This EMPLOYMENT AGREEMENT ("AGREEMENT") is
made and entered into as of the 17 day of November,
1999, by and between Weekly Reader Corporation, a
Delaware corporation (the "COMPANY"), and ▇▇▇▇ ▇▇▇▇▇,
an individual resident of the State of Connecticut
(the "EXECUTIVE").
WHEREAS the Company wishes to employ Executive, and
Executive wishes to accept such employment, on the following terms and
conditions, effective as of the Closing Date (as defined in the Redemption,
Stock Purchase and Recapitalization Agreement dated as of August 13, 1999, as
amended (the "PURCHASE AGREEMENT"), between PRIMEDIA Inc. and WRC Media Inc.
(formerly named EAC II Inc.), a Delaware corporation ("WRC Media");
NOW, THEREFORE, in consideration of the mutual covenants
contained herein and intending to be legally bound hereby, the parties hereby
agree as follows:
SECTION 1. EMPLOYMENT. The Company hereby employs Executive
and Executive accepts employment by the Company, on the terms and conditions
contained in this Agreement.
SECTION 2. TERM. The employment of Executive pursuant
hereto shall commence on the Closing Date and shall remain in effect until
December 31, 2001 unless terminated by Executive upon 30 days prior written
notice to the Company or by the Company upon 30 days prior written notice to
Executive. The period of time between the Closing Date and the termination of
this Agreement pursuant to its terms is herein referred to as the "TERM". The
Term shall be automatically renewed for successive one-year periods unless,
at least 90 days prior to any applicable expiration date, either party gives
written notice to the other party that such party does not wish to renew.
SECTION 3. DUTIES AND EXTENT OF SERVICE; PLACE OF
PERFORMANCE. During the Term, Executive shall serve the Company as Vice
President and Group Product Director, Secondary, and shall perform duties and
exercise authority commensurate with such role. Executive shall initially
report to ▇▇▇▇▇ ▇. ▇▇▇▇▇▇. Executive shall devote Executive's full business
time and best
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efforts to the performance of Executive's duties hereunder and to the
business of the Company and its direct and indirect subsidiaries. Except as
mutually agreed upon by Executive and the Company, the Company shall not
materially diminish Executive's position at the Company without Good Cause
(as defined in Section 11). During the Term, Executive shall continue to be
employed at the location at which he is employed as of the Closing Date or at
another location within 30 miles thereof as the Company, in its sole
discretion, shall determine.
SECTION 4. BASE SALARY. During the Term, Executive shall be
paid a base salary (the "BASE SALARY"), payable in bi-weekly installments at
the end of every two weeks, at a rate of $114,800 per annum (the "INITIAL
SALARY") subject to annual review; PROVIDED that Executive's Base Salary
shall not be reduced below the Initial Salary.
SECTION 5. BONUS. Executive shall continue to be eligible
to receive any annual bonus for the 1999 calendar year which may be payable
to Executive under the short-term executive incentive compensation plan
currently applicable to Executive in accordance with the terms of Executive's
bonus letter from the Company (the "BONUS LETTER"), a copy of which is
attached hereto. Bonuses for future years during the Term shall be set by the
Company annually based on reasonable criteria communicated to Executive. Such
criteria shall be comparable to the criteria currently set forth in the Bonus
Letter. Target bonuses shall not be less than the target bonus set forth in
the Bonus Letter.
SECTION 6. FRINGE BENEFITS. Executive shall be entitled to
participate, to the extent eligible, in such medical, dental, disability,
life insurance, deferred compensation, retirement and other benefit plans as
the Company shall maintain for the benefit of employees generally, on the
terms and subject to the conditions set forth in such plans, which plans
shall be comparable in the aggregate to those plans in effect for Executive
as of the date hereof. Executive shall also be entitled to vacation time and
sick leave in accordance with the Company's policies in existence immediately
prior to the Closing and as applied to Executive immediately prior to the
Closing.
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SECTION 7. EXPENSES. Upon receipt from Executive of expense
vouchers and other documentation reasonably requested by the Company, the
Company shall reimburse Executive promptly for all reasonable expenses
incurred by Executive in accordance with the Company's policies and
procedures in connection with Executive's duties and responsibilities
hereunder.
SECTION 8. EQUITY INVESTMENT. From the date of the Closing
to December 15, 1999, Executive may elect to purchase up to $10,000 of Common
Stock, par value $0.01 per share ("WRC MEDIA COMMON STOCK"), of WRC Media
from EAC IV L.L.C. at a purchase price of $18.60065 per share in cash. If
Executive purchases any such shares, Executive will enter into a shareholder
agreement among WRC Media, EAC III L.L.C. and certain other executives of the
Company and its affiliates in the form previously agreed to by such parties.
If Executive so elects, up to one half of Executive's purchase of WRC Media
Common Stock may be financed with a personal loan guaranteed by the Company
on commercially reasonable terms. The Company shall make reasonable efforts
to arrange and guarantee such loan.
SECTION 9. NONSOLICITATION. (a) In the event that
Executive's employment with the Company is terminated by the Company for any
reason, then during the period beginning on the Closing Date and ending on
the date that is 12 months after the date of termination of Executive's
employment and to the fullest extent permitted under applicable law,
Executive agrees that Executive shall not, directly or indirectly, solicit or
attempt to solicit any business from any customers or clients of the Company,
including actively sought prospective customers or clients, in connection
with any Competing Publication or Product Line (as defined on Schedule I).
During the period beginning on the Closing Date and ending on the date that
is 24 months after the date of termination of Executive's employment with the
Company and to the fullest extent permitted under applicable law, Executive
agrees that Executive shall not, directly or indirectly, other than as an
employee of the Company, solicit, recruit or hire any employees of or persons
who have worked for the Company, other than secretaries, during the
twelve-month period prior to termination of Executive's employment or solicit
or encourage any such employee of the Company to leave the employment of the
Company.
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(b) If a judicial determination is made that any of the
provisions of this Section 9 constitutes an unreasonable or otherwise
unenforceable restriction against Executive, the provisions of such Section
shall be rendered void only to the extent that such judicial determination
finds such provisions to be unreasonable or otherwise unenforceable.
SECTION 10. NONDISCLOSURE. The parties hereto agree that
during the course of Executive's employment by the Company, Executive will
have access to, and will gain knowledge with respect to, the Companies'
Confidential Information (as defined below). The parties acknowledge that
unauthorized disclosure or misuse of such Confidential Information would
cause irreparable damage to the Companies. Accordingly, Executive agrees that
Executive shall not (except as may be required by law), without the prior
written consent of the Company during Executive's employment with the Company
under this Agreement, and any extension or renewal hereof, and thereafter for
a period ending on the fifth anniversary of the date of termination of
Executive's employment with the Company, use or disclose, or knowingly permit
any unauthorized person to use, disclose or gain access to, any Confidential
Information; PROVIDED that Executive may disclose Confidential Information to
a person to whom disclosure is reasonably necessary or appropriate in
connection with the performance by Executive of Executive's duties under this
Agreement. Upon termination of this Agreement for any reason, Executive shall
return to the Company the original and all copies of all documents and
correspondence in Executive's possession relating to the business of any of
the Companies or any of their affiliates, including but not limited to all
Confidential Information, and shall not be entitled to any lien or right of
retention in respect thereof. Upon termination of this Agreement for any
reason, Executive shall be entitled to remove all documents and
correspondence of a purely personal nature. For purposes of this Agreement,
"CONFIDENTIAL INFORMATION" shall mean all business information (whether or
not in written form) which relates to any of the Companies, any of their
affiliates or their respective businesses or products and which is not known
to the public generally, including but not limited to technical information
or reports; trade secrets; unwritten knowledge and "know-how"; operating
instructions; training manuals; customer lists; customer buying records and
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habits; product sales records and documents, and product development,
marketing and sales strategies; market surveys; marketing plans;
profitability analyses; product cost; long-range plans; information relating
to pricing, competitive strategies and new product development; information
relating to any forms of compensation and other personnel-related
information; contracts; and supplier lists; PROVIDED that "Confidential
Information" shall not include general business know-how.
SECTION 11. SEVERANCE. If Executive's employment hereunder
is terminated upon a breach by the Company of this Agreement, by the Company
for any reason other than for Good Cause or by reason of a notice of
nonrenewal given by the Company, the Company shall pay to Executive as
severance pay a lump sum cash payment in an amount equal to Executive's Base
Salary for the year in which termination occurs. The Company shall also pay
to Executive any accrued and unpaid Base Salary owed to Executive for the
period prior to such termination, a prorated portion of Executive's Base
Salary for any accrued unused vacation time of Executive for the period prior
to such termination and any incurred but unpaid reimbursable expenses as
contemplated by Section 7. Additionally, in the event that any such
termination occurs more than six months after the beginning of any calendar
year, the Company shall pay to Executive a prorated portion of the Bonus that
Executive would have been entitled to for such calendar year puruant to
Section 5. Payment of such severance pay and other amounts will be made
within 30 days of such termination. For purposes of this Agreement, "GOOD
CAUSE" shall exist upon the occurrence of any of the following: (i) Executive
is convicted of, pleads guilty to, confesses to, or enters a plea of nolo
contendere to, any felony or any crime that involves moral turpitude or any
act of fraud, misappropriation or embezzlement; (ii) Executive has engaged in
a fraudulent act to the damage or prejudice of any of the Companies or any
affiliate of any of the Companies; (iii) any act or omission by Executive
involving malfeasance or gross negligence in the performance of Executive's
duties to the Company; (iv) Executive otherwise fails to comply in any
material respect with the terms of this Agreement or deviates in any material
respect from any reasonable written policies or reasonable directives of the
Board of Directors of the Company and, within 60 days after written notice
from the Company of such failure or deviation, Executive has not
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corrected such failure; or (v) the occurrence of the death or total
disability of Executive (total disability meaning the failure of Executive to
perform Executive's normal required services hereunder for a period of six
consecutive months during the term hereof by reason of Executive's mental or
physical disability, as determined by an independent physician reasonably
satisfactory to Executive and the Company).
SECTION 12. TERMINATION; SURVIVAL. This Agreement shall
terminate upon the earlier of (a) the termination of the Purchase Agreement
pursuant to its terms and (b) the termination of Executive's employment by
the Company. Notwithstanding the foregoing, Sections 9, 10 and 13 and, if
Executive's employment terminates in a manner giving rise to a payment under
Section 11, Section 11 shall survive the termination of this Agreement.
SECTION 13. MISCELLANEOUS. (a) This Agreement shall inure
to the benefit of and shall be binding upon Executive and Executive's
executor, administrator, heirs, personal representative and permitted assigns
and the Company and its successors and permitted assigns; PROVIDED that
Executive shall not be entitled to assign or delegate any of Executive's
rights or obligations hereunder without the prior written consent of the
Company.
(b) This Agreement shall be deemed to be made in, and in
all respects shall be interpreted, construed and governed by and in
accordance with, the laws of the State of New York, without regard to the
conflicts of law principles of such State. No provision of this Agreement or
any related document shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have
structured or drafted such provision.
(c) This Agreement constitutes the entire agreement between
the Company and Executive with respect to Executive's employment by the
Company after the Closing Date and, effective as of the Closing Date,
supersedes all prior agreements, whether written or oral, between them
relating to Executive's employment by the Company, including those agreements
set forth on Schedule II attached hereto, if any; PROVIDED that this
Agreement does not
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supersede the Bonus Letter. Effective as of the Closing Date, Executive
hereby releases the Company and its affiliates from any claims or rights
under such agreements, without any liability or other adverse consequence to
the Company, its affiliates or WRC Media and the Company hereby releases
Executive from any claims or rights under such agreements, without any
liability or other adverse consequence to Executive.
(d) All notices or other communications required or
permitted by this Agreement shall be made in writing and any such notice or
communication shall be deemed delivered when delivered in person, transmitted
by telecopier, or one business day after it has been sent by a nationally
recognized overnight courier, at the address for notices as follows:
(i) if to the Company,
Weekly Reader Corporation
c/o Ripplewood Holdings L.L.C.
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
(ii) if to Executive,
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
with a copy to:
▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Constant & ▇▇▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
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Communications by telecopier also shall be sent concurrently by overnight
courier, but shall in any event be effective as stated above. Each party may
from time to time change its address for notices under this Section 13(d) by
giving at least five days' notice of such changed address to the other
parties hereto.
(e) This Agreement may be executed in one or more
counterparts, all of which shall be considered one and the same agreement,
and shall become effective when one or more of the counterparts have been
signed by each of the parties and delivered to the other parties, it being
understood that all parties need not sign the same counterpart.
(f) The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(g) No failure or delay by Executive or the Company in
exercising any right or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power, or any
abandonment of any steps to enforce such a right or power, preclude any other
or further exercise thereof or the exercise of any other right or power.
Neither this Agreement nor any provision hereof may be waived, amended or
modified except pursuant to an agreement in writing entered into by Executive
and the Company.
(h) Any controversy, dispute or claim arising out of, in
connection with, or in relation to the interpretation, performance,
non-performance, validity or breach of this Agreement or otherwise arising
out of, or in any way related to, this Agreement shall be determined, at the
request of any party, by arbitration conducted in New York City, before and
in accordance with the then-existing Rules for Commercial Arbitration of the
American Arbitration Association, and any judgment or award rendered by the
arbitrator shall be final, binding and unappealable, and any judgment may be
entered by any state or Federal court having jurisdiction thereof. In its
award the arbitrator shall allocate, in its discretion, among the parties to
the arbitration all costs of the arbitration, including the fees and expenses
of the arbitrator and reasonable attorneys' fees, costs and expert witness
expenses of the
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parties. The Company shall pay for all reasonable travel expenses (including
transportation, lodging and meals) incurred by Executive in connection with
any arbitration session.
(i) All amounts paid hereunder will be net of any
applicable withholdings required by existing or future tax laws.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
Weekly Reader Corporation,
by /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Secretary
/s/ ▇▇▇▇ ▇▇▇▇▇
--------------------------------
▇▇▇▇ ▇▇▇▇▇