EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of April 28, 1998, by
and between The Reader's Digest Association, Inc., a Delaware
corporation (the "Company"), and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ (the
"Executive") (hereinafter collectively referred to as "the
parties").
WHEREAS, the Executive has been a senior executive of a
Fortune 100 company; and
WHEREAS, the Board of Directors of the Company (the
"Board") has determined that it is in the best interests of the
Company and its stockholders to secure the services and
employment of the Executive and the Executive is willing to
render such services on the terms and conditions set forth in
this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the
respective agreements of the parties, the parties agree as
follows:
1. Term. Unless terminated earlier as provided in
Section 10 hereof, the initial term of employment under this
Agreement shall be for the period commencing on the date first
above written (the "Commencement Date") and ending on the third
anniversary of the Commencement Date (the "Initial Term");
provided, however, that, upon the expiration of the Initial
Term, the term of employment under this Agreement automatically
shall be extended for a period of one (1) year and again for
successive one-year periods on each anniversary thereof (each a
"Renewal Term"), unless either the Company or the Executive
shall have given written notice to the other at least ninety
(90) days prior to the end of the Initial Term or a Renewal
Term that the term of employment under this Agreement shall not
be so extended or the term of employment under this Agreement
shall have expired earlier as provided in Section 10 hereof.
Executive's term of employment hereunder shall be defined as
the "Employment Term".
2. Employment.
(a) Positions. As of the Commencement Date, the
Executive shall be employed as the Chairman of the Board and
the Chief Executive Officer of the Company. In such positions,
the Executive shall perform the duties, undertake the
responsibilities and exercise the authority in accordance with
the By-laws of the Company, the Company's Guidelines on
Governance, as may be in effect from time to time, and under
the general supervision of the Board. A copy of the current
Guidelines on Governance (April 1998) has been provided to the
Executive. The Executive shall comply with the Company's
Proprietary Information Policy, subject to Section 14(a)
hereof, and the Company's Code of Conduct. The Executive shall
report directly to the Board. Subject to commencement of
employment hereunder, the Executive has been elected by the
Board as a director and, during the Employment Term, the
Company shall nominate the Executive as a member of the Board
for election at each of the Company's annual meetings of
stockholders.
(b) Obligations. The Executive agrees to devote his
full business time and attention to the business and affairs of
the Company and its subsidiaries. The foregoing, however,
shall not preclude the Executive from serving on corporate,
civil or charitable boards or committees or managing personal
or family investments or affairs, so long as these activities
do not interfere with the performance of the Executive's
responsibilities hereunder or, if they do, are otherwise
approved by the Board. The Executive shall notify the Board
prior to accepting any position as a director of a for-profit
corporate entity and may request formal Board approval of such
or any other activity.
3. Base Salary. The Company agrees to pay or cause to be
paid to the Executive during the term of this Agreement a base
salary at the rate of $700,000 per year or such larger amount
as the Board may from time to time determine (the "Base
Salary"); provided, however, that the Board shall not be
required to review the Base Salary until August 1999. The
Base Salary shall be payable in accordance with the Company's
customary practices applicable to its senior executives.
4. Annual Incentive Award. As of July 1, 1998, the
Executive shall be entitled to participate in the Company's
Management Incentive Compensation Plan (or any successor annual
incentive plan) and any other incentive plan (whether annual or
long term) adopted by the Company on terms and conditions at
least as favorable as those generally applying to other senior
executives of the Company. The Executive's target award under
any plan shall be determined in accordance with the Company's
policy generally applicable to its senior executives, but in no
event shall the target under the Management Incentive
Compensation Plan (or any successor annual incentive plan) for
the Company's 1999 fiscal year be less than six hundred sixty-
two thousand dollars ($662,000).
5. Equity Compensation.
(a) The Executive shall be entitled to
participate in the Company's 1994 Key Employee Long Term
Incentive Plan (the "KELTIP") (or any successor long-term
incentive plan) and any other equity plan adopted by the
Company on terms and conditions at least as favorable as those
generally applying to other senior executives of the Company.
Subject to Section 9(e) below, if applicable, as of the
Commencement Date, the Company has granted the Executive stock
options in respect of 250,000 shares of the Company's Class A
nonvoting common stock ("Common Stock") in respect of the
Company's fiscal year 1999 at an exercise price equal to the
"fair market value," as defined in Section 2.10 of the KELTIP,
of Common Stock on the New York Stock Exchange (the "Fair
Market Value") on the Commencement Date (the "Initial Grant").
This option is granted under the KELTIP and pursuant to the
terms and conditions set forth in Exhibit A. The Initial Grant
is not intended to be a "mega grant" and the number of shares
in respect of which this option is granted shall have no
bearing on the number of shares in respect of which stock
options are granted to the Executive in the future.
(b) The Executive shall not be entitled to
participate, through the Company's fiscal year 2001, in the
Company's ongoing retention program pursuant to which certain
executives receive grants of restricted stock.
6. Retirement Plans. The Executive shall be entitled to
participate in the Company's Retirement Plan, the Company's
Excess Benefit Retirement Plan and the Company's 1992 Executive
Retirement Plan (collectively, the "Retirement Plans") on terms
and conditions at least as favorable as those generally
applying to other senior executives of the Company and, in
addition, shall have the rights set forth in Section 12(c).
7. Employee Benefits. The Executive shall be entitled to
participate in all employee benefit and payroll plans,
practices and programs (including fringe benefits and
perquisites) maintained by the Company and generally made
available to senior executives as may be in effect from time to
time (collectively, "Benefit Plans"). The Executive's
participation in these Benefit Plans shall be on terms and
conditions at least as favorable as those generally applicable
to other senior executives of the Company or any of its
subsidiaries.
8. Other Benefits.
(a) Expenses. The Executive shall be entitled to
receive prompt reimbursement of all expenses reasonably
incurred by him in connection with the performance of his
duties or for promoting, pursuing or otherwise furthering the
business or interests of the Company and its subsidiaries.
(b) Office and Facilities. The Executive shall be
provided with an appropriate office and with such secretarial
and other support facilities as are commensurate with the
Executive's status with the Company and adequate for the
performance of his duties.
(c) Vacation. The Executive shall be entitled to
annual vacation in accordance with the policies as periodically
established by the Board for other senior executives of the
Company, but in no event less than four (4) weeks per year.
9. Replacement Compensation. To partially compensate the
Executive for the stock options, restricted stock and other
equity-based and cash compensation forfeited as a result of the
Executive's terminating his prior employment, the Executive
shall receive the following:
(a) Vested Stock Options. Subject to (e) below, if
applicable, as of the Commencement Date, the Company has
granted the Executive stock options in respect of 470,000
shares of the Company's Class A nonvoting common stock ("Common
Stock"). The stock options shall be granted at an exercise
price equal to Fair Market Value on the Commencement Date and
shall be immediately vested and fully exercisable. The stock
options shall be granted under the KELTIP and pursuant to the
terms and conditions set forth in Exhibit B.
(b) Unvested Stock Options. Subject to (e) below, if
applicable, as of the Commencement Date, the Company has
granted the Executive stock options in respect of 360,000
shares of Common Stock. The stock options shall be granted at
an exercise price equal to Fair Market Value on the
Commencement Date. The stock options shall be granted under
the KELTIP and pursuant to the terms and conditions set forth
in Exhibit C.
(c) Restricted Stock. As of the Commencement Date,
the Company has granted the Executive 358,000 shares of
restricted Common Stock. The restricted stock shall be granted
under the KELTIP and shall be issued pursuant to the terms and
conditions set forth in Exhibit D.
(d) Cash Payment. No later than September 30, 1998,
the Company shall pay to the Executive an amount in cash equal
to $350,000.
(e) Other Grant Related Provisions. The Company
represents that it has an adequate number of shares available
under the KELTIP to grant the stock options and restricted
stock provided in this Section 9 and the Initial Grant under
Section 5. The Company further represents that it has amended
the KELTIP: (i) subject to approval of its stockholders, to
increase the annual fiscal year limit on stock option grants to
any individual to a number adequate to make the grants provided
hereunder; and (ii) to permit, subject to the approval of the
Compensation and Nominating Committee, nonqualified stock
options to be transferable to members of an employee's
immediate family, to trusts solely for the benefit of such
immediate family members and to partnerships in which such
family members and/or trusts are the only partners. The
Company agrees to submit the amendment of the annual fiscal
year limit (the "Increased Limit") to the stockholders for
their approval pursuant to the requirements of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code"),
at a meeting to be held prior to December 31, 1998. To the
extent the grant of any stock options under this Section 9 or
the Initial Grant under Section 5 would exceed the current
annual fiscal year limit (prior to the amendment to the
Increased Limit), such grant shall be subject to approval of
the Increased Limit by the stockholders as provided in this
Section 9(e). The grants shall be deemed granted in the
following order for purposes of determining when the current
annual fiscal year limit shall be exceeded and which options
are subject to shareholder approval: Section 9(a), Section
9(b), the Initial Grant under Section 5. With regard to the
grants under the KELTIP, the Company agrees to file and
maintain effective a Form S-8 (or successor) registration
statement.
10. Employment Term. The "Employment Term" shall mean the
period beginning on the Commencement Date and ending on the
earliest of the following to occur:
(a) the death of the Executive;
(b) the Disability (as defined in Section 11(a)) of
the Executive;
(c) the termination of the Executive's employment by
the Company for Cause (as defined in Section 11(b));
(d) the termination of the Executive's employment by
the Executive for Good Reason (as defined in Section 11(c));
(e) the termination of the Executive's employment by
the Executive without Good Reason;
(f) the termination of the Executive's employment by
the Company other than a termination by the Company for Cause
or Disability;
(g) the termination of the Executive's employment by
mutual agreement of the Company and the Executive; and
(h) the expiration of the Initial Term or, in the
event the Initial Term is extended pursuant to Section 1 on any
one or more occasions, the expiration of the last of any
Renewal Terms.
11. Termination.
(a) Disability. The Company may terminate the
Executive's employment after having established the Executive's
Disability. For purposes of this Agreement, "Disability" means
a physical or mental infirmity which impairs the Executive's
ability to substantially perform his duties under this
Agreement which either (i) has continued for a period of at
least one hundred eighty (180) consecutive days or (ii) has
continued for a period of at least ninety (90) consecutive days
and with regard to which a doctor mutually agreeable in good
faith to the Company and the Executive has certified that such
infirmity is likely to continue to impair Executive's ability
to substantially perform his duties under this Agreement for
another ninety (90) consecutive days (provided that, if such
termination would in any manner impair Executive's right to
short term or long term disability benefits, Executive may then
be placed on paid leave upon such certification but not
terminated until the end of the aforesaid one hundred eighty
(180) day period).
(b) Cause. The Company may terminate the Executive's
employment for Cause or without Cause. "Cause" shall mean:
(i) for purposes of Exhibits B, C and D (x) an act or acts of
dishonesty or gross misconduct on the Executive's part which
result or are intended to result in material damage to the
Company's business or reputation or (y) repeated material
violations by the Executive of his obligations under Section 2
of this Agreement which violations are willful and deliberate
on the Executive's part and which result in material damage to
the Company's business or reputation and as to which material
violations the Board has notified the Executive in writing; and
(ii) for all other purposes (x) willful and continued failure
to attempt to adequately perform substantially all of the
Executive's duties with the Company (other than a failure
resulting from the Executive's incapacity due to physical or
mental illness) which failure has continued for a period of at
least twenty (20) days after a written notice of demand for
substantial performance has been delivered to the Executive
specifying the manner in which the Executive has failed to
substantially perform; (y) willful engagement in conduct with
regard to the Company or its business which is demonstrably and
materially injurious to the Company, monetarily or otherwise;
or (z) a conviction of, or pleading of nolo contendere by the
Executive to a felony (other than solely a traffic violation,
but not excluding other felonies resulting from such
violation). No act, nor failure to act, on the Executive's
part shall be considered "willful" unless he has acted or
failed to act, with an absence of good faith and without a
reasonable belief that his action or failure to act was in the
best interests of the Company. Any termination for Cause shall
procedurally be done as follows: a termination for Cause shall
be evidenced by a resolution adopted in good faith by two-
thirds (2/3) of the Board that the Executive performed one of
the acts specified above; provided, however, that no
termination of the Executive's employment shall be for Cause
unless (x) there shall have been delivered to the Executive a
copy of a written notice setting forth the acts (or failures to
act) by Executive that give rise to a finding of Cause and
(y) the Executive shall have been provided an opportunity on at
least seven (7) days' notice to be heard by the Board (with the
assistance of the Executive's counsel if the Executive so
desires). For purposes of this subparagraph (b), the term
"Company" shall include the Company and its subsidiaries.
(c) Good Reason. The Executive may terminate his
employment for Good Reason or without Good Reason. "Good
Reason" shall mean the occurrence of any of the following
without Executive's express written consent:
(i) the assignment to Executive of any duties
materially inconsistent with his current position, duties,
responsibilities and status with the Company, or a material
change or a substantial diminution in his then current
authority, reporting responsibilities, titles or offices (it
being acknowledged, without limiting in any manner the
foregoing, that being chairman and chief executive officer of a
nonpublic entity is a material diminution), or removal from or
failure to re-elect Executive to any such position or office,
except in the event of a termination of his employment for
Cause, death, Disability, written mutual agreement or mandatory
retirement in accordance with Company policies at or after age
sixty-five (65);
(ii) a reduction by the Company in
Executive's Base Salary, unless such reduction is part of and
consistent with a good faith management-wide or Company-wide
cost cutting program, and then only if the percentage of his
reduction is no greater than that of the other management
personnel;
(iii) a relocation of Executive to an office
located anywhere other than within fifty (50) miles of his
primary residence or away from the Company's executive offices,
except for required travel on the business of the Company or
any of its subsidiaries to an extent substantially consistent
with his then current business travel obligations;
(iv) the failure by the Company or any of
its subsidiaries to continue in effect any compensation plan or
Benefit Plan provided by the Company or any of its subsidiaries
in which Executive is then participating, unless there shall
have been instituted a replacement or substitute plan providing
comparable benefits or unless such failure is part of and
consistent with a good faith benefit discontinuance applicable
to all of the management personnel of the Company and then only
if the scope of the discontinuance with respect to Executive is
no greater than that of the other management personnel;
(v) the failure of the Company to obtain (and
deliver to Executive) an agreement satisfactory to Executive
from any successor to the Company to assume and agree to
perform this Agreement. The Company shall use its best efforts
to require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the businesses or assets of the Company to
expressly assume and agree to perform this Agreement;
(vi) the material breach by the Company of
any material provision of this Agreement which remains uncured
for thirty (30) days after written notice thereof has been
given by the Executive to the Company; or
(vii) the failure of the stockholders of the
Company to approve the Increased Limit prior to December 31,
1998.
Any notice of termination of employment by
Executive for "Good Reason" shall be given within one hundred
eighty (180) days after the occurrence of the "Good Reason."
(d) Nonextension. A termination without Cause for
purposes of this Agreement, any equity plan, any Benefit Plan or
any other arrangement or plan of the Company shall include
nonextension of the Employment Term as a result of a notice of
nonextension given by the Company at any time prior to the
Executive's sixty-fifth (65th) birthday; provided, however, that
a termination of the Executive's employment by the Company on or
after the date the Executive attains age sixty-five (65) shall
not be a termination without Cause.
(e) Notice of Termination. Any termination by the
Executive or the Company shall be communicated by written
Notice of Termination indicating the termination provision in
this Agreement relied upon, if any, and the Date of
Termination; provided, however, the Date of Termination shall
in no event be earlier than ten (10) business days after the
date on which such Notice of Termination is delivered pursuant
to Section 21 of this Agreement.
(f) Date of Termination. "Date of Termination" shall
mean in the case of the Executive's death, his date of death,
or in all other cases, the date specified in the Notice of
Termination.
(g) Executive's Obligation. For a period of three
(3) years following termination of the Employment Term for any
reason, the Executive agrees to use reasonable efforts to be
available to the Company on a mutually agreeable basis with
respect to providing information as to continuing and/or future
matters which arose during Executive's employment or any other
relationship with the Company and with which Executive was
involved or otherwise had information, whether such matters are
business-related or legal. Any such request by the Company
shall be done in such manner as to be as unburdensome as
reasonably possible on Executive.
(h) Other Arrangements. The definition of "Cause" or
"Good Reason" or the equivalencies of such terms under any
equity plan, Benefit Plan or other plan, agreement or
arrangement of the Company shall not be deemed to provide a
basis for a Cause determination unless such Cause determination
would exist and occur under this Agreement and Good Reason
shall be deemed to exist thereunder if it would exist under
this Agreement, provided that, other than with regard to the
grants referred to in Section 9 hereto (which are to be based
on the meaning of Cause as defined in Section 11(b)(i)), the
reference shall be to Cause as defined in Section 11(b)(ii).
The scope and definition of the non-competition clause under
any equity plan, Benefit Plan or other plan, agreement or
arrangement of the Company shall not be deemed to prohibit the
Executive's actions or serve as a basis for any reduction or
forfeiture of benefits or payments thereunder unless such
actions violate Section 14(b) of this Agreement.
12. Compensation and Benefits Upon Termination.
(a) Compensation Upon Termination.
(i) Termination of Employment Without Cause or
for Good Reason. Executive shall be entitled to the benefits
provided under this Section 12(a)(i) only if: (x) the
termination of his employment is by him for Good Reason, or the
termination of his employment is by the Company, unless such
termination is for Cause or Disability, as a result of the
Executive's death, or at or after his sixty-fifth (65th)
birthday; and (y) the Executive executes the General Waiver and
Release of Claims attached as Exhibit E:
(1) Promptly in a lump sum, any accrued
obligations, such as earned but unpaid salary, accrued but
unused vacation in accordance with Company policy and
unreimbursed expenses;
(2) When otherwise due to other executives,
any incentive payment earned for any completed measuring period
(with any requirement for any continued employment through the
date of payment or any other date after the measuring period
being disregarded or with any right of the Company to reduce
such amount being disregarded in determining the amount
earned);
(3) When otherwise due to other executives,
an incentive payment in respect of any measuring period that is
not completed as of the Date of Termination, determined as
follows: (x) the incentive payment payable in respect of the
full measuring period based on the Executive's target and
actual results for the full measuring period, multiplied by (y)
a fraction the numerator of which is the number of days that
elapsed during the measuring period through the Date of
Termination and the denominator of which is the number of days
in the full measuring period. For purposes of this Section
12(a)(i)(3), any requirement for continued employment through
the date of payment or any other date after the measuring
period or any right of the Company to reduce such amount shall
be disregarded in determining the amount payable;
(4) An amount equal to the sum of:
(A) three (3) times Executive's
highest annual rate of base salary in effect any time during
the 12-month period prior to the Date of Termination (the
"Severance Base Salary"), plus
(B) two (2) times the higher of the
following: (x) the highest amount paid to Executive under
the Company's Management Incentive Compensation Plan (or any
successor annual incentive plan) (the "Annual Incentive Plan")
for the three (3) plan years most recently ended prior to the
Date of Termination; or (y) the originally approved target
amount of the highest award under the Annual Incentive Plan
outstanding on the Date of Termination, as such target amount
may have been increased prior to the Date of Termination.
Any compensation received by Executive
or granted to Executive in lieu of an amount paid under the
Annual Incentive Plan for any one-year period (whether in the
form of restricted stock or otherwise) shall be deemed to be an
amount paid to Executive under the Annual Incentive Plan for
purposes of this Section 12(a)(i)(4). Any compensation
receivable by Executive in lieu of an amount payable under the
Annual Incentive Plan for any period shall be deemed to be an
additional target amount for purposes of this Section. The
amount of any non-cash compensation received or receivable
shall be the greater of the fair market value of such
compensation on the date of award or the cash amount that would
have been received by Executive in lieu of such non-cash
compensation.
One half of one year's Severance Base
Salary shall be paid to Executive in a lump sum within ten (10)
days after his termination of employment and one half of one
year's Severance Base Salary shall be paid to Executive in a
lump sum at the end of the Severance Period, as defined in the
next sentence. The aggregate remaining amount of severance
payable under this Section 12(a)(i)(4) shall be paid in equal
installments on a bi-weekly basis, commencing upon the Date of
Termination over a two (2) year period (the "Severance Period");
(5) The Company shall maintain in full
force and effect, for Executive's continued benefit during the
Severance Period, all welfare benefit plans and programs or
arrangements in which the Executive participated immediately
prior to the Date of Termination, provided that his continued
participation is possible under the general terms and
conditions of such welfare plans and programs. In the event
that Executive's participation in any such plan or program is
barred, the Company shall provide Executive with benefits
substantially equal to those which Executive would have been
entitled to receive under such plans and programs had his
participation not been barred; and
(6) As otherwise provided in this Section
12.
(ii) Termination by Company for Cause or
Voluntarily by Executive Without Good Reason. If Executive's
employment is terminated for Cause or he leaves voluntarily
without Good Reason, the Company shall pay Executive the
amounts under Sections 12(a)(i)(1) and (2) and the Company
shall have no further obligations to Executive under this
Agreement. Executive shall receive whatever rights, payments
or benefits that he is entitled to under any arrangement,
contract, plan or grant with the Company, including any equity
grant or Benefit Plan, and under the By-laws or Certificates of
Incorporation of the Company ("Other Benefits"), so long as
these rights, benefits or payments would be paid or provided
even if the Executive's employment was terminated by the
Company for Cause or voluntarily by the Executive without Good
Reason.
(iii) Termination by Death or Disability. If
Executive's employment is terminated by his death or as a
result of his Disability, the Company shall pay to the
Executive or his estate the amounts due under Sections
12(a)(i)(1), (2) and (3) and shall pay the cost of COBRA
continuation coverage for Executive (if a Disability
termination) and his spouse and dependents while they are
eligible for COBRA and the Company shall have no further
obligations to Executive under this Agreement, except for the
Other Benefits.
(b) Long-Term Incentive Plan Benefits.
(i) In the event of the termination of the
Executive's employment, Executive shall have the right to
exercise his outstanding stock options and stock appreciation
rights under the KELTIP or any successor long term incentive
plan (the "Long Term Incentive Plan"): (x) with respect to the
stock options granted pursuant to Sections 9(a), 9(b) and 5, in
the manner and to the extent provided in Exhibits A, B and C,
respectively; and (y) with respect to all other stock options
and stock appreciation rights, in the manner and to the extent
provided in the terms and conditions relating to such stock
options and stock appreciation rights, except that if the
Executive's employment is terminated by the Company without
Cause or by the Executive for Good Reason, such stock options
and stock appreciation rights shall continue to vest during the
Severance Period and, upon completion of the Severance Period,
shall vest and be exercisable as if the Executive's employment
was terminated at that time by the Company without Cause or by
the Executive with Good Reason.
(ii) In the event of the termination of the
Executive's employment, Executive's outstanding performance
units, restricted stock and awards (other than stock options
and stock appreciation rights) under the Long Term Incentive
Plan shall (x) in the case of the restricted stock granted
under Section 9(c), be treated in the manner provided in
Exhibit D and (y) in all other cases, be treated in accordance
with the terms and conditions relating to the performance unit,
restricted stock or award, except that if the Executive's
employment is terminated by the Company without Cause or by the
Executive for Good Reason, (1) such performance units,
restricted stock or awards (other than stock options and stock
appreciation rights) shall continue to be outstanding and
payable during the Severance Period as if the Executive's
employment with the Company continued during the Severance
Period and, if applicable, shall vest upon completion of the
Severance Period in accordance with the terms of the award as
if the Executive's employment was terminated at that time by
the Company without Cause or by the Executive with Good Reason
and (2) any such award that is based on a period of employment
shall be payable on a prorated basis as if the Executive's
employment had continued during the Severance Period.
(iii) If any benefits due under this Section
12(b) cannot be paid under the existing or amended terms of an
applicable plan or award agreement, the Company shall pay
Executive the value of such benefits at the time they would
otherwise be payable if they were payable under such terms.
(c) Retirement Benefits. The Executive is hereby
designated a participant in the Reader's Digest Association
Executive Retirement Plan (the "Executive Retirement Plan")
under Article 2 thereof and as eligible for the enhanced
severance benefit under such plan.
(i) In the event Executive's employment is
terminated on or after age sixty (60) for any reason other than
for Cause, the Company shall pay Executive an amount equal to
the difference between (x) the monthly retirement benefit
Executive would accrue under The Reader's Digest Association,
Inc. Retirement Plan (the "Retirement Plan"), the Excess
Benefit Retirement Plan of The Reader's Digest Association,
Inc. (the "Excess Benefit Retirement Plan") and the Executive
Retirement Plan or replacements therefor based on his actual
service with the Company plus, if the Executive's employment is
terminated either by the Company without Cause or by the
Executive for Good Reason, two (2) years, and (y) the amount
that he actually receives under such plans. Any amount payable
under this Section 12(c)(i) shall be payable at the same time,
in the same form and subject to the same actuarial adjustments
as such payments would have been made under the Retirement
Plan, but shall not be subject to any requirements of
eligibility, vesting, Board or other consents or any
forfeitures under the Executive Retirement Plan.
(ii) In the event the Executive's employment is
terminated prior to age sixty (60) either by the Company
without Cause or by the Executive for Good Reason, the
Executive shall be credited with two additional years of
credited service for all purposes (including eligibility and
vesting) under the Retirement Plan, the Excess Benefit
Retirement Plan and the Executive Retirement Plan. If, after
taking into consideration such additional credited service, the
Executive is not deemed to have been terminated after his Early
Retirement Date (as defined in the Executive Retirement Plan),
the Executive (or his beneficiary) shall receive a lump sum
payment in the amount of the equivalent actuarial value (as
determined under the Retirement Plan) of pension credits that
would have been earned under the Executive Retirement Plan
through the end of the Severance Period, without regard to
vesting, eligibility or Board or other consents, with any such
payment to be made within ninety (90) days of the end of the
Severance Period. If, after taking into consideration the two
additional years of credited service, the Executive is deemed
to have been terminated after his Early Retirement Date (and,
in fact, was terminated prior to age sixty (60)), the Executive
shall receive the enhanced benefit determined under Article 4
of the Executive Retirement Plan in the form of an annuity in
accordance with such plan rather than a lump sum. Any amount
payable under this Section 12(c)(ii) shall be payable at the
same time, in the same form and subject to the same actuarial
adjustments as such payments would have been made under the
Retirement Plan, but shall not be subject to any requirements
of eligibility, vesting, Board or other consents or any
forfeitures under the Executive Retirement Plan.
(iii) Subject to paragraph (iv) and (v)
below, in the event the Executive's employment is terminated
prior to age sixty (60) for any reason other than by the
Company without Cause or other than by the Executive for Good
Reason, the Executive shall be entitled to receive benefits, if
any, under the terms of the Retirement Plan, the Excess Benefit
Retirement Plan and the Executive Retirement Plan that
generally apply to other senior executives.
(iv) In the event of the Executive's death, his
spouse shall be entitled to the death benefit provided under
Article 6 of the Executive Retirement Plan (without regard to
the five-year period of service requirement).
(v) If the Executive's employment terminates by
reason of Disability, he shall be entitled to the benefits
provided under this Section 12(c) when the period of Disability
ends.
(d) Retiree Health Benefits. If the Executive's
employment is terminated (i) on or after he has attained age
sixty (60) for any reason other than for Cause or (ii) prior to
age sixty (60) by the Company without Cause, by the Executive
for Good Reason or as the result of Disability, the Executive
shall be entitled to retiree health benefits under the
Company's benefit plans. If the Executive's employment is
terminated under any other circumstance, the Executive shall be
entitled to retiree health benefits only as provided under the
terms of the Company's benefit plans.
(e) Profit-Sharing Plan. Executive's participation
in The Reader's Digest Employees Profit-Sharing Plan and the
Profit-Sharing Benefit Restoration Plan of The Reader's Digest
Association, Inc. or replacements therefor (the "Profit-Sharing
Plans") ceases upon his termination of employment with the
Company. However, if the Executive's employment is terminated
by the Company without Cause or by the Executive for Good
Reason, he shall receive cash payments equal to the amounts
that would have been contributed to his account had his
employment with the Company continued for the Severance Period,
with payments to be made to Executive by the Company at the
time any contributions have been made for participants in the
Profit-Sharing Plans and Executive shall be paid an amount in a
lump sum promptly at the end of the Severance Period as if he
was fully vested in the Profit-Sharing Plans (less any amount
vested in the Profit-Sharing Plans).
(f) Other Plans.
(i) The Reader's Digest Association, Inc.
Severance Plan for Senior Management shall not apply to
Executive. Any amounts under The Reader's Digest Association,
Inc. Income Continuation Plan for Senior Management shall be
adjusted so that, with regard to each type of payment or
benefit thereunder and hereunder, Executive receives the
greatest amount at the earliest time it would be made under
either that plan or this Agreement.
(ii) Any reference to a specific plan in this
Section 12 shall be deemed to include any similar plan or
program of the Company or any of its subsidiaries then in
effect that is the predecessor of, the successor to, or the
replacement for, such specific plan.
(g) Mitigation. All payments to Executive shall be
made without any obligation to mitigate and the amounts shall
not be offset or reduced by any amount Executive earns
elsewhere (except that the welfare benefits provided hereunder
shall be reduced by any similar benefits the Executive is
entitled to receive from a subsequent employer). Other than as
provided in Section 14(e) and if, and to the extent, the
Company obtains a court ordered judgment against the Executive,
no amount due to Executive nor any benefit under a Benefit
Plan, including stock options and restricted stock, shall be
reduced, suspended or offset as a result of any claim the
Company may have against Executive or of any action of the
Executive.
(h) Death. In case of Executive's death while any
amounts are still payable to him under this Section 12, the
Company shall pay all such amounts to his designated
beneficiary or, if none has been designated, to his estate as
if the Executive had continued to live.
13. Effect of a Change in Control.
(a) Treatment of Equity-Based Awards. In the event
of a Change in Control of the Company (as defined under the
KELTIP (or successor long-term incentive plan)) during the
Employment Term, the treatment of all stock options and
restricted stock held by the Executive shall be governed by the
terms of the plan under which the award was granted and the
grant, provided that, subject to (b) below, the Executive shall
immediately become fully vested in all stock options and
restricted stock granted as of the Commencement Date.
(b) Excise Tax. To the extent that the payments and
benefits provided under this Agreement and benefits provided
to, or for the benefit of, the Executive under any other
Company plan or agreement (such payments or benefits are
collectively referred to as the "Payments") would be subject to
the excise tax (the "Excise Tax") imposed under Section 4999 of
the Code, the Payments shall be reduced (but not below zero) if
and to the extent necessary so that no payment to be made or
benefit to be provided to the Executive shall be subject to the
Excise Tax. Payments shall be reduced or eliminated in a
manner that will result in the Executive receiving the largest
amount of value after the cutback as of the date of the
cutback. It is currently contemplated that this would be
accomplished by first reducing or eliminating the portion of
the Payments which are payable in cash and then by reducing,
eliminating, not fully accelerating or delaying acceleration of
vesting on options or other equity awards. The determination
as to whether the Payments must be reduced, and the extent of
any reduction, shall be made, at the expense of the Company, by
the Company's auditors immediately prior to the Change in
Control (or, if they are incapable of serving or decline to do
so, by a "Big Six" accounting firm or nationally recognized
compensation consulting firm), and such determination shall be
final and binding on both parties unless reflecting an
egregious and uncontestable error in interpretation or
calculation, in which case upon reconsideration, such
determination shall be final and binding. The foregoing
procedures shall be deemed the only manner of good faith
determination by the Company of any similar cutbacks under any
Company plan or arrangement with a similar type provision.
Notwithstanding the foregoing, in the event the Company revises
or modifies its plans and arrangements as they generally apply
to any other executive with regard to similar type of
provisions, and under such alternative the Executive would net
a greater amount after all taxes (including any income, payroll
or excise tax), the foregoing provision shall not apply and,
instead, such alternative provisions would apply.
14. Executive Covenants.
(a) Unauthorized Disclosure. The Executive shall
not, during the Employment Term and thereafter, make any
Unauthorized Disclosure. For purposes of this Agreement,
"Unauthorized Disclosure" shall mean disclosure by the
Executive without the prior written consent of the Board to any
person, other than an employee of the Company, any of its
subsidiaries or any of its affiliates or, during the Employment
Term and in the Executive's good faith judgment, to a person to
whom disclosure is reasonably necessary, appropriate or
desirable in connection with the performance by the Executive
of duties as an executive of the Company or as may be legally
required, of any confidential information relating to the
business or prospects of the Company or any of its subsidiaries
(including, but not limited to, any confidential information
with respect to any of the Company's or any of its subsidiary's
or affiliate's customers, products, methods of distribution,
strategies, business and marketing plans and business policies
and practices); provided, however, that the term shall not
include the use or disclosure by the Executive, without
consent, of any information known generally to the public or in
the industry (other than as a result of disclosure by him in
violation of this Section 14(a)). This confidentiality
covenant has no temporal, geographical or territorial
restriction. Except with regard to the entities covered by (b)
below, the Company agrees that it will not assert "inevitable
disclosure" of confidential information or a similar argument
to attempt to limit Executive's activities with any other
entity.
(b) Non-Competition. During the Employment Term and
for a period of (2) years thereafter, the Executive shall not,
directly or indirectly, without the prior written consent of
the Company, own, manage, operate, join, control, be employed
by, consult with or participate in the ownership, management,
operation or control of: (x) any of the companies identified on
the list of competitors furnished to the Executive on the
Commencement Date (the "List"); or (y) any entity that, after
the date of this agreement, (i) becomes engaged, or seeks to
become engaged, in a business that directly competes with a
line of business of the Company or its subsidiaries, which line
of business generated more than 15% of the consolidated
revenues of the Company and its subsidiaries in the preceding
fiscal year (the "15% Test") (If the Executive's employment
terminates, the 15% Test will be based upon the fiscal year
preceding such termination. Moreover, in the case of a Change
in Control of the Company followed by a termination of the
Executive's employment, the determination regarding the 15%
Test will be based on the Company and its subsidiaries without
regard to either the business or revenues of the acquiror.);
and (ii) is, or seeks to be, a significant competitor of any
material line of business of the Company or its subsidiaries (a
"Competitor"). In determining whether or not a particular
company hereafter is a Competitor, the companies specified on
the List are examples of a Competitor. The foregoing shall not
limit the Executive from serving as an executive of, or
otherwise providing services to, a company which is on the List
or is a Competitor so long as the Executive is not employed by,
provide services to or supervise the activities of the
Competitor or the Company that is on the List that directly
competes with the Company. Furthermore, the "beneficial
ownership" by the Executive of not more than one percent (1%)
of the stock or of the debt of any of the foregoing entities
shall not be a violation of this Section 14(b) and the
foregoing limitation shall not include interests of Executive
through mutual funds or investment partnerships, limited
liability entities or similar investment vehicles in which he
is a passive investor and owns less than five percent (5%) of
the fund or entity.
(c) Non-Solicitation. For a period of two (2) years
after the end of the Employment Term, the Executive shall not:
(i) solicit, hire or identify for hire by any entity with which
he is actively involved, any person who is, and at the time of
his termination of employment was, a nonclerical employee of
the Company or any of its subsidiaries; and (ii) either
directly or indirectly, alone or in conjunction with another
party, interfere with or harm, or attempt to interfere with or
harm, the relationship of the Company, any of its subsidiaries
or any of its affiliates, with any person who as of the end of
the Employment Term and during the two-year period thereafter
is a customer or supplier of the Company, any of its
subsidiaries or any of its affiliates; provided, however, the
foregoing shall not prohibit the Executive from conducting good
faith commercial activities in the normal course.
(d) Disparagement. For a period of one (1) year
after the end of the Employment Term, the Executive shall not
engage in a series of actions, including comments, materially
disparaging the Company or any of its subsidiaries or any of
their senior management, provided that the Executive may
respond to disparaging statements about himself.
(e) Remedies. The Executive agrees that any material
breach of the terms of this Section 14 would result in
irreparable injury and damage to the Company for which the
Company would have no adequate remedy at law. Accordingly, the
Executive agrees that, in the event of said material breach or
any threat of material breach, the Company shall be entitled to
an immediate injunction and restraining order to prevent such
material breach and/or threatened material breach and/or
continued material breach by the Executive, without having to
prove damages, in addition to any other remedies to which the
Company may be entitled at law or in equity. In addition, in
the event the Executive violates Section 14(b) during the period
specified therein, the Company shall be entitled to discontinue
all benefits or payments then being provided to Executive under
this Agreement or any other Benefit Plan, including terminating
the future exercisability of stock options or vesting of
restricted stock. The terms of this paragraph shall not prevent
the Company from pursuing any other available remedies for any
breach or threatened breach of this Agreement, including but not
limited to the recovery of damages from the Executive. The
Executive and the Company further agree that the provisions of
the covenants not to compete and solicit are reasonable and that
the Company would not have entered into this Agreement but for
the inclusion of these covenants. Should a court determine,
however, that any provision of the covenants is unreasonable,
either in period of time, geographical area, or otherwise, the
parties agree that the covenant should be interpreted and
enforced to the maximum extent which the court or arbitrator
deems reasonable.
The provisions of this Section 14 shall survive any
termination of the Employment Term, and the existence of any
claim or cause of action by the Executive against the Company,
whether predicated on this Agreement or otherwise, shall not
constitute a defense to the enforcement by the Company of the
covenants and agreements of this Section 14; provided, however,
that this paragraph shall not, in and of itself, preclude the
Executive from defending himself against the enforceability of
the covenants and agreements of this Section 14.
15. Executive's Representation. The Executive represents
to the Company that he has delivered to the Company or its
representatives copies of the only agreements that he has
entered into that limit his competitive activities, as well as
a copy of the Code of Conduct (including a confidentiality
provision, but no non-competition provision) that he has agreed
to abide by. He further represents that, after discussions
with his previous employer and conversations with his counsel,
he believes, in good faith, that his execution and performance
of this Agreement shall not be in violation of any agreement or
obligation (whether or not written) that he may have with his
previous employer.
16. Legal Fees. The Company has required Executive to
obtain counsel to assist him in negotiating this Agreement and
believes it in the best interests of the Company that Executive
have counsel. Accordingly, the Company shall promptly pay the
legal fees and disbursements of counsel to Executive in
connection with negotiating this Agreement and related matters
(which fees shall be on a time charge basis at his counsel's
normal billing rates) up to a maximum of fifty thousand dollars
($50,000).
17. Withholding Taxes. The Company may withhold from any
benefits payable under this Agreement all federal, state, local
or other applicable taxes as shall be required pursuant to any
law or governmental regulation or ruling.
18. Duplicative Benefits. No benefit or payment provided
to the Executive under this Agreement shall be duplicative of
any other benefit or payment provided under this Agreement or
any other plan, agreement or arrangement of the Company or any
of its subsidiaries under which the Executive is a participant
or party.
19. Indemnification and Insurance. During the Employment
Term and thereafter while any claim can be made against the
Executive with regard to any action or inaction he took in
connection with being an officer or director of the Company or
any of its subsidiaries or in the service of the Company or any
of its subsidiaries, the Company shall continue to cover him
under the indemnity provision in the By-laws as they currently
exist or, if hereafter amended to provide greater rights to any
officer or director, as so amended and shall continue to cover
him under officers and directors insurance to the greatest
extent any other officer or director (either current or former)
is covered.
20. Successors and Assigns.
(a) This Agreement shall be binding upon and shall
inure to the benefit of the Company, its successors and assigns
and the Company shall require any successor or assign to
expressly assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had
taken place. The term "Company" shall include any such
successors and assigns to the Company's business and/or assets.
The term "successors and assigns" shall only mean a corporation
or other entity acquiring or otherwise succeeding to, directly
or indirectly, all or substantially all the assets and business
of the Company (including this Agreement), whether by merger,
combination, operation of law or otherwise.
(b) Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by the Executive,
the Executive's beneficiaries or legal representatives, except
by will or by the laws of descent and distribution, or except
as may otherwise be provided with regard to equity grants.
This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal personal representative.
21. Notice. For the purposes of this Agreement, notices
and all other communications provided for in the Agreement
(including the Notice of Termination) shall be in writing and
shall be deemed to have been duly given when personally
delivered or three (3) days after being sent by registered or
certified mail, return receipt requested, postage prepaid, or
upon receipt if overnight delivery service or facsimile is
used, addressed as follows:
To the Executive:
▇▇▇▇▇▇ ▇▇▇▇▇
[Address]
To the Company:
The Reader's Digest Association, Inc.
Attn: Chairman, Compensation & Nominating Committee
Reader's ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
The Reader's Digest Association, Inc.
Attn: General Counsel
Reader's ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
22. Legal Fees on Disputes. In the event that a claim for
payment or benefits under this Agreement or any other
arrangement between the Executive and the Company is disputed
or an action for injunctive relief or otherwise is brought in
connection with Section 14 hereof, the Company shall pay all
reasonable attorney fees and expenses incurred by Executive in
pursuing such claim or in connection with such matter, provided
that Executive is successful as to a meaningful part of the
disputed claim or matter by reason of litigation, arbitration
or settlement. The Company shall pay or reimburse Executive's
legal fees on an ongoing basis within ten (10) days of
submission of invoices, subject to an undertaking by Executive
to repay such amounts promptly if it is ultimately found by a
court or arbitrator that Executive was not entitled to such
reimbursement.
23. Miscellaneous. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification
or discharge is agreed to in writing and signed by the
Executive and the Company. No waiver by either party at any
time of any breach by the other party of, or compliance with,
any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior
or subsequent time. No agreement or representations, oral or
otherwise, express or implied, with respect to the subject
matter of this Agreement have been made by either party which
are not expressly set forth in this Agreement.
24. Governing Law. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the
State of New York without giving effect to the conflict of law
principles thereof.
25. Severability. The provisions of this Agreement shall
be deemed severable and the invalidity or unenforceability of
any provision shall not affect the validity or enforceability
of the other provisions hereof.
26. Entire Agreement. This Agreement constitutes the
entire agreement between the parties with respect to the
subject matter of this Agreement and supersedes all prior
agreements, if any, understandings and arrangements, oral or
written, between the parties with respect to the subject matter
of this Agreement.
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by its duly authorized officer and the
Executive has executed this Agreement as of the day and year
first above written.
THE READER'S DIGEST ASSOCIATION, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief Executive Officer
/s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
EXHIBIT A
THE READER'S DIGEST ASSOCIATION, INC.
1994 KEY EMPLOYEE LONG TERM INCENTIVE PLAN
Annual Non-Qualified Stock Option Grant in Respect of Fiscal
1999
(unvested compensatory stock options)
TERMS AND CONDITIONS
This stock option grant (the "Option") from The Reader's
Digest Association, Inc. (the "Company") to purchase 250,000
shares of its Class A Nonvoting Common Stock, $.01 par value
(the "Common Stock"), is subject to the provisions of The
Reader's Digest Association, Inc. 1994 Key Employee Long Term
Incentive Plan (the "Plan") and the terms and conditions
detailed below, which terms and conditions the Company
represents are not in conflict with the Plan.
1. Option Terms. Except as provided in this Paragraph 1
and Paragraphs 2, 3, and 4, this Option may not be exercised
prior to April 28, 1999, and may not be exercised unless you
have remained in the continuous employ of the Company, or any
of its subsidiaries as designated by the Board of Directors of
the Company under the Plan ("Designated Subsidiaries"), from
the Grant Date until the date of exercise. This Option may be
exercised from time to time on or after April 28, 1999,
provided that the aggregate number of shares of Common Stock
acquired pursuant to exercise of this Option is not in excess
of:
(i) on and after April 28, 1999, but before April 28,
2000, 25 percent of the total number of shares which may be
purchased pursuant to this Option (62,500 shares);
(ii) on and after April 28, 2000, but before
April 28, 2001, 50 percent of the total number of shares which
may be purchased pursuant to this Option (125,000 shares);
(iii) on and after April 28, 2001, but before
April 28, 2002, 75 percent of the total number of shares which
may be purchased pursuant to this Option (187,500 shares); and
(iv) on and after April 28, 2002, 100 percent of
the total number of shares which may be purchased pursuant to
this Option (250,000 shares).
The "Grant Date" of the Option is April 28, 1998.
This Option expires at the close of business on April 28, 2008.
Notwithstanding the foregoing, the Committee in its
sole discretion after the grant may accelerate the
exercisability of all or part of this Option to a date or dates
no earlier than October 28, 1998.
2. Change in Control. Notwithstanding the foregoing, you
may exercise this Option, without regard to the percentage
limitations of Paragraph 1, upon the occurrence of a "Change in
Control" of the Company (as defined in the Plan), provided that
your right to exercise this Option pursuant to this Paragraph 2
shall be subject to limitation by the Company in accordance
with Section 12.3 of the Plan, as modified by Section 13(b) of
the Employment Agreement.
3. Termination of Employment.
(a) Retirement. If your employment terminates on or
after age fifty-five (55) after at least five (5) years of
employment by the Company and/or a Designated Subsidiary, this
Option shall be fully vested and may thereafter be exercised by
you for a period of three (3) years from the date of such
termination of employment or until the expiration of the stated
term of this Option, whichever period is shorter.
(b) Total Disability. If your employment by the
Company or a Designated Subsidiary terminates by reason of a
total disability as defined in the Company's Long Term
Disability Plan or by reason of your Disability as defined in
your Employment Agreement, this Option shall be fully vested
and may thereafter be exercised by you for a period of three
(3) years from the date of your termination of employment or
until the expiration of the stated term of this Option,
whichever period is shorter.
(c) Death While Employed. If your employment with
the Company or a Designated Subsidiary terminates by reason of
your death, this Option shall be fully vested and may
thereafter be exercised by the legal representative of your
estate for a period of one (1) year from the date of your death
or until the expiration of the stated term of this Option,
whichever period is shorter.
(d) Other Termination. If your employment by the
Company or its Designated Subsidiary terminates (as defined in
the Plan) for any reason other than as specified in
subparagraphs (a), (b) or (c) above, this Option shall
terminate on the date of your termination of employment, except
that, if you were involuntarily terminated by the Company or a
Designated Subsidiary without Cause (as defined in your
Employment Agreement) or if you terminate your employment for
Good Reason (as defined in your Employment Agreement), this
Option shall continue to vest during the two-year period
commencing on the date of such termination and, to the extent
exercisable, this Option may be exercised for a period ending
two (2) years and three (3) months after such termination of
employment or for a period ending five (5) years after such
termination of employment (if you meet the requirements of
Paragraph 3(a) at the end of the Severance Period (as defined
in your Employment Agreement) as if your employment with the
Company continued during the Severance Period) or, if less, the
balance of the stated term of this Option. Notwithstanding the
foregoing, the Company may terminate the post-employment future
vesting and future exercisability of this Option by written
notice to you pursuant to Section 14(e) of your Employment
Agreement because of a violation of Section 14(b) of your
Employment Agreement.
4. Death During the Extended Exercise Period. If you die
within either of the three (3) year periods mentioned in
Paragraphs 3(a) and (b) hereof, or within the period in
Paragraph 3(d) hereof, this Option, to the extent unexercised,
shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of twelve (12)
months from the date of your death or until the expiration of
the stated term of this Option, whichever period is shorter.
5. Exercise of Option.
(a) Procedure. Subject to whatever installment
exercise waiting periods apply hereunder, exercise of this
Option, in whole or in part, shall be made by submitting to the
Company written notice of exercise in the form of the exercise
letter provided by the Company herewith, specifying the number
of shares to be purchased, or by providing such telephonic or
other notice as the Company shall specify. The exercise of
this Option shall be effective on the first business date on
which the Company receives due notice of exercise at the
principal corporate offices of the Company in accordance with
the procedures established by the Company. Payment for the
shares of Common Stock may be made in cash and/or shares of
Common Stock (accompanied by a stock power with your signature
guaranteed) owned by you for at least six (6) months and for
which you have good title, free and clear of any liens or
encumbrances, by delivery of a properly executed exercise
notice, together with a copy of irrevocable instruction to a
New York Stock Exchange member brokerage firm to deliver
promptly to the Company the amount of sale proceeds in payment
of the purchase price or such other method as approved by the
Committee. No shares of Common Stock shall be issued until
payment therefor has been made.
(b) Tax Withholding. All applicable withholding
taxes either shall be paid by you directly to the Company in
cash or shall be collected by the Company's reduction of the
number of shares otherwise deliverable to you, in each case
prior to the issuance of the Common Stock to be acquired by you
upon exercise of this Option.
6. Adjustments. If there is any change in the capital
stock of the Company by reason of any stock dividend or
distribution, stock split, recapitalization, merger,
consolidation, split-up, combination or exchange of shares, or
any similar change affecting the capital stock of the Company
as provided under the Plan, the Committee of the Board of
Directors (as defined in the Plan) may make such adjustments as
it may determine to be appropriate in accordance with the Plan
and such determination shall be final and binding.
7. Registration of Shares. The obligation of the Company
to issue, sell and deliver shares under this Option shall be
subject to all applicable laws, rules and regulations, and such
approvals by governmental agencies as may be required,
including, without limitation, the effectiveness of a
registration statement under the Securities Act of 1933, as
amended, covering the shares to be so issued, and the receipt
by the Company of an acknowledgment of receipt of a prospectus.
Accordingly, shares will not be issued upon the exercise of the
Option unless the Company has taken the steps necessary to
comply with applicable law.
8. Nontransferability. This Option is not transferable
or assignable otherwise than by will or by the laws of descent
and distribution and may be exercised only during your lifetime
and only by you, except as provided in Paragraphs 3 and 4
hereof with respect to your death.
9. NOTWITHSTANDING ANY OTHER PROVISION CONTAINED HEREIN,
THIS OPTION SHALL NOT BE EXERCISABLE AFTER THE EXPIRATION OF
TEN YEARS FROM THE GRANT DATE.
10. Miscellaneous.
(a) The Company shall have no obligation to notify
you or your representative of the expiration of this Option.
(b) This Option is subject to the detailed provisions
of the Plan, a copy of which may be obtained from the office of
the Secretary of the Company.
(c) Nothing herein is intended to or shall give you
any right or status of any kind as a shareholder of the Company
in respect of any shares covered by this Option or entitle you
to any dividends or other distributions thereon unless and
until said shares shall have been registered in your name.
(d) The granting of this Option does not confer upon
you any right to continue in the employ of the Company or any
of its Designated Subsidiaries.
(e) This Option is not intended to be an incentive
stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
(f) Notwithstanding any other provision contained
herein, this Option may also be exercised to the extent
provided in any employee benefit plan of the Company.
EXHIBIT B
THE READER'S DIGEST ASSOCIATION, INC.
1994 KEY EMPLOYEE LONG TERM INCENTIVE PLAN
Non-Qualified Stock Option Grant: 1998
(vested replacement stock options)
TERMS AND CONDITIONS
This stock option grant (the "Option") from The Reader's
Digest Association, Inc. (the "Company") to purchase 470,000
shares of its Class A Nonvoting Common Stock, $.01 par value
(the "Common Stock"), is subject to the provisions of The
Reader's Digest Association, Inc. 1994 Key Employee Long Term
Incentive Plan (the "Plan") and the terms and conditions
detailed below, which terms and conditions the Company
represents are not in conflict with the Plan.
1. Option Terms. Except as provided in Paragraphs 2 and
3, this Option may be exercised at any time prior to its
expiration and may be exercised only if you have remained in
the continuous employ of the Company, or any of its
subsidiaries as designated by the Board of Directors of the
Company under the Plan ("Designated Subsidiaries"), from the
Grant Date until the date of exercise. The "Grant Date" of the
Option is April 28, 1998. This Option expires at the close of
business on April 28, 2006.
2. Termination of Employment.
(a) Retirement. If your employment terminates on or
after age 55 after at least five (5) years of employment by the
Company and/or a Designated Subsidiary, this Option may be
exercised by you for a period of three (3) years from the date
of such termination of employment or until the expiration of
the stated term of this Option, whichever period is shorter.
(b) Total Disability. If your employment by the
Company or a Designated Subsidiary terminates by reason of a
total disability as defined in the Company's Long Term
Disability Plan or by reason of your Disability as defined in
your Employment Agreement, this Option may be exercised by you
for a period of three (3) years from the date of your
termination of employment or until the expiration of the stated
term of this Option, whichever period is shorter.
(c) Death While Employed. If your employment with
the Company or a Designated Subsidiary terminates by reason of
your death, this Option may be exercised by the legal
representative of your estate for a period of one (1) year from
the date of your death or until the expiration of the stated
term of this Option, whichever period is shorter.
(d) Other Termination. If your employment by the
Company or its Designated Subsidiary terminates (as defined in
the Plan) for any reason other than as specified in
subparagraphs (a), (b) or (c) above, this Option shall
terminate on the date of your termination of employment, except
that, if you were involuntarily terminated by the Company or a
Designated Subsidiary without Cause (as defined in your
Employment Agreement) or if you terminated your employment for
Good Reason (as defined in your Employment Agreement), this
Option may be exercised for a period ending two (2) years and
three (3) months after such termination as an employee or for a
period ending five (5) years after such termination of
employment (if you meet the requirements of Paragraph 3(a) at
the end of the Severance Period (as defined in your Employment
Agreement) as if your employment with the Company continued
during the Severance Period) or, if less, the balance of the
stated term of this Option or the Company giving you notice
under Section 14(e) of your Employment Agreement that it is
terminating the exercisability of this Option because of a
violation of Section 14(b) of the Employment Agreement.
3. Death During the Extended Exercise Period. If you die
within either of the three (3) year periods mentioned in
Paragraphs 2(a) and (b) hereof or within the period in
Paragraph 2(d) hereof, this Option, to the extent unexercised,
shall thereafter be exercisable for a period of twelve (12)
months from the date of your death or until the expiration of
the stated term of this Option, whichever period is shorter.
4. Exercise of Option.
(a) Procedure. Exercise of this Option, in whole or
in part, shall be made by submitting to the Company written
notice of exercise in the form of the exercise letter provided
by the Company, specifying the number of shares to be
purchased, or by providing such telephonic or other notice as
the Company shall specify. The exercise of this Option shall
be effective on the first business date on which the Company
receives due notice of exercise at the principal corporate
offices of the Company in accordance with the procedures
established by the Company. Payment for the shares of Common
Stock may be made in cash and/or shares of Common Stock
(accompanied by a stock power with your signature guaranteed)
owned by you for at least six (6) months and for which you have
good title, free and clear of any liens or encumbrances, by
delivery of a properly executed exercise notice, together with
a copy of irrevocable instruction to a New York Stock Exchange
member brokerage firm to deliver promptly to the Company the
amount of sale proceeds in payment of the purchase price or
such other method as approved by the Committee. No shares of
Common Stock shall be issued until payment therefor has been
made.
(b) Tax Withholding. All applicable withholding
taxes either shall be paid by you directly to the Company in
cash or shall be collected by the Company's reduction of the
number of shares otherwise deliverable to you, in each case
prior to the issuance of the Common Stock to be acquired by you
upon exercise of this Option.
5. Adjustments. If there is any change in the capital
stock of the Company by reason of any stock dividend or
distribution, stock split, recapitalization, merger,
consolidation, split-up, combination or exchange of shares, or
any similar change affecting the capital stock of the Company
as provided under the Plan, the Committee of the Board of
Directors (as defined in the Plan) may make such adjustments as
it may determine to be appropriate in accordance with the Plan
and such determination shall be final and binding.
6. Registration of Shares. The obligation of the Company
to issue, sell and deliver shares under this Option shall be
subject to all applicable laws, rules and regulations, and such
approvals by governmental agencies as may be required,
including, without limitation, the effectiveness of a
registration statement under the Securities Act of 1933, as
amended, covering the shares to be so issued, and the receipt
by the Company of an acknowledgment of receipt of a prospectus.
Accordingly, shares will not be issued upon the exercise of the
Option unless the Company has taken the steps necessary to
comply with applicable law.
7. Nontransferability. This Option is not transferable
or assignable otherwise than by will or by the laws of descent
and distribution and may be exercised only during your lifetime
and only by you, except as provided in Paragraphs 2 and 3
hereof with respect to your death.
8. NOTWITHSTANDING ANY OTHER PROVISION CONTAINED HEREIN,
THIS OPTION SHALL NOT BE EXERCISABLE AFTER THE EXPIRATION OF
EIGHT YEARS FROM THE GRANT DATE.
9. Miscellaneous.
(a) The Company shall have no obligation to notify
you or your representative of the expiration of this Option.
(b) This Option is subject to the detailed provisions
of the Plan, a copy of which may be obtained from the office of
the Secretary of the Company.
(c) Nothing herein is intended to or shall give you
any right or status of any kind as a shareholder of the Company
in respect of any shares covered by this Option or entitle you
to any dividends or other distributions thereon unless and
until said shares shall have been registered in your name.
(d) The granting of this Option does not confer upon
you any right to continue in the employ of the Company or any
of its Designated Subsidiaries.
(e) This Option is not intended to be an incentive
stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
(f) Notwithstanding any other provision contained
herein, this Option may also be exercised to the extent
provided in any employee benefit plan of the Company.
EXHIBIT C
THE READER'S DIGEST ASSOCIATION, INC.
1994 KEY EMPLOYEE LONG TERM INCENTIVE PLAN
Non-Qualified Stock Option Grant: 1998
(unvested replacement stock option)
TERMS AND CONDITIONS
This stock option grant (the "Option") from The Reader's
Digest Association, Inc. (the "Company") to purchase 360,000
shares of its Class A Nonvoting Common Stock, $.01 par value
(the "Common Stock"), is subject to the provisions of The
Reader's Digest Association, Inc. 1994 Key Employee Long Term
Incentive Plan (the "Plan") and the terms and conditions
detailed below, which terms and conditions the Company
represents are not in conflict with the Plan.
1. Option Terms. Except as provided in this Paragraph 1
and Paragraphs 2, 3, and 4, this Option may not be exercised
prior to April 28, 1999, and may not be exercised unless you
have remained in the continuous employ of the Company, or any
of its subsidiaries as designated by the Board of Directors of
the Company under the Plan ("Designated Subsidiaries"), from
the Grant Date until the date of exercise. This Option may be
exercised from time to time on or after April 28, 1999,
provided that the aggregate number of shares of Common Stock
acquired pursuant to exercise of this Option is not in excess
of:
(i) on and after April 28, 1999, but before April 28,
2000, 33.33 percent of the total number of shares which may be
purchased pursuant to this Option (120,000 shares);
(ii) on and after April 28, 2000, but before
April 28, 2001, 66.67 percent of the total number of shares
which may be purchased pursuant to this Option (240,000
shares);
(iii) on and after April 28, 2001, 100 percent of
the total number of shares which may be purchased pursuant to
this Option (360,000 shares).
The "Grant Date" of the Option is April 28, 1998.
This Option expires at the close of business on April 28, 2008.
Notwithstanding the foregoing, the Committee in its
sole discretion after the grant may accelerate the
exercisability of all or part of this Option.
2. Change in Control. Notwithstanding the foregoing, you
may exercise this Option, without regard to the percentage
limitations of Paragraph 1, upon the occurrence of a "Change in
Control" of the Company (as defined in the Plan), provided that
your right to exercise this Option pursuant to this Paragraph 2
shall be subject to limitation by the Company in accordance
with Section 12.3 of the Plan, as modified by Section 13(b) of
the Employment Agreement.
3. Termination of Employment.
(a) Retirement. If your employment terminates on or
after age fifty-five (55) after at least five (5) years of
employment by the Company and/or a Designated Subsidiary, this
Option shall be fully vested and may thereafter be exercised by
you for a period of three (3) years from the date of such
termination of employment or until the expiration of the stated
term of this Option, whichever period is shorter.
(b) Total Disability. If your employment by the
Company or a Designated Subsidiary terminates by reason of a
total disability as defined in the Company's Long Term
Disability Plan or by reason of your Disability as defined in
your Employment Agreement, this Option shall be fully vested
and may thereafter be exercised by you for a period of three
(3) years from the date of your termination of employment or
until the expiration of the stated term of this Option,
whichever period is shorter.
(c) Death While Employed. If your employment with
the Company or a Designated Subsidiary terminates by reason of
your death, this Option shall be fully vested and may
thereafter be exercised by the legal representative of your
estate for a period of one (1) year from the date of your death
or until the expiration of the stated term of this Option,
whichever period is shorter.
(d) Other Termination. If your employment by the
Company or its Designated Subsidiary terminates (as defined in
the Plan) for any reason other than as specified in
subparagraphs (a), (b) or (c) above, this Option shall
terminate on the date of your termination of employment except
that, if you were involuntarily terminated by the Company or a
Designated Subsidiary without Cause (as defined in your
Employment Agreement) or if you terminate your employment for
Good Reason (as defined in your Employment Agreement), this
Option shall continue to vest during the two-year period
commencing on the date of such termination and, to the extent
not already vested, the portion of this Option that would have
vested on April 28, 2001 (120,000 shares) will be vested as of
the end of the two-year period, and this Option may be
exercised for the lesser of the period ending two (2) years and
three (3) months after such termination of employment or for a
period ending five (5) years after such termination of
employment (if you meet the requirements of Paragraph 3(a) at
the end of the Severance Period (as defined in your Employment
Agreement) as if your employment with the Company continued
during the Severance Period) or, if less, the balance of the
stated term of this Option or the Company giving you notice
under Section 14(e) of your Employment Agreement that it is
terminating the exercisability of this Option because of a
violation of Section 14(b) of the Employment Agreement.
4. Death During the Extended Exercise Period. If you die
within either of the three (3) year periods mentioned in
Paragraphs 3(a) and (b) hereof or within the period in
Paragraph 3(d) hereof, this Option, to the extent unexercised,
shall thereafter be exercisable, to the extent to which it was
exercisable at the time of death, for a period of twelve (12)
months from the date of your death or until the expiration of
the stated term of this Option, whichever period is shorter.
5. Exercise of Option.
(a) Procedure. Subject to whatever installment
exercise waiting periods apply hereunder, exercise of this
Option, in whole or in part, shall be made by submitting to the
Company written notice of exercise in the form of the exercise
letter provided by the Company herewith, specifying the number
of shares to be purchased, or by providing such telephonic or
other notice as the Company shall specify. The exercise of
this Option shall be effective on the first business date on
which the Company receives due notice of exercise at the
principal corporate offices of the Company in accordance with
the procedures established by the Company. Payment for the
shares of Common Stock may be made in cash and/or shares of
Common Stock (accompanied by a stock power with your signature
guaranteed) owned by you for at least six (6) months and for
which you have good title, free and clear of any liens or
encumbrances, by delivery of a properly executed exercise
notice, together with a copy of irrevocable instruction to a
New York Stock Exchange member brokerage firm to deliver
promptly to the Company the amount of sale proceeds in payment
of the purchase price or such other method as approved by the
Committee. No shares of Common Stock shall be issued until
payment therefor has been made.
(b) Tax Withholding. All applicable withholding
taxes either shall be paid by you directly to the Company in
cash or shall be collected by the Company's reduction of the
number of shares otherwise deliverable to you, in each case
prior to the issuance of the Common Stock to be acquired by you
upon exercise of this Option.
6. Adjustments. If there is any change in the capital
stock of the Company by reason of any stock dividend or
distribution, stock split, recapitalization, merger,
consolidation, split-up, combination or exchange of shares, or
any similar change affecting the capital stock of the Company
as provided under the Plan, the Committee of the Board of
Directors (as defined in the Plan) may make such adjustments as
it may determine to be appropriate in accordance with the Plan
and such determination shall be final and binding.
7. Registration of Shares. The obligation of the Company
to issue, sell and deliver shares under this Option shall be
subject to all applicable laws, rules and regulations, and such
approvals by governmental agencies as may be required,
including, without limitation, the effectiveness of a
registration statement under the Securities Act of 1933, as
amended, covering the shares to be so issued, and the receipt
by the Company of an acknowledgment of receipt of a prospectus.
Accordingly, shares will not be issued upon the exercise of the
Option unless the Company has taken the steps necessary to
comply with applicable law.
8. Nontransferability. This Option is not transferable
or assignable otherwise than by will or by the laws of descent
and distribution and may be exercised only during your lifetime
and only by you, except as provided in Paragraphs 3 and 4
hereof with respect to your death.
9. NOTWITHSTANDING ANY OTHER PROVISION CONTAINED HEREIN,
THIS OPTION SHALL NOT BE EXERCISABLE AFTER THE EXPIRATION OF
TEN YEARS FROM THE GRANT DATE.
10. Miscellaneous.
(a) The Company shall have no obligation to notify
you or your representative of the expiration of this Option.
(b) This Option is subject to the detailed provisions
of the Plan, a copy of which may be obtained from the office of
the Secretary of the Company.
(c) Nothing herein is intended to or shall give you
any right or status of any kind as a shareholder of the Company
in respect of any shares covered by this Option or entitle you
to any dividends or other distributions thereon unless and
until said shares shall have been registered in your name.
(d) The granting of this Option does not confer upon
you any right to continue in the employ of the Company or any
of its Designated Subsidiaries.
(e) This Option is not intended to be an incentive
stock option within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended.
(f) Notwithstanding any other provision contained
herein, this Option may also be exercised to the extent
provided in any employee benefit plan of the Company.
EXHIBIT D
THE READER'S DIGEST ASSOCIATION, INC.
RESTRICTED STOCK
TERMS AND CONDITIONS
This grant of 358,000 shares (the "Restricted Stock")
of Class A Nonvoting Common Stock, $.01 par value ("Common
Stock") of The Reader's Digest Association, Inc. (the
"Company") is subject to the provisions of The Reader's Digest
Association, Inc. 1994 Key Employee Long Term Incentive Plan
(the "Plan") and the terms and conditions detailed below, which
terms and conditions the Company represents are not in conflict
with the Plan.
1. Grant of Shares Subject to Conditions and
Restrictions. This grant of Restricted Stock is subject to the
condition that you shall have delivered to the Company a duly
signed stock power, endorsed in blank, relating to the
Restricted Stock. The Restricted Stock is also granted to you
subject to the restrictions contained herein and in the Plan,
which shall lapse after the expiration of period or periods
described below (the "Restrictions").
2. Restrictions.
(a) Transfer. Until the Restrictions have lapsed, as
provided below, you may not anticipate, alienate, attach, sell,
assign, pledge, encumber, charge or otherwise transfer any of
the Restricted Stock still subject to Restrictions without the
written consent of the Company as authorized by its Board of
Directors or the Committee (as defined in the Plan) under the
Plan.
(b) Forfeiture. Upon your termination of employment
(as defined in the Plan) by the Company or any of its
subsidiaries as designated by the Board of Directors of the
Company under the Plan ("Designated Subsidiaries"), then except
as provided in Paragraph 5 hereof, all Restricted Stock still
subject to Restrictions shall be returned to or canceled by the
Company, appropriately adjusted by the Committee pursuant to
the Plan for any change in the capital stock of the Company by
reason of any stock dividend or distribution, stock split,
recapitalization, reorganization, merger, consolidation,
split-up, combination or exchange of shares, or any similar
change affecting the capital stock of the Company, as provided
under the Plan, which has occurred after the date hereof, and
shall be deemed to have been forfeited by you.
3. Lapse of Restrictions. Subject to prior lapse of
Restrictions pursuant to Paragraphs 4 or 5 hereof, the
Restrictions shall lapse with respect to one-sixth of the
Restricted Stock (59,666 shares) on each of September 30, 1998,
December 31, 1998 and December 31, 1999, and with respect to
one-fourth of the Restricted Stock (89,501 shares) on each of
June 30, 2000 and June 30, 2002, in each case provided that you
have remained in the continuous employ of the Company or any of
its Designated Subsidiaries through the relevant date.
Notwithstanding the foregoing, the Committee may, in its sole
discretion after the grant, accelerate the lapse of
Restrictions as to some or all of the Restricted Stock to a
date or dates no earlier than within six months from the date
hereof.
4. Change in Control. Notwithstanding the foregoing, the
Restrictions applicable to all of the Restricted Stock granted
hereunder shall lapse, without regard to the limitations of
Paragraph 3, upon a "Change in Control" of the Company (as
defined in the Plan), provided that the lapse of Restrictions
pursuant to this Paragraph 4 shall be subject to limitation by
the Company in accordance with Section 12.3 of the Plan, as
modified by Section 13(b) of your Employment Agreement.
5. Termination of Employment.
(a) Total Disability. If your employment by the
Company or a Designated Subsidiary terminates by reason of a
total disability as defined in the Company's Long Term
Disability Plan or by reason of your Disability as defined in
your Employment Agreement, the Restrictions shall lapse upon
such termination of employment.
(b) Death. If your employment by the Company or a
Designated Subsidiary terminates by reason of your death, the
Restrictions shall lapse upon your death.
(c) Other Termination. If your employment by the
Company or a Designated Subsidiary terminates for any reason
other than total disability/Disability or death as provided in
(a) and (b) above, respectively, the provisions of Paragraph
2(b) above shall apply, except that, if you were involuntarily
terminated by the Company or a Designated Subsidiary without
Cause (as defined in your Employment Agreement) or if you
terminate your employment for Good Reason (as defined in your
Employment Agreement), the Restrictions shall continue to lapse
in accordance with Paragraph 3 during the two-year period
commencing on the date of such termination and, to the extent
not already lapsed, the Restrictions that would have lapsed on
June 30, 2002 (with respect to 89,501 shares of Restricted
Stock) shall lapse as of the end of the two-year period.
Notwithstanding the foregoing, the Company may terminate the
post-employment future lapsing of Restrictions by written
notice to you pursuant to Section 14(e) of your Employment
Agreement because of a violation of Section 14(b) of your
Employment Agreement.
6. Adjustments. If there is any change in the capital
stock of the Company as described in Paragraph 2(b), the term
"Restricted Stock" shall include any shares or other securities
that you receive or become entitled to receive as a result of
your ownership of the original Restricted Stock, and the
Committee may make any other adjustments as it may determine to
be appropriate in accordance with the Plan, such determination
to be final and binding.
7. Restrictive Legend. Either a stock certificate will
be issued in your name in respect of the Restricted Stock or
the Restricted Stock will be issued in your name and maintained
in non-certificated form. Any certificate for Restricted
Stock will be inscribed with the following legend and such
additional legend as may be required to comply with the
Securities Act of 1933 or as otherwise permitted under the
Plan:
"The anticipation, alienation, attachment, sale,
transfer, assignment, pledge, encumbrance or charge of
the shares of stock represented hereby are subject to
the terms and conditions (including forfeiture) of The
Reader's Digest Association, Inc. 1994 Key Employee
Long Term Incentive Plan and an Agreement entered into
between the registered owner (the Employee) and the
Company dated April 28, 1998. Copies of such Plan and
Agreement are on file at the principal office of the
Company."
8. Custody and Tax Withholding. Any stock certificates
evidencing the Restricted Stock will be held in custody by the
Company until the Restrictions thereon have lapsed and all
applicable withholding taxes have been collected by (a)
withholding and re-transferring to the Company or a Designated
Subsidiary the appropriate number of shares necessary to cover
the withholding taxes, (b) lump sum payroll deduction or (c)
direct payment to the Company or a Designated Subsidiary. For
purposes of tax withholding, shares of Restricted Stock shall
be valued at their Fair Market Value (as defined in the Plan)
on the date of the taxable event that gives rise to the tax
withholding obligation.
9. Compliance With Laws. The obligation of the Company
to issue and deliver the Restricted Stock granted hereunder
shall be subject to all applicable laws, rules and regulations,
and such approvals by governmental agencies as may be required,
including, without limitation, if deemed advisable by the
Committee upon the advice of counsel, the effectiveness of a
registration statement under the Securities Act of 1933, as
amended, covering the shares to be so issued.
10. Miscellaneous.
(a) The Restricted Stock is subject to the detailed
provisions of the Plan, a copy of which may be obtained from
the Human Resources Department of the Company.
(b) You shall have all of the rights and status as a
stockholder of the Company in respect of the Restricted Stock,
including tender, proxy and the right to receive dividends or
other distributions thereon.
(c) The granting of the Restricted Stock does not
confer upon you any right to continue in the employ of the
Company or any of its Designated Subsidiaries.
EXHIBIT E
GENERAL WAIVER AND RELEASE OF CLAIMS
In consideration of my being granted severance
payments and certain other release based benefits to which I am
not otherwise entitled unless I execute this release, I do
hereby, for myself, my heirs, executors, and administrators,
waive, remise, release and forever discharge The Reader's
Digest Association, Inc., its subsidiaries and affiliates and
their shareholders, directors, officers, employees,
representatives, agents, partners, insurers and contractors
(collectively, "RDA") of and from all claims and demands
arising prior to this date of every name, type, act and nature
arising or existing by reason of any known or unknown, past or
present act or failure to act in connection with, arising out
of, or related to my employment with the Company or termination
of employment from the Company. This release is being provided
as part of an agreement dated April 28, 1998 (the "Agreement").
I understand that, nothing herein shall be deemed to waive or
release any of my rights or benefits as set forth in, or
preserved by, the Agreement or my rights of indemnification and
director and officer liability insurance under the Company's
Certificate of Incorporation, the Company's By-laws, any
agreement or at law.
This General Waiver and Release of Claims includes,
but is not limited to, any claims, demands, complaints,
actions, or suits, which have or might have been asserted under
federal, state or local statutes concerning civil rights,
unlawful employment practices, wrongful discharge, or
retaliatory discharge (including but not limited to claims
under the Employee Retirement Income Security Act of 1974, as
amended); Title VII of the Civil Rights Act of 1964, 42 U.S.C.
Section 1981; the Equal Pay Act of 1963; the Age Discrimination
in Employment Act, as amended by the Older Workers Benefit
Protection Act; the Rehabilitation Act of 1973 (Sections 503
and 504); the Americans With Disabilities Act; Executive Order
11246, as amended, and the regulations thereunder, the Civil
Rights Act of 1991; the Family and Medical Leave Act of 1993;
the New York State Human Rights Law; and Article 20-C, Section
740 of the N.Y. Labor Law, Retaliatory Action By Employers, and
any and all other claims which I now have regarding my
employment and separation from employment with RDA or its
affiliates.
I acknowledge that I have been advised by RDA to
consult an attorney prior to signing this General Waiver and
Release of Claims, that I have been afforded an opportunity to
be represented by counsel of my choice who has had an
opportunity to reviews this General Waiver and Release of
Claims and that I have had at least twenty-one (21) days to
consider this release. I warrant that I am executing this
document of my own free will, knowingly and voluntarily. I am
not relying on any promises or representations made to me other
than RDA's promises as set forth in the Agreement. In the
event that any provision of this General Waiver and Release of
Claims is held to be invalid, the remaining provisions shall
continue to be valid and binding. This document is not an
admission of liability or wrongdoing.
I understand that I have seven (7) days following the
signing of this General Waiver and Release of Claims to revoke
it and this General Waiver and Release of
Claims will not become effective or enforceable, and severance
payments will not be made, until after that seven (7) day
revocation period has elapsed.
WITNESS: Date:
(Witness' Signature (Employee's Signature)
(Printed Named) (Printed Name)
(Home Address) (Home Address)
HUMAN RESOURCES:
(Signature) (Represents Confirmation)
(Printed Name)
