SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a)
of the Securities Exchange Act of 1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement
[_] CONFIDENTIAL, FOR USE OF THE
COMMISSION ONLY (AS PERMITTED BY
RULE 14A-6(E)(2))
[X] Definitive Proxy Statement
[_] Definitive Additional Materials
[_] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
PENTON MEDIA, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[LOGO OF PENTON]
_______________________________________________________________
1100 Superior Avenue
Cleveland, Ohio 44114-2543
_______________________________________________________________
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS TO BE HELD
ON MAY 5, 2000
_______________________________________________________________
TO THE STOCKHOLDERS:
The annual meeting of stockholders of Penton Media, Inc. will be held on May 5,
2000, at 2:00 P.M., local time, at the Ritz-Carlton, 1515 West 3rd St.,
Cleveland, Ohio, for the following purposes:
1. To elect one director to the Board of Directors for a two-year term expiring
in 2002 and to elect five directors to the Board of Directors for a three-
year term expiring in 2003.
2. To act upon a proposal of the Board of Directors to approve Penton's Employee
Stock Purchase Plan.
3. To act upon a proposal of the Board of Directors to approve Penton's
Management Stock Purchase Plan.
4. To act upon a proposal of the Board of Directors to approve Penton's Senior
Executive Bonus Plan.
5. To act upon a proposal of the Board of Directors to approve Penton's Senior
Executive Loan Program.
6. To approve the appointment of the independent certified accountants of Penton
for the fiscal year ending December 31, 2000.
7. To transact such other business as may properly be brought before the
meeting.
The annual meeting may be postponed or adjourned from time to time without any
notice other than announcement at the meeting, and any and all business for
which notice is hereby given may be transacted at any such postponed or
adjourned meeting.
The Board of Directors has fixed the close of business on March 24, 2000, as the
record date for determination of stockholders entitled to notice of and to vote
at the meeting.
A list of stockholders entitled to vote at the annual meeting will be available
for examination by any stockholder, for any purpose germane to the meeting,
during ordinary business hours at Penton's principal executive offices, 1100
Superior Avenue, Cleveland, Ohio 44114-2543 during the ten days preceding the
meeting.
Stockholders are requested to complete and sign the enclosed proxy, which is
solicited by the Board of Directors, and promptly return it in the accompanying
envelope, whether or not they plan to attend the annual meeting.
By Order of the Board of Directors
PRESTON L. VICE
Secretary
Cleveland, Ohio
March 31, 2000
[LOGO OF PENTON APPEARS HERE]
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PROXY STATEMENT
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This proxy statement is furnished in connection with the solicitation by the
Board of Directors of Penton Media, Inc. of proxies for use at the annual
meeting of stockholders to be held on May 5, 2000, and at any postponement or
adjournment thereof. All shares of common stock entitled to vote at the annual
meeting that are represented by properly executed proxies will, unless such
proxies have been revoked, be voted in accordance with the instructions given in
such proxies or, if no contrary instructions are given therein, will be voted
FOR the election of directors as described under "Election of Directors," will
be voted FOR the proposal of the Board of Directors to adopt Penton's Employee
Stock Purchase Plan, will be voted FOR the proposal of the Board of Directors to
adopt Penton's Management Stock Purchase Plan, will be voted FOR the proposal of
the Board of Directors to adopt Penton's Senior Executive Bonus Plan, will be
voted FOR the proposal of the Board of the Directors to adopt Penton's Senior
Executive Loan Program, will be voted FOR the proposal of the Board of Directors
to appoint the independent certified accountants of Penton for the fiscal year
ending December 31, 2000, and, as to any other matters that may properly be
presented to the meeting, will be voted as described under "Other Matters." Any
stockholder who has given a proxy with respect to any matter may revoke it at
any time prior to the closing of the polls as to that matter at the annual
meeting by delivering a notice of revocation or a duly executed proxy bearing a
later date to the Secretary of Penton, or by attending the annual meeting and
voting in person.
Proxy statements and proxies are first being mailed to stockholders on or about
March 31, 2000. The mailing address of the principal executive offices of Penton
is 1100 Superior Avenue, Cleveland, Ohio 44114-2543.
Penton had outstanding on March 24, 2000, the record date for the annual
meeting, 31,787,781 shares of common stock. Penton's stock is traded on the New
York Stock Exchange.
Pursuant to Penton's Amended and Restated Certificate of Incorporation, with
respect to all matters voted upon by the stockholders of Penton, the
stockholders are entitled to one vote per share of common stock.
Under Penton's Bylaws, the presence at the annual meeting, in person or by
proxy, of the holders of shares of common stock of Penton entitled to cast at
least a majority of the votes which the outstanding common stock entitled to
vote at the annual meeting is entitled to cast on a particular matter will
constitute a quorum entitled to take action with respect to that vote on that
matter. Abstentions and broker "non-votes" are counted as present and entitled
to vote for purposes of determining a quorum. A broker "non-vote" occurs when a
nominee holding common stock for a beneficial owner does not vote on a
particular proposal because the nominee does not have discretionary voting power
with respect to that item and has not received instructions from the beneficial
owner.
A plurality of the votes duly cast is required for the election of directors
(i.e. the nominees receiving the greatest number of votes will be elected).
Abstentions and broker "non-votes" are not counted for purposes of the election
of directors.
The affirmative vote by the holders of the majority of the common stock present
in person or represented by proxy and entitled to vote on the matter is required
to approve any other matter to be acted upon at the annual meeting. An
abstention is counted as a vote against and a broker "non-vote" is not counted
for purposes of approving other matters to be acted upon at the annual meeting.
Security Ownership of Certain Beneficial Owners and Management
The following table sets forth information with respect to the beneficial
ownership of Penton's common stock as of March 24, 2000, by (a) the persons
known by Penton to be the beneficial owners of more than 5% of the outstanding
shares of common stock, (b) each director, and nominee for director, of Penton,
(c) each of the executive officers of Penton listed in the Summary Compensation
Table, and (d) all directors, nominees and executive officers of Penton as a
group. The information set forth in the table as to directors, nominees and
executive officers is based upon information furnished to Penton by them in
connection with the preparation of this Proxy Statement. Except where otherwise
indicated, the mailing address of each of the stockholders named in the table
is: c/o Penton Media, Inc., 1100 Superior Avenue, Cleveland, Ohio 44114-2543.
Number of Percent of
Shares of Outstanding
Common Shares of
Name Stock/(1)/ Common Stock/(2)/
---- ---------- -----------------
William Harris Investors, Inc./(3)/........... 2,040,194 6.42%
2 North LaSalle Street
Suite 400
Chicago, Illinois 60602
Mario J. Gabelli, et al/(4)/.................. 5,667,568 17.83
One Corporate Center
Rye, New York 10580
R. Douglas Greene/(5)/........................ 2,117,751 6.66
c/o New Hope Group, Inc.
600 Linden Ave.
Boulder, Colorado 80304
Current Harris Group/(6)/..................... 3,787,265 11.91
Paul W. Brown................................. 0 *
William C. Donohue............................ 570,819 1.80
Anthony Downs................................. 12,839 *
William J. Friend/(6)/(7)/.................... 73,755 *
Joan W. Harris/(6)/........................... 2,000 *
King Harris/(6)/(8)/.......................... 1,012,393 3.18
Thomas L. Kemp................................ 209,110 *
John J. Meehan................................ 570,819 1.80
Joseph G. NeCastro............................ 42,924 *
David B. Nussbaum............................. 54,619 *
Daniel J. Ramella/(9)/........................ 159,551 *
Don E. Schultz................................ 3,000 *
Edward J. Schwartz............................ 20,144 *
William B. Summers............................ 0 *
Richard B. Swank.............................. 4,500 *
James W. Zaremba.............................. 56,291 *
All Directors and Executive Officers
as a Group (19 persons)/(10)/............... 4,885,205 15.37
__________
* Less than one percent
/(1)/ Except as otherwise indicated below, beneficial ownership means the sole
power to vote and dispose of shares.
/(2)/ Calculated using 31,787,781 shares as the number of outstanding shares.
/(3)/ The information as to William Harris Investors, Inc. ("WHI") is derived
from Schedule 13G, as filed with the Commission on February 14, 2000, and
information furnished to Penton separately by WHI. Such statements
disclose that (i) WHI, an investment adviser registered under the
Investment Advisers Act of 1940, holds all its shares of Penton common
stock on behalf, and in terminable discretionary accounts, of Joan W.
Harris and certain other members of the "Harris Group," (ii) WHI shares
voting power with such persons, and has sole dispositive power, with
respect to all such shares, (iii) Irving B. Harris and his children are
the sole voting stockholders of WHI, and (iv) Irving B. Harris is the
Chairman of WHI.
-2-
/(4)/ The information as to Mario J. Gabelli and entities controlled directly
or indirectly by Mr. Gabelli is derived from Schedule 13D/A, as filed
with the Commission on September 15, 1999, and statements required to be
filed by Mr. Gabelli and entities controlled directly or indirectly by
Mr. Gabelli pursuant to Section 16(a) of the Exchange Act. Such statement
discloses that (i) Mr. Gabelli is the chief investment officer for most
of the entities signing such statements and is deemed to have beneficial
ownership of the shares beneficially owned by all such entities, (ii) Mr.
Gabelli and such entities do not admit that they constitute a group
within the meaning of Section 13(d) of the Exchange Act and the rules and
regulations thereunder, and (iii) with respect to Penton common stock,
Mr. Gabelli and such entities have the sole power to vote and dispose of
all the shares of which they are beneficial owners, unless the aggregate
voting interest of all such entities exceeds 25% of Penton's total voting
interest or other special circumstances exist, in which case the proxy
voting committees of certain of such entities would have the sole power
to vote certain shares of Penton common stock except 139,683 shares of
Penton's common stock as to which they have no voting power.
/(5)/ The information as to Mr. Greene is derived in part from Schedule 13D, as
filed with the commission on June 21, 1999, statements required to be
filed by Mr. Greene pursuant to Section 16(a) of the Exchange Act, and
information furnished to Penton separately by Mr. Greene. Mr. Greene has
indirect beneficial ownership of the common stock under Rule 13d-3 of the
Securities Exchange Act of 1934 through New Hope Group, Inc., a Colorado
corporation ("New Hope Group"). Mr. Greene is the chief executive
officer, sole director and majority shareholder of New Hope Group. The
minority shareholder of New Hope Group is New Hope Alliance, LLC, a
Delaware limited liability company, of which Mr. Greene is the managing
member. Mr. Greene is a director of Penton.
/(6)/ The information as to the Current Harris Group (as defined below), Joan
W. Harris, King Harris, and William J. Friend is derived in part from
Schedule 13D as filed with the Commission on May 24, 1999, and statements
required to be filed by such named persons pursuant to Section 16(a) of
the Exchange Act. Such statements were filed on behalf of such named
persons as well as those other persons and entities who are currently
members of the "Harris Group" beneficially owning, directly or
indirectly, shares of Penton common stock (the "Current Harris Group").
Such statements disclose that, because of the relationships among members
of the Current Harris Group, such persons may be deemed to be a group
within the meaning of Section 13(d) of the Exchange Act and the rules and
regulations thereunder. The "Harris Group" means Messrs. Irving B.
Harris, Neison Harris, King Harris, William W. Harris, and June Barrows,
and their respective spouses, descendants and spouses of descendants,
trustees of trusts established for the benefit of such persons, and
executors of estates of such persons. Joan W. Harris is the spouse of
Irving B. Harris and the aunt of King Harris. King Harris is the uncle of
William J. Friend. The aggregate number of outstanding shares which may
be deemed to be beneficially owned by the Current Harris Group includes
all the shares shown in this table for WHI, Joan W. Harris, King Harris,
and William J. Friend. The total excludes duplication of shares within
such group.
/(7)/ Mr. Friend shares the power to vote and dispose of 70,826 such shares.
/(8)/ Mr. King Harris shares the power to vote and dispose of 663,693 such
shares.
/(9)/ Mr. Ramella shares the power to vote and dispose of 58,886 such shares.
/(10)/ Includes 592,867 shares as to which voting power will be shared other
than with directors and officers of Penton.
Election of Directors
One director is to be elected to serve a two year term expiring in 2002 and
until his successor has been elected. In addition, five directors are to be
elected to serve a three-year term expiring in 2003 and until their respective
successors have been elected. Nominees for election this year are: Paul W.
Brown, R. Douglas Greene, John J. Meehan, David B. Nussbaum, Daniel J. Ramella,
and William B. Summers. The directors to be elected will be elected by a
plurality of the votes cast FOR directors. Except to the extent that
stockholders indicate otherwise on their proxies solicited by Penton's Board of
Directors, the holders of such proxies intend to vote such proxies for the
election as directors of the persons named in the following table as nominees
for election, provided that if any of the nominees for election shall be unable
or shall fail to act as such by virtue of an unexpected occurrence, such proxies
will be voted for such other person or persons as shall be determined by the
holders of such proxies in their discretion. Alternatively, so long as such
action does not conflict with the provisions of Penton's Restated Certificate of
Incorporation, as amended, the Board of Directors may, in its discretion, reduce
the number of directors to be elected.
The Board recommends a vote FOR the nominees.
-3-
Nominee for Director for a Two-year Term Ending 2002:
Director Principal Occupation
Nominee Since Age and Directorships
- ------- ----- --- -----------------
R. Douglas Greene (I)(N) 1999 50 Director and Chief Executive Officer of New
Hope Group, Inc. (investment holding company)
since May 1999. Non-executive Chairman of New
Hope Communications (a business media company
in the natural products industry and a
division of Penton) since May 1999. Investor
in joint venture business interests in media
and entertainment companies and international
businesses in the publishing and forest
products industries. Chairman and Chief
Executive Officer of New Hope Communications
Inc. from February 1981 to May 1999.
Nominees for Director for a Three-year Term Ending 2003:
Director Principal Occupation
Nominee Since Age and Directorships
- ------- ----- --- -----------------
Paul W. Brown -- 47 General Partner, Bedrock Capital Partners
(venture capital firm) since January 1998,
Managing Director, Prudential Volpe
Technology Group (investment banking) since
May 1989. Chairman, Genesis Medical
Technologies, Inc. (surgical products
manufacturer) since July 1999.
John J. Meehan 1998 52 Executive Vice President of Donohue Meehan
Publishing Company (a business publishing
company and a subsidiary of Penton) since
January 1987.
David B. Nussbaum -- 42 Executive Vice President and Group President
of Penton since September 1998. President of
Internet World Media, Inc. (a business trade
show and publishing company and a subsidiary
of Penton) since December 1998. Senior Vice
President from 1995 to August 1998 and Vice
President from 1994 to 1995 of Miller Freeman
Inc. (business magazine publisher and
exhibition manager).
Daniel J. Ramella (E) 1990 48 President and Chief Operating Officer of
Penton since 1990.
William B. Summers -- 49 Chairman and CEO of McDonald Investments Inc.
(an investment banking and securities firm
and a subsidiary of Key Corp) since August
1995. Chairman of Key Capital Partners,
(brokerage and investment banking services)
since November 1998. Executive Vice President
and a member of the Management Committee of
Key Corp. since November 1998. Director, the
New York Stock Exchange since March 1998.
Chairman of the Board of Trustees of Baldwin
Wallace College since April 1997. Chairman of
the Board for the Law Enforcement Foundation
for the state of Ohio since October 1998.
-4-
Directors Continuing in Office Until 2001:
Director Principal Occupation
Nominee Since Age and Directorships
- ------- ----- --- --------------------
Anthony Downs (A)(C) 1998 69 Senior Fellow of Brookings Institution (non-profit
social policy research center) since 1977; Consultant
since 1977. Bedford Property Investors, Inc. (real
estate investment trust), General Growth Properties,
Inc. (real estate investment trust), Massachusetts
Mutual Life Insurance Corporation (insurance company),
and National Housing Partnership Foundation (low-income
housing operator).
King Harris (C)(E)(N) 1987 56 Non-executive Chairman of the Board since May 1998.
President, Chief Executive Officer and Director of
Pittway Corporation (manufacturer and distributor of
alarm and other security products and a subsidiary of
Honeywell International Inc.) since 1987. Non-executive
Chairman of the Board and Director, Aptar Group, Inc.
(specialty packaging components manufacturer).
Thomas L. Kemp (E) 1996 48 Chief Executive Officer of Penton since September 1996;
Chairman of the Board of Penton from September 1996 to
May 1998; President and Chief Operating Officer from
January 1996 to August 1996, Executive Vice President
from 1994 to 1996, and Senior Vice President, Business
and Special Interest division, from 1992 to 1994, of
Miller Freeman, Inc. (business magazine publisher and
exhibition manager).
Edward J. Schwartz (A)(E)(I) 1998 58 Vice President of Pittway Corporation (manufacturer and
distributor of alarm and other security products and a
subsidiary of Honeywell International Inc.) since 1989.
Directors Continuing in Office Until 2002:
Director Principal Occupation
Nominee Since Age and Directorships
- ------- ----- --- -----------------
William J. Friend (I) 1998 36 Vice President Corporate Development of Pittway
Corporation (manufacturer and distributor of alarm and
other security products and a subsidiary of Honeywell
International Inc.) since August 1999. Assistant to the
President/Strategic Planning Manager of Pittway
Corporation from August 1996 to July 1999. National
Sales Manager, Xetron (division of Pittway) April 1994
to July 1996 and Engineering Product Manager, System
Sensor (division of Pittway) from August 1992 to March
1994.
Don E. Schultz (A)(N) 1998 66 President, Agora, Inc. (integrated marketing and
branding consulting firm). Professor of Integrated
Marketing Communication Northwestern University. Senior
Partner, Targetbase and Targetbase Institute (database
marketing agency). Director, Insignia Systems, Inc. (in-
store, supermarket signage systems), Simon Richards
Group (direct marketing agency - Australia and
Malaysia).
-5-
Richard B. Swank (C)(I) 1998 68 Retired. Director, The Dialog Corporation Plc (an
online information and data provider) from November
1997 to present. Chairman and Chief Executive Officer
of Advanstar Communications, Inc. (magazine,
publishing, exhibition and marketing services
enterprise) from April 1990 to December 1994 and
Director until May 1996.
_____________
(A) Member of Audit Committee
(C) Member of Compensation Committee
(E) Member of Executive Committee
(I) Member of Investment Committee
(N) Member of Nominating Committee
Joan W. Harris is the aunt of King Harris. Mr. Harris is the uncle of William J.
Friend. Pursuant to the agreement by which Penton acquired the assets of New
Hope Communications, Inc., R. Douglas Greene was elected by the Board of
Directors of Penton to serve as a director of Penton.
Committees and Meetings of the Board of Directors
Penton's Board of Directors has an Audit Review Committee, a Compensation
Committee, an Executive Committee, an Investment Committee and a Nominating
Committee.
Executive Committee. The Executive Committee consists of Mr. Harris as Chairman
and Messrs. Kemp, Ramella, and Schwartz. When the Board is not in session, the
Executive Committee may exercise all the powers and authority of the Board
except as limited by law and Penton's Amended and Restated Certificate of
Incorporation. The Executive Committee held seven meetings in fiscal 1999.
Audit Review Committee. The Audit Review Committee consists of Mr. Schwartz as
Chairman and Messrs. Downs and Schultz. The Audit Review Committee reviews, as
it deems appropriate, and approves internal accounting and financial controls
for Penton and auditing practices and procedures to be employed in the
preparation and review of Penton's financial statements. The Audit Review
Committee makes recommendations to the full Board concerning the engagement of
independent public accountants to audit Penton's annual financial statements and
arranges with such accountants the scope of the audit to be undertaken by such
accountants. The Audit Review Committee held two meetings in fiscal 1999.
Compensation Committee. The Compensation Committee consists of Mr. Swank as
Chairman and Messrs. Downs and Harris and Ms. Harris. The Compensation Committee
reviews and determines the compensation of executive officers, reviews and makes
recommendations to the Board with respect to salaries, bonuses, and deferred
compensation of other officers and executives, compensation of directors and
management succession, and makes such determinations and performs such other
duties as are expressly delegated to it pursuant to the terms of any employee
benefit plan of Penton. The Compensation Committee held five meetings in fiscal
1999.
Investment Committee. The Investment Committee consists of Mr. Schwartz as
Chairman and Messrs. Friend, Greene and Swank. The Investment Committee provides
objectives and guidelines for the investment of funds held in trust under
Penton's pension plan, acts as the investment committee for purposes of Penton's
401(k) plan, and reviews the performance of investment managers charged with
investing Penton pension plan funds. The Investment Committee held two meetings
in fiscal 1999.
Nominating Committee. The Nominating Committee consists of Ms. Harris as
Chairwoman and Messrs. Greene, Harris and Schultz. The Nominating Committee, as
it deems appropriate, makes recommendations to the full Board with respect to
the size and composition of the Board and its committees and with respect to
nominees for election as directors. The Nominating Committee held one meeting in
fiscal 1999.
The Nominating Committee considers suggestions regarding candidates for election
to the Board submitted by stockholders in writing to Penton's Secretary. With
regard to the 2001 annual meeting of stockholders, any such suggestion must be
received by the Secretary no later than the date by which stockholder proposals
for such annual meeting must be received as described below under the heading
"Stockholder Proposals for the 2001 Annual Meeting."
The Board of Directors of Penton met seven times during 1999. All of the
directors attended at least seventy-five percent of the total meetings held by
the Board of Directors and by the committees on which they served in 1999.
-6-
Compensation Committee Interlocks and Insider Participation
None of the members of the Compensation Committee was or has been an officer or
employee of Penton or engaged in transactions with Penton (other than in his
capacity as director). None of Penton's executive officers serves as a director
or member of the compensation committee of another entity, one of whose
executive officers serves as a member of the Compensation Committee or a
director of Penton.
Executive Officers
All officers of Penton are elected each year by the Board of Directors at its
annual organization meeting. In addition to Messrs. Kemp, Ramella, and Nussbaum,
information with respect to whom is set forth above, the executive officers of
Penton include the following:
Jocelyn A. Bradford, 42, Vice President and Controller since January 2000.
Before joining Penton, Ms. Bradford spent three years at Century Business
Services, Inc. as Controller from December 1996 through April 1998 and as
Treasurer from April 1998 through January 2000. Ms. Bradford was Manager -
Financial Reporting at Allen Telecom, Inc. from August 1992 until December
1996.
Joseph G. NeCastro, 43, Chief Financial Officer and Treasurer of Penton
since June 1998. Before joining Penton, Mr. NeCastro spent five years with
Reader's Digest Association, Inc. Mr. NeCastro was Vice President, Finance
for Reader's Digest USA from 1995 until 1998 and Corporate Controller in
1994 and 1995.
Preston L. Vice, 51, Senior Vice President and Secretary of Penton since
July 1998, Senior Vice President since prior to 1994.
James W. Zaremba, 59, Executive Vice President and Group President since
1999, and Group President of Penton since prior to 1994.
Compensation
Board Compensation
Compensation of non-employee directors consists of an annual retainer of
$20,000, plus $3,000 for each Board meeting attended in person, $1,000 for each
Board meeting attended by telephone and $1,000 for each committee meeting
attended, except that $500 is paid for attending a committee meeting held on the
same day as a Board meeting. The Chairman of the Audit Review Committee is paid
an additional $2,000 and the Chairman of the Compensation Committee is paid an
additional $5,000 per year. In lieu of the above fees, the non-executive
Chairman of the Board receives an annual retainer of $75,000 per year. Employee
directors are not separately compensated for serving as directors.
Each director of Penton will be reimbursed by Penton for out-of-pocket expenses
incurred in attending Board and Board committee meetings.
Penton has adopted the Penton Media, Inc. 1998 Director Stock Option Plan (As
Amended and Restated Effective as of March 12, 1999) for non-employee directors.
The plan was approved by the stockholders at the 1999 annual meeting. Pursuant
to the plan, and subject to certain limitations contained in it, the Board may
grant non-qualified options to purchase common stock, at an exercise price not
less than fair market value on the date of grant, to directors of Penton who at
the time of grant are not employees of Penton or any of its subsidiaries. In
addition, the Board may authorize the grant of restricted stock or deferred
shares to non-employee directors under the plan. The plan also provides that the
Board may permit non-employee directors to elect to receive non-qualified
options, restricted stock or deferred shares in lieu of all or a portion of such
non-employee director's compensation otherwise payable in cash. No grants were
made under the plan in 1999 and no non-employee directors elected to receive all
or a portion of their cash compensation as non-qualified options, restricted
stock or deferred shares under the plan in 1999.
-7-
Summary Compensation Table
The following table sets forth compensation information for the Chief Executive
Officer of Penton (who served as such through out 1999) and for each of Penton's
four most highly compensated other executive officers during 1999 who were
serving at the end of 1999.
Long Term
Compensation
Awards
--------------------------------
Securities
Annual Restricted Underlying
Compensation Stock Options All Other
------------------
Name and Principal Position Year Salary Bonus Awards (#)(1) Compensation
- --------------------------- ---- -------- -------- ---------- ---------- ------------
Thomas L. Kemp, Chief 1999 $470,000 $276,680 $ 100,000 (2) 37,000 $9,512 (7)
Executive Officer 1998 450,000 320,500 60,000 (2) 60,000 (3) 8,930
1997 400,000 291,000 0 10,000 4,322
Daniel J. Ramella, President and Chief 1999 365,000 195,010 75,000 (2) 25,000 6,639 (8)
Operating Officer 1998 350,000 229,000 50,000 (2) 46,000 6,540
1997 330,000 241,000 0 7,000 4,481
David B. Nussbaum, Executive Vice 1999 345,000 322,320 0 13,500 2,826 (9)
President and Group President (4) 1998 94,423 150,000 (5) 100,000 (6) 25,000 800
James W. Zaremba, Executive Vice 1999 265,000 81,875 0 13,500 4,812 (10)
President and Group President 1998 238,327 166,680 0 25,000 5,100
1997 210,000 181,510 0 2,000 5,362
Joseph G. NeCastro, Chief Financial 1999 259,992 76,000 0 12,000 4,800 (11)
Officer (4) 1998 136,370 75,200 0 25,000 1,973
(1) The amounts and numbers listed for 1997 represent awards under the Pittway
Corporation 1990 Stock Performance Awards Plan.
(2) Deferred shares awarded in lieu of bonuses that would otherwise have been
paid in cash: Mr. Kemp, 3,698 shares and Mr. Ramella, 3,082 shares awarded
in 1998, each having three year deferral periods; and Mr. Kemp, 4,969
shares and Mr. Ramella, 3,727 shares awarded in 1999, each having five-year
deferral periods. Deferral periods are subject to acceleration in the event
of death, permanent disability, retirement upon or after reaching age
sixty-five or upon a change of control of Penton. These numbers are valued
as of the date of grant. As of December 31, 1999, the value of the deferred
shares awards to Messrs. Kemp and Ramella in 1999 were $119,256 and
$89,448, respectively and in 1998 were $88,752 and $73,968, respectively.
The deferred shares awarded to Messrs. Kemp and Ramella in 1998 and 1999 do
not provide for dividend equivalents or voting rights. As of December 31,
1999, these were the only deferred shares awarded to Messrs. Kemp and
Ramella.
(3) In addition, in accordance with the terms of his employment agreement, Mr.
Kemp converted unexercised options to purchase Pittway stock into 47,655
options to purchase Penton common stock.
(4) Mr. Nussbaum joined Penton in September 1998 and Mr. NeCastro joined Penton
in August, 1998.
(5) In accordance with the terms of his employment agreement, Mr. Nussbaum
received a portion of a signing bonus of $100,000 in cash on September 18,
1998.
(6) In addition, in accordance with the terms of his employment agreement,
Mr. Nussbaum was awarded 7,619 Deferred Shares having a one-year deferral
period, in lieu of a portion of a signing bonus that would otherwise have
been paid in cash. This number was valued as of the date of grant and as of
December 31, 1999, the value of the award was $182,856. In addition, the
Deferred Shares awarded did not provide for dividend equivalents or voting
rights.
(7) Consists of $4,800 annual matching contributions during the year to
Penton's salary reduction plan and $4,712 for term life insurance provided
by Penton during the year.
(8) Consists of $4,800 annual matching contributions during the year to
Penton's salary reduction plan and $1,839 for term life insurance provided
by Penton during the year.
(9) Consists of $2,400 annual matching contributions during the year to
Penton's salary reduction plan and $426 for term life insurance provided by
Penton during the year.
-8-
(10) Consists of $3,750 annual matching contributions during the year to
Penton's salary reduction plan and $1,062 for term life insurance provided
by Penton during the year.
(11) Consists of $4,800 annual matching contributions during the year to
Penton's salary reduction plan.
Stock Option Grants During Year
The following table sets forth information with respect to stock options granted
during 1999 to executive officers named in the Summary Compensation Table.
Option Grants in Last Fiscal Year
Individual Grants
-------------------------------------------------------------
Potential Realizable
Number of % of Total Value at Assumed
Securities Options Annual Rates of Stock
Underlying Granted to Price Appreciation
Option/s Employees Exercise or Expiration for Option Term ( 1 )
----------------------
Name Granted (#)(2) Fiscal Year Price ($/ Sh) Date 5% ($) 10% ($)
---- -------------- ------------ ------------- ---------- ---------- ----------
Thomas L. Kemp 37,000 10.6 $21.50 1/27/09 $ 500,240 $1,267,990
Daniel J. Ramella 25,000 7.2 21.50 1/27/09 338,000 856,750
David B. Nussbaum 13,500 3.9 21.50 1/27/09 182,520 462,645
James W. Zaremba 13,500 3.9 21.50 1/27/09 182,520 462,645
Joseph G. NeCastro 12,000 3.4 21.50 1/27/09 162,240 411,240
___________
(1) The assumed annual rates of appreciation in the price of common stock are
in accordance with rules of the Securities and Exchange Commission and are
not predictions of future market prices of the common stock nor of the
actual values the named executive officers will realize. In order for such
annual rates of appreciation to be realized over the 10-year term of the
options, the market price of the common stock would have to increase to
$35.02/share (5%) or $55.77/share (10%) during that term. In such event,
and assuming corresponding annual rates of increase for the market price of
common stock, the market value of all currently outstanding shares of
common stock would have increased by approximately $429,800,000 (5%) or
$1,089,400,000 (10%) during that 10-year term.
(2) Consists of non-qualified options to purchase common stock granted under
the Equity Incentive Plan at an exercise price equal to the closing price
of the common stock on the date of grant, January 27, 1999. Each option
becomes fully exercisable on the third anniversary of the date of grant,
subject to full or partial acceleration in the event of earlier termination
of employment (full acceleration if earlier termination is on account of
death, permanent disability, retirement upon or after reaching age sixty-
five or upon a change of control of Penton; partial acceleration in
increments of 33 1/3% each year commencing one year after the date of grant
if termination is for any other reason other than for "cause").
Option Exercises and Year-End Values
The following table sets forth information with respect to exercises of options
during 1999 by the executive officers named in the Summary Compensation Table
and the values of unexercised options held by them as of December 31, 1999.
Aggregated Option Exercises in 1999 and Year-End Option Values
Shares
Acquired Number of Securities Value of Unexercised
on Underlying Unexercised In-the-Money Options
Exercise Value Options at Year-End (#) at Year-End ($)
--------------------------- ----------------------------
Name (#) Realized ($) Exercisable Unexercisable Exercisable Unexercisable
- ---- -------- ------------ ----------- ------------- ----------- --------------
Thomas L. Kemp 0 0 14,727 129,928 $114,502 $815,015
Daniel J. Ramella 0 0 0 71,000 0 420,150
David B. Nussbaum 0 0 0 38,500 0 228,125
James W. Zaremba 0 0 0 38,500 0 228,125
Joseph G. NeCastro 0 0 0 37,000 0 224,375
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Employment Agreements
In 1999, the Compensation Committee approved restated employment agreements with
each of Messrs. Kemp and Ramella and approved initial employment agreements with
each of Messrs. Zaremba and NeCastro. In 1998, Penton entered into an employment
agreement with Mr. Nussbaum. The agreements provide for minimum annual salaries
of $470,000, $365,000, $265,000, $260,000 and $345,000, respectively, and in the
case of Messrs. Kemp, Ramella NeCastro and Nussbaum, supplementary insurance
coverage. The agreements for Messrs. Kemp and Ramella provide for participation
in Penton's Supplemental Executive Retirement Plan. The agreements are for terms
currently expiring December 31, 2001 in the case of Messrs. Kemp and Ramella,
December 31, 2000 in the case of Mr. Zaremba, August 24, 2001 in the case of Mr.
NeCastro and September 8, 2000 in the case of Mr. Nussbaum, and renew
automatically at the end of each year for an additional year (or until age 65,
if earlier) unless either party thereto elects otherwise, but may be terminated
by the executive party thereto on 120 days notice. Each agreement includes non-
competition, non-solicitation and confidentiality obligations on the part of the
executive, which survives its termination. In addition, Mr. Nussbaum's agreement
provides for a signing bonus equal to $200,000, payable in cash or shares of
common stock. Such bonus was paid to Mr. Nussbaum 50% in cash and 50% in 7,619
deferred shares with a one-year vesting period. Such shares were issued to Mr.
Nussbaum in December 1999.
The agreements also provide that in the event the executive's employment is
terminated by Penton (other than for "cause" (as defined in the agreements) or
by reason of his death, disability or retirement) or by the executive for "good
reason" (as defined in the agreements and as described below) during the two
years following a "change in control," the executive will be entitled to receive
certain severance benefits. In the case of Messrs. Kemp and Ramella, each such
executive is entitled to receive (a) any accrued but unpaid salary and expense
reimbursement; (b) salary (as in effect at the time of termination or, if
higher, as in effect as of the most recent extension of the employment period)
for a period of three years following the date of his termination after a change
in control (payable, at the executive's option, in a lump sum); (c) target bonus
for the year in which the termination occurs or, if higher, the executive's
target bonus for the preceding year or the year in which the change in control
occurs; and (d) if the executive's employment is terminated after July 1 of the
then-current year, a pro-rated portion of the executive's target bonus for the
year in which the termination occurs or, if higher, a pro-rated portion of the
executive's target bonus for the preceding year or the year in which the change
in control occurs. In the case of Messrs. Zaremba, NeCastro and Nussbaum, each
such executive is entitled to receive (a) any accrued but unpaid salary and
expense reimbursement; and (b) two times his salary (as in effect at the time of
termination or, if higher, as in effect as of the most recent extension of the
employment period) and target bonus for the year in which the termination occurs
or, if higher the executive's target bonus for the preceding year or the year in
which the change in control occurs (payable, at the executive's option, in a
lump sum). All executives party to such agreements are also entitled to the
continuation of certain additional benefits (e.g., medical insurance).
Benefits under these agreements are subject to an overall limitation which
assures that payments will not constitute "excess parachute payments" under
federal income tax law.
The transactions that are deemed to result in a change in control for the
purposes of these agreements include: (a) any person (with certain exceptions as
described in the agreements) becoming the beneficial owner of 40% or more of the
voting stock of Penton; (b) individuals who, as of the date of the agreements,
constitute the board of directors (the "Incumbent Board") cease for any reason
(other than death or disability) to constitute at least a majority of the board
of directors (provided that any individual who becomes a director subsequent to
the date of the agreements whose appointment or election is approved by a
majority of the Incumbent Board is considered to be a member of the Incumbent
Board); (c) a merger or consolidation with, or sale of all of or substantially
all of Penton's assets to another corporation, as a result of which less than a
majority of the voting shares of the surviving entity are owned by former
shareholders of Penton; and (d) approval by the shareholders of Penton of a
complete liquidation or dissolution of Penton. "Good reason" for termination of
employment by the executive includes reduction in salary, the failure by Penton
to extend the executive's employment under the agreement or a breach by Penton
of the terms of the agreement.
The Compensation Committee felt it appropriate to improve the existing
employment contract with Messrs. Kemp and Ramella and to enter into formal
contracts for employment with Messrs. Zaremba, NeCastro and Nussbaum in order to
encourage them to continue their services and the long-term benefits provided
under their leadership. The provisions relating to a change in control are to
retain the executives and provide for continuity of management in the event of
any actual or threatened change in the control of Penton.
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Plans and Arrangements
Employee Retirement and Savings Plans
Retirement Plan
Participants in the Penton Media, Inc. Retirement Plan consist of a majority of
the full-time employees of Penton and its subsidiaries in the United States,
including the executive officers. The plan is fully paid for by Penton, and
employees become fully vested after five years of service. The annual benefit
payable to an employee under the plan upon retirement, computed as a straight
life annuity amount, equals the sum of the separate amounts the employee accrues
for each of his years of service under the plan. Such separate amounts are
determined as follows: for each year through 1988, 1.2% of such year's
compensation up to the Social Security wage base for such year and 1.85% (2.0%
for years after 1986) of such year's compensation above such wage base; for each
year after 1988 through the year in which the employee reaches thirty-five years
of service, 1.2% of such year's "covered compensation" and 1.85% of such year's
compensation above such "covered compensation;" and for each year thereafter,
1.2% of such year's compensation. Years of service and compensation with Pittway
are taken into account under the plan. The employee's compensation under the
plan for any year includes all salary (before any election under Pittway's or
Penton's salary reduction plan or cafeteria plan), commissions and overtime pay
and, beginning in 1989, bonuses; subject to such year's limit applicable to tax-
qualified retirement plans ($160,000 for 1999 and, $170,000 for each year
thereafter). The employee's "covered compensation" under the plan for any year
is generally the average, computed as of such year, of the Social Security wage
bases for each of the thirty-five years preceding the employee's Social Security
retirement age, assuming that such year's Social Security wage base will not
change in the future. Normal retirement age under the plan is age 65, and
reduced benefits are available as early as age 55. Benefits are not subject to
reduction for Social Security benefits or other offset amounts. Estimated annual
benefits payable under the plan upon retirement at normal retirement age for the
following persons (assuming 1999 at $160,000 and future compensation at the
$170,000 limit currently applicable, and that covered compensation remains
constant) are: Mr. Kemp, $52,603; Mr. Ramella, $87,708; Mr. Zaremba, $59,810;
Mr. Nussbaum, $63,525; and Mr. NeCastro, $61,542.
Supplemental Executive Retirement Plan
Messrs. Kemp and Ramella participate in Penton's Supplemental Executive
Retirement Plan, which is not tax-qualified. The annual benefit payable to a
participant under the plan at age 65, computed as a straight life annuity
amount, equals the sum of the separate amounts the participant accrues for each
of his years of service after September 3, 1996, and January 1, 1996,
respectively. Years of service and compensation with Pittway are taken into
account. The separate amount for each such year is 1.85% of that portion of the
participant's salary and annual discretionary cash bonus, if any, for such year
(before any election under Pittway's or Penton's salary reduction plan, and
including any portion of such bonus taken in the form of Deferred Shares Awards)
in excess of $170,000 (or any higher limit applicable that year to tax-qualified
retirement plans) but less than $300,000. Benefits are not subject to reduction
for Social Security benefits or other offset amounts. Accrued benefits are
subject to forfeiture in certain events. Estimated annual benefits payable under
the plan upon retirement at age 65 for Messrs. Kemp and Ramella (assuming 1999
and future annual salary and discretionary cash bonus of not less than $300,000
for each of them and that the $170,000 limit currently applicable remains
constant) are: Mr. Kemp, $48,343; and Mr. Ramella, $51,028.
Compensation Committee Report on Executive Compensation
This Compensation Committee report shall not be deemed incorporated by reference
by any general statement incorporating by reference this Proxy Statement into
any filing under the Securities Act of 1933 or under the Exchange Act, except to
the extent that Penton specifically incorporates this information by reference,
and shall not otherwise be deemed filed under those Acts.
The Compensation Committee of the Board of Directors is responsible for
establishing and administering an executive compensation program for Penton,
determining the compensation of the Chief Executive Officer of Penton and
approving the compensation proposed by the Chief Executive Officer for all other
executive officers of Penton listed in the Summary Compensation Table. Actions
regarding compensation for 1999 were approved by the Compensation Committee.
Penton's Compensation Committee intends to follow the compensation policies
discussed below.
The Compensation Committee, comprised of four non-employee directors, has
prepared this report to summarize Penton's policies and practices with regard to
executive compensation.
-11-
Objectives
Penton's basic objectives for executive compensation are to recruit and keep top
quality executive leadership focused on attaining long-term corporate goals and
increasing stockholder value.
Elements of Compensation
Total compensation has three components: (1) base salary; (2) short-term
incentive (generally cash bonus); and (3) long-term incentive (generally stock
options).
Base Salary
Base salaries for executive officers are set within ranges that are reasonable,
considering comparable positions in companies similar to Penton in industry and
region. Base salaries are also intended to be equitable and high enough to keep
qualified executives from being overdependent on cash bonuses.
Short-Term Incentives
Annual cash bonuses are based on Penton's attainment of its earnings objectives.
Generally, all cash bonuses are tied to individual and group performance based
on goals established at the start of the year, consistent with the Senior
Executive Bonus Plan, and are available in proportionately greater amounts to
those who can most influence corporate earnings. In addition, certain employees
may use all or a portion of their cash bonuses to increase their ownership of
common stock. See "Proposal to Approve the Penton Media, Inc. Management Stock
Purchase Plan."
Long-Term Incentives
Long-term incentives consisting of stock options are intended to motivate
executives to make and execute plans that improve stockholders' value over the
long-term.
Chief Executive Officer Compensation
At the start of the 1999 fiscal year, the Compensation Committee increased Mr.
Kemp's salary to $470,000. Mr. Kemp also was awarded an option to purchase
37,000 shares of common stock at an exercise price of $21.50 per share. One-
third of such options will vest per year, subject to full or partial
acceleration in the event of earlier termination of employment (full
acceleration if earlier termination is on account of death, permanent
disability, retirement upon or after reaching age sixty-five or upon a change of
control of Penton). In addition, in lieu of a $100,000 cash bonus, Mr. Kemp
received 4,969 Deferred Shares having a five year deferral period, subject to
full or partial acceleration in the event of earlier termination of employment
(full acceleration if earlier termination is on account of death, permanent
disability, retirement upon or after reaching age sixty-five or upon a change of
control of Penton).
This report is submitted on behalf of the Compensation Committee:
Richard B. Swank, Chairman
Anthony Downs
Joan W. Harris
King Harris
-12-
Performance Graph
The following graph reflects a comparison of the cumulative total stockholder
return on the common stock with the Russell 2000 Market Index and an index of
peer companies, respectively, for the period commencing August 10, 1998 (the
initial trading date for the common stock) through December 31, 1999. The peer
group consists of Elsevier NV, Meredith Corporation, Inc., Playboy Enterprises,
Inc. (Class B), Primedia, Inc., Reader's Digest Association, Inc., Reed
International Plc, Scholastic Corporation, United News & Media Plc and Ziff-
Davis, Inc. The peer group has been revised to exclude CMP Media, Inc., which
was included in the peer group last year, because it was sold to Miller Freeman,
Inc. in 1999. CMP's removal did not significantly affect the peer group's 1998
performance. The graph assumes that the value of the investment in the common
stock and each index was $100 at August 10, 1998, and all dividends were
reinvested. The comparisons in this graph are required by the Securities and
Exchange Commission and, therefore, are not intended to forecast or be
necessarily indicative of the actual future return on the common stock.
[Graph]
August 10, 1998 December 31, 1998 December 31, 1999
--------------- ----------------- -----------------
Penton Media $100.00 $125.12 $149.29
Russell 2000 Index 100.00 100.79 120.54
Peer Group 100.00 93.79 100.56
Proposal to Approve the Penton Media, Inc. Employee Stock Purchase Plan
The Employee Stock Purchase Plan is a broad based plan intended to advance the
interests of Penton and its stockholders by allowing employees of Penton and
those subsidiaries of Penton that participate in the plan the opportunity to
purchase shares of Penton's common stock. It is intended that the plan will
constitute an "employee stock purchase plan" within the meaning of Section 423
of the Internal Revenue Code of 1986, as amended (the "Code"). The following
description of the material elements of the employee stock purchase plan is
necessarily brief and general. A copy of the plan is attached hereto as Appendix
A and the summary description that follows is qualified in its entirety by
reference to that Appendix.
Summary Description
The plan, if approved by the stockholders, provides eligible employees with the
opportunity to purchase shares of Penton's common stock pursuant to a payroll
deduction program. The purchase price provides for offering periods of Penton's
fiscal quarters during which contributions may be made to purchase shares of
common stock. At the end of each offering period, shares of common stock are
purchased automatically at a price equal to the lesser of eighty-five percent
(85%) of the market price of shares of common stock at the beginning of the
offering period or eighty-five percent (85%) of the market value of shares of
common stock on the last day of the offering period. There currently are
approximately 1056 employees eligible to participate in the employee stock
purchase plan. The plan will continue in effect for a period of ten years or
until all shares of common stock available for issuance under the plan have been
issued, unless terminated earlier in the discretion of the Compensation
Committee.
An employee may elect to have up to ten percent (10%) of his or her compensation
withheld and applied to the purchase of shares of common stock under the plan.
Compensation for this purpose means the participant's base salary plus bonus.
However, during any calendar year, no employee is entitled to purchase shares of
common stock under the plan having a value of more than $25,000 (determined at
the beginning of the offering periods during the year).
Each participant will be granted a separate purchase right for each offering
period in which the individual participates. The purchase right will be granted
on the first day of such offering period and will be automatically exercised on
the last day of the offering period.
There will be 750,000 shares of common stock available for issuance under the
employee stock purchase plan. In the event of any change in Penton common stock
subject to the plan, or subject to any purchase right granted under the plan
including (a) any stock dividend, stock split, combination of shares,
recapitalization or other change in the capital structure of Penton; (b) any
merger, consolidation, spin-off, split-off, spin-out, split-up, separation,
reorganization, partial or complete liquidation, or other distribution of assets
or issuance of rights or warrants to purchase stock; or (c) any other corporate
transaction or event having an effect similar to any of the foregoing, the
Compensation Committee may make appropriate adjustments to (i) the class and
maximum number of shares of common stock subject to the plan, (ii) the class and
maximum number of shares of common stock purchasable by each participant per
offering period and (iii) the class and
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number of shares of common stock and price per share of common stock subject to
outstanding purchase rights, in order to prevent the dilution or enlargement of
benefits under the plan.
Each employee of Penton, and of such subsidiaries as the Compensation Committee
shall from time to time designate, may participate in the employee stock
purchase plan. However, employees whose customary employment is less than twenty
hours per week, employees whose customary employment is less than five months
per calendar year and employees who have less than one year of service will not
be eligible to participate in the plan. Further, an employee will not be
eligible to participate if such individual would, immediately after the grant of
purchase rights, own or hold outstanding options or other rights to purchase
stock possessing five percent (5%) or more of the total combined voting power or
value of all classes of stock of Penton. In addition, the following limitations
apply to the plan: (i) the whole percentage designated by a participant may not
be less than one percent (1%) of his or her compensation and may not exceed ten
percent (10%) of his or her compensation; (ii) the maximum number of shares of
common stock which can be purchased by any one participant in any offering
period may not exceed 600 shares of common stock; and (iii) the Compensation
Committee may establish from time to time minimum payroll deductions.
An eligible employee may enroll in the employee stock purchase plan prior to the
beginning of any offering period. Payment for common stock under the plan will
be effected by means of the participant's authorized payroll deductions.
Interest will not accrue on amounts withheld from a participant's compensation.
A Participant may cancel his or her subscription in whole or in part and obtain
a refund of amounts withheld from his or her compensation by submitting a
written request at least ten business days before the end of any offering
period. An employee who has withdrawn from an offering period may not again
participate in the plan until the next offering period.
Because the purchase of shares of common stock under the employee stock purchase
plan is discretionary with all eligible employees, it would not be meaningful to
include information as to the number of shares of common stock which would have
been distributable during fiscal 1999 to all employees, or to groups of
employees, or to any particular employee of Penton or a participating
subsidiary.
Administration
The employee stock purchase plan will be administered by the Compensation
Committee. The Compensation Committee will have full authority to interpret and
construe any provision of the plan and to adopt such rules and regulations for
administering the plan as it may deem necessary. Decisions of the Compensation
Committee will be final and binding on all parties who have an interest therein.
The Compensation Committee may amend, suspend, or discontinue the plan with
respect to any shares of common stock at any time not subject to purchase
rights. However, no such action may, without the approval of stockholders of
Penton, increase the number of shares of common stock subject to the employee
stock purchase plan (other than for the permitted adjustments described above)
or materially modify the requirements as to eligibility for participation in the
plan.
Federal Income Tax Consequences
The employee stock purchase plan and the right of eligible employees to make
purchases thereunder are intended to qualify under the provisions of Section 423
of the Code. Under these provisions, no income will be taxable to a participant
at the time of grant of a purchase right or upon the purchase of shares of
Penton's common stock at the end of an offering period. As summarized below, a
participant may be taxed upon the sale or other disposition of shares of common
stock acquired under the plan. The consequences will depend upon how long the
participant has held the shares of common stock prior to disposition.
If the shares of common stock are disposed of at least two years after the date
of granting of the purchase right and at least one year after the shares of
common stock are purchased under the employee stock purchase plan, the following
federal income tax consequences will apply. The lesser of (a) the excess of the
fair market value of the shares of common stock at the time a purchase right is
granted over the purchase price of the shares of common stock or (b) the excess
of the fair market value of the shares of common stock at the time such shares
are disposed of over the purchase price of the shares of common stock will be
treated as ordinary income. Any further gain upon such sale will be treated as a
capital gain. If the shares of common stock are sold and the sale price is less
than the purchase price, there is no ordinary income and the employee has a
capital loss equal to the difference. If a participant holds the shares of
common stock for this period, no deduction in respect of the disposition of such
shares of common stock will be allowed to Penton.
-14-
If the shares of common stock are disposed of before the expiration of either
the two year or the one year holding period described above (a "Disqualifying
Disposition"), the following federal income tax consequences will apply. The
excess of the fair market value of the shares of common stock at the date the
shares are purchased over the purchase price will be treated as ordinary income
to the employee. This excess will constitute ordinary income in the year of sale
or other disposition even if no gain is realized on the sale. Any further gain
upon such sale will be treated as capital gain. If the shares of common stock
are sold for less than their fair market value on the date of purchase, the same
amount of ordinary income is attributed to the employee and a capital loss will
be recognized equal to the difference between the sale price and fair market
value of the shares of common stock on such purchase date. To the extent the
employee recognizes ordinary income by reason of a Disqualifying Disposition,
Penton will be entitled to a corresponding tax deduction for compensation in the
tax year in which the disposition occurs.
The foregoing discussion is merely a summary of the more significant effects of
the federal income tax on an employee of Penton or a participating subsidiary
with respect to shares of common stock purchased under the employee stock
purchase plan and does not purport to be a complete analysis of the tax laws
dealing with this subject. Reference should be made to the applicable provisions
of the Code and the regulations promulgated thereunder. In addition, this
summary does not discuss the provisions of the income tax laws of any state or
foreign country in which an employee may reside. Each employee should consult
his or her own tax advisor concerning the federal, state, local and foreign
income tax consequences of participation in the plan.
Vote Required for Approval
The vote required to approve the Employee Stock Purchase Plan is the affirmative
vote by the holders of a majority of the common stock present in person or
represented by proxy at the annual meeting and entitled to vote on this matter.
If the Employee Stock Purchase Plan is not approved, no prospective awards will
be made under the Employee Stock Purchase Plan.
The Board recommends a vote FOR the approval of the Employee Stock Purchase
Plan.
Proposal to Approve the Penton Media, Inc. Management Stock Purchase Plan
The purpose of the Penton Media, Inc. Management Stock Purchase Plan is to
provide a means for designated officers and other key employees of Penton and
its subsidiaries to acquire a proprietary interest (or increase an existing
interest) in Penton. Participants in the management stock purchase plan may
elect to receive restricted stock units ("RSUs") in lieu of all or a portion of
their annual incentive bonus under the Penton Media, Inc. Senior Executive Bonus
Plan (See "Proposal to Approve the Penton Media, Inc. Senior Executive Bonus
Plan, below). Each RSU represents the right to receive one share of Penton's
common stock in the future as described below. RSUs are granted at a discount of
20% below the fair market value of Penton's common stock on the date the RSUs
are awarded. So long as the participant remains employed by Penton for at least
two years after the date of grant or until the occurrence of certain specified
events, his or her RSUs will be settled in shares of common stock after a period
of deferral selected by the participant, or upon termination of employment, if
earlier. A copy of the plan is attached hereto as Appendix B and the summary
description that follows is qualified in its entirety by reference to that
Appendix.
Summary Description
The employees of Penton who are eligible to participate in the management stock
purchase plan include officers and other key employees of Penton and its
subsidiaries, as designated by the Compensation Committee. Participation in the
plan is based on the award of RSUs. Each RSU awarded to a participant is
credited to a bookkeeping account established and maintained for that
participant. In order to participate in the plan, no later than March 31, of any
year each participant may elect to receive RSUs in lieu of all or a specified
part of his or her incentive bonus that would become payable to him or her for
performance during the following year under the Senior Executive Bonus Plan in
the absence of such election. Such election is made on an election form filed
with the Compensation Committee. When bonuses for that year are payable (usually
early in the following year), Penton will credit each participant's account with
a whole number of RSUs determined by dividing the amount (expressed in dollars)
of bonus that the participant elected to invest in RSUs by the price of each RSU
awarded on such date. The "price" of each RSU is equal to eighty percent (80%)
of the average of the high and low sales price of a share of common stock on the
New York Stock Exchange on such date. No fractional RSU will be credited and the
amount equivalent in value to the fractional RSU will be paid out to the
participant in cash.
Each year, a participant will specify on his or her election form a deferral
period for the RSUs. The deferral period is at least two years and begins on the
date the incentive bonus would be payable absent the election. Subject to the
approval of Penton, a participant may request a change in the deferral period.
Any such change generally must occur at least one
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(1) year prior to the end of the deferral period, although the one (1) year
notice requirement does not apply if the participant otherwise would be entitled
to receive shares of common stock following an involuntary termination of the
participant's employment, including by reason of death or permanent disability.
With respect to each vested RSU, Penton will issue to the participant one share
of common stock as soon as practicable after the end of the deferral period
specified in the participant's election form pertaining to such RSU, or, if
earlier, (a) upon the participant's termination of employment or (b) the
termination of the plan.
A participant's RSUs become vested if he or she remains employed two years after
the date the incentive bonus would be payable, and also become immediately
vested upon death or disability or upon a change of control. If a participant
voluntarily terminates his or her employment with Penton, or the participant is
terminated for cause (as defined in the plan), the participant's nonvested RSUs
will be canceled and he or she will receive a cash payment equal to the lesser
of (i) the price of such RSUs or (ii) an amount equal to the number of such RSUs
multiplied by the fair market value of the common stock on the date of the
participant's termination of employment. If a participant's employment is
terminated by Penton for any reason other than cause, the participant's
nonvested RSUs will be canceled and he or she will receive payment as follows:
The number of nonvested RSUs awarded with respect to each award date will be
multiplied by a fraction that is equal to the number of full months that the
participant was employed by Penton after each such award date divided by twenty-
four (24) and the participant will receive the resulting number of such RSUs in
shares of common stock (with any fractional shares resulting from such
calculation being settled in cash). With respect to the participant's remaining
nonvested RSUs, the participant will receive cash in an amount equal to the
lesser of (a) the price of such RSUs or (b) an amount equal to the number of
such RSUs multiplied by the fair market value of the common stock on the date of
the participant's termination of employment.
Prior to the time a participant's account becomes payable, the Compensation
Committee, in its sole discretion, may elect to distribute all or a portion of
any vested RSUs in the participant's account in the event such participant
requests a distribution on account of severe financial hardship. For purposes of
this plan, severe financial hardship will be deemed to exist if the Compensation
Committee determines that a participant needs a distribution to meet immediate
and heavy financial needs resulting from a sudden or unexpected illness or
accident of the participant or a member of his or her family, loss of the
participant's property due to casualty, or other similar extraordinary and
unforeseeable circumstances arising as a result of events beyond the control of
the participant. A distribution based on financial hardship may not exceed the
amount required to meet the immediate financial need created by the hardship.
The aggregate maximum number of shares of common stock reserved and available
for issuance under the plan is 250,000 shares. For purposes of this limitation,
the shares of common stock underlying any RSUs that are canceled are added back
to the shares of common stock available for issuance under the plan. Such shares
may be shares of original issuance or treasury shares or a combination of the
foregoing.
The plan will at all times be entirely unfunded, and no provision will at any
time be made with respect to segregating assets of Penton (including common
stock) for payment of any amounts or issuance of any shares of common stock
under the plan.
Administration
The Plan will be administered by the Compensation Committee. The Compensation
Committee will have complete discretion and authority with respect to the plan
and its application. Determinations by the Compensation Committee will be final
and binding on all parties with respect to all matters relating to the plan.
Penton reserves the right to amend or terminate the plan at any time, by action
of its Board of Directors, provided that no such action may adversely affect a
participant's rights under the plan with respect to RSUs awarded before the date
of such action.
Federal Income Tax Consequences
Generally, a participant will not recognize income upon the grant of RSUs. A
participant who receives an RSU grant will be taxed at ordinary income rates on
the fair market value of unrestricted shares on the date that the shares are
transferred to the recipient. Upon a subsequent sale of the shares received upon
transfer, any difference between the net proceeds on the sale and the basis of
such shares (i.e., generally the fair market value of the shares on the date of
transfer) will be taxed as capital gain or loss.
To the extent that an individual recognizes ordinary income in the circumstances
described above, Penton is entitled to a corresponding deduction provided, among
other things, that the deduction meets the test of reasonableness, is an
ordinary
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and necessary business expense and is not an "excess parachute payment" within
the meaning of Section 280G of the Code.
In addition to federal income taxes, participants also may be subject to Federal
social security taxes (including hospital insurance taxes), as well as state,
local and foreign taxes. To the extent Penton is required to withhold any taxes
in connection with the granting of awards under the plan, arrangements will be
made for withholding or payments in lieu thereof.
Vote Required for Approval
The vote required to approve the Management Stock Purchase Plan is the
affirmative vote by the holders of a majority of the common stock present in
person or represented by proxy at the annual meeting and entitled to vote on
this matter. If the Management Stock Purchase Plan is not approved, no
prospective awards will be made under the Management Stock Purchase Plan.
The Board recommends a vote FOR the approval of the Management Stock Purchase
Plan.
Proposal to Approve the Penton Media, Inc. Senior Executive Bonus Plan
The purpose of the Penton Media, Inc. Senior Executive Bonus Plan is to attract
and retain key executives for Penton and its subsidiaries and to provide such
persons with incentives for superior performance. If approved by the
shareholders, the bonus plan will provide for incentive bonus payments to
participants in the plan, based on the achievement of specified performance
objectives. Incentive bonus payments made under the bonus plan are intended to
constitute qualified "performance-based compensation" for purposes of Section
162(m) of the Code and Section 1.162-27 of the Regulations promulgated
thereunder. A copy of the plan is attached hereto as Appendix C and the summary
description that follows is qualified in its entirety by reference to that
Appendix.
Summary Description
Those employees of Penton who are eligible to participate in the bonus plan
include Penton's Chief Executive Officer and each other executive officer of
Penton that the Compensation Committee determines is, or is likely to become, a
"covered employee" of Penton within the meaning of Section 162(m) of the Code.
Incentive bonus payments are made to participants based on the achievement of a
performance objective or objectives established pursuant to the plan for
participants. Performance objectives may be described in terms of Penton-wide
objectives or objectives that are related to the performance of the individual
participant or of the subsidiary, division, department or function within Penton
or a subsidiary in which the participant is employed. The performance objectives
are limited to specified levels of or growth in:
(i) return on invested capital;
(ii) earnings per share;
(iii) net earnings;
(iv) operating profit;
(v) pre-tax profit;
(vi) after-tax cash flow per share;
(vii) business unit contribution profit;
(viii) earnings before interest expense, income tax expense, depreciation
and amortization;
(ix) total shareholder return (including relative to an index);
(x) return on assets;
(xi) return on equity;
(xii) sales growth; and/or
(xiii) productivity improvement
Under the terms of the plan, not later than the ninetieth day of each of
Penton's fiscal years, the Compensation Committee will establish the performance
criteria for each participant and the amount of incentive bonus payable (or the
formula for determining such amount) upon full achievement of the specified
performance objectives. The Compensation Committee may further specify a minimum
acceptable level of achievement of the performance goals below which no
incentive bonus payment will be made and will set forth a formula for
determining the amount of any payment to be made if performance is at or above
the minimum acceptable level but falls short of full achievement of the
specified goals. The Compensation
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Committee may not modify any terms of awards established pursuant to the bonus
plan, except to the extent that after such modification the incentive bonus
would continue to constitute qualified "performance-based compensation" for
purposes of Section 162(m) of the Code.
The Compensation Committee retains the discretion to reduce the amount of any
incentive bonus that would be otherwise payable to a participant (including a
reduction in such amount to zero).
Under the terms of the bonus plan, in no event will the incentive bonus paid to
a participant under the plan for a year exceed $2,000,000. This figure includes
the 20% discount a participant receiving a bonus under the plan may receive if
he or she makes a timely election to defer all or a portion of the bonus to the
Management Stock Purchase Plan (see the above discussion of the Management Stock
Purchase Plan).
Administration
The bonus plan will be administered by the Compensation Committee, which will
have full power and authority to construe, interpret and administer the plan and
will have the exclusive right to establish performance objectives and the amount
of incentive bonus payable to each participant upon the achievement of the
specified performance objectives. Subject to its approval by the shareholders,
the bonus plan will become effective for bonuses earned in years beginning with
the year 2000 and will remain effective until the fifth anniversary of the date
of such approval, subject to any further shareholder approvals (or reapprovals)
mandated for performance-based compensation under Section 162(m) of the Code,
and subject to the right of the Board of Directors to terminate the plan, on a
prospective basis only, at any time.
Federal Income Tax Consequences
Any payment of incentive bonus under the bonus plan will be taxed as ordinary
income to the participant on the date it is received if paid in cash. If a
participant elects to defer all or a portion of his or her bonus in accordance
with the terms of the Management Stock Purchase Plan, the participant will be
taxed as described in the above section entitled "Proposal to Approve the Penton
Media, Inc. Management Stock Purchase Plan."
To the extent that an individual recognizes ordinary income in the circumstances
described above, Penton is entitled to a corresponding deduction provided, among
other things, that the deduction meets the test of reasonableness, is an
ordinary and necessary business expense and is not an "excess parachute payment"
within the meaning of Section 280G of the Code.
Vote Required for Approval
The vote required to approve the Senior Executive Bonus Plan is the affirmative
vote by the holders of a majority of the common stock present in person or
represented by proxy at the annual meeting and entitled to vote on this matter.
If the Senior Executive Bonus Plan is not approved, no prospective awards will
be made under the Senior Executive Bonus Plan.
The Board recommends a vote FOR the approval of the Senior Executive Bonus Plan.
Proposal to Approve the Penton Media, Inc. Senior Executive Loan Program
In order to increase the ownership of common stock by Penton's officers and
thereby more closely align the interests of the officers with those of the
shareholders, in January of 2000 Penton approved the making of loans to certain
of its officers solely for the purpose of purchasing common stock.
Summary Description
The loan program will enable the top six executives of Penton to borrow funds
from Penton to purchase up to an aggregate of 400,000 shares of Penton common
stock. Each loan to an officer is evidenced by a promissory note and is for a
term of up to five years at a fixed rate of interest on each such loan equal to
the interest rate identified as the Applicable Federal Rate (as defined in the
Code) at the time of making any such loan. Principal or interest due on this
promissory note may be prepaid at any time or from time to time, in whole or in
part, without any premium or penalty. Any such prepayment is applied first
against unpaid interest and then against principal. Each promissory note states
that the proceeds thereof may be used only to purchase Penton's common stock.
The unpaid principal amount of the note, together with any accrued and unpaid
interest, will become immediately due and payable (1) 120 days following the
termination of employment of the
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executive for any reason other than disability, (2) upon the insolvency of the
executive, (3) upon the issuance of a writ of attachment against the executive
or (4) 120 days after an uncured breach by the executive of any of his duties or
obligations under the note.
The loan program is currently structured so that the executives will purchase
common stock directly from Penton. Shares purchased from Penton will not be
registered under the Securities Act of 1933, as amended. Thus, pursuant to the
requirements of Rule 144 under such Act, a minimum of one year must elapse
before an executive may sell any of the shares purchased from Penton.
The maximum aggregate amounts that Messrs. Kemp, Ramella, Nussbaum, Zaremba,
NeCastro and Vice may borrow from Penton under the terms of the program are
$3,600,000, $2,400,000, $1,000,000, $1,000,000, $1,000,000, and $800,000,
respectively.
Administration
The loan program will be administered by the Board of Directors, which will have
full power and authority to construe, interpret and administer the program.
Federal Income Tax Consequences
Provided the loans to executives bear an interest rate of the "Applicable
Federal Rate," as defined in the Code, the executives will not recognize income
upon the occurrence of the transactions contemplated under the loan program.
Vote Required for Approval
The vote required to approve the Senior Executive Loan Program is the
affirmative vote by the holders of a majority of the common stock present in
person or represented by proxy at the annual meeting and entitled to vote on
this matter.
The Board recommends a vote FOR the approval of the Senior Executive Loan
Program.
Proposal to Approve the Appointment of the Independent Certified Accountants of
Penton for the fiscal year ending December 31, 2000.
PricewaterhouseCoopers LLP, who served as auditors for the year ended December
31, 1999, have been selected by the Board, upon recommendation of the Audit
Review Committee, to audit the consolidated financial statements of Penton for
the year ending December 31, 2000. It is expected that one or more
representatives of PricewaterhouseCoopers LLP will attend the annual meeting,
with the opportunity to make a statement if they should so desire and will be
available to respond to appropriate questions.
The Board recommends a vote FOR the approval of the appointment of the
independent certified accountants.
Certain Transactions
On August 7, 1998, Pittway Corporation, the then sole stockholder of Penton,
distributed 100% of the outstanding common stock of Penton on the basis of one
share of common stock for each share of Pittway common stock outstanding and one
share of common stock for each share of Pittway class A stock outstanding (the
"Stock Distribution").
In connection with the Stock Distribution and the acquisition by Penton of
Donohue Meehan Publishing Company (the "Spinoff Transactions"), each of Penton,
Pittway Corporation and Messrs. Donohue and Meehan has agreed to indemnify the
others (except that Pittway has no indemnity obligation to Messrs. Donohue and
Meehan) with respect to various matters related to the Spinoff Transactions.
With respect to the indemnities between Penton and Messrs. Donohue and Meehan,
no obligation will arise until the aggregate liability exceeds $500,000, and
then only to the extent such liability exceeds $500,000.
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In connection with the acquisition by Penton of Donohue Meehan Publishing
Company, each of Messrs. Donohue and Meehan has certain contingent rights to
additional cash (and/or, under certain circumstances, additional shares of
common stock) and to have such shares of common stock registered for sale under
the federal securities laws.
In connection with the acquisition by Penton of the assets of New Hope
Communications, Inc., Mr. Greene has certain contingent rights to additional
cash and shares of common stock. In 1999, Mr. Greene earned $2,857,720 in
contingent payments, half of which was paid in cash and the other half of which
was paid in shares of common stock. In addition, in connection with the New Hope
transaction, Mr. Greene received a consulting agreement that pays $25,000 per
year for three years.
Donohue Meehan Publishing Company leases equipment from Donohue Meehan Equipment
Leasing, an Illinois partnership, which is owned by Messrs. Donohue and Meehan.
The total balances on these leases as of December 31, 1999, was approximately
$104,000. Penton believes that the lease terms are no less favorable to Donohue
Meehan Publishing Company than those obtainable in an arm's-length transaction
with an independent third party.
Key Corp provides cash management and merchant banking services to Penton, for
which it received fees totaling $112,197 in 1999.
Penton has adopted the Senior Executive Loan Program pursuant to which certain
executives may receive loans from Penton to purchase common stock. See "Proposal
to Approve the Penton Media, Inc. Senior Executive Loan Program." The maximum
amount of indebtedness that was outstanding under this loan program since
January 1, 1999, for each of Messrs. Kemp, Ramella, Nussbaum, Zaremba, NeCastro
and Vice was $3,554,063, $2,318,125, $947,813, $796,172, $999,375, and $799,953,
respectively. These amounts also represent the outstanding balances as of March
24, 2000.
Section 16(a) Beneficial Ownership Reporting Compliance
Based solely on a review of reports of ownership, reports of changes of
ownership and written representations under Section 16(a) of the Securities
Exchange Act of 1934 which were furnished to Penton during or with respect to
1999 by persons who were, at any time during 1999, directors or officers of
Penton or beneficial owners of more than 10% of the outstanding shares of common
stock, no such person failed to file on a timely basis any report required by
such section during 1999.
Annual Report
Penton's annual report for the year ended December 31, 1999, is enclosed with
this proxy statement. Stockholders are referred to the report for financial and
other information about Penton, but such report is not incorporated in this
proxy statement and is not to be deemed a part of the proxy soliciting material.
Stockholder Proposals for the 2001 Annual Meeting
Stockholders who intend to have a proposal considered for inclusion in Penton's
proxy materials for presentation at the 2001 annual stockholders meeting must
submit the proposal to Penton no later than December 7, 2000. Stockholders who
intend to present a proposal at the 2001 annual meeting without inclusion of
such proposal in Penton's proxy materials are required to provide notice of such
proposal to Penton in accordance with the advance notice procedures for
stockholder proposals set forth in Penton's Bylaws and summarized below. Penton
reserves the right to reject, rule out of order, or take other appropriate
action with respect to any proposal that does not comply with these and other
applicable requirements.
The Bylaws establish an advance notice procedure for stockholder proposals to be
brought before an annual or special meeting of stockholders of Penton, including
proposed nominations of persons for election to the Board of Directors.
Stockholders at an annual or special meeting may only consider proposals or
nominations brought before the meeting by Penton, by or at the direction of the
Board of Directors or by a stockholder who was a stockholder of record on the
record date for the meeting, who is entitled to vote at the meeting and who has
given to Penton's Secretary timely written notice, in proper form, of the
stockholder's intention to bring that business before the meeting.
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To be timely, notice by stockholders of nominations or proposals to be brought
before any special meeting of stockholders must be delivered to the Secretary of
Penton not earlier than the 90th day prior to such meeting and not later than
the 60th day prior to such meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made. Notice by
stockholders of nominations or proposals to be brought before any annual meeting
must be received by the Secretary not less than 60 days nor more than 90 days
prior to the first anniversary of the preceding year's annual meeting of
stockholders or, if the date of the annual meeting is more than 30 days prior to
or more than 60 days after the preceding anniversary date, notice by the
stockholder will be timely if received not earlier than the 90th day prior to
such annual meeting and not later than the close of business on the later of (i)
the 60th day prior to such annual meeting or (ii) the 10th day following public
announcement of such meeting.
Each notice by stockholders must set forth (i) the name and address of the
stockholder who intends to make the nomination or proposal and of any beneficial
owner on whose behalf the nomination or proposal is made and (ii) the class and
number of shares of common stock that are owned beneficially and of record by
such stockholder and beneficial owner, if any. In the case of a stockholder
proposal, the notice must also set forth a brief description of the business
desired to be brought before the meeting, the reasons for conducting such
business at the meeting and any material interest of such stockholder or
beneficial owner, if any, in that proposed business. In the case of nomination
of any person for election as a director, the notice must also set forth any
information regarding the nominee proposed by the stockholder that would be
required to be included in a proxy statement filed pursuant to the proxy rules
of the Securities and Exchange Commission and the consent, if so required, of
the nominee to be named in a proxy statement as a candidate for election and to
serve as a director of Penton if elected.
Proxy Solicitation
Proxies will be solicited by mail. Proxies may also be solicited by directors,
officers and a small number of regular employees of Penton personally or by
mail, telephone or telegraph, but such persons will not be specially compensated
for such services. Brokerage houses, custodians, nominees and fiduciaries will
be requested to forward the soliciting material to the beneficial owners of
stock held of record by such persons, and Penton will reimburse them for their
expenses in doing so.
The entire cost of solicitation will be borne by Penton.
Other Matters
The management of Penton does not intend to present, and does not have any
reason to believe that others will present, any item of business at the annual
meeting other than those specifically set forth in the notice of the meeting.
However, if other matters are properly presented for a vote, the proxies will be
voted for such matters in accordance with the judgment of the persons acting
under the proxies.
By Order of the Board of Directors
PRESTON L. VICE
Secretary
Cleveland, Ohio
March 31, 2000
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Appendix A
EMPLOYEE STOCK PURCHASE PLAN
SECTION 1. PURPOSE.
This Employee Stock Purchase Plan (the "Plan") is intended to advance the
interests of Penton Media, Inc. (the "Company") and its stockholders by allowing
employees of the Company and those subsidiaries of the Company that participate
in the Plan the opportunity to purchase shares of the Company's common stock,
par value $.01 per share ("Common Stock"). It is intended that the Plan will
constitute an "employee stock purchase plan" within the meaning of Section 423
of the Internal Revenue Code of 1986, as amended from time to time (the "Code").
SECTION 2. ADMINISTRATION.
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board"). The
majority of the Committee shall constitute a quorum, and the action of (a) a
majority of the members of the Committee present at any meeting at which a
quorum is present or (b) all members acting unanimously by written consent,
shall be the acts of the Committee.
The interpretation and construction by the Committee of any provision of
the Plan or of any subscription to purchase shares of Common Stock under it
shall be final. The Committee may establish any policies or procedures which in
the discretion of the Committee are relevant to the operation and administration
of the Plan and may adopt rules for the administration of the Plan. The
Committee will, from time to time, designate the subsidiaries (as defined below)
of the Company whose employees will be eligible to participate in the Plan. No
member of the Committee shall be liable for any action or determination made in
good faith with respect to the Plan or any subscription to purchase shares under
it. For purposes of this Plan, the term "subsidiary" means any corporation in
which the Company directly or indirectly owns or controls more than 50 percent
of the total combined voting power of all classes of stock issued by the
corporation.
SECTION 3. ELIGIBILITY.
(a) Each person who is an employee of the Company or of a participating
subsidiary of the Company on November 18, 1999 (i) whose customary employment is
a minimum of 20 hours per week and (ii) whose customary employment is a minimum
of 5 months per year may subscribe to purchase shares of Common Stock under the
terms of the Plan.
(b) Each person who becomes an employee of the Company or of a
participating subsidiary of the Company on or after November 19, 1999 (i) whose
customary employment is a
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minimum of 20 hours per week, and (ii) whose customary employment is a minimum
of 5 months per year, and (iii) who has at least one year of service with the
Company or with a participating subsidiary of the Company (each of the persons
described in Sections 3(a) and 3(b) is hereinafter referred to as an "Eligible
Employee") may subscribe to purchase shares of Common Stock under the terms of
the Plan.
(c) Notwithstanding the provisions of this Section 3, no Participant (as
defined below) may subscribe to purchase shares on the immediately following
Purchase Date (as defined below) if, immediately after the immediately preceding
Subscription Date (as defined below), such Participant would own stock
possessing 5 percent or more of the total combined voting power or value of all
classes of stock of the Company or of any subsidiary of the Company. For
purposes of this paragraph, stock ownership of an individual shall be determined
under the rules of Section 424(d) of the Code.
For purposes of the Plan:
(i) The term "Subscription Date" means the first business day of each
fiscal quarter of the Company during which the Plan is effective. The first
Subscription Date under the Plan will be January 1, 2000.
(ii) The term "Participant" means an Eligible Employee who has a
Subscription and Authorization Form (as defined below) in effect.
(iii) The term "Purchase Date" means the last business day of the fiscal
quarter in which the related Subscription Date occurs.
SECTION 4. PARTICIPATION.
(a) An Eligible Employee shall evidence his or her agreement to subscribe
for shares by completing a written agreement (the "Subscription and
Authorization Form") provided by the Committee and filing it as directed by the
Committee. Subject to the provisions of Section 6(b), a Subscription and
Authorization Form shall take effect on the first Subscription Date which is
within a reasonable time after it has been filed with the Committee, but in no
event later than the first Subscription Date which is at least thirty (30) days
after the date on which the Eligible Employee files the Subscription and
Authorization Form.
(b) In the Subscription and Authorization Form, an Eligible Employee
shall designate any whole percentage to be withheld from such Eligible
Employee's compensation (as defined below) for each payment remitted by the
Company to the Eligible Employee and used to purchase shares of Common Stock on
the next Purchase Date, subject to the provisions of Section 6(d) and the
following limitations: (i) the whole percentage designated by such Eligible
Employee shall not be less than 1 percent of his or her compensation and shall
not exceed 10 percent of his or her compensation; (ii) the maximum number of
shares of Common Stock which can be purchased by any one Participant on any
Purchase Date shall not exceed 600 shares of Common Stock; and (iii) the
Committee may establish from time to time minimum payroll
A-2
deductions. For purposes of this Plan, the term "compensation" means base salary
and annual bonus (prior to any reductions in either).
SECTION 5. COMMON STOCK.
The stock purchased under the Plan shall be Treasury shares. In the event
that the number of shares subject to options to be granted pursuant to any
offering under the Plan exceeds the number of Treasury shares, the shares
available to be purchased shall be allocated on a pro rata basis among the
options to be granted. Subject to the provisions of Section 6(g), the aggregate
number of shares of Common Stock which may be purchased under the Plan shall not
exceed 750,000 shares of Common Stock. In the event that the dollar amount of
shares of Common Stock subscribed for in any quarter exceeds the number of
shares of Common Stock available to be purchased under the Plan, the shares of
Common Stock available to be purchased shall be allocated on a pro rata basis
among the subscriptions.
SECTION 6. TERMS AND CONDITIONS OF SUBSCRIPTIONS.
Subscriptions shall be evidenced by a Subscription and Authorization Form
in such form as the Committee shall from time to time approve, provided that all
Participants subscribing to purchase shares shall have the same rights and
privileges (except as otherwise provided in Section 4(b)), and provided further
that such subscriptions shall comply with and be subject to the following terms
and conditions:
(a) Purchase Price. The purchase price shall be the lower of (i) 85
percent of the fair market value of Common Stock on the Subscription Date or
(ii) 85 percent of the fair market value of Common Stock on the Purchase Date.
During such time as Common Stock is traded on the New York Stock Exchange, the
fair market value per share shall be the closing price of Common Stock (as
reported in the record of Composite Transactions for New York Stock Exchange
listed securities and printed in The Wall Street Journal) on such Purchase Date
-----------------------
(or on the next regular business date on which shares of Common Stock shall be
traded in the event that no shares of Common Stock shall have been traded on the
Purchase Date). Subject to the foregoing, the Committee shall have full
authority and discretion in fixing the purchase price.
(b) Medium and Time of Payment. The purchase price shall be payable in
full in United States dollars, pursuant to uniform policies and procedures
established by the Committee. The funds required for such payment will be
derived by withholding from a Participant's compensation. A Participant shall
have the right at any time to terminate the withholding from his or her
compensation of amounts to be paid toward the purchase price. A Participant
shall have the right, one time in each quarter, to change the amount so
withheld, by submitting a written request at least 10 business days before any
Purchase Date. A Participant shall have the right to cancel his or her
subscription in whole or in part and to obtain a refund of amounts withheld from
his or her compensation by submitting a written request at least 10 business
days before any Purchase Date. Such amounts shall thereafter be paid to the
Participant within a reasonable period of time. Shares of Common Stock purchased
hereunder for a Participant shall
A-3
be held in escrow pending transfer to the Participant. Subject to Section 6(j),
shares of Common Stock shall be transferred to the Participant as soon as
reasonably practicable after the request of the Participant or upon the
Participant's termination of employment with the Company and its affiliates. Any
dividends paid on such shares of Common Stock held in escrow on behalf of a
Participant shall be reinvested in additional shares of Common Stock on behalf
of such Participant.
(c) No Interest on Employee Funds. No interest shall accrue on any
amounts withheld from a Participant's compensation.
(d) Accrual Limitation. No subscription shall permit the rights of a
Participant to purchase stock under all "employee stock purchase plans" (as
defined in the Code) of the Company to accrue, under the rules set forth in
Section 423(b)(8) of the Code, at a rate which exceeds $25,000 of fair market
value of such stock (determined at the time of subscription) for each calendar
year.
(e) Termination of Employment. If a Participant ceases to be an Eligible
Employee before any applicable Purchase Date for any reason, the total unused
payments credited to his or her account on the date of termination will be
refunded to the Participant (or his or her estate) within a reasonable time
without interest.
(f) Transferability. Neither payments credited to a Participant's account
nor any rights to subscribe to purchase shares of Common Stock under the Plan
may be transferred by a Participant except by the laws of descent and
distribution. Any such attempted transfer will be without effect.
(g) Adjustments. The Committee may make or provide for such adjustments
in the purchase price and in the number or kind of shares of Common Stock or
other securities covered by outstanding subscriptions, or specified in the
second sentence of Section 5 of the Plan, as the Committee in its sole
discretion, exercised in good faith, may determine is equitably required to
prevent dilution or enlargement of the rights of Participants that would
otherwise result from (i) any stock dividend, stock split, combination of
shares, recapitalization or other change in the capital structure of the
Company; (ii) any merger, consolidation, spin-off, split-off, spin-out, split-
up, separation, reorganization, partial or complete liquidation, or other
distribution of assets, issuance of rights or warrants to purchase stock; or
(iii) 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
Committee, in its discretion, may provide in substitution for any or all
outstanding subscriptions under this Plan such alternative consideration as it,
in good faith, may determine to be equitable in the circumstances.
(h) Rights as a Stockholder. A Participant shall have no rights as a
stockholder with respect to any Common Stock covered by his or her subscription
until the Purchase Date following payment in full. No adjustment shall be made
for dividends (ordinary or extraordinary, whether in cash, securities or other
property) or distributions or other rights for which the record date is prior to
the date of such purchase, except as provided in Section 6(g) of the Plan.
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(i) Fractional Shares. Fractional shares may be purchased under the Plan
and credited to an account for the Participant. The Company, however, shall have
the right to pay cash in lieu of any fractional shares of Common Stock to be
distributed from a Participant's account under the Plan.
(j) Holding Period. The Committee may determine, in its discretion, that
shares of Common Stock acquired under the Plan shall not be transferable by the
Participant, other than by reason of death or such other reasons as the
Committee may specify, for a period not to exceed six (6) months following the
Purchase Date. If the Committee does so determine, shares of Common Stock so
acquired shall be held in escrow by the Company until such transfer restrictions
lapse.
(k) Other Provisions. The Subscription and Authorization Form authorized
under the Plan shall contain such other provisions as the Committee may deem
advisable, provided that no such provisions may in any way be in conflict with
the terms of the Plan.
SECTION 7. TERM OF PLAN.
Eligible Employees may subscribe for shares under the Plan within a period
of ten years from the date the Plan is adopted by the Board; provided, however,
that the Committee may terminate or suspend the Plan if at any time there are
less than 5 percent of the Eligible Employees participating in the Plan.
SECTION 8. AMENDMENT OF THE PLAN.
The Plan may be amended from time to time by the Committee, but without
further approval of the stockholders, no such amendment shall (a) increase the
aggregate number of shares of Common Stock that may be issued and sold under the
Plan (except that adjustments authorized by Section 6(g) of the Plan shall not
be limited by this provision) or (b) materially modify the requirements as to
eligibility for participation in the Plan.
SECTION 9. APPROVAL OF STOCKHOLDERS/EFFECTIVE DATE.
The Plan shall take effect upon adoption by the Board; provided, however,
that any subscriptions and purchases under the Plan shall be null and void
unless the Plan is approved by a vote of the holders of a majority of the total
number of outstanding shares of voting stock of the Company present in person or
by proxy at a meeting at which a quorum is present in person or by proxy, which
approval must occur within the period of 12 months after the date the Plan is
adopted by the Board.
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Appendix B
PENTON MEDIA, INC.
MANAGEMENT STOCK PURCHASE PLAN
(As Amended and Restated Effective as of January 1, 2000)
ARTICLE I
Purpose of the Plan
The purpose of the Penton Media, Inc. Management Stock Purchase Plan (As
Amended and Restated Effective as of January 1, 2000) (the "Plan") is to provide
a means for designated officers and other key employees of Penton Media, Inc.
(the "Company") and its Subsidiaries to acquire a proprietary interest (or
increase an existing interest) in the Company. Participants in the Plan may
elect to receive restricted stock units ("RSUs") in lieu of a designated portion
of up to one hundred percent (100%) of their annual incentive bonus ("Bonus")
under the Penton Media, Inc. Senior Executive Bonus Plan or other similar
arrangement (the "Bonus Plan"). Each RSU represents the right to receive one
share of the common stock, par value $.01 of the Company (the "Common Stock")
upon the terms and conditions stated herein. RSUs are granted at a discount of
20% of the Fair Market Value (as defined in Section 4.2 of the Plan) on the date
the RSUs are awarded. So long as the participant remains employed by Company for
at least two years after the date of grant or until the occurrence of certain
specified events, his or her RSUs will be settled in shares of Common Stock
after a period of deferral selected by the participant, or upon termination of
employment, if earlier.
ARTICLE II
Administration
The Plan shall be administered by the Compensation Committee (the
"Committee") of the Board of Directors of the Company (the "Board"). The
Committee shall have complete discretion and authority with respect to the Plan
and its application, except as expressly limited herein. Determinations by the
Committee shall be final and binding on all parties with respect to all matters
relating to the Plan.
ARTICLE III
Eligibility
Officers and other key employees of the Company and its Subsidiaries as
designated by the Committee shall be eligible to participate in the Plan. For
all purposes of the Plan, the term "Subsidiary" means any corporation or other
legal entity in which the Company owns, directly or indirectly, an equity
interest.
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ARTICLE IV
Participation
4.1 Generally. Participation in the Plan shall be based on the award of
RSUs. Each RSU awarded to a participant shall be credited to a bookkeeping
account established and maintained for that participant.
4.2 Price of RSUs. The "Price" of each RSU shall be equal to eighty
percent (80%) of the Fair Market Value on the date the RSU is awarded. For all
purposes of the Plan, the "Fair Market Value" on any given date shall mean the
average of the high and low sales price of a share of Common Stock on the New
York Stock Exchange or other public exchange on which the Common Stock is traded
on such date or, if the Common Stock is not publicly traded on such date, the
value of the Common Stock as determined by the Committee.
4.3 Election to Participate. No later than March 31 of any year, each
participant may elect to receive RSUs in lieu of all or a specified part of his
or her Bonus that may become payable to him or her for performance in such year
under the Bonus Plan that in the absence of such election would be payable in
the following year; provided, however, that, with respect to any Bonus payable
in 2000, a participant may make an election on or prior to September 10, 1999.
Such election shall be made on an election form specified by the Committee (an
"Election Form") and filed with the Committee. An Election Form that is timely
delivered shall be effective for the Bonus earned in the relevant calendar year
(or, with respect to any Bonus payable in 2000, earned in 1999). Such election
may be expressed as a specified percentage (up to one hundred percent (100%)) of
the participant's actual Bonus amount or a specified dollar amount (up to one
hundred percent (100%)) of the participant's Bonus. Any percentage amount
specified must be at least 10% of the Bonus otherwise payable. Any dollar amount
specified must be at least $5,000. Amounts specified are entirely contingent on
the amount of Bonus actually awarded.
4.4 Deferral Period. Each Election Form shall specify a deferral period
for the RSUs to which it pertains (the "Deferral Period"). The Deferral Period
shall be expressed as a number of whole years, not less than two, beginning on
the award date. Subject to the approval of the Company as described below in
this Section, a participant may make a subsequent election requesting a change
in the Deferral Period (subject to the limitations set forth in this Section).
Such subsequent election shall be on a form provided by the Company, which form
must be filed with the Company (a) at a time at which the participant is an
employee of the Company or a Subsidiary and (b), except as described below in
the sentence that immediately follows, at least one (1) year prior to the date
on which the participant otherwise would be entitled to receive shares of Common
Stock. The one (1) year notice requirement described above, however, does not
apply in the case where the participant otherwise would be entitled to receive
shares of Common Stock following an involuntary termination of the participant's
employment, including by reason of death or permanent disability.
4.5 Awards. Once each year, on the date that Bonuses are paid or would
otherwise be paid, the Company shall award RSUs to each participant as follows:
Each participant's
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account shall be credited with a whole number of RSUs determined by dividing the
amount (expressed in dollars) that is determined under his or her Election Form
by the Price of each RSU awarded on such date. No fractional RSU will be
credited and the amount equivalent in value to the fractional RSU will be paid
out to the participant currently in cash.
ARTICLE V
Vesting and Settlement
5.1 Normal Vesting. A participant shall be fully vested in each RSU on
the second anniversary of the date of award of the RSU.
5.2 Accelerated Vesting. Notwithstanding Section 5.1 of the Plan, a
participant's RSUs shall immediately become completely vested upon the
participant's death or permanent disability or upon a Change of Control (as
defined in Section 5.5 of the Plan).
5.3 Settlement After Vesting. With respect to each vested RSU, the
Company shall issue to the participant one share of Common Stock as soon as
practicable after the end of the Deferral Period specified in the participant's
Election Form pertaining to such RSU, or, if earlier, (a) upon the participant's
termination of employment in accordance with the provisions of Section 5.4 of
the Plan, or (b) the termination of the Plan.
5.4 Settlement Prior to Vesting.
(a) If a participant voluntarily terminates his or her employment
with the Company, or the participant is terminated for Cause (as defined in
Subsection 5.4(d) of the Plan), the participant's nonvested RSUs shall be
canceled and he or she shall receive a cash payment equal to the lesser of
(i) the Price of such RSUs or (ii) an amount equal to the number of such
RSUs multiplied by the Fair Market Value on the date of the participant's
termination of employment.
(b) If a participant's employment is terminated by the Company for
any reason other than Cause, the participant's nonvested RSUs shall be
canceled and he or she shall receive payment as follows: The number of
nonvested RSUs awarded with respect to each award date shall be multiplied
by a fraction that is equal to the number of full months that the
participant was employed by the Company after each such award date divided
by twenty-four (24) and the participant shall receive the resulting number
of such RSUs in shares of Common Stock (with any fractional shares
resulting from such calculation being settled in cash). With respect to the
participant's remaining nonvested RSUs, the participant shall receive cash
in an amount equal to the lesser of (a) the Price of such RSUs or (b) an
amount equal to the number of such RSUs multiplied by the Fair Market Value
on the date of the participant's termination of employment.
(c) The Committee shall have complete discretion to determine the
circumstances of a participant's termination of employment, including
whether the same results from voluntary termination, permanent disability,
termination for Cause, or
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termination by the Company for any reason other than Cause. The Committee's
determination shall be final and binding on all parties and not subject to
review or challenge by any participant or other person.
(d) For purposes of the Plan, "Cause" shall mean:
(i) the commission by the participant of a felony or a crime
involving moral turpitude;
(ii) the commission by the participant of a fraud;
(iii) the commission by the participant of any act involving
dishonesty or disloyalty with respect to the Company or any of
its Subsidiaries or affiliates that harms or damages any of them
to any extent;
(iv) conduct by the participant that brings the Company or any of its
Subsidiaries or affiliates into substantial public disgrace or
disrepute; or
(v) gross negligence or willful misconduct by the participant with
respect to the Company or any of its Subsidiaries or affiliates.
5.5 Change of Control. For purposes of the Plan, "Change of Control"
shall mean the occurrence of any of the following events:
(a) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of
40% or more of either: (i) the then-outstanding shares of Common Stock or
(ii) the combined voting power of the then-outstanding voting securities of
the Company entitled to vote generally in the election of directors
("Voting Stock"); provided, however, that for purposes of this Subsection
-------- -------
5.4(a), the following acquisitions shall not constitute a Change of
Control: (A) any acquisition directly from the Company, (B) any acquisition
by the Company, a Subsidiary or the Harris Group (as defined in Section 5.6
of the Plan), (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Company or any Subsidiary, or (D) any
acquisition by any Person pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of Subsection 5.5(c); or
(b) Individuals who, as of the date hereof, constitute the Board (the
"Incumbent Board") cease for any reason (other than death or permanent
disability) to constitute at least a majority of the Board; provided,
--------
however, that any individual becoming a director subsequent to the date
-------
hereof whose election, or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (either by a specific vote or
by approval of the proxy statement of the Company in which such person is
named as a nominee for director, without objection to such nomination)
shall be considered as though such
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individual were a member of the Incumbent Board, but excluding for this
purpose, any such individual whose initial assumption of office occurs as a
result of an actual or threatened election contest (within the meaning of
Rule 14a-11 of the Exchange Act) with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board; or
(c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and entities who
were the beneficial owners, respectively, of the Common Stock and Voting Stock
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than a majority of, respectively, the then-outstanding shares
of common stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the entity resulting from such Business Combination (including,
without limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company's assets either directly or
through one or more Subsidiaries) in substantially the same proportions relative
to each other as their ownership, immediately prior to such Business
Combination, of the Common Stock and Voting Stock of the Company, as the case
may be, (ii) no Person (excluding any entity resulting from such Business
Combination, the Harris Group or any employee benefit plan (or related trust)
sponsored or maintained by the Company, a Subsidiary or such entity resulting
from such Business Combination) beneficially owns, directly or indirectly, 40%
or more of, respectively, the then-outstanding shares of common stock of the
entity resulting from such Business Combination, or the combined voting power of
the then-outstanding voting securities of such corporation, except to the extent
that such ownership existed prior to the Business Combination and (iii) at least
a majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board
providing for such Business Combination; or
(d) Approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
5.6 Harris Group. For purposes of Section 5.5 of the Plan, the "Harris
Group" shall mean Messrs. Irving B. Harris, Neison Harris, King Harris, William
W. Harris and June H. 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 entity of which any of the foregoing owns (a) more than fifty percent
(50%) of the voting stock or other voting interests and (b) stock or other
interests representing more than fifty percent (50%) of the total value of the
stock or other interests of such entity.
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ARTICLE VI
Dividend Equivalent Amounts
Whenever dividends (other than dividends payable only in shares of stock)
are paid with respect to Common Stock, each participant shall be paid an amount
in cash equal to the number of his or her vested RSUs multiplied by the dividend
value per share. In addition, each participant's account shall be credited with
an amount equal to the number of such participant's nonvested RSUs multiplied by
the dividend value per share. Amounts credited with respect to each nonvested
RSU shall be paid, without interest, on the earlier of the date the participant
becomes vested in such RSU, or when the participant receives payment for his or
her nonvested RSUs pursuant to Section 5.4 of the Plan.
ARTICLE VII
Designation of Beneficiary
Upon the death of a participant, his or her account shall be paid to the
beneficiary or beneficiaries designated by him or her. If there is no designated
beneficiary, or no designated beneficiary surviving at a participant's death,
payment of a participant's account shall be made to his or her estate.
Beneficiary designations shall be made in writing. A participant may designate a
new beneficiary or beneficiaries at any time by notifying the Committee.
ARTICLE VIII
Shares Available Under the Plan
The aggregate maximum number of shares of Common Stock reserved and
available for issuance under the Plan shall be 250,000 shares of Common Stock.
For purposes of this limitation, the shares of Common Stock underlying any RSUs
that are canceled shall be added back to the shares of Common Stock available
for issuance under the Plan. Such shares may be shares of original issuance or
treasury shares or a combination of the foregoing.
ARTICLE IX
Adjustments
The Committee may make or provide for such adjustments in the numbers of
shares of Common Stock covered by outstanding RSUs granted hereunder, in the
Price of each RSU, and in the kind of shares covered thereby, as the Committee,
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.
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Moreover, in the event of any such transaction or event, the Committee, 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 Committee may also make or provide for
such adjustments in the numbers of shares specified in Article VIII of the Plan
as the Committee in its sole discretion, exercised in good faith, may determine
is appropriate to reflect any transaction or event described in this Article IX.
ARTICLE X
Amendment or Termination of the Plan
The Company reserves the right to amend or terminate the Plan at any time,
by action of its Board, provided that no such action shall adversely affect a
participant's rights under the Plan with respect to RSUs awarded before the date
of such action.
ARTICLE XI
Miscellaneous Provisions
11.1 Taxes. To the extent that the Company is required to withhold
Federal, state or local taxes in connection with any component of a
participant's compensation in cash or shares of Common Stock, and the amounts
available to the Company for such withholding are insufficient, it shall be a
condition to the receipt of any shares of Common Stock that the participant make
arrangements satisfactory to the Company for the payment of the balance of such
taxes required to be withheld, which arrangement may include relinquishment of
the shares of Common Stock. The Company and a participant may also make similar
arrangements with respect to payment of any other taxes derived from or related
to the payment of shares of Common Stock with the respect to which withholding
is not required.
11.2 Hardship Distributions. Prior to the time a participant's account
becomes payable, the Committee, in its sole discretion, may elect to distribute
all or a portion of any vested RSUs in the participant's account in the event
such participant requests a distribution on account of severe financial
hardship. For purposes of this Plan, severe financial hardship shall be deemed
to exist in the event the Committee determines that a participant needs a
distribution to meet immediate and heavy financial needs resulting from a sudden
or unexpected illness or accident of the participant or a member of his or her
family, loss of the participant's property due to casualty, or other similar
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the participant. A distribution based on financial
hardship shall not exceed the amount required to meet the immediate financial
need created by the hardship.
11.3 Assignment. No right or interest of any participant (or any person
claiming through or under such participant, other than the surviving spouse of
such participant after the participant is deceased) in any benefit or payment
herefrom shall be assignable or transferable in any manner or be subject to
alienation, anticipation, sale, pledge, encumbrance or other legal process or in
any manner be liable for or subject to the debts or liabilities of such
participant. If
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any participant or any such person (other than the surviving spouse of such
participant after the participant is deceased) shall attempt to or shall
transfer, assign, alienate, anticipate, sell, pledge or otherwise encumber his
or her benefits hereunder or any part thereof, or if by reason of his or her
bankruptcy or other event happening at any time such benefits would devolve upon
anyone else or would not be enjoyed by him or her, then the Committee, in its
discretion, may terminate his or her interest in any such benefit to the extent
the Committee considers necessary or advisable to prevent or limit the effects
of such occurrence. Termination shall be effected by filing a written
"termination declaration" with the Committee records and making reasonable
efforts to deliver a copy to such participant or other person or his or her
legal representative.
As long as any individual whose interests hereunder are subject to a
termination declaration is alive, any benefits affected by the termination shall
be retained by the Company and, in the Committee's sole and absolute judgment,
may be paid to or expended for the benefit of such individual, his or her
spouse, his or her children or any other person or persons in fact dependent
upon him or her in such a manner as the Committee shall deem proper. Upon the
death of any individual, all benefits withheld from him or her and not paid to
others in accordance with the preceding sentence shall be distributed to such
individual's estate or to his or her creditors and if such individual shall have
descendants, including adopted children, then living, distribution shall be made
to such individual's then living descendants, including adopted children, per
stirpes.
11.4 Unfunded and Unsecured. The Plan shall at all times be entirely
unfunded, and no provision shall at any time be made with respect to segregating
assets of the Company (including Common Stock) for payment of any amounts or
issuance of any shares of Common Stock hereunder. No participant or other person
shall have any interest in any particular assets of the Company (including
Common Stock) by reason of the right to receive payment under the Plan, and any
participant or other person shall have only the rights of a general unsecured
creditor of the Company with respect to any rights under the Plan.
11.5 Governing Law. The terms of the Plan shall be governed construed,
administered and regulated in accordance with the laws of the State of Ohio.
11.6 Effective Date. The Plan shall become effective as of August 26,
1999.
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Appendix C
PENTON MEDIA, INC.
SENIOR EXECUTIVE BONUS PLAN
1. Purpose. The purpose of the Senior Executive Bonus Plan (the "Plan")
is to attract and retain key executives for Penton Media, Inc., a Delaware
corporation (the "Company"), and its Subsidiaries and to provide such persons
with incentives for superior performance. Incentive Bonus payments made under
the Plan are intended to constitute qualified "performance-based compensation"
for purposes of Section 162(m) of the Code, and Section 1.162-27 of the
Regulations, and the Plan shall be construed consistently with such intention.
2. Definitions. As used in this Plan,
"Board" means the Board of Directors of the Company.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Committee" means the Compensation Committee of the Board or any other
committee appointed by the Board to administer the Plan; provided,
however, that in any event the Committee shall be comprised of not
less than two directors of the Company, each of whom shall qualify as
an "outside director" for purposes of Section 162(m) of the Code and
Section 1.162-27(e)(3) of the Regulations.
"Common Stock" means (i) shares of the common stock, par value $.01,
of the Company and (ii) any security into which Common Stock may be
converted by reason of any corporate capital transaction.
"Eligible Executive" means the Company's Chief Executive Officer and
each other executive officer of the Company that the Committee
determines is, or is likely to become, a "covered employee" of the
Company within the meaning of Section 162(m) of the Code and Section
1.162-27(c)(2) of the Regulations.
"Incentive Bonus" shall mean, for each Eligible Executive, a bonus
opportunity amount determined by the Committee pursuant to Section 5
below.
"Management Objectives" means the achievement of a performance
objective or objectives established pursuant to this Plan for Eligible
Executives. Management Objectives may be described in terms of
Company-wide objectives or objectives that are related to the
performance of the individual Eligible
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Executive or of the Subsidiary, division, department or function
within the Company or Subsidiary in which the Eligible Executive is
employed. The Management Objectives shall be limited to specified
levels of or growth in:
(i) return on invested capital;
(ii) earnings per share;
(iii) net earnings;
(iv) operating profit;
(v) pre-tax profit;
(vi) after-tax cash flow per share;
(vii) business unit contribution profit;
(viii) earnings before interest expense, income tax expense,
depreciation and amortization;
(ix) total shareholder return (including relative to an index);
(x) return on assets;
(xi) return on equity;
(xii) sales growth; and/or
(xiii) productivity improvement.
"Regulations" mean the Treasury Regulations promulgated under the
Code, as amended from time to time.
"Subsidiary" means a corporation, partnership, joint venture,
unincorporated association or other entity in which the Company has a
direct or indirect ownership or other equity interest.
3. Administration of the Plan. The Plan shall be administered by the
Committee, which shall have full power and authority to construe, interpret and
administer the Plan and shall have the exclusive right to establish Management
Objectives and the amount of Incentive Bonus payable to each Eligible Executive
upon the achievement of the specified Management Objectives.
4. Eligibility. Eligibility under this Plan is limited to Eligible
Executives designated by the Committee in its sole and absolute discretion.
5. Awards.
(a) Not later than the 90th day of each fiscal year of the Company,
the Committee shall establish the Management Objectives for each Eligible
Executive and the amount of Incentive Bonus payable (or formula for
determining such amount) upon full achievement of the specified Management
Objectives. The Committee may further specify in respect of the specified
Management Objectives a minimum acceptable level of achievement below which
no Incentive Bonus payment will be made and shall set forth a formula for
determining the amount of any payment to be made if performance is at or
above the minimum acceptable level but falls short of full achievement of
the specified Management Objectives. The Committee may not modify any
terms of awards
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established pursuant to this section, except to the extent that after such
modification the Incentive Bonus would continue to constitute qualified
"performance-based compensation" for purposes of Section 162(m) of the
Code.
(b) The Committee retains the discretion to reduce the amount of any
Incentive Bonus that would be otherwise payable to an Eligible Executive
(including a reduction in such amount to zero).
(c) Notwithstanding any other provision of the Plan to the contrary,
in no event shall the Incentive Bonus paid to an Eligible Executive under
the Plan for a year exceed $2,000,000.
6. Committee Certification. As soon as reasonably practicable after the
end of each fiscal year of the Company, the Committee shall determine whether
the Management Objective has been achieved and the amount of the Incentive Bonus
to be paid to each Eligible Executive for such fiscal year and shall certify
such determinations in writing. The Committee at such time shall further
specify, at its discretion, whether the amount of Incentive Bonus shall be paid
in cash, shares of Common Stock or a combination thereof. To the extent an
Incentive Bonus is paid in shares of Common Stock, the number of shares of
Common Stock shall be based on the closing price of Common Stock on the New York
Stock Exchange on the date of Committee certification. The Company shall not be
required to issue any fractional shares of Common Stock pursuant to this Plan,
and any fractional shares of Common Stock shall be settled in cash.
7. Payment of Incentive Bonuses. Subject to a valid election made by an
Eligible Executive with respect to the deferral of all or a portion of his or
her Incentive Bonus, including any such deferral into the Company's Management
Stock Purchase Plan, Incentive Bonuses shall be paid within 30 days after
written certification pursuant to Section 6.
8. No Right to Bonus or Continued Employment. Neither the establishment
of the Plan, the provision for or payment of any amounts hereunder nor any
action of the Company, the Board or the Committee with respect to the Plan shall
be held or construed to confer upon any person (a) any legal right to receive,
or any interest in, an Incentive Bonus or any other benefit under the Plan or
(b) any legal right to continue to serve as an officer or employee of the
Company or any Subsidiary of the Company.
9. Withholding. The Company shall have the right to withhold, or require
an Eligible Executive to remit to the Company, an amount sufficient to satisfy
any applicable federal, state, local or foreign withholding tax requirements
imposed with respect to the payment of any Incentive Bonus.
10. Nontransferability. Except as expressly provided by the Committee,
the rights and benefits under the Plan shall not be transferable or assignable
other than by will or the laws of descent and distribution.
C-3
11. Effective Date. Subject to its approval by the shareholders, this
Plan shall become effective for bonuses earned in years beginning with the year
2000 and shall remain effective until the fifth anniversary of the date of such
approval, subject to any further shareholder approvals (or reapprovals) mandated
for performance-based compensation under Section 162(m) of the Code, and subject
to the right of the Board to terminate the Plan, on a prospective basis only, at
any time.
C-4
Penton Media, Inc.
This Proxy Is Solicited on Behalf of the Board of Directors
For The Annual Meeting of Stockholders to be Held on May 5, 2000
Thomas L. Kemp, Joseph G. NeCastro and Preston L. Vice (each with full power of
substitution) are hereby authorized to vote all the shares of Common Stock which
the undersigned would be entitled to vote if personally present at the annual
meeting of stockholders of Penton Media, Inc. to be held on May 5, 2000, and at
any adjournment thereof, as follows on the reverse side and below. The shares
represented by this proxy will be voted as directed on the reverse side, but
if no direction is given, the shares will be voted FOR the election as directors
of the named nominees and FOR each of items 2-6, inclusive.
YOUR VOTE IS IMPORTANT! PLEASE MARK, SIGN AND DATE THIS PROXY
ON THE REVERSE SIDE AND RETURN IT PROMPTLY
IN THE ACCOMPANYING ENVELOPE.
(Continued and to be signed on reverse side.)
................................................................................
FOLD AND DETACH HERE
Penton Media, Inc.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY.
1. Elect Directors -- For Withheld For All
Nominees: P. Brown, R. Greene, J. Meehan, All All Except
D. Nussbaum, D. Ramella, W. Summers. [_] [_] [_]
___________________________________________
(Except nominee(s) written above) For Against Abstain
2. Approve the Employee Stock Purchase Plan. [_] [_] [_]
3. Approve the Management Stock Purchase For Against Abstain
Plan.
[_] [_] [_]
4. Approve the Senior Executive Bonus Plan. For Against Abstain
[_] [_] [_]
5. Approve the Senior Executive Loan Program. For Against Abstain
[_] [_] [_]
6. Approve the appointment of independent For Against Abstain
accountants for fiscal year 2000.
[_] [_] [_]
7. Transact such other business as may properly be brought before the meeting.
NOTE: Please sign exactly as your name appears. Joint owners should each sign
personally. Where applicable, indicate your official position or
representation capacity.
The undersigned acknowledges receipt of the Notice of Annual Meeting of
Stockholders and of the Proxy Statement.
Date____________, 2000 Signature(s) ________________________________
_____________________________________________
- --------------------------------------------------------------------------------
- FOLD AND DETACH HERE -
YOUR VOTE IS IMPORTANT
PLEASE VOTE, SIGN, DATE AND RETURN THIS PROXY FORM PROMPTLY USING THE ENCLOSED
ENVELOPE.