THE MILLBROOK PRESS INCORPORATED
00X Xxxx Xxxxxx
Xxxxxxxxxxx, Xxx Xxxx 00000
August 1, 1998
Mr. Xxxx Xxxxxx
0 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxx. 00000
Dear Xx. Xxxxxx:
Upon the terms and subject to the conditions set forth below, this
letter shall constitute the agreement pursuant to which The Millbrook Press
Incorporated ("Millbrook") agrees to employ you as Chief Executive Officer.
1. TERM OF EMPLOYMENT.
1.1 TERM. Millbrook hereby employs you, and you hereby accept
employment with Millbrook, for a period of two years commencing August 1, 1998
unless sooner terminated in accordance with the provisions of Section 9 hereof.
1.2 FORMER AGREEMENT. Upon commencement of the term described
in paragraph 1.1, the employment agreement of September 27, 1996, as amended
December 13, 1996 (collectively the "Old Employment Agreement"), is deemed
terminated. After August 1, 1998, the Old Employment Agreement is of no further
force or effect and your employment will be based solely upon the terms of this
Employment Agreement (the "Agreement").
1.3 DEFINITION. As used herein, "Employment Term" means the
entire period of your employment by Millbrook hereunder, whether for the period
provided above, or whether sooner terminated in accordance with the provisions
of Section 9 hereof.
2. DUTIES.
2.1 DESCRIPTION OF DUTIES. In your capacity as Chief Executive
Officer, you shall perform such duties and exercise such authority, consistent
with your position, as may from time to time be given to you by the Board of
Directors of Millbrook (the "Directors"). You shall have the responsibility for
the supervision of the day-to-day operations of Millbrook.
2.2 DEVOTION OF ENTIRE TIME. During the Employment Term, you
agree that you will loyally and conscientiously devote your entire productive
time, efforts, ability and attention to the duties of your office and to promote
the interests of Millbrook, and that you will not engage in any other business
duties or pursuits whatsoever. Notwithstanding any of the foregoing, you
will not be prohibited from making passive personal investments or being
involved in the private business affairs of your immediate family to the extent
that such activities do not interfere with the performance of your duties
hereunder and are not in any way competitive with the business of Millbrook.
3. COMPENSATION.
3.1 ANNUAL SALARY. During the Employment Term, you will be
compensated at a base salary at the rate of $200,000 per annum, payable in
accordance with the customary payroll policies of Millbrook; provided however,
that if, pursuant to Section 9.1, 9.2. or 9.3 hereof, your employment is
terminated prior to the end of the Employment Term, you will receive the
appropriate pro rata portion of your annual salary for the period during which
you are actually employed by Millbrook.
3.2 INCENTIVE COMPENSATION. You will be eligible annually to
earn incentive compensation equal to fifteen percent (15%) of your annual
salary. Such incentive compensation will be based on your meeting or exceeding
the annual budgeted amount of operating and net income as a percentage of sales.
The budgeted figures are those submitted by the Company to and approved by the
Board of Directors. Such submission and approval will be completed prior to July
15th of each year. Such incentive compensation shall be available provided you
complete each fiscal year. Neither full nor partial incentive compensation will
be paid unless your employment is continued through that date. The Board at its
discretion may provide additional compensation for exceeding the budgeted goals.
3.3 REIMBURSEMENT FOR BUSINESS EXPENSES. Millbrook will
reimburse you, upon presentation of proper expense statements or such other
supporting information as Millbrook may reasonably require, for your reasonable
and necessary business expenses (including, without limitation, telephone,
travel and entertainment expenses) incurred or paid by you in connection with
the performance of your duties hereunder.
4. FRINGE BENEFITS. You shall be entitled to participate on the
same basis and subject to the same qualifications as all other regular full time
executive employees of Millbrook in any fringe benefit plans Millbrook makes
available from time to time for all its employees, including those benefits
available, if any, under any vacation, retirement, disability, medical insurance
and life insurance plans as the same may be placed into effect from time to
time. In addition, you shall be entitled to participate in such other benefit
plans, if any, as Millbrook makes generally available from time to time to
members of its executive staff.
5. STOCK OPTIONS. The Options granted to you under Section 5 of
the Old Employment Agreement shall be modified to provide that
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(i) the Option Term (as defined in the Old Employment Agreement) shall be
extended for two years from the date hereof and (ii) the exercise price of the
Option shall be corrected to be $4.50 per share.
6. CHANGE OF CONTROL
6.1 ADDITIONAL OPTION. If prior to the expiration of the
Employment Term, there is a Change of Control (as defined hereinafter) you are
to be granted an additional Stock Option (the "Additional Option") for 100,000
immediately exercisable shares of stock at an exercise price of $4.00 per share.
The Additional Option will have provisions substantially similar to the terms
and conditions in Millbrook's Stock Option Plan and the Standard Stock Option
Agreement.
6.2 TERMINATION FOLLOWING A CHANGE OF CONTROL. If prior to the
Expiration of the Employment Term, there is a Change of Control (as defined
hereinafter) and thereafter any of the following occur: (i) this Employment
Agreement is, within one year of the anniversary date of such Change of Control,
terminated otherwise than by reason of cause as defined in paragraph 9.3; (ii)
within one week of the anniversary date of such Change of Control, you tender a
notice of resignation from your position as Chief Executive Officer; (iii) you
are placed in any position of lesser stature than that of Chief Executive
Officer of Millbrook; are assigned duties inconsistent with a Chief Executive
Officer or duties which, if performed, would result in a significant change in
the nature or scope of powers, authority, functions or duties inherent in such
positions on the date hereof; are assigned performance requirements or working
conditions which are at variance with the performance requirements and working
conditions in effect on the date hereof; or are accorded treatment on a general
basis that is in derogation of your stature as a Chief Executive Officer; (iv)
any breach of Sections 3 through 5, inclusive, of this agreement; or (v) any
requirement of Millbrook that the location at which you perform your principal
duties for Millbrook be outside a radius of 40 miles from the location which you
performed such duties immediately before the Change of Control, then this
Agreement is deemed to be terminated by Millbrook otherwise than by reason of
cause, and Millbrook shall pay you Severance Pay in an amount equal to your
annual salary for one year within five days after notice from you to such
effect.
6.3 DEFINITION. For the purposes of this agreement, a Change
of Control means the direct or indirect sale, lease, exchange or other transfer
to any entity, individual, or group of individuals of any number of shares of
capital stock which would then allow a stockholder or group of related
stockholders to (i) replace, appoint, or otherwise change a majority of the
Board of Directors (as compared to the Board of Directors at the beginning of
that fiscal year); or (ii) effect a substantial change in
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management, or there is a merger, consolidation, or combination of Millbrook
into or with another corporation or entity. Change of Control shall not include
any transfer of shares to an entity or group controlling 20% of Millbrook's
outstanding shares as of the date of this Agreement.
7. CONFIDENTIALITY.
7.1 TRADE SECRETS. You and Millbrook acknowledge and agree
that during the Employment Term and in the course of the discharge of your
duties hereunder, you will have access to and become acquainted with information
concerning the operation of Millbrook and other valuable information regularly
used in Millbrook's business and not generally known to others. You acknowledge
and agree that it is Millbrook's policy to maintain such information as secret
and confidential, whether relating to Millbrook's business as heretofore or
hereafter conducted, or relating to Millbrook's customers, clients, suppliers,
employees and other business associates (all such information being referred to
hereinafter as "Confidential Information"). You acknowledge and agree that all
Confidential Information is owned by Millbrook and constitutes Millbrook's trade
secrets.
7.2 NON-DISCLOSURE. You specifically agree that you shall not
use, publish, disseminate, misappropriate or otherwise disclose any Confidential
Information, whether directly or indirectly, either during the term of this
Agreement or at any other time thereafter, except as required by law or in the
course of your employment hereunder. This provision shall not apply to
Confidential Information which becomes generally known to the public by means
other than your breach of this Section.
7.3 UNFAIR COMPETITION. You acknowledge and agree that the
sale, unauthorized use or disclosure of any Confidential Information obtained by
you during the course of your employment under this Agreement, including but not
limited to (a) information concerning Millbrook's current, future or proposed
work, services, or products, (b) the fact that any such work, services or
products are planned, under consideration, or in production, as well as, (c) and
descriptions thereof, constitute unfair competition. You promise and agree not
to engage in any unfair competition with Millbrook, either during the term of
this Agreement or at any other time thereafter.
7.4 PRECAUTIONS; RETURN OF MATERIALS. You agree to take all
reasonable precautions to protect the integrity of all Confidential Information,
including all documents and other material entrusted to you containing or
embodying Confidential Information. You further agree that all files, records,
documents, and similar items relating to Millbrook's business, whether prepared
by you or by others, are and shall remain exclusively the property of Millbrook,
and that upon the expiration or termination
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of your employment hereunder you shall return to Millbrook all such material and
all copies thereof in your possession or control.
7.5 COPYRIGHTABLE AND PATENTABLE MATERIALS. You agree that
during the Employment Term you will take any and all business developments,
opportunities and potentially profitable situations relating to Millbrook's
business to the Directors for exploitation by Millbrook. You agree promptly to
disclose to Millbrook (and only to Millbrook) any and all knowledge possessed or
acquired (by you by any means whatsoever during the Employment Term which
relates in any way to any developments, concepts, ideas or innovations, whether
copyrightable or patentable or not, relating to the business of Millbrook. For
the compensation and benefits received hereunder, you hereby assign and agree to
assign to Millbrook your entire right, title and interest in and to any of the
aforedescribed materials, discoveries, developments, concepts, ideas or
innovations. All such materials, discoveries, developments, concepts, ideas and
innovations shall be the property of Millbrook, and you shall, without further
compensation, do all things necessary to enable Millbrook to perfect title in
such materials, discoveries, concepts, ideas and innovations and to obtain and
maintain effective patent or copyright protection in the United States and
foreign countries thereon, including, without limitation, rendering assistance
and executing necessary documents.
8. COMPETITIVE ACTIVITIES.
8.1 NON-COMPETITION. During the Employment Term and for a
period of two (2) years after the expiration or earlier termination thereof for
whatever reason, you shall not within the United States:
(a) Consult with, be employed by, render
services to, or engage in any business activity with (whether as owner,
controller, employee, employer, consultant, partner, officer, director, agent or
otherwise) any business or business entity competing in any way with the
business of Millbrook;
(b) Without the prior written consent of the
Directors, personally solicit or cause to be solicited or authorize, directly or
indirectly, for or on behalf of yourself or any third party, any business
competitive with Millbrook, from others who are or were at any time within 12
months prior to the expiration or termination of your employment hereunder
customers, suppliers, clients, authors, agents or other business associates of
Millbrook.
8.2 SOLICITATION OF EMPLOYEES AND OTHERS. You acknowledge and
agree that Millbrook's directors, officers and employees possess special
knowledge of Millbrook's operations and are vitally important to the continued
success of Millbrook's business. You shall not, without the prior written
consent of the
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Directors, directly or indirectly seek to persuade any director, officer or
employee of Millbrook either to discontinue his or her position with Millbrook
or to become employed or engaged in any activity competitive with the activities
of Millbrook.
8.3 SCOPE. If any court determines that any of the covenants
set forth herein, or any part or parts thereof, is unenforceable because of the
duration or geographic scope of such provision, such court shall have the power
to reduce the duration or scope of such provision, as the case may be, and, in
its reduced form, such provision shall then be enforceable and shall be
enforced.
9. TERMINATION.
9.1 BY DEATH. Prior to the end of the Employment Term, your
employment hereunder shall be terminated in the event of your death.
9.2 PERMANENT DISABILITY. Your employment hereunder may be
terminated by Millbrook upon thirty (30) days' prior written notice to you in
the event of your permanent disability. As used herein "permanent disability"
shall mean any illness, injury or other physical or mental disability that shall
prevent you from performing a substantial portion of your duties hereunder for
any period of either 90 consecutive days or an aggregate of 120 days during any
consecutive twelve (12) month period.
9.3 TERMINATION FOR CAUSE. Millbrook reserves the right to
terminate this Agreement at any time and without notice for "cause" as defined
below. As used in this Agreement, the term "cause" shall mean (i) the commission
by you of any act which would constitute a felony under state or federal law, or
the equivalent under foreign law, if prosecuted; (ii) the commission by you of
any act of moral turpitude; (iii) the material breach by you of the provisions
of this Agreement; (iv) your failure or refusal to perform your obligations
under this Agreement, or other acts or omissions constituting neglect or
dereliction of duties hereunder; (v) fraud, dishonesty or other acts or
omissions by you that amount to a willful breach of your fiduciary duty to
Millbrook; (vi) your personal bankruptcy; or (vii) the happening of any other
event which, under the provisions of any laws applicable to Millbrook or its
activities, disqualifies you from acting in any or all capacities provided for
herein. Millbrook may, at its option, terminate this Agreement for the reasons
stated in this Section by given written notice of termination to you without
prejudice to any other remedy to which Millbrook may be entitled either by law,
in equity, or under this Agreement. Upon any such termination under this
Section, and upon Millbrook's request, you agree to resign from all
directorships and positions as an executive officer you may then hold with
Millbrook or any of its affiliates.
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9.4 SEVERANCE PAY. Other than with respect to Section 6
hereof, whether and to what extent you are entitled to severance pay upon
termination of your employment with Millbrook will be determined according to
Millbrook's severance policies, if any, at the time of such termination.
10. MISCELLANEOUS.
10.1 NOTICES. Notices hereunder shall be in writing and shall
be delivered by hand or sent by registered or certified mail, return receipt
requested, if to you, at the address set forth above, and if to Millbrook Press,
at 00X Xxxx Xxxxxx, Xxxxxxxxxxx, Xxx Xxxx 00000, or at such other address as to
which notice has been given in the manner herein provided.
10.2 ENTIRE AGREEMENT. This Agreement sets forth your and
Millbrook's complete understanding with respect to the matters set forth herein.
This Agreement may be modified or amended only by an agreement in writing signed
by the parties hereto.
10.3 SEVERABILITY. If any term, provision, covenant, or
condition of this Agreement, or the application thereof to any person, place or
circumstance, shall be held by a court of competent jurisdiction to be invalid,
unenforceable, or void, the remainder of this Agreement and such term,
provision, covenant, or condition as applied to other persons, places and
circumstances shall remain in full force and effect.
10.4 HEADINGS. The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in construing
or interpreting this Agreement.
10.5 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York without giving
effect to the conflict of laws principles thereunder.
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If the foregoing accurately reflects your understanding of our
agreement and is acceptable to you, please sign the enclosed copy of this letter
and return it to the undersigned.
Very truly yours,
THE MILLBROOK PRESS INCORPORATED
By:/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, Chairman of
the Board of Directors
By: /s/ Xxxxx Xxxxxxxxx
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Xxxxx Xxxxxxxxx, Chairman of
the Compensation Committee
Accepted and Agreed:
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
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