FIRST AMENDMENT AGREEMENT
AMENDMENT AGREEMENT, made as of this 28th day of April,
1998, by and between The Reader's Digest Association, Inc., a
Delaware corporation (the "Company"), and Xxxxxx X. Xxxxx (the
"Employee").
WHEREAS, on August 11, 1997, the parties entered into an
Employment Agreement (the "Agreement") under which the Employee
became employed by the Company; and
WHEREAS, the parties now desire to amend the Agreement as
set forth below pursuant to Section 15 of the Agreement.
NOW, THEREFORE, in consideration of the mutual covenants of
the parties contained in the Agreement and for other good and
valuable consideration, the Employee and the Company hereby agree
as follows:
1. Section 1: Employment Term. The period of employment
shall not be extended beyond the Initial Term and shall terminate
as of the end of the Initial Term on July 31, 1998.
2. Section 2: Duties.
(a) The following two sentences are hereby added
to the end of the first paragraph of Section 2: "As of April 28,
1998, the Employee shall cease service as Chairman of the Board
and Chief Executive Officer of the Company. Until July 31, 1998,
the Employee shall remain available to the Company to assist the
Company with respect to matters related to the Company's
transition to a new Chief Executive Officer."
(b) The second paragraph of Section 2 is hereby
amended by changing the words "his full" to "reasonably
necessary".
3. Section 3: Compensation and Certain Benefits.
(a) Section 3(a). As a result of a Company-wide 60%
reduction in annual bonus targets for fiscal 1998, the dollar
figure "$990,000" in the second sentence of Section 3(a) is
hereby replaced by the dollar figure "$396,000".
(b) Section 3(b). The word "and" in Section 3(b) is
hereby replaced with a comma and the following is added to
Section 3(b) immediately after the word "housing":
"and prompt reimbursement for all expenses reasonably incurred by
the Employee (including, but not limited to, air and land travel
expenses) in connection with the Employee's travel between the
Company's offices and his primary residence."
(c) Section 3(c). The second and third sentences of
Section 3(c) are hereby deleted and a new second sentence is
added as follows: "100% of the SARs will vest on the last day of
the Initial Term."
4. Section 7: Termination Payments.
(a) Section 7(a), Clause (1)(ii). The words "$56,221
multiplied by the number of months for which the Employee was
employed hereunder prior to his termination" in Section 7(a)(1),
clause (1)(ii) are hereby replaced by "$674,652".
(b) Section 7(c). Section 7(c) is hereby deleted in
its entirety and is replaced by the following: "The Company will
pay to the Employee within 60 days after the end of fiscal 1998
the Annual Bonus applicable to fiscal 1998 as determined in
accordance with Section 3(a)."
5. Effectiveness. Except as herein modified, the
Agreement remains in full force and effect, unmodified and
unamended.
IN WITNESS WHEREOF, the Company has caused this Amendment
Agreement to be executed by authority of its Board of Directors,
and the Employee has hereunto set his hand, on the day and year
first above written.
THE READER'S DIGEST ASSOCIATION,INC.
/S/: XXXXXXX X. XXXXXXX
Name: Xxxxxxx X. Xxxxxxx
Title: Acting Vice President, Human Resources
/S/: XXXXXX X. XXXXX
Name: Xxxxxx X. Xxxxx
