<PAGE>

                                                                    EXHIBIT 10.3

                              EMPLOYMENT AGREEMENT
                              --------------------

     THIS EMPLOYMENT AGREEMENT (the "Agreement") is made and entered into as of
September 1, 1999 by and between Advanstar, Inc., a Delaware corporation (the
"Company") and James M. Alic ("Executive").

     WHEREAS, the Company currently operates certain trade exposition and
publishing businesses; and

     WHEREAS, the Company wishes to continue to employ Executive and Executive
is prepared to continue to serve in those capacities required by the Company.

     NOW, THEREFORE, the parties agree as follows:

     1.  Position and Authority. The Company agrees to employ the Executive, and
         ----------------------
the Executive accepts such employment and agrees to serve the Company as Vice
Chairman of the Company and any of its respective Subsidiaries as may from time
to time be requested by the Company, for the compensation and benefits detailed
in Sections 3 and 4 hereof. It is understood that the Executive will report to
the Chief Executive Officer of the Company. During the Employment Term, the
Company shall nominate Executive, and shall use its commercially reasonable best
efforts to cause Executive to be elected, to the Board of Directors. A
"Subsidiary" shall be any company in which the Company beneficially owns more
than 50% of the voting power of such company's outstanding voting securities.

     2.  Duties.  Executive shall devote substantially all of his business time
         ------
(subject to four weeks of vacation, or such greater amount as is authorized by
the Board of Directors) to the affairs of the Company during the employment
term, except as may be consented to by the Board of Directors. Notwithstanding
the foregoing, to the extent that it does not materially interfere with the
performance of his duties, Executive may devote such business time as is
reasonably necessary to his duties as a director of not more than two business
corporations not affiliated with the Company, and Executive may devote business
time to any charitable or not-for-profit activities. Executive shall perform
such duties and responsibilities as the Board of Directors or Chief Executive
Officer of the Company may reasonably determine from time to time, provided that
such duties and responsibilities are consistent with Executive's position as
Vice Chairman of the Company and do not diminish Executive's authority as set
forth in Section 1 hereof. Executive will not be required to relocate his
permanent residence .

     3.  Base Compensation and Bonus.
         ---------------------------

         (a)   Base Composition.  Executive will be compensated at a base salary
               ----------------
rate of $400,000 per year (or such higher rate as may be set from time to time
by the Board of Directors in its discretion) during the employment term.  Base
compensation will be paid in installments on the same schedule as the Company's
Subsidiaries generally pay their employees.  All

                                       1
<PAGE>

compensation and benefits will be subject to reduction by all federal, state,
local and other withholdings and similar taxes and payments required by
applicable law.

         (b)   Bonus for any Fiscal Year.  The Executive shall receive bonus
               -------------------------
compensation based on the relationship between the Company's actual earnings
before interest, taxes, depreciation and amortization and non-cash compensation
expense ("EBITDA") for each fiscal year starting with the fiscal year ending
December 31, 1999 (determined based on the Company's audited financial
statements for such fiscal year) and the EBITDA set for such year in the Company
"Adjusted Business Plan" (as defined below) as follows:

<TABLE>
<CAPTION>
              Actual EBITDA                  Bonus
              as a Percentage                (as a Percentage
              of Plan                        of Base Salary
              ---------------                ----------------
              <S>                            <C>
              Less than 80%                  No bonus
              100%                           50% of Base Salary
              120% or More                   100% of Base Salary
</TABLE>

If actual EBITDA as a percentage of the Company's Adjusted Business Plan falls
between 80% and 120%, the amount of bonus shall be pro rated on a straight-line
basis.  In no case shall bonus payable under this Section 3(b) exceed 100% of
Base Salary unless agreed to by the Board of Directors in its absolute
discretion.  Nothing herein shall be construed to prohibit or restrict the
Company from paying additional compensation to Executive if the Board of
Directors so determines in its absolute discretion.

         The "Adjusted Business Plan" shall be the Company's business plan for
the fiscal year in question as approved by the Board of Directors with the
consent of the Chief Executive Officer of the Company, appropriately adjusted
for acquisitions or dispositions during the year as determined by the Board of
Directors in good faith.  If the Board and the Chief Executive Officer do not
adopt a mutually satisfactory business plan prior to the beginning of any fiscal
year, the business plan for purposes of this Section 3(b) shall be the last
business plan submitted by the Company to its lenders, subject to adjustment as
provided above for acquisitions and dispositions occurring after the date
thereof.

         Any bonus payable under this Section 3(b) shall be paid not later than
60 days after the applicable fiscal year end.

     4.  Benefits.
         --------

         (a)   During Executive's employment by the Company, Executive will
receive the same (or substantially similar) employee benefits to those provided
by the Company or its Subsidiaries to other members of senior management from
time to time.

                                       2
<PAGE>

         (b)   During and after the employment term the Company agrees that if
Executive is made a party, or compelled to testify or otherwise participate in,
any action, suit or proceeding (a "Proceeding"), by reason of the fact that he
is or was a director or officer of the Company or any of its Subsidiaries,
Executive shall be indemnified by the Company as provided in Section 145 of the
Delaware General Corporation Law or (but not to any lesser extent) as authorized
by the Company's certificate of incorporation or bylaws or resolutions of the
Company's Board of Directors against all cost, expense, liability, damage and
loss reasonably incurred or suffered by Executive in connection therewith, and
such indemnification shall continue as to Executive even if he has ceased to be
a director or officer of the Company or Subsidiary for the period of any
applicable statute of limitations or, if longer, for the period in which any
such Proceeding which commenced within the period of any such statute of
limitations is pending.  The Company shall advance to Executive all reasonable
costs and expenses incurred by him in connection with a Proceeding within 20
days after receipt by the Company of a written request for such advance.  Such
request shall include an itemized list of the costs and expenses and an
undertaking by Executive to repay the amount of such advance if it shall
ultimately be determined, in a final judgment for which the time to appeal has
expired, that, pursuant to applicable law, he is not entitled to be indemnified
against such costs and expenses.

         (c)   The Company will reimburse Executive for his reasonable and
customary business expenses, including travel, accommodations and meals.

         Such reimbursement shall include the reasonable cost of travel to and
from Boston, Cleveland and other Company offices and accommodations and meals
when outside of his residence location.

     5.  Reserved.
         --------

     6.  Term.  This Agreement shall have a term equal to the period from the
         ----
Effective Date through May 31, 2003 (the "Employment Term"), provided that
                                                             --------
Sections 9 and 10 shall survive such expiration in accordance with their terms.

     7.  Termination.
         -----------

         (a)   This Agreement may be terminated by the Company at any time for
Cause upon written notice to Executive, which notice shall specify the reason
for termination.  Such notice shall be given at any time prior to termination in
the case of matters described in clauses (B) or (C), and shall be given not less
than 30 days prior to the date of termination, in the case of matters described
in clauses (A), (D) or (E), and in the case of matters described in clauses (A),
(D) or (E) shall be rescinded if the Executive cures any misconduct, negligent
act, breach or failure giving rise to such notice to the reasonable satisfaction
of the Board of Directors, including curing any damage suffered by the Company
as a result thereof.  As used herein, "Cause" shall mean (A) willful misconduct
or gross negligence by Executive in respect of his material obligations under
this Agreement, (B) conviction of a felony involving moral turpitude, (C) theft
of Company property or other disloyal or dishonest conduct of the Executive that
materially harms the Company or its business or (in the case of dishonest
conduct) undermines

                                       3
<PAGE>

the confidence of the Board of Directors, (D) willful breach of this Agreement,
or (E) willful failure to observe Company policies or carry out the directives
of the Board of Directors.

         (b)   Executive may terminate this Agreement for Good Reason by giving
thirty (30) days prior written notice to the Company. "Good Reason" shall exist
only if (i) Executive is removed or is not re-appointed as the Company's Vice
Chairman, except in connection with termination of this Agreement by the Company
for Cause or due to death or Disability (as defined below), (ii) Executive is
assigned duties, or authority is withdrawn from Executive, inconsistent with
Executive's authority pursuant to Section 1, without Executive's express written
consent, (iii) breach by the Company of any material obligation of the Company
under this Agreement, (iv) Hellman & Friedman and its affiliates shall cease to
beneficially own, directly or indirectly, at least 50% of the voting securities
of the Company, and another person or group (as defined in Section 13 of the
Securities Exchange Act) beneficially owns greater than 50% of such voting
securities or (v) Robert Krakoff ceases to be Chief Executive Officer of the
Company and Executive is not appointed Chief Executive Officer of the Company.

         (c)   Should the Executive terminate this Agreement for Good Reason, or
should the Company terminate this Agreement without Cause, then the Executive
shall be entitled to receive, for a period of one year, the salary and the
benefits provided for in Section Sections 3 and 4 hereof, provided that any
bonus under Section 3(b) will be payable only with respect to that portion of
the fiscal year in which Executive's employment was terminated (or any prior
fiscal year for which bonus remains unpaid)); bonus for any partial fiscal year
shall be determined by multiplying the bonus Executive would have received had
he continued to work for the Company during the entire fiscal year by a
fraction, the numerator of which is the number of days in the fiscal year during
which Executive was employed by the Company, and the denominator of which is 365
(such amount the "Pro Rata Bonus Amount").  If any such benefits cannot be
legally provided, or the provision thereof would disqualify any plan for
favorable tax treatment under the Internal Revenue Code, a financially
equivalent substitute shall be provided.  The Company shall have no obligation
to Executive under this Section 7(c) if Executive breaches the provisions of the
letter agreement referred to in Section 9.  This clause (c) shall not apply to a
termination under clause (d) below.

         (d)   This Agreement shall terminate automatically upon Executive's
death.  This Agreement may be terminated by the Company upon written notice to
Executive, or by Executive upon written notice to the Company, upon Executive's
Disability.  For purposes of this Agreement, "Disability" means the Executive's
suffering of a disability which shall have prevented him from performing his
obligations hereunder for a period of at least 120 consecutive days or 180 non-
consecutive days in any 365 day period.  In the event of termination of this
Agreement due to Executive's death or Disability, in addition to any salary due
to Executive as of the date of death or Disability and remaining unpaid,
Executive shall be entitled to receive, at such time as Executive would
otherwise would have received such sum, the Pro Rata Bonus Amount for the
portion of the fiscal year in which Executive's death or Disability occurred
during which Executive was employed by the Company.

                                       4
<PAGE>

         (e)   If the Company terminates this Agreement with Cause or if the
Executive terminates this Agreement without Good Reason, or if this Agreement is
terminated under clause (d) above, then the Executive shall, from the date of
such termination, no longer be entitled to any compensation under Sections 3 or
4 (other than, in the case of termination for Disability, disability benefits as
provided pursuant to Section 4 and, in the case of termination for death or
Disability, any bonus payable pursuant to clause (d) above).  Nothing in this
clause (e) shall affect Executive's rights under Company health and disability
plans in which Executive participates to the extent such plans provide for
benefits to be paid following the termination of employment.

         (f)   Termination of this Agreement shall not discharge any liability
(of either the Company or the Executive) existing at the date of termination.
Further, notwithstanding any termination, the provisions of Sections 9 and 10
shall survive in accordance with their terms.

         (g)   If Executive ceases to be employed by the Company for any reason,
Executive will resign from the Board of Directors if requested by the Company.

     8.  Effective Date.  This Agreement shall take effect as of the date hereof
         --------------
(the "Effective Date").

     9.  Non-Competition and Confidentiality.  Executive shall execute and
         -----------------------------------
deliver a letter agreement in the form of Exhibit A hereto.

     10. Arbitration.  Any claim arising out of or relating to this Agreement
         -----------
(including disputes regarding the presence or absence of "Cause" or "Good
Reason" in the event of a termination), or otherwise arising out of or relating
to the Executive's employment by the Company, will be subject to arbitration in
San Francisco, California (if brought by Executive) or Boston, Massachusetts (if
brought by the Company), in accordance with the Federal Arbitration Act and the
rules of the American Arbitration Association relating to commercial disputes.
The prevailing party in any such arbitration shall be entitled to recover from
the other party its reasonable expenses incurred in connection with such
arbitration, including the reasonable fees and expenses of counsel.

     11. Severability.  If any provision of this Agreement is determined to be
         ------------
invalid or unenforceable, it shall be adjusted rather than voided, to achieve
the intent of the parties to the extent possible, and the remainder of the
Agreement shall be enforced to the maximum extent possible.

     12. Entire Agreement.  This Agreement constitutes the entire agreement
         ----------------
between Executive and the Company with respect to the terms and conditions of
the employment of Executive by the Company, and, as of the Effective Date,
supersedes all prior or concurrent arrangements, discussions, agreements or
understandings with respect to the Executive's employment.

     13. Governing Law.  This Agreement shall be governed by the laws of
         -------------
California without regard to principles of conflicts of law.

                                       5
<PAGE>

     14.  Notice.  Any notice, or other written communication to be given
          ------
pursuant to this Agreement for whatever reason shall be deemed duly given and
received (a) if delivered personally, from the date of delivery, or (b) by
certified mail, postage pre-paid, return receipt requested, three (3) days after
the date of mailing, addressed to the above parties as follows:

     If to the Company:

          Advanstar, Inc.
          545 Boylston Street
          Boston, Massachusetts 02116
          Attn:  Board of Directors

          Hellman & Friedman LLC
          One Maritime Plaza
          Suite 1200
          San Francisco, California 94111
          Attn:  Mitchell R. Cohen

     with a copy to:

          Heller, Ehrman, White & McAuliffe
          333 Bush Street
          San Francisco, California 94101
          Attn:  Timothy G. Hoxie, Esq.

     If to Executive:

          James M. Alic
          6 Snowflake Lane
          Westport, Connecticut 06880

     with a copy to:

          Testa, Hurwitz & Thibeault, LLP
          High Street Tower
          125 High Street
          Boston, Massachusetts 02110
          Attn:  F. George Davitt, Esq.


                  [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                       6
<PAGE>

     IN WITNESS WHEREOF, the parties hereto have executed this Agreement the
date and year first above written.

                              ADVANSTAR, INC.


                              By: /S/ Robert L. Krakoff
                                  ---------------------
                                  Robert L. Krakoff
                                  Chairman of the Board and Chief Executive
                                  Officer



                              /S/ James M. Alic
                              -----------------
                              James M. Alic

                                       7
<PAGE>

                                                                       Exhibit A
                                                                       ---------

                                Advanstar, Inc.
                              545 Boylston Street
                                Boston, MA 02116

                               September 1, 1999


James M. Alic
6 Snowflake Lane
Westport, CT 06880

Dear Mr. Alic:

     You are to be employed by Advanstar, Inc. (the "Company" and, together with
its subsidiaries "Advanstar").  In consideration of your employment with the
Company, you and the Company agree as follows:

     1.  Non-Competition.  You agree that you will not, during the course of
         ---------------
your employment with the Company or for the Non-Compete Period following the
termination of such employment, compete with Advanstar, as defined in paragraph
4 below.  As used herein "Non-Compete Period" means (a) if your employment is
terminated by the Company without Cause (as defined therein) or by you for Good
Reason (as defined therein), six months or (b) if your employment is terminated
for any other reason, one year.

     2.  Confidentiality.  You acknowledge that your association with Advanstar
         ---------------
will bring you into close contact with many confidential affairs of Advanstar,
including information about costs, profits, markets, sales, publications, key
personnel, pricing policies, operational methods, other business affairs,
methods and other information not readily available to the public, and plans for
future development.  In recognition of the foregoing, you covenant and agree
that you will keep confidential all material confidential to Advanstar that is
not otherwise in the public domain and that you will not intentionally disclose
any such information to anyone outside Advanstar or make any use thereof for
your own benefit or for any purpose other than the advancement of the business
of Advanstar at any time except with the prior written consent of Advanstar as
evidenced by a certified resolution of the Board of Directors of the Company.
For purposes of this Agreement, the following information shall be deemed not to
constitute confidential information of Advanstar:

          (a) Any information developed independently by you;

          (b)  Information that was received by you from a third-party, which,
               to your knowledge, is not bound by an agreement of
               confidentiality with Advanstar; or

                                      A-1
<PAGE>

          (c)  Any information that is in the public domain or generally
               available to the public.

     3.  No Solicitation of Employees.  You covenant that during the Non-Compete
         ----------------------------
Period, you will not, and no person, corporation, partnership, or other entity
over which you exercise control (whether as an officer, director, sole
proprietor, holder, debt or equity securities, consultant, partner, or
otherwise) will, directly or indirectly (a) enter into any written or oral
agreement or understanding relating to the services of any person who is then
employed by Advanstar or, in the case of any employee other than secretaries,
clerks and similar employees fulfilling merely clerical functions, who has been
so employed within the preceding six months, or (b) solicit, or bid against
Advanstar in an attempt to be awarded, any trade show or exposition business, or
any publishing contract, from any party sponsoring or arranging any trade show
or exposition, or publishing or sponsoring any publication, in either case with
which Advanstar then has such a relationship or contract.

     4.  Certain Definitions.  For purposes of this Letter Agreement,
         -------------------
competition with Advanstar shall include carrying on any business that is
competitive with the business of Advanstar, in the United States or in any other
country in which Advanstar conducts business as of the termination of your
employment.  For purposes of this Letter Agreement, (a) the business of
Advanstar will be deemed to include (without limitation) the organization of
trade shows and expositions of the type and with respect to the industries held
by Advanstar as of the termination of your employment (it being understood that
industry shall be analogized to the categories of the category system of the
Standard Rate Data Service) and the publication (including electronic
publication) of trade journals and other magazines aimed at the particular
businesses, industries or professions (as defined by category according to the
category system of the Standard Rate Data Service) at which Advanstar's
operations are aimed, and (b) each of the following activities (without
limitation) will be deemed to constitute to carrying on business: to engage in,
work with, have interest in, advise, lend money to, guarantee the debts or
obligations of, or permit one's name or any part thereof to be used in
connection with, an enterprise or endeavor either individually, in partnership,
or in conjunction with any person, firm, association, company, or corporation,
whether as principal, agent, shareholder (other than holding of less than 1% of
the voting securities of any public company or 5% of the voting securities of
any private company), employee, director, consultant, or in any other capacity
or manner whatsoever.

     5.  Severability.  The scope and effect of the terms and provisions
         ------------
contained in this Letter Agreement (including the noncompetition covenant
contained in Section 1) will be as broad in time (but not beyond the time
periods specified herein), geography, and all other respects as is permitted by
applicable law.  If arbitrators, a court, or another body of competent
jurisdiction determine that any term or provision of this Agreement is excessive
in scope, then if possible such term or provision will be adjusted (rather than
voided) in accordance with the purpose stated in the preceding sentence and with
applicable law, but in such a manner as to minimize the change in the provision.
If such term or provision cannot be so adjusted, then it will be struck.  All
other terms and provisions of this Letter Agreement will be deemed valid and
enforceable to the full extent possible.

                                      A-2
<PAGE>

     6.  Remedies.  If any of the covenants or agreements in Sections 1, 2 or 3
         --------
are violated or threatened to be violated, you agree and acknowledge that such
violation or threatened violation will cause irreparable injury to Advanstar,
and that the remedy at law of Advanstar for any such violation or threatened
violation will be inadequate and that Advanstar will be entitled to obtain any
injunction prohibiting a continuance or occurrence of such violations or
threatened violations in addition to (not in limitation of) any other rights or
remedies available at law or in equity.  Your services hereunder are of a
special, unique, unusual, extraordinary character which gives them peculiar
value, the loss of which cannot be reasonably or adequately computed in damages.

     The provisions of this Letter Agreement will be binding upon and inure to
the benefit of our respective heirs, executives, administrators, successors and
assigns.  This Letter Agreement will be governed by and construed in accordance
with the laws of the Commonwealth of Massachusetts.  If there is any conflict
between the provisions of this letter agreement and the provisions of any other
agreement between you and the Company in respect of the subject matter hereof,
the provisions of this agreement shall govern.


                              Very truly yours,

                              ADVANSTAR, INC.


                              By: /S/ Robert L. Krakoff
                                  ---------------------
                                  Robert L. Krakoff
                                  Chairman of the Board and Chief Executive
                                  Officer

ACCEPTED AND AGREED:


/S/ James M Alic
----------------
James M. Alic

                                      A-3