EXECUTIVE AGREEMENT

 

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                                                                   Exhibit 10.18

 

                                   CONFIDENTIAL             FINAL EXECUTION COPY

 

                               EXECUTIVE AGREEMENT

 

            THIS EXECUTIVE AGREEMENT (this "Agreement") is made as of September

17, 2003 (the "Effective Date"), by and between Ziff Davis Media Inc., a

Delaware corporation (the "Company") and Paul O'Reilly ("Executive"). Certain

definitions are set forth in the Appendix to this Agreement.

 

            In consideration of the representations and covenants set forth

herein, the parties hereby agree as follows:

 

      1. Employment. The Company shall employ Executive, and Executive hereby

accepts employment with the Company, upon the terms and conditions set forth in

this Agreement for the period beginning September 22, 2003 and ending December

31, 2008 or earlier pursuant to Section 4 hereof (the "Employment Period").

 

      2. Position and Duties.

 

      (a) During the Employment Period, Executive shall (subject to promotion)

serve as the Vice President, Ziff Davis Events, of the Company and shall have

the normal duties, responsibilities and authority implied by such positions.

Executive shall hold similar positions with any Affiliate of the Company to the

extent Executive may be so appointed by the Company in its sole discretion.

 

      (b) Executive shall report directly to the Company's Chief Operating

Officer ("COO"), the Company's President ("President") and the Company's Chief

Executive Officer ("CEO") or such other senior Company executive as the CEO may

direct, and shall devote his best efforts and substantially all of his business

time and attention to the business and affairs of the Company (and to the extent

applicable, its Affiliates). Executive shall perform Executive's duties and

responsibilities to the best of Executive's abilities in a diligent and

professional manner.

 

      3. Base Salary; Benefits and Bonuses.

 

      (a) During the Employment Period, Executive's base salary shall be

$225,000 per annum, or such higher rate as the Company may designate from time

to time (the "Base Salary"), which salary shall be payable by the Company in

regular installments in accordance with the Company's general payroll practices.

 

      (b) In addition to the Base Salary, during the Employment Period Executive

shall be eligible to receive an annual bonus (the "Bonus") calculated from an

annual bonus pool (the "Bonus Pool") allocated by the Company to the TM Media

Principals. On or prior to March 31 of each calendar year, beginning with the

calendar year beginning January 1, 2004, the Company's board of directors, CEO,

President or CFO, after consultation by the CEO, President or CFO with one or

more of the TM Media Principals, shall approve a budget for the Initial Events

and their development and implementation which shall include a reasonable target

(the "Budgeted TM EBITDA") for TM EBITDA for such year and, during the

Employment Period, the Company shall give written notice of Budgeted TM EBITDA

to Executive within ten (10) business days after it has been approved by the

CEO, President or CFO of the Company; provided, however, that Budgeted TM EBITDA

for any particular calendar year shall, without more and without prejudice to

any other target being deemed reasonable, automatically be deemed to be

reasonable if (A) Budgeted TM EBITDA does not exceed the sum of (x) actual TM

EBITDA with respect to the immediately preceding calendar year plus (y) an

amount of additional EBITDA that reasonably may be projected for such year

taking into account the Company's preceding or anticipated capital expenditures,

economies of scale and similar efficiencies) or (B) TM Media Principals then

employed by the Company

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and holding at least 60% (based upon Personal Share percentages) of the

aggregate Personal Shares do not deliver written notice that they believe that

such Budgeted TM EBITDA is not reasonable within fifteen (15) days after receipt

of written notice of Budgeted TM EBITDA from the Company. If, for any calendar

year, TM EBITDA for such calendar year exceeds Budgeted TM EBITDA (such excess,

the "Excess Amount"), then the Company will allocate to the Bonus Pool an amount

equal to the lesser of (i) 50% of the aggregate base salaries for the relevant

calendar year for the TM Media Principals continuously employed by the Company

throughout the entire relevant calendar year and (ii) the Excess Amount. The

percentage determined by dividing (x) the amount required to be allocated to the

Bonus Pool pursuant to the immediately foregoing sentence by (y) the aggregate

base salaries for the relevant calendar year for the TM Media Principals

continuously employed by the Company throughout the entire relevant calendar

year is referred to herein as the "Bonus Percentage." On or before April 15 of

each year during the Employment Period, beginning April 15, 2005, the Company

shall pay Executive (provided Executive is still employed as a full-time

employee by the Company or any of its Affiliates on the date such payment is

made) an amount in cash equal to the product of (A) the Bonus Percentage

multiplied by (B) the Base Salary of Executive during such prior calendar year.

For example and without limiting the foregoing, if (i) Budgeted TM EBITDA for a

calendar year is $2,000,000, (ii) actual TM EBITDA for such calendar year is

$3,000,000 and (iii) the aggregate base salaries for such calendar year of the

TM Media Principals (all of whom were continuously employed by the Company

throughout the entire calendar year) is $850,000, then (A) the Bonus Pool shall

be $425,000, and (B) the Bonus Percentage shall be 50%. For example and without

limiting the foregoing, if (i) Budgeted TM EBITDA for a calendar year is

$2,000,000, (ii) actual TM EBITDA for such calendar year (before reduction on

account of the Bonus Pool for such calendar year) is $2,250,000 and (iii) the

aggregate base salaries for such calendar year of the TM Media Principals (all

of whom were continuously employed by the Company throughout the entire calendar

year) is $850,000, then (A) the Bonus Pool shall be $250,000 and (B) the Bonus

Percentage shall be 29%.

 

      (c) During the Employment Period, (i) Executive shall be entitled to

participate in all of the Company's employee benefit plans and programs for

which senior executive employees of the Company are generally eligible, which

currently include, but shall not be limited to, health insurance, dental

insurance, life insurance, short-term and long-term disability insurance and

participation in the Company's 401(k) plan and (ii) Executive shall be eligible

for three (3) weeks of paid vacation in accordance with the policies of the

Company. Executive's right to participate in any employee benefit plans or

programs of the Company shall be subject to the Company's right to amend, modify

or terminate any such plan or program in accordance with its terms and

applicable law and subject in each case to any applicable waiting periods or

other restrictions contained in such benefit plans or programs.

 

      (d) The Company shall reimburse Executive for all reasonable business

expenses incurred by Executive in the course of performing Executive's duties

under this Agreement which are consistent with the Company's policies in effect

from time to time for senior executive employees of the Company with respect to

travel, entertainment and other business expenses, subject to the Company's

requirements with respect to reporting and documentation of such expenses as per

Company policies.

 

      (e) All payments to Executive shall be subject to customary withholding as

may be required by law.

 

      4. Termination; Severance.

 

      (a) The Employment Period (i) shall terminate upon Executive's death; (ii)

may be terminated by the Company upon delivery of written notice to Executive at

any time with Cause or without Cause; (iii) may be terminated by Company for

Incapacity upon delivery of written notice to Executive within 30 days following

the end of the relevant Incapacity or while the relevant Incapacity is

continuing; and (iv)

 

 

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may be terminated by Executive at any time upon delivery of written notice to

Company for Good Reason or other than for Good Reason. Executive acknowledges

and agrees that nothing contained herein or in any other agreement or document

shall entitle Executive to remain in the employment of the Company or any of its

Affiliates. "Termination" means such time as of which Executive ceases to be

employed by the Company, for any reason, whether on account of termination by

the Company, resignation by Executive, Executive's death or otherwise and

"Termination Date" means the date on which Termination occurs.

 

      (b) Upon any Termination, Executive shall be entitled to receive

Executive's Base Salary earned through the Termination Date, prorated on a daily

basis together with all accrued but unpaid vacation time earned by Executive

during the calendar year in which such Termination occurs, reimbursements of

expenses incurred during the Employment Period and reimbursable in accordance

with and after compliance with Company policies, and any Bonus in respect of a

prior, completed calendar year which is then due and owing and has not been

paid. Except as set forth in Section 4(d) or as required by applicable law,

Executive shall not be entitled to receive Executive's Base Salary or any

bonuses or other benefits from the Company in respect of any period after the

Termination Date.

 

      (c) In the event Executive's employment is terminated (i) by the Company

with Cause or for Incapacity, (ii) by Executive other than for Good Reason, or

(iii) upon Executive's death or upon any Termination on or after December 31,

2008, the Company shall have no obligation to make any severance or other

similar payment to or on behalf of Executive.

 

      (d) In the event that Executive's employment is terminated (i) by the

Company without Cause or (ii) by Executive for Good Reason (in either case prior

to December 31, 2008), following such Termination and upon execution and

delivery by Executive within thirty (30) calendar days after the Termination

Date of a general release in favor of the Company and its Affiliates and its and

their respective officers, directors, employees, representatives, agents and

attorneys, and the successors and assigns of each of the foregoing, in form and

substance satisfactory to the Company (provided, however, that the Company shall

not require such general release to include any claim alleging a right to

receive indemnification from the Company related to any action, suit or

proceeding that may be brought against Executive by any third party in

connection with Executive's status as an executive of the Company or any

payments or other rights to which Executive may be entitled under the Stock

Purchase Agreement), the Company shall, through the first (1st) anniversary of

the Termination Date, (x) pay Executive his annual Base Salary (as in effect on

the Termination Date) in regular installments in accordance with the Company's

general payroll practices and (y) if Executive elects under COBRA to maintain

health insurance benefits through the Company's group plan (if any), pay that

portion of the premium for such benefits that the Company would have paid had

Executive remained an employee of the Company for such period. After payment of

the severance amounts described in this Section 4(d), the Company shall have no

obligation to make any further severance or other payment or provide any other

benefit to or on behalf of Executive, other than payments that may become due

and owing to Executive in accordance with the terms of the Stock Purchase

Agreement. Notwithstanding the foregoing, in the event that Executive shall

breach any of Executive's obligations under Section 5 of this Agreement (except

any breach which Executive carries the burden of proving is solely of a

technical nature, is immaterial and was inadvertent) or Executive's obligations

pursuant to Section 5(a) of this Agreement are terminated as determined in

accordance with the terms hereof, then, in addition to any other rights that the

Company may have under this Agreement or otherwise, the Company shall be

relieved from and shall have no further obligation to pay Executive any amounts

to which Executive would otherwise be entitled pursuant to this Section 4.

 

      5. Noncompete, Non-Solicitation.

 

 

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      (a) Noncompete. In further consideration of the compensation to be paid to

Executive hereunder, Executive acknowledges that in the course of Executive's

employment with the Company and any applicable Affiliate thereof, Executive will

during the Employment Period become familiar with the trade secrets, business

plans and business strategies and with other Confidential Information (as

defined on the Appendix hereto) concerning each of the Company and any

applicable Affiliate of the Company (and their respective predecessors,

successors and assigns) and that Executive's services have been and shall be of

special, unique and extraordinary value to the Company and any applicable

Affiliate of the Company. Therefore, Executive agrees that, during the period

from the beginning of the Employment Period through and including the date that

is the one-year anniversary of the last day of the Employment Period (such

period, the "Noncompete Period"), Executive shall not directly or indirectly

(whether for Executive or for any other Person) own any interest in, operate,

manage, control, engage in, participate in (whether as an officer, director,

employee, partner, agent, representative or otherwise), invest in, permit

Executive's name to be used by, consult with, advise, render services for (alone

or in association with any other Person), or otherwise assist in any manner (i)

any of International Data Group, Inc.; CMP Media, Inc. (a subsidiary of United

Business Media PLC); The Future Network Plc; CNET Networks, Inc.; MediaLive

International, Inc.; Penton Media, Inc.; Jupitermedia Corporation; Deutsche

Messe AG; or DMG World Media, (ii) any Person that engages in, or owns, invests

in, operates, manages or controls any venture or enterprise which directly or

indirectly engages or proposes to engage in, any business or enterprise which

manufactures, designs, produces, renders or sells products or services which

compete with the products and services of the Company and its Affiliates

(including, but not limited to, the Initial Events, Other Events, other events,

conferences or businesses of the Company or any of its Subsidiaries from which

TM Media Revenues are to be calculated, or any products, services, or events the

Company is in the process of developing), as the Company's and its Affiliates'

businesses existed at or at any time during the Employment Period and prior to

termination of the Noncompete Period (the "Restricted Enterprises"), or (iii)

any successor, assignee, subsidiary, division or Affiliate of any Listed Person

or Restricted Person, or (iv) any Person in which, to the Knowledge of

Executive, any Person listed in clause (i) or clause (ii) of this Section 5(a)

owns an interest or participates, which any Person listed in clause (i) or

clause (ii) of this Section 5(a) manages or controls (whether as an officer,

director, employee, partner, agent, representative or otherwise), or to which

any Person listed in clause (i) or clause (ii) of this Section 5(a) otherwise

provides management or financial support. Any Person listed in clause (i) of

this Section 5(a), or clause (iii) or clause (iv) of this Section 5(a) by virtue

of its relationship with a Person listed in clause (i) of this Section 5(a),

shall be referred to as a "Listed Person." Any Person listed in clause (ii) of

this Section 5(a), or clause (iii) or clause (iv) of this Section 5(a) by virtue

of its relationship with a Person listed in clause (ii) of this Section 5(a),

shall be referred to as a "Restricted Person." Notwithstanding the foregoing,

Executive may provide advice, services or assistance otherwise prohibited by

this Section 5(a) to a Restricted Person that is not a L