EXHIBIT 10.5
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the "Agreement"), dated
effective as of October 22, 2001, by and between The Peoples Publishing Group,
Inc., a Delaware corporation (the "Company"), and Xxxxx X. Prima, an individual
resident of the State of New Jersey (the "Executive").
WITNESSETH:
WHEREAS, the Company desires to continue the employment of the
Executive and the Executive wishes to accept such continued employment with the
Company upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements herein contained, the Company and the Executive agree as follows:
1. Employment. The Company hereby employs the Executive as Senior Vice
President of Sales and the Parent (as defined below) hereby employs the
Executive as the Senior Vice President of Business Development, with such
additional operating titles as the Chief Executive Officer of the Company (the
"CEO") shall from time to time approve, and the Executive accepts such
employment and agrees to perform services for the Company and its Affiliates in
accordance with the requirements of the position, for the period and upon the
other terms and conditions set forth in this Agreement. The term "Affiliate" as
used in this Agreement shall mean any subsidiary or parent corporation of the
Company and any other corporation under common control with the Company,
including Peoples Educational Holdings, Inc., a Minnesota corporation, or any
successor company (the "Parent").
2. Term. Unless terminated at an earlier date in accordance with
Section 8, the initial term of the Executive's employment hereunder shall be for
a period of two (2) years, commencing on the date hereof. Thereafter, the term
of this Agreement shall be automatically extended for successive one-year
periods unless either party objects to such extension by written notice to the
other party at least 90 days prior to the end of the initial term or any
extension term. Notwithstanding the foregoing, the terms of Sections 4.05
(Registration Rights), 5 (Confidential Information), 7 (Non-Competition), 8
(Termination), and 9 (Miscellaneous) shall survive the expiration or termination
of this Agreement (whether such expiration or termination occurs as a result of
the expiration of the term as provided herein, by mutual agreement, as a result
of the Executive's resignation, termination by the Company with or without
cause, or any other reason), and continue in full force and effect in accordance
with their terms.
3. Position and Duties.
3.01 Service with Company. During the term of this Agreement,
the Executive shall perform such duties for the Company and its Affiliates as
the CEO (or a designate of the CEO) shall assign to him from time to time.
Without limiting the generality of the foregoing, it is understood between the
Company and the Executive that while the primary functions of the Executive
shall relate to the Company's and its Affiliates' long-term organic sales
growth, the responsibilities of the Executive may also include the coordinating
the prospecting and execution of, and obtaining the financing for, acquisition
transactions for the Company or the Parent consistent with the Company's and the
Parent's objectives.
3.02 Performance of Duties. The Executive shall serve the
Company and its Affiliates faithfully and to the best of his ability, and devote
his full time, attention and efforts to the business and affairs of the Company
and its Affiliates during normal business hours (and outside normal business
hours as reasonably
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required) during the term of this Agreement. The Executive hereby confirms that
he is under no contractual commitments inconsistent with his obligations set
forth in this Agreement, and that during the term of this Agreement he shall not
render or perform services for any other corporation, firm, entity or person.
4. Compensation.
4.01 Base Salary. As compensation for all services to be
rendered by the Executive under this Agreement during the first 12-month period
during the term of this Agreement, the Company shall pay to the Executive a base
salary of $125,000, which salary shall be paid in accordance with the Company's
normal payroll procedures and policies. The compensation payable to the
Executive for each 12-month period following the expiration of the initial
12-month period of this Agreement shall be mutually agreed upon by the Company
and the Executive prior to the commencement of each such 12-month period based
on the Executive's performance, provided, however, that the base salary shall
not be reduced unless there is a downward adjustment in all executive salaries
of the Company. The Executive understands that executive salaries are subject to
the approval of the Parent's Board of Directors.
4.02 Incentive Compensation.
(a) In addition to the base salary described in Section 4.01,
the Executive shall be eligible to receive incentive compensation as set forth
in the Sales Manager Incentive Plan attached hereto as Exhibit A and made part
hereof. If the Executive's employment is terminated pursuant to Sections
8.01(a)(iii) or 8.01(a)(iv) hereof, or if the Executive voluntarily resigns
other than for Good Reason, no such incentive compensation shall be payable for
the quarter or year in which such termination or resignation occurred. If the
Executive's employment is terminated pursuant to Sections 8.01(a)(i),
8.01(a)(ii) or 8.01(b) hereof, the Company shall pay the Executive a pro rated
incentive bonus up through the date of termination for the quarter and year in
which such termination occurred, payable promptly after the Company's and its
Affiliates' audited financial statements for the quarter and year in which the
termination occurred become available.
(b) In addition to the base salary described in Section 4.01,
the Executive shall be eligible to receive for each 12-month period beginning on
each October 22 and ending on October 21 of the following year (each, a
"Contract Year") during the term of this Agreement, as bonus compensation, an
amount equal to (a) three percent (3%) of the net proceeds to the Company of its
Affiliates of any equity securities sold by the Company or its Affiliates
through the efforts of the Executive during such Contract Year to raise
financing for the Company or its Affiliates; and (b) one percent (1%) of the any
debt financing raised by the Company or its Affiliates through the efforts of
the Executive during such Contract Year; provided, however, (i) the aggregate
bonus compensation payable by the Company to the Executive in any Contract Year
shall be limited to and shall not exceed $25,000, and (ii) no bonus shall be
payable under this Section 4.02(b) unless the debt financing is raised in
furtherance of and to fund a specific acquisition or merger consummated by the
Company or its Affiliates. If the Executive's employment is terminated pursuant
to Sections 8.01(a)(iii) or 8.01(a)(iv) hereof, or if the Executive voluntarily
resigns other than for Good Reason, no bonus compensation under this Section
4.02(b) shall be payable for the Contract Year in which such termination
occurred. Otherwise, such bonus payable under this Section 4.02(b) shall be paid
to the Executive within thirty (30) days of the consummation of the transaction
for which the equity or debt funds were raised.
4.03 Participation in Benefit Plans. The Executive shall also
be entitled to participate in all employee benefit plans or programs (including
vacation time of not less than three weeks annually) established by the
Company's Board of Directors from time to time to the extent that his position,
title, tenure, salary, age, health and other qualifications make him eligible to
participate. The Executive's participation in any such plan or program shall be
subject to the provisions, rules and regulations applicable thereto. Without
limiting the generality of the foregoing, the Executive shall be provided with
medical, disability (including long-term disability), and life
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insurance coverage to the extent it is available at a reasonable cost from
reputable insurers. The Company shall pay 100% of the Executive's individual and
family medical insurance coverage.
4.04 Registration Rights.
(a) Whenever the Parent proposes to file a Registration
Statement at any time and from time to time, it will, prior to such filing, give
written notice to the Executive of its intention to do so and, upon the written
request of the Executive, given within 10 business days after the Parent
provides such notice (which request shall state the intended method of
disposition of the Registrable Shares), the Parent shall use its best efforts to
cause all shares purchased by the Executive pursuant to any Parent stock options
held by the Executive (the "Registrable Shares") which the Parent has been
requested by the Executive to register, to be registered under the Securities
Act to the extent necessary to permit their sale or other disposition in
accordance with the intended methods of distribution specified in the request of
the Executive; provided, however, that the Parent shall have the right to
postpone or withdraw any registration effected pursuant to this Section without
obligation to the Executive. The Executive shall promptly provide to the Parent
such information and representations as may be requested by the Parent for
purposes of the Registration Statement, and agrees that the Parent does not have
to honor the piggy-back registration rights granted in this Section if, at the
time the Registration Statement becomes effective or shortly thereafter, there
is in effect a Registration Statement on Form S-8 or on another Form allowing
the Executive to sell the Registrable Shares.
(b) In connection with any registration under this Section
involving an underwriting, the Parent shall not be required to include any
Registrable Shares in such registration unless the Executive accept the terms of
the underwriting as agreed upon between the Parent and the underwriters selected
by it. If in the opinion of the managing underwriter it is desirable because of
marketing factors to limit the number of Registrable Shares to be included in
the offering, then the Parent shall be required to include in the registration
only that number of Registrable Shares, if any, which the managing underwriter
believes should be included therein.
4.05 Expenses; Auto Allowance. The Company shall pay or
reimburse the Executive for all reasonable and necessary out-of-pocket expenses
(including tolls and parking, but specifically excluding purchases of gas,
repairs, maintenance and insurance) incurred by him in the performance of his
duties under this Agreement, and shall also pay the Executive an auto allowance
for up to $600 net per month, subject to the Company's normal policies for
expense verification.
5. Confidential Information. Except as permitted or directed by the
Company's Board of Directors, during the term of this Agreement and for a period
of one year thereafter the Executive shall not divulge, furnish or make
accessible to anyone or use in any way (other than in the ordinary course of the
business of the Company or any of its Affiliates) any confidential or secret
knowledge or information of the Company or any of its Affiliates which the
Executive has acquired or become acquainted with or shall acquire or become
acquainted with prior to the termination of the period of his employment by the
Company (including employment by the Company or any of its Affiliates), whether
developed by himself or by others, concerning any trade secrets, confidential or
secret designs, processes, formulae, plans, devices or material (whether or not
patented or patentable), financial results or condition, business plans or
projections directly or indirectly useful in any aspect of the business of the
Company or any of its Affiliates, any confidential customer lists or printer or
supplier lists of the Company or any of its Affiliates, any consultant, author,
salaried and independent sales representative, freelance employee, employee and
contractor lists of the Company or any of its Affiliates, any confidential or
secret development or research work of the Company or any of its Affiliates, any
lists of potential investors or acquisitions contemplated by the Company or any
of its Affiliates, any plans, proposals or strategies of the Company or its
Affiliates to expand, merge or engage in a business combination or relationship,
or any other confidential or secret aspects of the business of the Company or
any of its Affiliates. The Executive acknowledges that the above-described
knowledge or information constitutes a unique and valuable asset of the Company
and its Affiliates, as the case may be, acquired at great time and expense by
the Company, its predecessors and its Affiliates, as the case may be, and that
any disclosures or
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other use of such knowledge or information other than for the sole benefit of
the Company or any of its Affiliates would be wrongful and would cause
irreparable harm to the Company and its Affiliates, as the case may be. The
foregoing obligations of confidentiality, however, shall not apply to any
knowledge or information which is now public or which subsequently becomes
generally publicly known, other than as a direct or indirect result of the
breach of this Agreement by the Executive, and to any disclosures required by
law.
6. Ventures. If, during the term of this Agreement, the Executive is
engaged in or associated with the planning or implementing of any project,
program or venture involving the Company or any of its Affiliates and a third
party or parties, all rights in the project, program or venture, to the extent
that such rights may be claimed by the Executive or the Company or any of its
Affiliates, shall belong to the Company or its Affiliates, as the case may be.
Except as approved by the Company's Board of Directors, the Executive shall not
be entitled to any interest in such project, program or venture or to any
commission, finder's fee or other compensation in connection therewith other
than the compensation to be paid to the Executive as provided in this Agreement.
7. Non-Competition.
(a) During the term of the Executive's employment by the
Company pursuant to this Agreement or otherwise, and for twelve (12) months
following termination, he shall not, directly or indirectly, engage in
competition with the Company or any of its Affiliates in any manner or capacity
(e.g., as an adviser, consultant, principal, agent, partner, officer, director,
stockholder, employee, or otherwise) in, or involving, the Test Preparation
Market (as defined below), the Advanced Placement Market (as defined below), the
Supplemental Market (as defined below), or any other significant new line of
business which the Company or its Affiliates may pursue during the term of this
Agreement.
"Test Preparation Market" shall mean the market consisting of
the following test preparation materials intended for public and private
elementary and secondary school students, whether such materials are in written,
electronic, or any other media now existing or hereafter developed, including
the Internet:
(i) generic test-taking training and materials,
including practice tests, teaching to
standardized national and state tests;
(ii) drill and practice materials on
state-specific tests, including practice
tests; and
(iii) instructional material lessons for students
on the new state curriculum standards with
practice on state-mandated tests as an
integral part of the lessons.
In addition, the Test Preparation Market shall also include teacher training
for the materials and tests set forth in subsections (i) - (iii) above in any
form, including, but not limited to, consulting, instruction, or teacher
training materials.
The "Advanced Placement Market" shall mean the market consisting of high
school and post-secondary instructional products, whether such products are in
written, electronic, or any other media now existing or hereafter developed
(including the Internet), that are used in an Advanced Placement or college prep
instructional environment, through grade 12, and that are designed to help
students and teachers meet the requirements for the various Advanced Placement
course of studies as prescribed by the College Board. In addition, the Advance
Placement Market shall also include teacher training for the materials set forth
above in any form, including, but not limited to, consulting, instruction, or
teacher training materials.
The "Supplemental Market" shall mean the market consisting of pre-K-12
instructional materials, whether such materials are in written, electronic, or
any other media now existing or hereafter developed (including the Internet),
that are used in private or public schools and intended for student or teacher
use with students and consisting of a
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wide array of educational materials that support or supplement basal textbooks
and other core curriculum areas. These materials include, but are not limited
to, workbooks and worktexts in paper or case, manipulatives, CD's, videos, film,
software, and products designed to provide web-based instruction using the
internet. In addition, the Supplemental Market shall also include teacher
training for the materials set forth above in any form, including, but not
limited to, consulting, instruction, or teacher training materials.
(b) The obligations of the Executive under Section 7(a) shall
apply to a territory consisting of the entire United States and shall also apply
to the U.S. Department of Education schools located in foreign countries for
children whose parents are stationed or work in those foreign countries in U.S.
government service.
(c) For a period of twelve (12) months following the
termination of the Executive's employment hereunder, the Executive will not, on
behalf of himself or on behalf of any other person, firm or corporation, (i)
call on any of the customers or identified customer prospects of the Company or
any of its Affiliates, for the purpose of soliciting or providing to any said
customers or prospective customers any products or services competitive to the
products and services of the Company or any of its Affiliates, nor will he in
any way divert or take away any customer of the Company or its Affiliates; or
(ii) call on any investor or acquisition/merger candidate identified by the
Company or its Affiliates, whether pursuant to this Agreement or otherwise.
(d) During the term of this Agreement, the Executive shall
not, directly or indirectly, assist or encourage any other person in carrying
out, directly or indirectly, any activity that would be prohibited by the above
provisions of this Section 7 if such activity were carried out by the Executive,
either directly or indirectly; and in particular the Executive shall not,
directly or indirectly, induce any employee of the Company or any of its
Affiliates to carry out, directly or indirectly, any such activity.
(e) For a period of twelve (12) months following the
termination of the Executive's employment hereunder, the Executive will not,
directly or indirectly, employ, solicit for employment, or advise or recommend
to any other person, firm or corporation that they employ or solicit for
employment or contract/consulting relationship any employee, consultant,
independent contractor or sales representative of the Company or any of its
Affiliates.
(f) Except as set forth in Section 8.01, during the term of
this noncompetition covenant which follows the termination of the Executive's
employment by the Company, the Company shall pay to the Executive, as
consideration for such covenant, an amount equal to 70% of the Executive's
annual base salary at the time of termination of employment, which amount shall
be payable to the Executive on a monthly basis in advance. However, if the
Executive becomes employed with another corporation or entity or as a sole
proprietor during the term of his noncompetition covenant which follows the
termination of the Executive's employment by the Company, the Company shall only
be obligated to pay to the Executive, as consideration for such covenant, an
amount equal to 30% of the Executive's annual base salary at the time of
termination of employment, which amount shall be payable to the Executive on a
monthly basis. In either case, the Company may, upon 30 days written notice to
the Executive, terminate its obligation to make such payments to the Executive
and, in such event, this noncompetition covenant shall terminate as of the end
of such 30-day period. The Executive shall not be entitled to any of the
payments or benefits set forth in Section 4 during the period during which the
Company pays the Executive as provided in this Section 7(f).
(g) Ownership by the Executive, as a passive investment, of
less than five percent (5%) of the outstanding shares of capital stock of any
corporation listed on a national securities exchange or publicly traded in the
over-the-counter market shall not constitute a breach of this Section 7.
8. Termination.
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8.01 Termination.
(a) This Agreement shall terminate prior to the expiration of
the initial term set forth in Section 2 or of any extension thereof and neither
the Company nor any of its Affiliates shall be obligated to make any further
payments or to provide any benefits (except up to the date of termination) to
the Executive in the event that at any time during such initial term or any
extension thereof:
(i) Executive shall die, or
(ii) Executive shall become disabled in accordance with
Section 8.02, or
(iii) Executive has breached the provisions of Sections 5
or 7 of this Agreement in any material respect, or
(iv) Executive is terminated for "cause," which means (A)
the Executive's violation of a specific written reasonable direction
from the CEO or the Board of Directors of the Company or the Parent or
(B) the Executive's failure or refusal to perform duties in accordance
with this Agreement; provided, however, no termination shall be for
cause under subsection (A) or (B) unless the Executive shall have first
received written notice from the CEO advising the Executive of the act
or omission that constitutes cause and such act or omission continues
after the Executive's receipt of such notice for at least a period of
time that would have allowed the Executive to correct such act or
omission or (C) an act or acts of personal dishonesty taken by the
Executive and intended to result in substantial personal enrichment of
the Executive at the expense of the Company or its Affiliates, or (D)
the willful engaging by the Executive in illegal conduct that is
materially and demonstrably injurious to the Company or its Affiliates.
For the purposes of this section, no act, or failure to act, on the
Executive's part shall be considered "dishonest," "willful" or
"deliberate" unless done, or omitted to be done, by the Executive in
bad faith and without reasonable belief that the Executive's action or
omission was in, or not opposed to, the best interest of the Company or
its Affiliates. Any act, or failure to act, based upon authority given
by the CEO or pursuant to a resolution duly adopted by the Board of the
Company shall be conclusively presumed to be done, or omitted to be
done, by Executive in good faith and in the best interest of the
Company and its Affiliates.
Notwithstanding any termination of this Agreement pursuant to this Section 8.01,
the Executive and the Company, in consideration of their respective rights and
obligations as set forth in this Agreement, shall remain bound by the provisions
of this Agreement which specifically relate to periods, activities or
obligations upon or subsequent to the termination of the Executive's employment.
(b) If the Company terminates the Executive prior to the
expiration of the initial or an extension term of this Agreement for reasons
other than set forth in Sections 8.01(a)(i)-(iv) or if the Executive terminates
this Agreement for Good Reason (as defined below), the Company shall pay the
Executive his salary and benefits through the date of termination, and:
(i) the Company shall be obligated to pay to the Executive
70% of his monthly base salary (as calculated below) for an aggregate
period of twelve (12) months from the date of termination or the
remainder of the term of this Agreement, whichever is shorter. Such
amount shall be payable by the Company on a monthly basis. The
Executive shall not be entitled to any of the payments or benefits set
forth in Section 4 during the period during which the Company pays the
Executive as provided in this Subsection (b)(i). For purposes of this
subsection only, the Executive's monthly base salary shall be
calculated by dividing (A) an amount equal to the Executive's annual
salary at the time of termination, by (B) twelve (12); and
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(ii) the Executive shall remain bound by the provisions of
Section 7 in accordance with the terms thereof during the payment
period set forth in Subsection (b)(i) immediately above, and the
Company shall not be obligated to pay the Executive the amounts set
forth in 7(f) in consideration therefore. Notwithstanding the
foregoing, if the period of the required payments under Subsection
8.01(b)(i) above is less than twelve (12) months, the Executive shall
be bound by the provisions of Section 7 of this Agreement for such
additional number of months which, when added to the number of months
the Company is required to pay the Executive under Subsection
8.01(b)(i) above, equals an aggregate of twelve (12) months, provided
that the Company pays the Executive the amounts set forth in Section
7(f) of this Agreement for such additional months.
"Good Reason" shall mean the Company's material breach of its
obligations or undertakings as set forth in this Agreement, provided,
however, that no termination shall be for Good Reason unless the
Company shall have first received written notice from the Executive
advising the Company of the specific nature of the breach that
constitutes the basis for the termination for Good Reason by the
Executive and such material breach continues after the Company's
receipt of such notice for at least a period of time that would have
allowed the Company to correct such material breach.
(c) If the Executive resigns prior to the expiration of the
initial or an extension term of this Agreement other than for Good Reason, the
Company shall be obligated to pay the Executive his salary and benefits through
the date of resignation. Thereafter, no salary, bonus or any other benefits or
amounts shall be payable by the Company to the Executive. In the event the
Executive resigns, the provisions of Section 7 shall continue to apply.
8.02 "Disability" Defined. The Board of Directors of the
Company or Parent may determine that the Executive has become disabled, for the
purpose of this Agreement, in the event that the Executive shall fail, because
of illness or incapacity, to render services of the character contemplated by
this Agreement for a period of 180 consecutive days and on the date of
determination continues to be so disabled. The existence or nonexistence of
grounds for termination of this Agreement for any reason under Section
8.01(a)(ii) shall be determined in good faith by the Board of Directors of the
Company or Parent after notice in writing given to the Executive at least 30
days prior to such determination. During such 30-day period, the Executive shall
be permitted to make a presentation to the Board of Directors for its
consideration.
8.03 Surrender of Records and Property. Upon termination of
his employment with the Company, the Executive shall deliver promptly to the
Company all records, manuals, books, blank forms, documents, letters,
manuscripts, publishing proposals from authors or employees, memoranda, notes,
notebooks, reports, data, tables, calculations, lists of investors or
acquisition/merger candidates, computer files, financial statements or records,
budgets or business plans or copies thereof, which are the property of the
Company or any of its Affiliates or which relate in any way to the business,
products, practices or techniques of the Company or any of its Affiliates, and
all other property, trade secrets and confidential information of the Company or
any of its Affiliates, including, but not limited to, all documents which in
whole or in part contain any trade secrets or confidential information of the
Company or any of its Affiliates, which in any of these cases are in his
possession or under his control.
9. Miscellaneous.
9.01 Governing Law. This Agreement is made under and shall be
governed by and construed in accordance with the laws of the State of New
Jersey.
9.02 Prior Agreements. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and supersedes
all prior agreements and understandings with respect to such subject matter
(including the Employment Agreement, dated October 21, 1999, between the Parent
and the Executive), and
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the parties hereto have made no agreements, representations or warranties
relating to the subject matter of this Agreement which are not set forth herein.
9.03 Withholding Taxes. The Company may withhold from any
benefits payable under this Agreement all federal, state, city or other taxes as
shall be required pursuant to any law or governmental regulation or ruling.
9.04 Amendments. No amendment or modification of this
Agreement shall be deemed effective unless made in writing signed by the parties
hereto.
9.05 Assignment. This Agreement shall not be assignable, in
whole or in part, by either party without the written consent of the other
party.
9.06 No Waiver. No term or condition of this Agreement shall
be deemed to have been waived, nor shall there be any estoppel to enforce any
provisions of this Agreement, except by a statement in writing signed by the
party against whom enforcement of the waiver or estoppel is sought. Any written
waiver shall not be deemed a continuing waiver unless specifically stated, shall
operate only as to the specific term or condition waive and shall not constitute
a waiver of such term of condition for the future or as to any act other than
that specifically waived.
9.07 Injunctive Relief. The Executive agrees that it would be
difficult to compensate the Company or its Affiliates fully for damages for any
violation of the provisions of this Agreement, including without limitation the
provisions of Sections 5, 7, and 8.03. Accordingly, the Executive specifically
agrees that the Company and its Affiliates shall be entitled to temporary and
permanent injunctive relief to enforce the provisions of this Agreement. This
provision with respect to injunctive relief shall not, however, diminish the
right of the Company and its Affiliates to claim and recover damages in addition
to injunctive relief.
9.08 Severability. To the extent any provision of this
Agreement shall be invalid or unenforceable, it shall be considered deleted
herefrom and the remainder of such provision and of this Agreement shall be
unaffected and shall continue in full force and effect. In furtherance and not
in limitation of the foregoing, should the duration or geographical extent of,
or business activities covered by, any provision of this Agreement be in excess
of that which is valid and enforceable under applicable law, then such provision
shall be construed to cover only that duration, extent or activities which may
validly and enforceably be covered. The Executive acknowledges the uncertainty
of the law in this respect and expressly stipulates that this Agreement be given
the construction which renders its provisions valid and enforceable to the
maximum extent (not exceeding its express terms) possible under applicable law.
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IN WITNESS WHEREOF, the parties have hereunto set their hands,
intending to be legally bound, as of the date first above written.
THE PEOPLES PUBLISHING GROUP, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------------
Its: Chief Executive Officer
/s/ Xxxxx X. Prima
----------------------------------------
Xxxxx X. Prima
ACCEPTED AND AGREED
this 22nd day of October, 2001
PEOPLES EDUCATIONAL HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxxx
----------------------------------------
Its: Chief Executive Officer
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