EXHIBIT 99.3
As of April 1, 2003
Xx. Xxxxx Xxxxxxxx
00 Xxx Xxxxxxxx Xxxx
Xxxxxxxxxxx, XX 00000
Dear Xx. Xxxxxxxx:
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 Executive
Vice President and Publisher of the Company's fiction and picture book line,
hereinafter called Roaring Brook Press ("RB").
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 Executive Vice
President and Publisher Roaring Brook Press, you shall be
totally responsible for the acquisition, publication and
management of the RB publishing program and you will perform
such duties and exercise such authority, consistent with your
position, as may from time to time be given to you by the
Board of Directors of Millbrook.
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 receive
a bonus of $14,000 (the "Guaranteed Bonus"). In addition,
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 Guaranteed Bonus, 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
$28,000 and an additional bonus of $20,000 relating to the
awarding of the Coldecott Award to one of the Company's
books. In order to receive the $28,000 bonus, you must be
employed by the Company at the end of the fiscal year ended
July 31, 2003.
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.
7.6 ORIGINAL BOOKS. It is agreed that original books written by
you are excluded from the provisions of paragraphs 7.5 and
2.2 above, except that you agree to offer Millbrook the
opportunity to publish any such books and, if Millbrook wishs
to publish the same, to negotiate in good faith with the
Executive Vice-President/Publisher and President the terms
for such publication. If Millbrook does not wish to publish
such books, or if you and Millbrook are unable to agree on
terms, you shall be free to offer them elsewhere.
8. Competitive Activities
8.1 NON-COMPETITION. During the Employment Term and for a period
of 90 days after termination for cause, or for a period of
180 days after termination 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; or (vi) 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
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 Xxxxxxxx
------------------------
Xxxxx Xxxxxxxx
