EXHIBIT 99.2
As of April 1, 2003
Xx. Xxxxx Xxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxx, XX 00000
Dear Xx. Xxxxx:
Upon the terms and subject to the conditions set forth below, this
letter shall constitute the agreement pursuant to which The Millbrook Press
Incorporated ("Millbrook" or the "Company") agrees to employ you as President,
Chief Executive Officer and Chief Financial Officer.
1. Term of Employment
1.1 TERM. Millbrook hereby employs you, and you hereby accept
employment with Millbrook, for the period commencing April 1,
2003 and terminating July 31, 2005, unless sooner terminated in
accordance with the provisions of Section 9 hereof.
1.2 DEFINITION. As used herein, "Employment Term" means the entire
period of your employment by Millbrook hereunder, whether for
the period provided above, or whether sooner terminated in
accordance with the provisions of Section 9 hereof.
2. Duties
2.1 DESCRIPTION OF DUTIES. In your capacity as President, Chief
Executive Officer and Chief Financial Officer, you shall
perform such duties and exercise such authority, consistent
with your positions, as may from time to time be given to you
by the Board of Directors of Millbrook.
2.2 DEVOTION OF ENTIRE TIME. During the Employment Term, you agree
that you will loyally and conscientiously devote your entire
productive time, efforts, ability and attention to the duties
of your office and to promote the interests of Millbrook, and
that you will not engage in any other business duties or
pursuits whatsoever. Notwithstanding any of the foregoing, you
will not be prohibited from making passive personal investments
or being involved in the private business affairs of your
immediate family to the extent that such activities do not
interfere with the performance of your duties hereunder and are
not in any way competitive with the business of Millbrook.
3. Compensation
3.1 ANNUAL SALARY. During the Employment Term, you will be
compensated at a base salary at the rate of $160,000 per annum,
payable in accordance with the customary payroll policies of
Millbrook; provided however, that if pursuant to Section 9.1,
9.2 or 9.3 hereof, your employment is terminated prior to the
end of the Employment Term, you will receive the appropriate
pro rata portion of your annual salary for the period during
which you are actually employed by Millbrook.
3.2 INCENTIVE COMPENSATION FOR THE FISCAL YEARS ENDED JULY 31, 2004
AND JULY 31, 2005. With respect to each of the fiscal years
ended July 31, 2004 and July 31, 2005, you will be eligible
annually to earn up to an additional $24,000 of incentive
compensation (the "Initial Performance Bonus"). The Initial
Performance Bonus will be based on the Company meeting the
annual budgeted amount of net sales, cash flow and net income.
The Initial Performance Bonus may be partially paid if one or
more items, but not all three items, are met. If all three
items are satisfied, you will be entitled to receive all of the
Initial Performance Bonus and you may be entitled to receive
additional incentive compensation subject to the satisfaction
of additional requirements as further described in this Section
3.2. With respect to each of the Fiscal Years ended July 31,
2004 and July 31, 2005, if each of net sales, cash flow and net
income equals or exceeds 110% of the annual budgeted amount,
then in addition to the Initial Performance Bonus, you will be
entitled to receive an additional bonus equal to $8,000 per
annum (the "Second Performance Bonus"). With respect to each of
the Fiscal Years ended July 31, 2004 and July 31, 2005, if each
of net sales, cash flow and net income equals or exceeds 120%
of the annual budgeted amount, then in addition to the Initial
Performance Bonus and the Second Performance Bonus, you will be
entitled to receive an additional bonus equal to $16,000 per
annum (the "Third Performance Bonus"). The budgeted figures are
those submitted by the Company to and approved by the Board of
Directors based on the plan presented to the Board Directors in
the Board package for the February 10, 2003 Board of Directors
meeting of the Company. In order to receive any or all of your
Initial Performance Bonus, Second Performance Bonus, or Third
Performance Bonus for any Fiscal Year, you must be employed by
the Company at the end of such Fiscal Year.
3.3 INCENTIVE COMPENSATION FOR THE FISCAL YEAR ENDED JULY 31, 2003.
With respect to the Fiscal Year ended July 31, 2003, you will
be eligible to receive additional compensation of $5,000 if the
Company meets the estimate prepared on March 25, 2003 for each
of net sales, cash flow, and net income.
3.4 REIMBURSEMENT FOR BUSINESS EXPENSES. Millbrook will reimburse
you, upon presentation of proper expense statements or such
other supporting information as Millbrook may reasonably
require, for your reasonable and necessary business expenses
(including, without limitation, telephone, travel and
entertainment expenses) incurred or paid by you in connection
with the performance of your duties hereunder.
4. Fringe Benefits
You shall be entitled to participate on the same basis and subject
to the same qualifications as all other regular full time executive employees of
Millbrook in any fringe benefit plans Millbrook makes available from time to
time for all its employees, including those benefits available, if any, under
any retirement, disability, medical insurance and life insurance plans as the
same may be placed into effect from time to time. You shall be entitled to four
weeks of vacation for each of the Fiscal Years ended July 31, 2004 and July 31,
2005. With respect to the Fiscal Year ended July 31, 2003, you will be entitled
to vacation time equal to four weeks minus the amount of vacation time you have
used through the date of this Agreement during the Fiscal Year ended July 31,
2003. In addition, you shall be entitled to participate in such other benefit
plans, if any, as Millbrook makes generally available from time to time to
members of its executive staff.
5. Stock Options
You will be granted options to purchase 100,000 shares of Common
Stock at an exercise price equal to the average closing sales price of the
Company's Common Stock during the five trading days immediately preceding April
1, 2003, as reported on the Nasdaq Stock Market. Such options will vest in equal
annual installments over a four-year period commencing April 1, 2004 and will
have such other terms as are contained in the form of Stock Option Agreement
attached as Exhibit A hereto.
6. Change of Control
6.1 TERMINATION FOLLOWING A CHANGE OF CONTROL. If prior to the
Expiration of the Employment Term, there is a Change of
Control (as defined hereinafter), all options held by you
shall immediately become exercisable.
6.2 DEFINITION. For the purposes of this agreement, a Change of
Control means (i) any merger, consolidation, or combination of
Millbrook into or with another corporation or entity unless
the stockholders of Millbrook immediately prior to such
merger, consolidation or combination continue to own, directly
or indirectly, more than Fifty (50) percent of the voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors of the new (or
continued entity) or (ii) the sale of all or substantially all
of the assets of the Company.
7. Confidentiality
7.1 CONFIDENTIALITY. You and Millbrook acknowledge and agree that
during the Employment Term and in the course of the discharge
of your duties hereunder, you will have access to and become
acquainted with information concerning the operation of
Millbrook and other valuable information regularly used in
Millbrook's business and not generally known to others. You
acknowledge and agree that it is Millbrook's policy to
maintain such information as secret and confidential, whether
relating to Millbrook's business as heretofore or hereafter
conducted, or relating to Millbrook's customers, imprints,
clients, suppliers, authors, employees, consultants and other
business associates (all such information to be referred to
hereinafter as "Confidential Information"). You acknowledge
and agree that all Confidential Information is owned by
Millbrook and constitutes Millbrook's trade secrets.
7.2 NON-DISCLOSURE. You specifically agree that you shall not use,
publish, disseminate, misappropriate or otherwise disclose any
Confidential Information, whether directly or indirectly,
either during the term of this Agreement or at any other time
thereafter, except as is required by law or in the course of
employment hereunder. This provision shall not apply to
Confidential Information which becomes generally known to the
public by means other than your breach of this Section.
7.3 UNFAIR COMPETITION. You acknowledge and agree that the sale,
unauthorized use or disclosure of any Confidential Information
obtained by you during the course of your employment under
this Agreement, including but not limited to (a) information
concerning Millbrook's current, future or proposed work,
services, or products, (b) the fact that any such work,
services or products are planned, under consideration, or in
production, as well as, (c) any descriptions thereof,
constitute unfair competition. You promise and agree not to
engage in any unfair competition with Millbrook, either during
the term of this Agreement or at any other time thereafter.
7.4 PRECAUTIONS; RETURN OF MATERIALS. You agree to take all
reasonable precautions to protect the integrity of all
Confidential Information, including all documents and other
material entrusted to you containing or embodying Confidential
Information. You further agree that all files, records,
documents, and similar items relating to Millbrook's business,
whether prepared by you or by others, are and shall remain
exclusively the property of Millbrook, and that upon the
expiration or termination of your employment hereunder you
shall return to Millbrook all such material and all copies
thereof in your possession or control.
7.5 COPYRIGHTABLE AND PATENTABLE MATERIALS. You agree that during
the Employment Term you will take any and all business
developments, opportunities and potentially profitable
situations relating to Millbrook's business to the Board of
Directors of the Company for exploitation by Millbrook. You
agree promptly to disclose to Millbrook (and only to
Millbrook) any and all knowledge possessed or acquired (by you
by any means whatsoever) during the Employment Term which
relates in any way to the developments, concepts, ideas or
innovations, whether copyrightable or patentable or not,
relating to the business of Millbrook. For the compensation
and benefits received hereunder, you hereby assign and agree
to assign to Millbrook, your entire right, title and interest
in and to any of the aforesaid described materials,
discoveries, developments, concepts, ideas or innovations. All
such materials, discoveries, developments, concepts, ideas and
innovations shall be the property of Millbrook, and you shall,
without further compensation, do all things necessary to
enable Millbrook to perfect title in such materials,
discoveries, concepts, ideas and innovations and to obtain and
maintain effective patent or copyright protection in the
United States and foreign countries thereon, including without
limitation, rendering assistance and executing necessary
documents.
8. Competitive Activities
8.1 NON-COMPETITION. During the Employment Term and for a period
of (1) year after termination for cause, or by you for any
reason, you shall not within the United States:
(a) Consult with, be employed by, render services to, or
engage in any business activity with (whether as owner,
controller, employee, employer, consultant, partner,
officer, director, agent or otherwise) any business or
business entity competing directly with the business of
Millbrook;
(b) Without the prior written consent of the Board of
Directors of the Company, personally solicit or cause to
be solicited or authorize, directly or indirectly, for
or on behalf of yourself or any third party, any
business competitive with Millbrook, from others who are
or were at any time within 12 months prior to the
termination of your employment hereunder customers,
suppliers, clients, authors, agents or other business
associates of Millbrook.
8.2 SOLICITATION OF EMPLOYEES AND OTHERS. You acknowledge and
agree that Millbrook's directors, officers and employees
possess special knowledge of Millbrook's operations and are
vitally important to the continued success of Millbrook's
business. You shall not, without the prior written consent of
the Board of Directors of the Company, directly or indirectly
seek to persuade any director, officer or employee of
Millbrook either to discontinue his or her position with
Millbrook or to become employed or engaged in any activity
competitive with the activities of Millbrook.
8.3 SCOPE. If any court determines that any of the covenants set
forth herein, or any part or parts thereof, is unenforceable
because of the duration or geographic scope of such provision,
such court shall have the power to reduce the duration or
scope of such provision, as the case may be, and, in its
reduced form, such provision shall then be enforceable and
shall be enforced.
9. Termination
9.1 BY DEATH. Prior to the end of the Employment Term, your
employment hereunder shall be terminated in the event of
death.
9.2 PERMANENT DISABILITY. Your employment hereunder may be
terminated by Millbrook upon thirty (30) days' prior written
notice to you in the event of your permanent disability. As
used herein, "permanent disability" shall mean any illness,
injury or other physical or mental disability that shall
prevent you from performing a substantial portion of your
duties hereunder for any period of either 90 consecutive days
or an aggregate of 120 days during any consecutive twelve (12)
month period.
9.3 TERMINATION OF CAUSE. Millbrook reserves the right to
terminate this Agreement at any time for "cause" as defined
below. As used in this Agreement, the term "cause" shall mean
(i) the commission by you of any act which would constitute a
felony under state or federal law, or the equivalent under
foreign law; if prosecuted; (ii) the commission by you of any
act of moral turpitude; (iii) the material breach by you of
any of the provisions of this Agreement; (iv) your failure or
refusal to perform your obligations under this Agreement, or
other acts or omissions constituting neglect or dereliction of
duties hereunder; (v) fraud, dishonesty or other acts or
omissions by you that amount to a willful breach of your
fiduciary duty to Millbrook; (vi) your personal bankruptcy; or
(vii) the happening of any other event which, under provisions
of any laws applicable to Millbrook or its activities,
disqualifies you from acting in any or all capacities provided
for herein. Millbrook may, at its option, terminate this
Agreement for the reasons stated in this Section by giving
written notice of termination to you without prejudice to any
other remedy to which Millbrook may be entitled either by law,
in equity, or under this Agreement. Notwithstanding the
foregoing, if Millbrook proposes to exercise this right, it
will provide you with written notice and give you a reasonable
opportunity to present, with the assistance of an attorney if
you so choose, to the Board of Directors of Millbrook facts
and witnesses related to the proposed termination before such
termination becomes effective. Upon any such termination under
this Section, and upon Millbrook's request, you agree to
resign from all directorships and positions as an executive
officer you may then hold with Millbrook or any of its
affiliates.
9.4 SEVERANCE PAY. In addition to any rights you may have pursuant
to Section 6 hereof, in the event that Millbrook terminates
your employment on or before July 31, 2004 (other than for
"cause"), you will be entitled to a severance payment equal to
twelve months of your annual salary. In addition to any rights
you may have pursuant to Section 6 hereof, in the event that
Millbrook terminates your employment at any time from August
1, 2004 until on or before July 31, 2005 (other than for
"cause"), you will be entitled to a severance payment equal to
six months of your annual salary.
10. Miscellaneous
10.1 NOTICES. Notices hereunder shall be in writing and shall be
delivered by hand or sent by registered or certified mail,
return receipt requested, if to you, at the address set forth
above, and if to Millbrook Press, 0 Xxx Xxx Xxxxxxx Xxxx,
Xxxxxxxxxx, XX, 00000, or at such other address as to which
notice has been given in the manner herein provided.
10.2 ENTIRE AGREEMENT. This Agreement sets forth your and
Millbrook's complete understanding with respect to the maters
set forth herein and shall supercede any and all previous
contracts, arrangements or understandings between the Company
and you. This Agreement may be modified or amended only by an
agreement in writing signed by the parties hereto.
10.3 SEVERABILITY. If any term, provision, covenant, or condition
of this Agreement, or the application thereof to any person,
place or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such term, provision,
covenant, or condition as applied to other persons, places,
and circumstances shall remain in full force and effect.
10.4 HEADINGS. The headings and captions of the Agreement are
provided for convenience only and are intended to have no
effect in construing or interpreting this Agreement.
10.5 APPLICABLE LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of
Connecticut without giving effect to the conflict of laws or
principles thereunder.
If the foregoing accurately reflects your understanding of our
agreement and is acceptable to you, please sign the enclosed copy of this letter
and return it to the undersigned.
Very truly yours,
The Millbrook Press Incorporated
By: /s/ Xxxxxx X Xxxxxx
----------------------------
Xxxxxx X Xxxxxx,
Chairman
of the Board of Directors
By: /s/ Xxxxx Xxxxx
----------------------------
Xxxxx Xxxxx
