with the
plan administrator in advance) to receive a monthly benefit for life commencing
on the first day of the calendar month coincident with or next following the
later of the date of the participant's death or the date the participant would
have been eligible for early retirement, or on the first day of any calendar
month thereafter that occurs prior to the participant's normal retirement date.
If such monthly benefit is to commence prior to the participant's normal
retirement date, the amount of such monthly benefit shall be determined by
reducing the amount of monthly benefit to which the eligible spouse would
otherwise be entitled commencing on the participant's normal retirement date by
1/180 for each of the first 60 months and 1/360 for each of the next 60 months
by which the commencement of the monthly benefit precedes the participant's
normal retirement date. Notwithstanding anything in this section 7.4 or the plan
to the contrary, if a participant who has completed five or more years of
service continues in the employ of the employers after he has attained age 65
years and the participant is married, the participant may elect prior to his
retirement (in writing on a form prescribed by and filed with the plan
administrator prior to the participant's death) to have the lump sum actuarially
equivalent present value of his monthly retirement benefit paid to his eligible
spouse, if any, as soon as practicable after his death provided that he dies
prior to his annuity commencement date and his spouse consents in writing to
such immediate lump sum payment in accordance with the spousal consent rules
described in section 7.3(a). The spouse of a participant will be considered as
an "eligible spouse" as of any date only if at least twelve months prior thereto
the participant and spouse are married in a religious or civil ceremony
recognized under the laws of the state where the marriage was contracted and the
marriage remains legally effective.
7.5 SPECIAL PRE-RETIREMENT LUMP SUM DEATH BENEFIT. A
participant who continues in the employ of the Penton Companies after his
attainment of normal retirement age may elect the lump sum benefit payment
described in section 7.2(d) as a pre-retirement death benefit to his designated
beneficiary. If a participant elects a lump sum pre-retirement death benefit
under this section, dies prior to his employment termination date or retirement
date and has not revoked his election as of the date of his death, payment of
the lump sum shall be made to
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the participant's designated beneficiary; provided, however, that if the
participant has an eligible spouse as of the date of the participant's death,
the eligible spouse shall receive the pre-retirement spouse's benefit described
in section 7.4 and the participant's election of a lump sum pre-retirement death
benefit described in this section shall be canceled unless the participant's
eligible spouse consents (within the 90-day period ending on the benefit
commencement date in accordance with the procedures described in section 7.3) to
the payment of such lump sum benefit to the participant's designated beneficiary
in lieu of the pre-retirement spouse's benefit. Any election made under this
section 7.5 shall be canceled upon the participant's employment termination
provided the participant's employment terminates by reason other than his death.
7.6 SPECIAL PAYMENT LIMITATIONS. Notwithstanding anything in
this plan to the contrary,
(a) As provided in section 401(a)(9) of the Code, (i)
in the case of a participant who (A) is a five-percent owner
or (B) attains age 70 1/2 prior to January 1, 1999, the
payment of such participant's benefits shall in no event
commence later than April 1 of the calendar year following the
calendar year in which the participant attains age 70 1/2 and
(ii) in the case of any other participant, the payment of such
participant's benefit shall in no event commence later than
April 1 of the calendar year following the later of the
calendar year in which the participant attains age 70 1/2 or
the calendar year in which the participant terminates
employment with the employers;
(b) If the actuarial present value of a participant's
vested accrued benefits exceeds, or at any time exceeded,
$5,000, no amount shall be distributable to the participant
prior to the date the participant attains normal retirement
age without the participant's written consent and, if the
participant's benefit is to be distributed in any form other
than a qualified joint and survivor annuity, the written
consent of the participant's eligible spouse;
(c) Payment of benefits under the plan to a
participant shall commence not later than the 60th day after
the end of the plan year in which occurs the latest of the
participant's termination of employment with the employer, the
participant's attainment of normal retirement age, or the
tenth anniversary of the year in which the participant
commenced participation in the plan; and
(d) If a participant continues in the employ of the
Penton Companies after his normal retirement date, the payment
of his accrued monthly retirement income shall be suspended
only for those calendar months within the period of his
continued employment during which he receives compensation for
at least 40
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hours of service as long as proper notification of such
suspension of benefits has previously been distributed to such
participant.
7.7 PAYMENT OF SMALL AMOUNTS. If the lump sum actuarially
equivalent value of the monthly benefit payable to or with respect to a
participant under the plan does not exceed $5,000 as of the participant's
employment termination date, then, in lieu of payment of such monthly benefits,
the plan administrator shall direct that an amount equal to the lump sum
actuarially equivalent value of such monthly benefits be paid to the participant
(or, in the event of the participant's death, to the participant's beneficiary)
in a lump sum as soon as practicable thereafter; and for this purpose, if the
value of the participant's vested and nonforfeitable benefit under the plan as
of the participant's employment termination date is zero, the participant shall
be deemed to have received a total distribution of such vested and
nonforfeitable benefit as of such date. For purposes of determining the lump sum
amount under this section, the interest rate used in determining actuarial
equivalence shall not be greater than the interest rate which would be used as
of the date of a distribution under this section by the Pension Benefit Guaranty
Corporation ("PBGC") for purposes of determining the present value of a lump sum
distribution under a plan which terminates on such date.
7.8 PAYMENT BY ANNUITY PURCHASE. The purchase for a
participant, contingent annuitant or beneficiary and distribution to that person
of an annuity contract or annuity certificate to provide such person's benefits
shall constitute the complete payment of that person's benefits under the plan.
7.9 DIRECT ROLLOVER OF ELIGIBLE ROLLOVER DISTRIBUTIONS.
Notwithstanding any provision of the plan to the contrary that would otherwise
limit a distributee's election under this Article 7, a distributee may elect, at
the time and in the manner prescribed by the plan administrator, to have any
portion of an eligible rollover distribution paid directly to an eligible
retirement plan specified by the distributee in a direct rollover.
An "eligible rollover distribution" is any distribution of all
or any portion of the balance to the credit of the distributee, except that an
eligible rollover distribution does not include: any distribution that is one of
a series of substantially equal periodic payments (not less frequently than
annually) made for the life (or life expectancy) of the distributee or the joint
lives
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<PAGE> 32
(or joint life expectancies) of the distributee and the distributee's designated
beneficiary, or for a specified period of ten years or more; any distribution to
the extent such distribution that is not includable in gross income (determined
without regard to the exclusion for net unrealized appreciation with respect to
employer securities).
An "eligible retirement plan" is an individual retirement
account described in section 408(a) of the Code, an individual retirement
annuity described in section 408(b) of the Code, an annuity plan described in
section 403(a) of the Code, or a qualified trust described in section 401(a) of
the Code, that accepts the distributee's eligible rollover distribution.
However, in the case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is an individual retirement account or
individual retirement annuity.
A "distributee" includes an employee or former employee. In
addition, the employee's or former employee's surviving spouse and the
employee's or former employee's spouse or former spouse who is the alternate
payee under a qualified domestic relations order, as defined in section 414(p)
of the Code, are distributees with regard to the interest of the spouse or
former spouse.
A "direct rollover" is a payment by the plan to the eligible
retirement plan specified by the distributee.
7.10 DESIGNATED BENEFICIARIES. A participant may from time to
time designate a beneficiary or beneficiaries on a form provided by the plan
administrator, to whom the participant's benefit will be distributed following
the participant's death. A participant may designate contingent or successive
beneficiaries and may name individuals, legal persons or entities, trusts,
estates, trustees or other legal representatives as beneficiaries. Beneficiary
designations must be completed and filed with the plan administrator during the
participant's lifetime, and, if the participant has an eligible spouse at the
date of the participant's death, the participant's surviving spouse will be the
participant's designated beneficiary unless the surviving spouse has consented
or consents in writing to the participant's designation of another beneficiary
in accordance with section 7.3. The consent of the spouse shall not be required
to the participant's designation of a beneficiary upon proof satisfactory to the
plan administrator that the participant is not married, the spouse of the
participant cannot be located, or the consent of the
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spouse cannot be obtained under such circumstances as may be prescribed in
regulation issued by the Secretary of Treasury or its delegate. A beneficiary
designation properly completed and filed will cancel all such designations filed
earlier.
7.11 MISSING PERSONS. Each participant and each other person
entitled to benefits under the plan must file with the plan administrator from
time to time in writing his post office address and each change of post office
address. Any communication, statement or notice addressed to a participant or a
person entitled to benefits at his last post office address as shown on the
employers' records will be binding on the participant and any person entitled to
benefits for all purposes of the plan. None of the employers or the plan
administrator are required to search for or locate any participant or other
person entitled to benefits under the plan. If the plan administrator notifies a
participant or any other person that he is entitled to a distribution and also
notifies him of the provisions of this section, and the participant or person
entitled to benefits fails to claim his benefits under the plan or make his
whereabouts known to the plan administrator within five years after the
notification, the benefits under the plan of the participant or other person may
be disposed of, to the extent permitted by federal law, as follows:
(a) If the whereabouts of the participant is unknown
and the whereabouts of a person entitled to receive the
participant's benefits under the plan then is known to the
plan administrator, distribution may be made to such other
person.
(b) If the whereabouts of the participant and any
person entitled to his benefits then is unknown to the plan
administrator, but the whereabouts of one or more relatives by
blood, adoption or marriage of the participant is known to the
plan administrator, distribution may be made to any one or
more of such relatives and in such proportions as the plan
administrator determines.
7.12 PAYMENT WITH RESPECT TO INCAPACITATED PARTICIPANTS OR
BENEFICIARIES. If any person entitled to benefits under the plan is under a
legal disability or, in the plan administrator's opinion, is incapacitated in
any way so as to be unable to manage his financial affairs, the plan
administrator may direct the payment of such benefits to such person's legal
representative or to a relative or friend of such person for such person's
benefit, or the plan administrator may direct the application of such benefit
for the benefit of such person in any manner which the plan administrator may
select that is permitted by federal law and is consistent with the plan. Any
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payments made in accordance with the foregoing provisions of this section shall
be a full and complete discharge of any liability for such payments.
ARTICLE 8
---------
REEMPLOYMENT
------------
8.1 REHIRED EMPLOYEE. If a former employee of a Penton Company
who had not previously become a participant in the plan is reemployed by an
employer and becomes a covered employee before his retirement date, the
following provisions shall apply in his case, notwithstanding any other
provisions of the plan:
(a) If he is reemployed by a Penton Company before he
has incurred a one-year break in service (as defined in
subsection 8.3), his employment with the employers shall be
deemed to have continued without interruption for purposes of
determining his eligibility to become a participant and his
years of service and he shall become a participant during his
period of reemployment when he meets the eligibility
requirements of section 2.1.
(b) If he is reemployed by a Penton Company after he
has incurred a one-year break in service, he will become a
participant immediately following the twelve consecutive month
period commencing on the date of his reemployment, provided he
meets all of the eligibility requirements of section 2.1.
(c) If he is reemployed by a Penton Company after he
has incurred a one-year break in service and if he becomes a
participant in the plan pursuant to subsection (b) next above,
then:
(i) If subparagraph (ii) next below does not
apply in his case, his prior years of service shall
be added to his years of service earned after his
reemployment.
(ii) If at the time of his prior termination
of employment with the employers he had no vested
interest in the plan and if he incurred five
consecutive one-year breaks in service, his prior
years of service shall not be reinstated and shall be
disregarded for purposes of the plan.
8.2 REHIRED PARTICIPANT. If a former participant or a
participant whose employment with the employers had terminated but who has not
received all benefits due him under the plan is reemployed by a Penton Company
but he does not again become a covered employee before his retirement date,
payment of his benefits, if any, shall be suspended for each
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<PAGE> 35
calendar month within the period of his reemployment during which he receives
compensation for at least 40 hours of service, but shall be resumed when such
period of reemployment ends. However, if his death occurs during the period of
his reemployment and if immediately prior to his reemployment his benefits were
being paid in the form of the qualified joint survivor annuity described in
subsection 7.1(a), in the form of a joint and survivor annuity described in
subsection 7.2(b), in the form of a period certain option described in
subsection 7.2(a), or in the full cash refund form described in subsection
7.2(e) benefits that would have been payable under the plan to his spouse under
the qualified joint and survivor annuity or to his spouse or any other person he
had designated under the joint and survivor annuity option, the period certain
option, or the full cash refund option, whichever applies, if he had not been
reemployed and his benefits had not been suspended shall become payable under
the plan. If a former participant, or a participant whose employment with the
Penton Companies had terminated but who has not received all benefits due him
under the plan, is reemployed by a Penton Company and again becomes a
participant before his retirement date, payment of his benefits, if any, shall
be suspended for each calendar month which commences during the period of his
reemployment. The following provisions shall apply in the case of such a
participant or former participant, notwithstanding any other provisions of the
plan:
(a) He shall become an active participant on the date
he again becomes a covered employee of an employer.
(b) If he is reemployed and becomes an active
participant before he has incurred a one-year break in
service, his prior years of service shall be added to his
years of service earned after his reemployment and his prior
years of service shall be added to his years of service earned
after his reemployment.
(c) If he is reemployed and becomes an active
participant after he has incurred a one-year break in service,
his prior years of service shall be added to his years of
service earned after his reemployment, except as follows:
(i) If at the time of his prior termination
of employment with the employers he had less than
five years of service and thus was not entitled to a
monthly retirement income or deferred vested benefit
at the time of his prior termination of employment,
and if his break in service period exceeds his prior
years of service, his prior years of service shall
not be reinstated and shall be disregarded for
purposes of the plan; and
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<PAGE> 36
(ii) If subparagraph (i) above does not
apply in his case but as a result of his prior
termination of employment he has received his entire
benefit due under the plan in the form of a lump sum
payment, his prior years of service shall not be
reinstated and shall be disregarded for purposes of
the plan.
8.3 ONE-YEAR BREAK IN SERVICE, FIVE-YEAR BREAK IN SERVICE,
BREAK-IN SERVICE PERIOD. For purposes of the plan, a "one-year break in service"
means any plan year in which a terminated employee or participant does not
complete more than 500 hours of service. A "five-year break in service" means a
period of five consecutive one-year breaks in service. A "break-in service
period" means the total number of an employee's or participant's consecutive
one-year breaks in service after his employment termination or retirement date.
8.4 REDETERMINATION OF BENEFITS. If a former employee who is
reemployed by a Penton Company and who had previously participated in the plan
again becomes an active participant in accordance with subsection 8.2(a), no
benefits shall be payable to him under the plan during the period of his
reemployment if he was not receiving benefits at the time of his reemployment
and, if he was receiving benefits at the time of his reemployment, payment of
his benefits shall be suspended for any calendar month within the period of his
reemployment during which he receives compensation for at least 40 hours of
service. Benefits payable to or with respect to a participant under the plan
after his period of reemployment ends shall be redetermined in accordance with
the provisions of the plan as then in effect. However, if the years of service
he was entitled to at the time of his initial termination of employment have
been added to the years of service earned after his reemployment pursuant to
section 8.2, such benefits shall be reduced by the actuarial equivalent of the
benefits, if any, previously paid to him under the plan. In no event shall his
redetermined benefits be less than the benefits he was receiving or entitled to
receive under the plan immediately prior to his reemployment.
ARTICLE 9
---------
MAXIMUM BENEFITS
----------------
9.1 BENEFIT LIMITATIONS. Section 415 of the Code imposes
certain limitations on the amount of benefits that may be provided for a
participant under a defined benefit plan (as
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defined in section 414(j) of the Code) maintained by his employer. If a
participant in a defined benefit plan maintained by his employer also is a
participant in a defined contribution plan (as defined in section 414(i) of the
Code) maintained by his employer, section 415 imposes certain combined
limitations as to the amount of benefits that may be provided for the
participant under both types of plans. This plan is a defined benefit plan and,
therefore, each participant in the plan shall be subject to the maximum benefit
limitations set forth in section 9.3 or 9.4, whichever applies, irrespective of
any other provisions of the plan. For purposes of section 415 of the Code, the
employers' "limitation year" is the plan year.
9.2 TOTAL COMPENSATION. For purposes of this Article 9, a
participant's "total compensation" means, with respect to any plan year, the
total compensation paid to the participant during that year for services
rendered to the Penton Companies as an employee that is subject to withholding
for federal income tax purposes (before taking into account any withholding
exemptions) and amounts contributed by an employee pursuant to a salary
reduction agreement as defined in section 414(s)(3) of the Code, but excluding
any noncash compensation and any compensation deferred beyond the participant's
retirement date or employment termination date.
9.3 PARTICIPANT COVERED BY DEFINED BENEFIT PLAN. If a
participant in the plan is not covered by a defined contribution plan maintained
by the employers, the participant's monthly retirement income or deferred vested
benefit payable under the plan (disregarding for this purpose that portion of
any joint and survivor annuity which constitutes a qualified joint and survivor
annuity under section 417(b) of the Code) may not exceed an amount that is
actuarially equivalent to a monthly benefit, commencing for life only, equal to
the lesser of (1) $7,500 (or such other maximum amount effective no sooner than
January 1 of any plan year as may be permitted from time to time by the
Secretary of the Treasury or his delegate or by law) (the "$7,500 limitation")
or (2) 1/12 of 100 percent of the participant's average annual total
compensation during that period of three consecutive plan years during which he
actively participated in the plan and in which his aggregate total compensation
was the greatest (or during his entire period of participation if less than
three such years). The foregoing limitation is subject to the following:
(a) ADJUSTMENT OF LIMITATION FOR YEARS OF
PARTICIPATION OR SERVICE. In the case of a participant with
less than ten years of
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participation, the limitation described in (1) of the first
sentence of this section shall be multiplied by a fraction,
the numerator of which shall be the participant's number of
years (or part thereof) of participation in the plan, and the
denominator of which shall be ten. In the case of a
participant with less than ten years of service the
limitations described in (2) of the first sentence of this
section and section 415(b)(4) of the Code shall be multiplied
by a fraction, the numerator of which shall be the
participant's number of years of service (or part thereof),
and the denominator of which shall be ten. In no event shall
the adjustments provided in this subsection (a) reduce the
limitations described in subsection (1) of the first sentence
of this section and section 415(b)(4) of the Code to an amount
less than one-tenth of the applicable limitation (determined
without regard to this subsection).
(b) ADJUSTMENT OF LIMITATION FOR EARLY OR DEFERRED
RETIREMENT. If the benefit payable under the plan to a
participant commences after his attainment of the Social
Security retirement age, the limitation described in (1) of
the first sentence of this section shall be adjusted in
accordance with Treasury regulations so that it equals the
actuarial equivalent of the maximum benefit payable at the
Social Security retirement age, based on an interest rate
assumption of five percent (5%) per year. If the benefit
payable under the plan to a participant commences prior to his
attainment of the Social Security retirement age, the
limitation described in (1) of the first sentence of this
section shall be adjusted in accordance with Treasury
regulations so that it equals the actuarial equivalent of such
benefit commencing at the Social Security retirement age. The
adjustment provided in the preceding sentence shall be made in
such manner as the Secretary of the Treasury may prescribe
which is consistent with the reduction for old-age insurance
benefits commencing before the Social Security retirement age
under the Social Security Act.
(c) SOCIAL SECURITY RETIREMENT AGE DEFINED. The term
"Social Security retirement age" shall mean the age used as
the retirement age for the participant under section 216(1) of
the Social Security Act, except that such section shall be
applied without regard to the age increase factor, and as if
the early retirement age under section 216(1)(2) of such Act
were 62.
(d) PRESERVATION OF CURRENT ACCRUED BENEFIT. If the
current accrued benefit of an employee who is a participant as
of the effective date exceeds the limitations of section 415
of the Code (as modified by paragraphs (b) and (c) of this
section), then, for purposes of sections 415(b) and 415(e) of
the Code, the defined benefit dollar limitation with respect
to such participant shall be equal to his current accrued
benefit. The term "current accrued benefit" means a
participant's accrued benefit under the plan, determined as if
the participant had
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<PAGE> 39
separated from service on December 31, 1988, when expressed as
an annual benefit within the meaning of section 415(b)(2) of
the Code (without regard to any cost of living adjustment
occurring after May 5, 1986).
9.4 PARTICIPANT COVERED BY DEFINED BENEFIT PLAN AND DEFINED
CONTRIBUTION PLAN. Effective prior to January 1, 2000, if a participant in the
plan also is a participant in a defined contribution plan maintained by the
employers, the benefit payable to the participant under this plan and the
contributions made on behalf of the participant under such defined contribution
plan shall be determined in a manner consistent with section 415 of the Code, as
follows:
(a) A fraction shall be determined which will equal
the benefits accrued or payable to or for such participant
under the plan as of the end of the plan year divided by the
"defined benefit limitation amount" in effect for that year.
The "defined benefit limitation amount" for any plan year
shall be the lesser of (i) 1.25 multiplied by the dollar
limitation in effect under section 415(b)(1)(A) of the Code
for such year, provided that in any year in which the plan
would be a "top-heavy" plan if 90 percent were substituted for
60 percent in subsection 17.1(b), 1.0 shall be substituted for
1.25, or (ii) 1.4 multiplied by 100 percent of the
participant's average annual total compensation for the three
consecutive plan years during which he actively participated
in the plan and in which his aggregate total compensation was
the greatest; provided that such amount shall be appropriately
adjusted if necessary as provided in section 415(b) of the
Code.
(b) A fraction shall also be determined indicating
the ratio of the participant's annual additions (as defined in
section 415(c)(2) of the Code) under the defined contribution
plans of the employers for each plan year to the aggregate of
the "defined contribution limitation amount" in effect for
each year of the participant's employment by the employers.
The "defined contribution limitation amount," for any year
shall be the lesser of (i) 1.25 multiplied by the dollar
limitation in effect under section 415(c)(1)(A) of the Code
for such year, provided that in any year in which the plan
would be a top-heavy plan if 90 percent were substituted for
60 percent in subsection 17.1(b), 1.0 shall be substituted for
1.25, or (ii) 1.4 multiplied by 25 percent of the
participant's total compensation for such year.
(c) The benefits under this plan shall be reduced
(before any reductions are made in contributions under the
defined contribution plans of the employers) so that the sum
of the fractions determined with respect to any participant in
accordance with subsections 9.4(a) and (b) above will
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not exceed 1.0 (or such other applicable maximum amount
permitted by law).
9.5 COMBINING OF PLANS. In applying the limitations set forth
in sections 9.3 and 9.4 reference to the plan shall mean the plan and all other
defined benefit plans (whether or not terminated) maintained by the employers,
reference to a defined contribution plan maintained by the employers shall mean
that plan and all other defined contribution plans (whether or not terminated)
maintained by the employers.
ARTICLE 10
----------
PLAN ADMINISTRATOR
------------------
10.1 PLAN ADMINISTRATOR'S DUTIES. As provided in section 1.2,
a committee appointed by the company is responsible for the administration of
the plan. Except as otherwise specifically provided and in addition to the
powers, rights and duties specifically given to the plan administrator elsewhere
in the plan, the plan administrator shall have the following powers, rights and
duties:
(a) To construe and interpret the plan, to decide all
questions of plan eligibility, to determine the amount, manner
and time of payment of any benefits under the plan, to make
findings of fact and to remedy ambiguities, inconsistencies or
omissions.
(b) To adopt such rules of procedure as may be
necessary for the efficient administration of the plan and as
are consistent with the plan, and to enforce the plan in
accordance with its terms and such rules.
(c) To make determinations as to the right of any
person to a benefit, to afford any person dissatisfied with
such determination the right to a hearing thereon, and to
direct payments or distributions from the trust in accordance
with the provisions of the plan.
(d) To furnish the employers with such information as
may be required by them for tax or other purposes in
connection with the plan.
(e) To enroll participants in the plan, to distribute
and receive plan administration forms, and to comply with all
applicable governmental reporting and disclosure requirements.
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(f) To employ agents, attorneys, accountants,
actuaries or other persons (who also may be employed by the
employers, the trustees, or any investment manager or
managers) and to allocate or delegate to them such powers,
rights and duties as the plan administrator considers
necessary or advisable to properly carry out the
administration of the plan (including but not limited to the
preparation of recommendations of actuarial assumptions which
shall be reviewed by the plan administrator), provided that
any such allocation or delegation and the acceptance thereof
must be in writing.
(g) To report to the directors of the company or to
such person or persons as the directors of the company
designate as to the administration of the plan, any
significant problems which have developed in connection with
the administration of the plan and any recommendations which
the plan administrator may have as to the amendment of the
plan or the modification of plan administration.
10.2 ACTION BY PLAN ADMINISTRATOR. During a period in which
two or more plan administrative committee members are acting, any action by the
plan administrator will be subject to the following provisions:
(a) The committee may act by meeting (including a
meeting from different locations by telephone conference) or
by document signed without meeting, and documents may be
signed through the use of a single document or concurrent
documents.
(b) A committee member by writing may delegate part
or all of his rights, powers, duties and discretions to any
other committee member, with such other committee member's
consent.
(c) The committee shall act by a majority decision,
which action shall be as effective as if such action had been
taken by all members of the committee; provided that by
majority action one or more committee members or other persons
may be authorized to act with respect to particular matters on
behalf of all committee members.
(d) If there is an equal division among the committee
members with respect to any questions, a disinterested party
may be selected by a majority vote to decide the matter. Any
decision by such disinterested party will be binding.
(e) The certificate of the secretary of the committee
or the majority of the committee members that the committee
has taken or authorized any action shall be conclusive in
favor of any person relying on such certificate.
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<PAGE> 42
(f) Except as required by law, no member of the
committee shall be liable or responsible for an act or
omission of other committee members in which the former has
not concurred.
10.3 INFORMATION REQUIRED FOR PLAN ADMINISTRATION. The
employers shall furnish the plan administrator with such data and information as
the plan administrator considers necessary or desirable to perform its duties
with respect to plan administration. The records of an employer as to an
employee's or participant's period or periods of employment, termination of
employment and the reason therefor, leaves of absence, reemployment, and
compensation will be conclusive on all persons unless determined to the plan
administrator's satisfaction to be incorrect. Participants and other persons
entitled to benefits under the plan also shall furnish the plan administrator
with such evidence, data or information as the plan administrator considers
necessary or desirable for the plan administrator to perform his duties with
respect to plan administration.
10.4 DECISION OF PLAN ADMINISTRATOR FINAL. Subject to
applicable law and the provision of section 10.5, any interpretation of the
provisions of the plan and any decision on any matter within the discretion of
the plan administrator made by the plan administrator in good faith shall be
binding on all persons. A misstatement or other mistake of fact shall be
corrected when it becomes known, and the plan administrator shall make such
adjustment on account thereof as the plan administrator considers equitable and
practicable.
10.5 REVIEW OF BENEFIT DETERMINATIONS. If a claim for benefits
made by a participant or his beneficiary is denied, the plan administrator
shall, within 90 days (or 180 days if special circumstances require an extension
of time) after the claim is made, furnish the person making the claim with a
written notice specifying the reasons for the denial. Such notice shall also
refer to the pertinent plan provisions on which the denial is based, describe
any additional material or information necessary for properly completing the
claim and explain why such material or information is necessary, and explain the
plan's claim review procedures. If requested in writing, the plan administrator
shall afford each claimant whose claim has been denied a full and fair review of
the plan administrator's decision and, within 60 days (120 days if special
circumstances require additional time) of the request for reconsideration of the
denied claim, the plan administrator shall notify the claimant in writing of the
plan administrator's final decision.
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<PAGE> 43
10.6 UNIFORM RULES. The plan administrator shall perform his
duties with respect to plan administration on a reasonable and nondiscriminatory
basis and shall apply uniform rules to all participants similarly situated.
10.7 PLAN ADMINISTRATOR'S EXPENSES. All costs, charges and
expenses reasonably incurred by the plan administrator will be paid by the plan
to the extent not paid by the employers in such portions as the company shall
direct; provided no compensation will be paid to a committee member as such.
10.8 INTERESTED PLAN ADMINISTRATOR. If a member of the plan
committee is also a participant in the plan, he may not decide or determine any
matter or question concerning his benefits unless such decision or determination
could be made by him under the plan if he were not a committee member.
10.9 RESIGNATION OR REMOVAL OF PLAN ADMINISTRATIVE COMMITTEE
MEMBERS. A member of the committee may be removed by the company at any time by
ten days' prior notice to him and the other members of the committee. A member
of the committee may resign at any time by giving ten days' prior written notice
to the company and the other members of the committee. The company may fill any
vacancy in the membership of the committee; provided, however, that if a vacancy
reduces the membership of the committee to less than three, such vacancy shall
be filled as soon as practicable. The company shall give prompt written notice
thereof to the other members of the committee. Until any such vacancy is filled,
the remaining members may exercise all of the powers, rights and duties
conferred on the plan administrator.
10.10 INDEMNIFICATION. To the extent permitted by law, no
person (including a trustee, any present or former plan administrative committee
member, and any present or former director, officer or employee of any employer)
shall be personally liable for any act done or omitted to be done in good faith
in the administration of the plan or the investment of the pension fund. To the
extent permitted by law, each present or former director, officer or employee of
any employer to whom the plan administrator or an employer has delegated any
portion of its responsibilities under the plan and each present or former plan
administrative committee member shall be indemnified and saved harmless by the
employers (to the extent not indemnified or saved harmless under any liability
insurance or other indemnification arrangement with respect to the
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<PAGE> 44
plan) from and against any and all claims of liability to which they are
subjected by reason of any act done or omitted to be done in good faith in
connection with the administration of the plan or the investment of the trust
fund, including all expenses reasonably incurred in their defense if the
employers fail to provide such defense.
ARTICLE 11
----------
RELATING TO THE EMPLOYERS
-------------------------
11.1 ACTION BY EMPLOYERS. Any action required or permitted of
an employer under the plan shall be by resolution of its board of directors or
by a duly authorized committee of its board of directors, or by a person or
persons authorized by resolution of its board of directors or such committee.
11.2 ADDITIONAL EMPLOYERS. Any subsidiary or other related
company that is not an employer may adopt the plan and become an employer
thereunder by filing with the trustees and the plan administrator a certified
copy of a resolution of the board of directors of the subsidiary or other
related company providing for its adoption of the plan and a certified copy of a
resolution of the directors of the company consenting to such adoption.
11.3 RESTRICTIONS ON REVERSIONS. The employers shall have no
right, title or interest in the assets of the plan, nor will any part of the
assets of the plan at any time revert or be repaid to an employer, directly or
indirectly, except as follows:
(a) If the Internal Revenue Service initially
determines that the plan, as applied to any employer, does not
meet the requirements of a "qualified plan" under section
401(a) of the Code, the assets of the plan attributable to
contributions made by that employer under the plan shall be
returned to that employer within one year of the date of
denial of qualification of the plan as applied to that
employer.
(b) If a contribution or a portion of a contribution
is made by an employer as a result of a mistake of fact, such
contribution or portion of a contribution shall not be
considered to have been contributed under the plan by that
employer and, after having been reduced by any losses of the
trust fund allocable thereto, shall be returned to that
employer within one year of the date the amount is contributed
under the plan.
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<PAGE> 45
(c) Each contribution made by an employer is
conditioned upon the deductibility of such contribution as an
expense for federal income tax purposes and, therefore, to the
extent that a contribution is made by an employer under the
plan for a period for which the deduction for a contribution
made by the employer is disallowed, then such contribution or
portion of a contribution, after having been reduced by any
losses of the pension fund allocable thereto, shall be
returned to that employer within one year of the date of
disallowance of the deduction.
(d) If after all fixed and contingent liabilities or
obligations to persons entitled to benefits under the plan
shall have been paid or provided for in full any plan assets
remain because of erroneous actuarial computation, such assets
shall be returned to the company.
ARTICLE 12
----------
AMENDMENT, TERMINATION OR PLAN MERGER
-------------------------------------
12.1 AMENDMENT. While the employers expect and intend to
continue the plan, the company must necessarily reserve and hereby does reserve
the right, subject to section 11.3, to amend the plan from time to time, except
as follows:
(a) The duties and liabilities of the plan
administrator cannot be changed substantially without the
consent of the plan administrator; and
(b) No amendment shall reduce the value of a
participant's benefits to less than the amount he would be
entitled to receive if he had resigned from the employ of all
of the employers on the day of the amendment.
The foregoing provisions of this section shall be subject to any applicable
collective bargaining agreements, provided that the company may amend the plan
at any time to the extent necessary in order that the plan shall meet the
requirements of a "qualified plan" under section 401(a) of the Code and any
other requirements of applicable law.
12.2 TERMINATION. The plan will terminate as to all employers
on any date specified by the company, and as to any employer on any date
specified by the that employer, if 10 days' advance written notice of the
termination is given to the plan administrator and any other employers. The plan
will terminate as to an individual employer on the first to occur of the
following:
(a) The date that employer is judicially declared
bankrupt or insolvent.
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<PAGE> 46
(b) The dissolution, merger, consolidation or
reorganization of that employer, or the sale by that employer
of all or substantially all of its assets, except that:
(i) In any such event arrangements may be
made with the consent of the company whereby the plan
will be continued by any successor to that employer
or any purchaser of all or substantially all of its
assets without a termination thereof, in which case
the successor or purchaser will be substituted for
that employer under the plan; and
(ii) If any employer is merged, dissolved or
in any way reorganized into, or consolidated with,
any other employer, the plan as applied to the former
employer will automatically continue in effect
without a termination thereof.
Notwithstanding the foregoing, if any of the events described above should occur
but some or all of the participants employed by an employer are transferred to
employment with one or more of the other employers coincident with or
immediately after the occurrence of such event, the plan as applied to those
participants will automatically continue in effect without a termination
thereof. The foregoing provisions of this section shall be subject to any
applicable collective bargaining agreements.
12.3 PLAN MERGER. In no event shall there be any merger or
consolidation of the plan with, or transfer of assets or liabilities to, any
other plan unless each participant in the plan would (if the plan then
terminated) received a benefit immediately after the merger, consolidation or
transfer which is equal to or greater than the benefit the participant would
have been entitled to receive immediately before the merger, consolidation or
transfer (if the plan had then terminated).
12.4 CONTINUATION BY A SUCCESSOR OR PURCHASER. Notwithstanding
section 12.2, the plan and the trust shall not terminate in the event of
dissolution, merger, consolidation or reorganization of an employer or sale by
an employer of its entire assets or substantially all of its
assets if arrangements are made in writing between the employer and any
successor to the employer or purchaser of all or substantially all of its assets
whereby such successor or purchaser will continue the plan and the trust. If
such arrangements are made, then such successor or purchaser shall be
substituted for the employer under the plan and the trust agreement.
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<PAGE> 47
12.5 NOTICE TO PARTICIPANTS OF AMENDMENTS, TERMINATIONS OR
PLAN MERGERS. Participants affected thereby shall be notified by the company
within a reasonable time following any amendment, termination, plan merger, or
consolidation.
12.6 VESTING AND DISTRIBUTION ON TERMINATION. On termination
or partial termination of the plan as respects all employers (and, at the
discretion of the company, on a termination or partial termination of the plan
as respects any employer that does not result in the termination or partial
termination of the plan as respects all employers), the rights of all affected
employees to benefits accrued to the date of such termination shall be
nonforfeitable, but in such event such affected employees and other participants
and other persons entitled to benefits under the plan who are affected by such
event shall have no recourse towards the satisfaction of their nonforfeitable
benefits from other than the assets allocable to them under Article 14 or the
PBGC. Notwithstanding the above, the benefits provided upon plan termination to
any highly compensated employee (or any highly compensated former employee)
shall be limited to a benefit that is nondiscriminatory within the meaning of
section 401(a)(4) of the Code. For purposes of this Article 12, whether an
employee is highly compensated will be determined in accordance with section
414(q) of the Code and regulations thereunder.
ARTICLE 13
----------
FUNDING OF PLAN BENEFITS
------------------------
13.1 EMPLOYER CONTRIBUTIONS. Subject to the provisions of
Article 14, the employers expect and intend to make contributions under the plan
from time to time of such amounts as are required under accepted actuarial
principles to maintain the plan in a sound condition and to meet all applicable
funding requirements imposed by federal law. The method of valuation used to
calculate the cost of the plan for purposes of this section and the actuarial
assumptions applied in regard to such method of valuation shall be determined
from time to time by the company, subject to applicable law.
13.2 PENSION FUND. A "pension fund" will be maintained in
order to implement and carry out the provisions of the plan and to fund benefits
payable under the plan. The pension fund from time to time shall consist of one
or more funds established through one or more
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<PAGE> 48
insurance contracts or trust agreements, or through a combination of insurance
contracts and trust agreements, as determined by the company. Such fund or funds
shall be maintained for the purposes of receiving and holding contributions to
the plan and interest and other income thereon and paying benefits provided
under the plan. The company shall determine the form and terms of each insurance
contract and trust agreement and from time to time may direct the transfer of
amounts held in any such fund to any other such fund in accordance with the
provisions of the applicable trust agreements or insurance contracts. Subject to
applicable law, benefits provided through any insurance contract will be paid in
accordance with its terms and conditions.
13.3 APPLICATION OF FORFEITED BENEFITS. Benefits that would
have been payable to a participant if his employment with the employers had not
terminated before he was eligible to receive a monthly retirement income or
deferred vested benefits, and benefits that would have been payable to the
participant or any other person but for the participant's death, shall not be
applied to increase the benefits of any other participants or other persons.
However, the limitation contained in the next preceding sentence shall not in
any way limit the right reserved to the company under section 12.1 to amend the
plan to provide for increases or decreases in the amount of benefits or to
modify the form of any benefits payable under the plan.
ARTICLE 14
----------
ALLOCATION AND DISTRIBUTION ON TERMINATION
------------------------------------------
On termination or partial termination of the plan as respects
all employers (and, at the discretion of the company, on a termination or
partial termination of the plan as respects any employer that does not result in
the termination or partial termination of the plan as respects all employers),
the plan administrator will direct the allocation and distribution of plan
assets allocable to participants employed by that employer with respect to whom
the plan is terminated, to retired or terminated participants, and to spouses
and other persons entitled to benefits under the plan as joint annuitants, to
the extent their benefits are attributable to employment with that employer.
After payment of any expenses of administration and liquidation allocable to
such plan assets, such plan assets remaining shall be allocated and distributed
to such participants and other persons to provide their benefits accrued to the
date of plan termination, to the extent of the
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<PAGE> 49
sufficiency of the plan assets, in accordance with the provisions of section
4044 of the Employee Retirement Income Security Act of 1974, as amended
("ERISA").
ARTICLE 15
----------
RESTRICTIONS ON BENEFITS
------------------------
15.1 PRE-TERMINATION RESTRICTIONS. In the event of the
termination of the plan, as provided in section 12.2, the benefit of any
highly-compensated employee (and any highly compensated former employee) will be
limited to a benefit that is nondiscriminatory under section 401(a)(4) of the
Code. For purposes of this Article 15, whether an employee is highly compensated
will be determined in accordance with section 414(q) of the Code and regulations
thereunder.
15.2 RESTRICTION OF BENEFITS. Annual payments to a "restricted
employee" are restricted to an amount equal in each year to the payments that
would be made on behalf of the employee under (i) a straight life annuity that
is the actuarial equivalent of the accrued benefit and other benefits to which
the employee is entitled under the plan (other than a Social Security
supplement), and (ii) the amount of the payments that the employee is entitled
to receive under a Social Security supplement; provided, however, that the
foregoing restrictions on annual payments to a restricted employee shall not
apply if any one of the following requirements is satisfied:
(a) The value of plan assets remaining after payment
of all benefits payable to the restricted employee equals or
exceeds 110 percent of the value of current liabilities, as
defined in section 412(l)(7) of the Code;
(b) The value of the benefits payable to the
restricted employee from the plan is less than one percent of
the value of current liabilities of the plan as determined
before distribution to such restricted employee; or
(c) The value of the benefits payable to the
restricted employee from the plan does not exceed the amount
described in section 411(a)(11)(A) of the Code.
For purposes of this Article 15, a "restricted employee" is an employee who is a
highly compensated employee or highly compensated former employee; provided
that, in any plan year,
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<PAGE> 50
no more than 25 employees will be restricted employees, and those employees who
are restricted employees will be those highly compensated employees and highly
compensated former employees with the greatest compensation in the current or
any prior plan year. The value of benefits payable to a restricted employee and
the current liabilities of the plan shall be determined in accordance with
Treasury Regulation section 1.401(a)(4)-5 or any substitute therefor.
ARTICLE 16
----------
GENERAL PROVISIONS
------------------
16.1 EXAMINATION OF PLAN DOCUMENTS. Copies of the plan and any
amendments thereto will be on file at the principal office of each employer
where they may be examined by any participant or any other person entitled to
benefits under the plan.
16.2 NOTICES. A notice mailed to a participant or beneficiary
at his last address filed with the plan administrator in care of the company
will be binding on the participant or beneficiary for all purposes of the plan.
Any notice or document relating to the plan required to be given to or filed
with the plan administrator or any employer shall be considered as given or
filed if delivered or mailed by registered or certified mail, postage prepaid,
to the plan administrator, in care of Penton Media, Inc., 1100 Superior Avenue,
Cleveland, Ohio 44114.
16.3 NONALIENATION OF PLAN BENEFITS. The rights or interests
of any participant or any participant's beneficiaries to any benefits or future
payments hereunder shall not be subject to attachment or garnishment or other
legal process by any creditor of any such participant or beneficiary, nor shall
any such participant or beneficiary have any right to alienate, anticipate,
commute, pledge, encumber or assign any of the benefits or rights which he may
expect to receive, contingently or otherwise under this plan except as may be
required by the tax withholding provisions of the Code or of a state's income
tax act or pursuant to a qualified domestic relations order, as defined in
section 414(p) of the Code.
16.4 NO EMPLOYMENT GUARANTEE. None of the establishment of the
plan, modification thereof, the creation of any fund or account, or the payment
of any benefits shall be construed as giving to any participant or other person
any legal or equitable right against the employers, the plan administrator or
any trustee except as herein provided. Under no
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<PAGE> 51
circumstances shall the terms of employment of any participant be modified or in
any way affected hereby. The maintenance of this plan shall not constitute a
contract of employment, and participation in the plan will not give any
participant a right to be retained in the employ of the employers. None of the
employers, the plan administrator or the trustees in any way guarantees any
assets of the plan from loss or depreciation or any payment to any person. The
liability of the plan administrator or any employer as to any payment or
distribution of benefits under the plan is limited to the available assets of
the trust fund.
16.5 PARTICIPANT LITIGATION. In any action or proceeding
regarding the plan assets (or any property constituting a portion or all
thereof), any plan benefit, or regarding the administration of the plan,
employees or former employees of the employers or their beneficiaries or any
other persons having or claiming to have an interest in this plan shall not be
necessary parties and shall not be entitled to any notice or process. Any final
judgment which is not appealed or appealable and may be entered in any such
action or proceeding shall be binding and conclusive on the parties hereto and
all persons having or claiming to have any interest in this plan. To the extent
permitted by law, if a legal action is begun against the employers, the plan
administrator or the trustees by or on behalf of any person, and such action
results adversely to such person, or if a legal action arises because of
conflicting claims to a participant's or other person's benefits, the costs to
the employers, the plan administrator or the trustees of defending the action
will be charged to the sums, if any, which were involved in the action or were
payable to the participant or other person concerned. To the extent permitted by
applicable law, acceptance of participation in this plan shall constitute a
release of the employers, the plan administrator and the trustees and their
agents from any and all liability and obligation not involving willful
misconduct or gross neglect. Notwithstanding any other provisions of the plan,
if the plan administrator is required by a final court order to distribute the
benefits of a participant other than in a manner required under the plan, then
the plan administrator shall cause the participant's benefits to be distributed
in a manner consistent with such final court order. The plan administrator shall
not be required to comply with the requirements of a final court order in an
action in which the plan administrator, the trustees, the plan or the trust was
not a party, except to
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<PAGE> 52
the extent that such final court order is qualified domestic relations order (as
defined in section 414(p) of the Code).
16.6 ACTUARIAL EQUIVALENT. A benefit shall be actuarially
equivalent to any other benefit if the actuarial reserve required to provide the
same is equal to the actuarial reserve required to provide such other benefit,
computed on the basis of the actuarial rates, tables and procedures adopted by
the company for this purpose as reflected in Supplement B which is attached to
and forms a part of the plan. No adjustment to a determination of an actuarially
equivalent value or amount shall be made solely because such tables, rates and
procedures are changed subsequent to a determination. If the actuarial rates or
factors applicable under the plan to the calculation of benefits in the joint
and survivor form or any optional form of payment are changed, the plan
administrator shall thereafter maintain a record of each participant's accrued
benefit as of the date of such change and the amount of such joint and survivor
or any such optional form of payment to which such participant was eligible
immediately prior to such change. Thereafter, if such participant's benefits are
payable in the joint and survivor or in any such optional form, then such
benefits shall not be less than the benefits to which the participant would have
been entitled had the participant terminated employment on the date of such
change and received his benefits in such form.
16.7 SUCCESSORS. The plan and the trust will be binding on all
persons entitled to benefits hereunder and their respective heirs and legal
representatives, and on the plan administrator and the trustees and their
successors.
16.8 ADEQUACY OF EVIDENCE. Evidence which is required of
anyone under the plan shall be executed or presented by the proper individuals
or parties and may be in the form of certificates, affidavits, documents or
other information which the plan administrator, the trustees, the employers or
other persons acting on such evidence considers pertinent and reliable.
16.9 GENDER AND NUMBER. Words denoting the masculine gender
shall include the feminine and neuter genders and the singular shall include the
plural and the plural shall include the singular wherever required by the
context.
16.10 WAIVER OF NOTICE. Any notice required under the plan may
be waived by the person entitled to notice.
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<PAGE> 53
16.11 APPLICABLE LAW. The plan and the trust shall be
construed in accordance with the provisions of ERISA and other applicable
federal laws. To the extent not inconsistent with such laws, this plan shall be
construed in accordance with the laws of the state of Ohio.
16.12 SEVERABILITY. If any provision of the plan shall be held
illegal or invalid for any reasons such illegal or invalid provision shall not
affect the remaining provisions of the plan, and the plan shall be construed and
enforced as if such illegal or invalid provisions had never been contained in
the plan.
16.13 FIDUCIARY RESPONSIBILITIES. It is specifically intended
that all provisions of the plan shall be applied so that all fiduciaries with
respect to the plan shall be required to meet the prudence and other
requirements and responsibilities of applicable law to the extent such
requirements of responsibilities apply to them. No provisions of the plan are
intended to relieve a fiduciary from any responsibility, obligation, duty or
liability imposed by applicable law. In general, a fiduciary shall discharge his
duties with respect to the plan solely in the interests of participants and
other persons entitled to benefits under the plan and with the care, skill,
prudence, and diligence under the circumstances then prevailing that a prudent
man acting in a like capacity and familiar with such matters would use in the
conduct of an enterprise of like character and with like aims.
ARTICLE 17
TOP-HEAVY PLAN
17.1 TOP-HEAVY PLAN DETERMINATION. For purposes of determining
whether the plan is "top-heavy" for any plan year, the following shall apply:
(a) KEY EMPLOYEES. An employee or former employee
shall be a "key employee" for any plan year if during such
plan year or during any of the four preceding plan years he
is:
(i) An officer of his employer whose
compensation exceeds 50 percent of the dollar limit
as defined in section 415(b)(1)(A) of the Code; or
(ii) One of the ten employees of his
employer having annual compensation from his employer
of more than the defined contribution dollar
limitation as defined in section 415(c)(1)(A) of
- 46 -
<PAGE> 54
the Code and owning (or considered as owning within
the meaning of section 318 of the Code) the largest
interests in the employer; or
(iii) Any person who owns (or is considered
as owning within the meaning of section 318 of the
Code) more than five percent of the outstanding stock
of an employer or stock possessing more than five
percent of the total combined voting power of all of
an employer's stock (a "five-percent owner"); or
(iv) Any person having annual compensation
in excess of $150,000 who owns (or is considered as
owning within the meaning of section 318 of the Code)
more than one percent of the outstanding stock of an
employer or stock possessing more than one percent of
the total combined voting power of all of an
employer's stock.
For purposes of subparagraph (i) above, if the number of
officers exceeds 50, only the 50 officers with the highest
compensation shall be considered key employees; and if the
number of officers is less than 50, the number of officers
considered key employees shall not exceed the greater of
three, or ten percent of all employees. For purposes of
subparagraphs (iii) and (iv) above, section 318(a)(2)(C) of
the Code shall be applied by substituting "five percent" for
the reference to "50 percent" therein and the rules of section
414(b), (c) and (m) of the Code shall not apply for
determining ownership in the employer. In addition, the
beneficiary of a key employee shall be deemed to be a key
employee. A "non-key employee" is any person who is not a key
employee or a beneficiary of such person, including any
employee who is a former key employee.
(b) TOP HEAVY PLAN. The plan will be considered a
"top-heavy plan" for any plan year if, as of the last day of
the preceding plan year, (the last day of the initial plan
year, in case of that year) (the "determination date") the sum
of (i) the aggregate of the accounts of all key employees
under all defined contribution plans in an aggregation group
of plans as described in subsection (c) below and (ii) the
present value of the aggregate accrued benefits for key
employees under the plan and all other defined benefit plan in
an aggregation group of plans exceeds 60 percent of such sum
determined for all participants under all such plans,
excluding participants who are former key employees. There
shall be included in the determination of a participant's
accounts and accrued benefit under such plans any amounts
distributed to him during the preceding five-year period.
However, a rollover contribution initiated by a participant
and made after December 31, 1983 to any plan in an aggregation
group of plans shall not be taken into account for purposes of
determining whether the plan is a top-heavy plan.
Notwithstanding the foregoing, if an individual has not been
an employee of the employers at any time during the five-year
period ending on the last day of the
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<PAGE> 55
preceding plan year, any account balance or accrued benefits
of such individual shall be excluded from the determination
made under this subsection.
(c) AGGREGATION GROUPS. For purposes of this
subsection and Article 9, all Penton Companies shall be
included in the term "employer." All employer plans in a
required aggregation group of plans shall be considered to be
top-heavy plans if either the required or permissible
aggregation group of plans is determined to be top-heavy under
subsection (b) above. If the required or permissive
aggregation group of plans is not a top-heavy group, no
employer plans in the group shall be considered to be
top-heavy plans. A "required aggregation group of plans" shall
include each employer plan (whether or not terminated) in
which a key employee participates and any other employer plan
which enables any plan in which a key employee participates to
meet the coverage and nondiscrimination requirements of
sections 401(a)(4) or 410 of the Code. A "permissive
aggregation group of plans" shall include all plans in the
required aggregation group plus any other employer plans which
satisfy the requirements of sections 401(a)(4) and 410 of the
Code when considered together with the required aggregation
group of plans.
17.2 SPECIAL TOP-HEAVY PLAN VESTING SCHEDULE. Notwithstanding
the foregoing provisions, a participant who is employed by an employer when the
plan is considered a "top-heavy plan" (as defined in subsection 17.1(b)) shall
be eligible to receive the portion of his benefit commencing on his normal
retirement date equal to the vested percentage determined in accordance with the
following schedule based on the participant's years of service:
If the Participant's His Vested and
Number of Years of Nonforfeitable
Service Equals: Interest Shall Be:
--------------- ------------------
Less than 1 0%
1 but less than 2 20%
2 but less than 3 40%
3 but less than 4 60%
4 but less than 5 80%
5 or more 100%
If the plan becomes a top-heavy plan and subsequently ceases to be a top-heavy
plan, the retirement benefits of a participant who has previously become vested
under this special vesting schedule shall again be his benefit calculated under
section 5.1; provided, however:
(a) A participant with less than five years of
service on the date the plan ceases to be a top-heavy plan
shall retain his vested interest as determined under the
special vesting schedule in his accrued retirement benefit as
of such date.
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<PAGE> 56
(b) A participant with five or more years of service
on the date the plan ceases to be a top-heavy plan shall be
entitled to continue under the special vesting schedule if, at
termination of employment, it would produce a larger deferred
vested benefit for such participant.
17.3 TOP-HEAVY MINIMUM BENEFITS. Notwithstanding the
provisions of Article 5 and this Article 17, a participant's normal or deferred
retirement benefit (or, if applicable, his monthly deferred vested benefit
commencing on his normal retirement date) shall not be less than an amount equal
to 3.0 percent of his final average earnings (as defined below) multiplied by
the aggregate of his number of years of service (not in excess of 10 such years)
in all plan years for which the plan is considered a top-heavy plan. For this
purpose, a participant's "final average earnings" shall be the monthly average
of the total earnings (including bonuses) paid to the participant during the
five consecutive calendar year period for which his earnings were highest within
his period of employment as a covered employee.
Executed as of this 7th day of August, 1998.
PENTON MEDIA, INC.
By: /s/ Preston L. Vice
--------------------------------------
Title: Sr. Vice President and Secretary
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<PAGE> 57
SUPPLEMENT A
TO
PENTON MEDIA, INC. RETIREMENT PLAN
A-1 PURPOSE, USE OF TERMS. The purpose of this Supplement A is
to set forth (i) the employers to whom the company has extended and who have
adopted the plan and (ii) the periods of employment with a Penton Company that
has not adopted the plan, a Penton Company before it adopted the plan or a
predecessor company which will be taken into account in determining years of
service under the plan pursuant to subsection 4.3(a). Except where the context
indicates to the contrary, terms used and defined in the plan shall have the
same respective meanings for purposes of this Supplement.
A-2 ADOPTING EMPLOYERS.
Employer Date of Adoption
-------- ----------------
D-M Acquisition Corp. The effective date
Curtin & Pease/Peneco, Inc. The effective date
A-3 EMPLOYMENT WITH PREDECESSOR COMPANIES. Employment with the
following entities shall be disregarded in determining a participant's years of
service under sections 5.1 and 6.3 of the plan before the dates indicated:
None as of the effective date.
-A1-
<PAGE> 58
SUPPLEMENT B
TO
PENTON MEDIA, INC. RETIREMENT PLAN
B-1 PURPOSE, USE OF TERMS. The purpose of this Supplement B is
to set forth the actuarial assumptions referred to in section 16.6 of the plan.
Except where the context indicates to the contrary, terms used and defined in
the plan shall have the same respective meanings for purposes of this
Supplement.
B-2 ACTUARIAL ASSUMPTIONS. Until the actuarial assumptions are
modified by the company, actuarial equivalence shall be determined during any
plan year on the basis of the 1971 Group Annuity Mortality Table for Males set
back one year of age for participants and five years of age for beneficiaries
under the qualified joint and survivor and optional joint and survivor forms of
benefit and a 6 percent interest rate assumption. In addition, for purposes of
computing the lump sum actuarially equivalent value of the monthly benefit
payable (or with respect to) to a participant, the lump sum actuarially
equivalent value shall be determined by using an interest rate equal to 7
percent. Notwithstanding anything in this Supplement B or the plan to the
contrary, in no event will the lump sum actuarially equivalent value of a
monthly benefit payable to (or with respect to) a participant be less than the
greatest of (a) the lump sum actuarially equivalent value determined using the
interest rate which would be used (as of the calendar month in which the date of
the distribution occurs) by the PBGC for purposes of determining the lump sum
actuarially equivalent value of a lump sum distribution on plan termination, or
(b) the lump sum actuarially equivalent value of the participant's accrued
benefit, if any, under the plan as of December 31, 1986, determined using a 6
percent interest rate assumption.
-B1-
<PAGE> 1
Exhibit 10.9
PENTON MEDIA, INC.
------------------
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
--------------------------------------
SECTION 1
---------
INTRODUCTION
------------
1.1 THE PLAN AND ITS EFFECTIVE DATE. This Penton Media, Inc. Supplemental
Executive Retirement Plan (the "plan") has been established by Penton Media,
Inc. (the "company"), effective August 7, 1998 (the "effective date").
1.2 PURPOSE. The company maintains the Penton Media, Inc. Retirement Plan (as
the same may hereafter be amended, the "retirement plan"), which is intended to
meet the requirements of a "qualified plan" under the Internal Revenue Code of
1986, as amended (the "Code"). While the Code places limitations on the maximum
benefits which may be paid from a qualified plan and the maximum amount of an
employee's compensation that may be taken into account for determining benefits
payable under a qualified plan, the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), permits the payment under an "unfunded plan" of
benefits which may not be paid under a qualified plan because of such
limitations. The purpose of the plan is to provide certain key employees of the
company and its subsidiaries with certain benefits which may not be provided
under the retirement plan because of the maximum compensation limitation of the
Code.
SECTION 2
---------
ELIGIBILITY AND BENEFITS
------------------------
2.1 ELIGIBILITY. Each key employee of the company or a subsidiary of the company
(a "participant") who participates in the retirement plan and who is a party to
an employment agreement with the company or a subsidiary of the company
substantially in the form attached hereto as Exhibit 1 (as the same may
hereafter be amended, his "Employment Agreement") that provides for his
participation in the plan or in the Pittway Corporation Supplemental Executive
Retirement Plan shall participate in the plan, subject to the conditions and
limitations of the plan. It is expressly understood that variations among the
participants' Employment Agreements may result in differences in the numbered
paragraphs thereof in which corresponding provisions appear (for example, the
non-competition provisions which are in paragraph 10 of Exhibit 1 attached
hereto, or variations thereof, may be in paragraph 10 of certain of the
Employment Agreements but in paragraph 9 of others). Accordingly, each reference
in the plan to a particular numbered paragraph of a participant's Employment
Agreement shall be deemed to be a reference to the paragraph thereof, if any,
which corresponds to the identically numbered paragraph of Exhibit 1.
2.2 ACCRUED BENEFIT. For 1995 and for each full calendar year and any final
fraction of a calendar year of a participant's Employment Period (as such term
is defined in such participant's Employment Agreement), the participant shall
accrue a benefit under the plan equal to 1.85 percent of that portion of his
earnings (as defined in section 2.3 below) for such year or fraction that is in
excess of the "maximum dollar limitation" (as defined below) for such year or
fraction and is less than $300,000.
- 1 -
<PAGE> 2
For purposes of the plan, "maximum dollar limitation" means, for
any year or fraction of a year, the greater of $150,000 or the dollar amount of
any higher maximum limitation on annual compensation taken into account under a
qualified plan for such year or fraction of a year determined by the Secretary
of Treasury or his delegate or by law under section 401(a) (17) of the Code; it
being understood that annual compensation for purposes of such limitation is
computed differently from "earnings" for purposes of the plan. A participant's
accrued benefits under the plan shall be referred to hereinafter as the
participant's "supplemental retirement benefits."
2.3 EARNINGS. For purposes of the plan, a participant's "earnings" for any year
or fraction means his total, regular cash compensation paid for such year or
fraction for services rendered to any Penton Company (as such term is defined in
the retirement plan) or, prior to the effective date, to the Pittway Companies
(as such term is defined in the Pittway Corporation Retirement Plan) during such
year or fraction, consisting solely of his salary and his annual discretionary
cash bonus, if any, for such year. It is expressly understood that a
participant's "earnings" do not include any other compensation, including,
without limitation, any of the following:
(a) Long-term incentive compensation;
(b) Unused vacation pay;
(c) Special cash bonuses;
(d) Any income realized for Federal income tax purposes as a
result of the grant or exercise of an option or options to
acquire shares of common stock of a Pittway Company or the
company, the receipt or exercise of any stock appreciation
right or payment, or the disposition of shares acquired by the
exercise of such an option or right;
(e) Any noncash compensation, including any amounts contributed by
the participant's employer(s) for his benefit under the
retirement plan or any other retirement or benefit plan,
arrangement, or policy maintained by his employer(s);
(f) Any reimbursements for medical, dental or travel expenses,
automobile allowances, relocation allowances, educational
assistance allowances, awards and other special allowances;
(g) Any income realized for Federal income tax purpose as a result
of (i) group life insurance, (ii) the personal use of an
employer-owned automobile, or (iii) the transfer of restricted
shares of stock or restricted property of a Pittway Company or
the company, or the removal of any such restrictions;
(h) Any severance pay paid as a result of the participant's
termination of employment (it being expressly understood that
any amount(s) taken into account pursuant to the final
sentence of section 2.8 below shall not be deemed severance
pay for purposes hereof); or
(i) Any compensation paid or payable to the participant, or to any
governmental body or agency on account of the participant,
under the terms of any state, Federal or foreign
- 2 -
<PAGE> 3
law requiring the payment of such compensation because
of the participant's voluntary or involuntary termination of
employment with the company .
Notwithstanding the foregoing, a participant's "earnings" do include (i) any
salary reduction amount elected by the participant and credited to a cafeteria
plan (as defined in section 125(c) of the Code) or a qualified cash or deferred
arrangement (as defined in section 401(k) of the Code) and (ii) the initial
value ascribed to any performance shares award the participant elects to receive
in lieu of a portion of his annual discretionary cash bonus.
2.4 PAYMENT OF BENEFITS. Each participant's Employment Agreement provides that
in no event shall his Employment Period be extended beyond his 65th birthday
except by mutual agreement of the participant and his employer. Subject to the
conditions and limitations of the plan, upon a participant's attainment of age
65 years, he shall be entitled to a monthly benefit payable for his life
commencing upon his attainment of age 65 years in an amount equal to one-twelfth
(1/12) of the sum of the participant's accrued supplemental retirement benefits.
A participant's supplemental retirement benefits shall be paid to him in the
form described below that applies to the participant; provided, however, that in
lieu of payment in the normal form described below, the participant may
irrevocably elect, within thirty (30) days after his commencement of
participation in the plan, to receive his supplemental retirement benefits in a
single lump sum as soon as practicable after his attainment of age 65 years. A
participant's "supplemental retirement benefit commencement date" means the date
as of which the initial payment (or, in the case of a single lump sum, full
payment) of the supplemental retirement benefits to which the participant is
entitled is payable. Subject to the conditions and limitations of the plan, a
participant's supplemental retirement benefit commencement date shall normally
be the first day of the calendar month coincident with or next following the
participant's attainment of age 65 years. Notwithstanding the immediately
preceding sentence, if a participant's Employment Period under his Employment
Agreement terminates prior to his attainment of age 65 years and he is eligible,
and elects, to receive early retirement benefits under the retirement plan, and
if the participant requests a supplemental retirement benefit commencement date
prior to his attainment of age 65 years, then with (but only with) the consent
of the committee (as defined in section 3.1 below), the participant's
supplemental retirement benefit commencement date shall be such earlier date, if
any, selected by the committee. Supplemental retirement benefits that are paid
in a lump sum, or commence, before the participant's attainment of age 65 years,
if any, shall be subject to actuarial reduction in accordance with section 2.5
below.
(a) LIFE ANNUITY. If a participant does not have a spouse (as
defined in section 2.7 below) on his supplemental retirement
benefit commencement date, and if he has not elected pursuant
to the preceding provisions of this section 2.4 to receive his
supplemental retirement benefits in a single lump sum, payment
of his supplemental retirement benefits shall be during his
lifetime on a life annuity basis.
(b) JOINT AND SURVIVOR ANNUITY. If a participant has a spouse (as
defined in section 2.7 below) on his supplemental retirement
benefit commencement date, payment of his supplemental
retirement benefits shall be in the form of a joint and 50
percent survivor annuity unless the participant has
theretofore elected pursuant to the preceding provisions of
this section 2.4 to have his benefits provided in a single
lump sum.
Such joint and 50 percent survivor annuity shall consist of a
reduced monthly benefit continuing during the participant's
lifetime, and if such spouse is living at the time of
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<PAGE> 4
the participant's death, payment of 50 percent of such monthly
benefit shall be made to such spouse until such spouse's death
occurs. The amount of the participant's and such spouse's
benefits under this subsection shall be calculated so that it
is the actuarial equivalent of the supplemental retirement
benefits to which the participant would otherwise be entitled
under the plan. If such spouse predeceases the participant, or
if the participant and such spouse cease to be married after
the participant's supplemental retirement benefit commencement
date, there shall be no adjustment to the participant's
monthly payments and no supplemental retirement benefits shall
be payable to any person after the participant' s death.
2.5 ACTUARIAL EQUIVALENT. A benefit shall be actuarially equivalent to another
benefit if the actuarial reserve required to provide such benefit is equal to
the actuarial reserve required to provide such other benefit, computed on the
basis of the same actuarial assumptions, interest rates, tables, methods and
procedures, including reduction factors for commencement of payments prior to
attainment of age 65 years, that are used for purposes of the retirement plan as
in effect on the applicable date that a benefit payment amount is determined.
2.6 PRE-RETIREMENT SURVIVING SPOUSE BENEFIT. If a participant dies prior to his
supplemental retirement benefit commencement date, no supplemental retirement
benefits under the plan shall be paid or payable with respect to the
participant; provided, however, that if the participant has a spouse (as defined
in section 2.7 below) at the time of his death, such spouse shall be entitled to
receive a monthly benefit for such spouse's lifetime equal to 50 percent of the
amount of monthly benefit that would have been payable to the participant in the
form of a joint and 50 percent survivor annuity if he had terminated employment
as of the date of his death with entitlement to supplemental retirement benefits
under the plan and the committee (as defined in section 3.1 below) had permitted
his supplemental retirement benefit commencement date to occur on the first day
of the calendar month coincident with or next following the date of his death,
taking into account actuarial reduction for commencement prior to the
participant's attainment of age 65 years. The first payment to the spouse shall
be made as of the first day of the calendar month coincident with or next
following the date of the participant's death and the final payment shall be
made as of the first day of the calendar month during which the spouse's death
occurs. If, prior to the participant's death, the participant had elected
pursuant to section 2.4 above to receive his supplemental retirement benefits in
a single lump sum, in lieu of the monthly payments described above, such spouse
shall be entitled to receive a single lump sum equal to 50 percent of the lump
sum value of the participant's supplemental retirement benefits as of the date
of his death, taking into account actuarial factors for payment prior to the
participant's attainment of age 65 years. Such lump sum payment shall be made to
such spouse as soon as practicable following the participant's death.
2.7 SPOUSE. For purposes of the plan, a person will be considered the "spouse"
of a participant as of any date if and only if such person and the participant
have been married in a religious or civil ceremony recognized under the laws of
the state where the marriage was contracted and the marriage remains legally
effective. Any person who is not, or who has ceased to be, a participant's
"spouse" on the participant's supplemental retirement benefit commencement date
(or, in the event of the participant's death prior to his supplemental
retirement benefit commencement date, the date of his death) shall not be
considered the participant's "spouse" for purposes of the plan.
2.8 FORFEITURE; EARLY TERMINATION OF EMPLOYMENT PERIOD. If the participant's
Employment Period ends early pursuant to paragraph 5 of his Employment Agreement
on account of a Termination for
-4-
<PAGE> 5
Cause or a Termination by Executive with Advance Notice (as such terms are
defined, respectively, in his Employment Agreement), or if after the
participant's Employment Period ends (whether or not early and regardless of the
reason) the participant breaches any of his agreements in paragraph 7, 9 or 10
of his Employment Agreement, the participant shall forfeit all of his
supplemental retirement benefits, if any, under the plan, no benefit under the
plan shall thereafter be payable to or with respect to the participant or his
spouse, and any benefit under the plan theretofore paid to or with respect to
the participant or his spouse must be repaid to the company by the participant
or his spouse promptly upon demand. If the participant's Employment Period ends
early pursuant to paragraph 5 of his Employment Agreement on account of a
Termination without Cause or a Termination by Executive for Good Reason (as such
terms are defined, respectively, in his Employment Agreement), the participant's
supplemental retirement benefits under the plan shall be the supplemental
retirement benefits the participant would have been entitled to under the plan
had his Employment Period remained in effect until the earlier of the date on
which (without any extension thereof) such Employment Period was then scheduled
to end pursuant to his Employment Agreement or the date of his death and had the
participant's salary in effect as of the last day of his Employment Period (or,
if greater, his Executive's Reference Salary (as such term is defined in his
Employment Agreement)) continued until the earlier of such dates and been paid
at the times such salary would have been paid, and had the participant received
no further annual cash bonus.
2.9 FUNDING. The plan is intended to be non-qualified for purposes of the Code
and unfunded for purposes of the Code and ERISA. Benefits payable under the plan
to a participant and/or his spouse, as the case may be, shall be paid directly
by the company . The company shall not be required to segregate on its books or
otherwise any amount to be used for payment of supplemental retirement benefits
under the plan. Each participant and spouse is solely an unsecured creditor of
the company with respect to any benefit payable with respect to a participant
hereunder.
SECTION 3
---------
GENERAL PROVISIONS
------------------
3.1 COMMITTEE. The plan shall be administered by the plan administrative
committee of the retirement plan (the "committee"). The committee shall have, to
the extent appropriate, the same powers,, rights, duties and obligations with
respect to the plan as it has with respect to the retirement plan. Each
determination provided for in the plan shall be made by the committee under such
procedure as may from time to time be prescribed by the committee and shall be
made in the absolute discretion of the committee. Any determination so made
shall be conclusive.
3.2 EMPLOYMENT RIGHTS. Neither the establishment of, nor participation in, the
plan shall be construed to give any participant the right to be retained in the
service of the Penton Companies or to any benefits not specifically provided by
the plan.
3.3 TAXES AND WITHHOLDING. Each participant (or his spouse, as applicable) shall
be responsible for any taxes imposed on him (or his spouse) ("taxes") by reason
of the establishment of, or his participation in, the plan, including, without
limitation, any Federal, state and/or local income or employment taxes imposed
on benefits or potential benefits under the plan (or on the value thereof) in
advance of the participant's receipt of such benefits or potential benefits. The
company or a subsidiary of the company may deduct any taxes from payroll or
other payments due the participant or his spouse. The committee shall deduct
from all payments under the plan any taxes required to
-5-
<PAGE> 6
be withheld, including, without limitation, any Federal, state and/or local
income or employment taxes. In the event that such deductions and/or
withholdings are not sufficient to pay the taxes, the participant (or his
spouse) shall promptly remit the deficit to the company upon its request.
3.4 INTERESTS NOT TRANSFERABLE. Except as to withholding of any tax under the
laws of the United States or any state, the interests of participants and their
spouses under the plan are not subject to the claims of their creditors and may
not be voluntarily or involuntarily transferred, assigned, alienated or
encumbered. No participant shall have any right to any benefit payments
hereunder prior to his termination of employment with the Penton Companies.
3.5 PAYMENT WITH RESPECT TO INCAPACITATED PARTICIPANTS OR BENEFICIARIES. If any
person entitled to benefits under the plan is under a legal disability or in the
committee's opinion is incapacitated in any way so as to be unable to manage his
financial affairs, the committee may direct the payment of such benefit to such
person's legal representative or to a relative or friend of such person for such
person's benefit, or the committee may direct the application of such benefits
for the benefit of such person in any manner which the committee may select that
is consistent with the plan. Any payments made in accordance o with the
foregoing provisions of this section shall be a full and complete discharge of
any liability for such payments.
3.6 LIMITATION OF LIABILITY. To the extent permitted by law, no person
(including the company, any subsidiary of the company, the Board of Directors of
the company (the "Board"), the board of directors of any subsidiary of the
company, the committee, any present or former member of the Board or of the
board of directors of any subsidiary of the company or of the committee, and any
present or former officer of the company or of any subsidiary of the company)
shall be personally liable for any act done or omitted to be done in good faith
in the administration of the plan.
3.7 CONTROLLING LAW. The plan shall be construed in accordance with the
provisions of ERISA and other Federal laws, to the extent such provisions are
applicable to the plan. To the extent not inconsistent therewith, the plan shall
be construed in accordance with the laws of the State of Ohio.
3.8 GENDER AND NUMBER. Where the context admits, words in the masculine gender
shall include the feminine and neuter genders, the plural shall include the
singular and the singular shall include the plural.
3.9 ACTION BY THE COMPANY. Any action required of or permitted by the company
under the plan, including action by the company to amend the plan, shall be by
resolution of the Board or by a duly authorized committee of the Board or by a
person or persons authorized by resolution of the Board or such committee. The
procedure for amending the plan is that the plan shall be amended by the company
taking appropriate corporate action to effectuate any amendment considered by it
to be advisable to be made. Appropriate corporate action includes action by
resolution of the Board, by a committee authorized by the Board, or by a person
or persons authorized by the Board or such committee, as provided above.
3.10 SUCCESSOR TO THE COMPANY. The term "company" as used in the plan shall
include any successor to the company by reason of merger, consolidation, the
purchase of all or substantially all of the company 's assets or otherwise.
- 6 -
<PAGE> 7
3.11 MISCELLANEOUS. The plan shall be binding upon and inure to the benefit of
the parties, their legal representatives, successors and assigns, and all
persons entitled to benefits hereunder. Any notice given in connection with the
plan shall be in writing and shall be delivered in person or by registered mail,
return receipt requested. Any notice given by registered mail shall be deemed to
have been given upon the date of delivery indicated on the registered mail
return receipt, if correctly addressed.
SECTION 4
---------
AMENDMENT AND TERMINATION
-------------------------
While the company expects to continue the plan, it must necessarily reserve, and
hereby does reserve, the right, either in general or as to one or more
particular participants, to amend the plan from time to time or to terminate the
plan at any time; provided (i) that no amendment of the plan with respect to a
participant that reduces or eliminates any benefits such participant has accrued
as of the effective date of such amendment shall be effective unless such
participant consents to such amendment; and (ii) no amendment of the plan with
respect to a participant whose Employment Period under his Employment Agreement
has not yet ended that adversely affects such participant, or termination of the
plan with respect to such a participant, by the company on any date shall be
effective prior to the date on which (without any extension thereof) such
participant's Employment Period is then scheduled to end pursuant to his
Employment Agreement unless the participant consents to such amendment or
termination.
IN WITNESS WHEREOF, this plan has been executed on behalf of the
company by its duly authorized officers as of the day and year first above
written.
PENTON MEDIA, INC.
By: /s/ Preston L. Vice
------------------------------
Its Preston L. Vice
------------------------------
Date November 12, 1998
------------------------------
- 7 -
<PAGE> 8
EXHIBIT 1
---------
EMPLOYMENT AGREEMENT
--------------------
AGREEMENT made as of __________, between Penton Media, Inc., a
Delaware corporation (the "COMPANY"), and _____________ ("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, 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 the
__________ of the _________ Group of the Company or any successor to such Group,
in each case as constituted from time to time (the "GROUP"), 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 President of the Company to expand or limit such duties,
responsibilities and authority, either generally or in specific instances.
Executive shall have the title _____________ of the Group, subject to the power
of the Board to change such title from time to time. During the Employment
Period, Executive shall also serve as a director of the Company for so long as
the Board nominates him to that position and he is elected to it, and as a
___________ of the Company for so long as the Board elects or appoints him to
that position and as a director of any affiliate of the Company designated by
the Board for so long as the Board causes him to be elected to such position.
(b) Executive shall report to the President 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 exceed those in which Executive has engaged in
the past, participation in charitable and civic endeavors and management of
Executive's personal investments and business interests) to the business and
affairs of the Company, or any subsidiary or affiliate of the Company. 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 _________ 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.
<PAGE> 9
3. SALARY AND BENEFITS.
(a) SALARY. The Company agrees to pay Executive a salary
during the Employment Period in monthly installments.
(b) Executive's initial salary shall be $_______ per annum.
(c) Executive's salary may be increased by the Board from time
to time.
(d) The Board may, in its sole discretion, award a bonus to
Executive for any calendar year during the Employment Period.
(e) The Company shall reimburse Executive for all reasonable
expenses incurred by him in the course of performing his duties under this
Agreement which 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 with respect to reporting and
documentation of such expenses.
(f) In addition to the salary, and any bonus(es) payable to
Executive pursuant to this paragraph 2, Executive shall be entitled during the
Employment Period to participate, on the same basis as other executives of the
Company (but subject to variations among executives resulting from differences
in the levels of benefits made available to employees at particular business
units under the Company's 401(k) plan or any other plan 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 and/or 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.
(g) In addition to participation in the Company's Standard
Executive Benefits Package pursuant to this paragraph 2, Executive shall be
entitled during the Employment Period to:
(i) additional term life insurance coverage in an amount
equal to Executive's salary; but only if and so long
as such additional coverage is available at standard
rates from the insurer providing term life insurance
coverage under the Standard Executive Benefits
Package or from a comparable insurer acceptable to
the Company;
(ii) supplementary long-term disability coverage in an
amount which will increase maximum covered annual
compensation to $330,000 and the maximum monthly
payments to $18,333; but only if and so long as such
supplementary coverage is available at standard rates
from the insurer providing long-term disability
coverage under the Standard Executive Benefits
Package or a comparable insurer acceptable to the
Company; and
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<PAGE> 10
(iii) participation in the Penton Media, Inc. Supplemental
Executive Retirement Plan (the "SERP"), a copy of
which, as currently in effect, is attached hereto as
Exhibit A.
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 Board
may make adjustments in Executive's duties, responsibility and authority, and in
Executive's compensation, as 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 third anniversary of the date
hereof.
(b) On each anniversary of the date hereof which precedes
Executive's sixty-fifth birthday by more than two years, 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 calendar year (unless Executive's sixty-fifth birthday occurs during
such additional calendar year, in which event the Employment Period shall be
extended only until such birthday). In no event shall the Employment Period be
extended beyond the 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 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");
-3-
<PAGE> 11
(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"); or
(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 eighty (180) 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").
(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;
(iii) the commission by Executive of any act involving
dishonesty or disloyalty with respect to the Company
or any of its subsidiaries or affiliates;
(iv) conduct by Executive tending to bring 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 10 hereof; 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:
-4-
<PAGE> 12
(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
(ii) 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.
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), or 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) (but only to
the extent provided in any option theretofore granted to Executive or in the
SERP or any other benefit plan in which Executive has participated as an
employee of the Company) any option rights or plan benefits which by their terms
extend beyond termination of Executive's employment, (iii) any benefits to which
Executive is entitled under the Consolidated Omnibus Budget Reconciliation Act
of 1985, as amended ("COBRA"), and (iv) any other amounts(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
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 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.
(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, 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 until the date on which (without any extension thereof) it
was then scheduled to end, at the times such amounts would have been paid (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); PROVIDED, HOWEVER, that in the
event of Executive's death during the payment period, the Company shall pay
-5-
<PAGE> 13
any subsequent such amounts to Executive's estate (or such person or persons as
Executive may designate in a written instrument signed by him and delivered to
the Company prior to his death) either (i) amounts during the remainder of the
payment period equal to one-half of the of the amounts which would have been
paid to Executive but for his death or (ii) if so elected by the payee(s) by
written notice to the Company within the period of sixty (60) days after the
date of Executive's death, a lump sum amount equivalent to the discounted
present value of such reduced amounts, discounted at the publicly announced
reference rate for commercial lending of the Company's principal lending bank in
effect from time to time, in effect at the date of notice to the Company of such
election, with said amount to be paid on a date no later than thirty (30) days
following the date of notice to the Company of such election. 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. It is expressly understood that the Company's
payment obligations under this (d) shall cease in the event Executive breaches
any of his agreements in paragraph 7, 9 or 10 hereof.
(e) If the Employment Period ends early pursuant to paragraph
5 hereof on account of a Termination by Executive with Advance Notice, the
Company shall make no further payments to Executive except as contemplated in
(a) (i), (ii) and (iii) above.
7. INVENTIONS AND OTHER INTELLECTUAL PROPERTY. Executive
agrees that all inventions, innovations, improvements, developments, methods,
designs, analyses, drawings, reports, trademarks, slogans, product or other
designs, advertising or marketing programs, and all similar or related
information which relate to the Company's or any of its subsidiaries' or
affiliates' actual or anticipated business, research and development or existing
or future products or services and which are (or were prior to the date of this
Agreement) conceived, developed or made by Executive, whether alone or jointly
with others, while employed by the Company or any such subsidiary or affiliate
or any predecessor thereof ("WORK PRODUCT") belong to the Company or such
subsidiary or affiliate. Executive will promptly disclose such Work Product to
the President of the Company and perform all actions reasonably requested by the
President of the Company (whether during or after the Employment Period) to
establish and confirm such ownership (including, without limitation,
assignments, consents, powers of attorney and other instruments).
8. LIMITATION/ILLINOIS DISCLOSURE. Paragraph 7 of this
Agreement regarding the ownership of inventions and other intellectual property
does not apply to the extent application thereof is prohibited by any law the
benefits of which cannot be waived by Executive. Executive hereby waives the
benefits of any such law to the maximum extent permitted by law. In accordance
with Section 2872 of the Illinois Employee Patent Act, Ill. Rev. Stat. Chap.
140, ss. 301 ET. SEQ. (1983), Executive is hereby advised that in the event and
to the extent such Act is applicable to Executive, paragraph 7 of this Agreement
regarding the ownership of inventions and other intellectual property does not
apply to any invention for which no equipment, supplies, facilities or trade
secret information of the Company or any of its subsidiaries or affiliates was
used and which was developed entirely on Executive's own time, unless (i) the
invention relates to the business of the Company or any of its subsidiaries or
affiliates or to the Company's or any of its subsidiaries' or affiliates' actual
or demonstrably anticipated research or development or (ii) the invention
results from any work performed by Executive for the Company or any of its
subsidiaries or affiliates.
-6-
<PAGE> 14
9. CONFIDENTIAL INFORMATION. Executive acknowledges that the
information, observations and data obtained by him while employed by the Company
pursuant to this Agreement concerning the business or affairs of the Company or
any of its subsidiaries or affiliates or any predecessor thereof (unless and
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 he shall not disclose
any Confidential Information without the prior written consent of the President
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 President of the Company.
Executive shall deliver to the Company at the termination of the Employment
Period, or at any other time the Company may request, all memoranda, notes,
plans, records, reports, computer tapes and software and other documents and
data (and copies thereof) relating to the Confidential Information, 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.
10. 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
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 will be of special, unique and extraordinary value
to the Company.
(b) Executive agrees (i) that during the Employment Period 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,
stockholder, investor or employee of or in any other corporation or enterprise
or otherwise, engage 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, and (ii) that for two years after the Employment Period 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, stockholder,
investor or employee of or in any other corporation or enterprise or otherwise,
assist _______________ or any subsidiary or affiliate of _____________, or any
successor or assign of ____________, in engaging or being engaged in the
business activity of publishing a magazine or electronic media product that
directly competes with any magazine or electronic media product then being
published by, conducting a trade show that directly competes with any trade show
then being conducted by, or creating or disseminating any other product that
competes directly with any product then being created or disseminated by, the
Company or any of its subsidiaries or affiliates.
(c) Executive further agrees that during the Employment Period
and for two years thereafter 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.
-7-
<PAGE> 15
(d) Nothing in this paragraph 10 shall prohibit Executive from
being: (i) a stockholder in a mutual fund or a diversified investment company or
(ii) a passive owner of not more than 2% of the outstanding stock of any class
of a corporation which is publicly traded, so long as Executive has no active
participation in the business of such corporation.
(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.
11. 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 7, 9 or 10 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).
12. 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.
13. SURVIVAL. Paragraphs 7, 9 and 10 hereof shall survive and
continue in full force in accordance with their terms notwithstanding any
termination of the Employment Period.
14. NOTICES. Any notice provided for in this Agreement shall
be in writing and shall be either personally delivered, or mailed by first class
mail, return receipt requested, to the recipient at the address below indicated:
NOTICES TO EXECUTIVE:
---------------------
---------------------
---------------------
-8-
<PAGE> 16
NOTICES TO THE COMPANY:
Mr. Thomas L. Kemp
Chairman and Chief Executive Officer
Penton Media, Inc.
1100 Superior Avenue
Cleveland, Ohio 44114
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
or mailed.
15. 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.
16. PAYMENT OF CERTAIN COSTS AND EXPENSES. In the event that
there is a Change of Control of the Company, if the Company thereafter
wrongfully withholds from Executive any amount payable to Executive pursuant to
this Agreement or the SERP and Executive obtains a final judgment against the
Company for such amount, the Company shall reimburse Executive for any costs and
expenses (including without limitation attorneys' fees) reasonably incurred by
Executive in obtaining such judgment and shall pay Executive interest on the
amount of each such cost or expense from the date of payment thereof by
Executive to the date of reimbursement by the Company at a floating rate per
annum equal to the publicly announced reference rate for commercial lending, in
effect from time to time, of the Company's principal lending bank in effect from
time to time. For purposes of the foregoing, a "CHANGE OF CONTROL OF THE
COMPANY" will be deemed to have occurred if but only if, for purposes of Section
13(d) of the Securities Exchange Act of 1934, as amended, a person or group
other than (i) Pittway or (ii) one or more members of the Harris Group becomes
the beneficial owner of stock of the Company possessing a majority of the voting
power under ordinary circumstances with respect to the election of directors.
For purposes of the preceding sentence, the "Harris Group" shall mean Messrs.
Irving B. Harris, Neison Harris, King Harris, William W. Harris and Sidney
Barrows, 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.
17. 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.
-9-
<PAGE> 17
18. 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.
19. 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: (i) Pittway or any subsidiary or affiliate
thereof in the event all or any substantial part of the business to which
Executive's duties under this Agreement relate are transferred thereto and (ii)
any successor to the Company by merger or consolidation or purchase of all or
substantially all of the Company's assets; in each case provided such transferee
or successor assumes the liabilities of the Company hereunder.
20. CHOICE OF LAW. This Agreement shall be governed by the
internal law, and not the laws of conflicts, of the State of Ohio.
21. 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 first written above.
PENTON MEDIA, INC.
By
-----------------------------------
Its
-----------------------------------
-------------------------------------
EXECUTIVE
-10-
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