THE MILLBROOK PRESS INCORPORATED
0 Xxx Xxx Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
February 1, 1999
Xx. Xxxxx Xxxxx
The Millbrook Press Inc.
0 Xxx Xxx Xxxxxxx Xxxx
Xxxxxxxxxx, 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") agrees to employ you as Chief Financial Officer.
1. Term of Employment.
1.1 Term. Millbrook hereby employs you, and you hereby accept
employment with Millbrook, for a period of two years commencing February 1, 1999
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 Chief Financial
Officer, you shall perform such duties and exercise such authority, consistent
with your position, as may from time to time be given to you by the President 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 $150,000 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. You will be eligible annually to
earn incentive compensation equal to fifteen thousand dollars ($15,000) per
annum. Such incentive compensation will be based on your meeting or exceeding
the annual budgeted amount of operating and net income as a percentage of sales.
The budgeted figures are those submitted by the Company to and approved by the
Board of Directors. Such submission and approval will be completed prior to July
15th of each year. Such incentive compensation shall be available provided you
complete each fiscal year. Neither full nor partial incentive compensation will
be paid unless your employment is continued through that date. The Board of
Directors at its discretion may provide additional compensation for exceeding
the budgeted goals.
3.3 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 vacation, retirement, disability, medical insurance
and life insurance plans as the same may be placed into effect from time to
time. 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 as of the commencement of your
employment, February 1, 1999, a stock option to purchase 50,000 shares of
Millbrook's common stock. The exercise price for the options will be $4.50 per
share. The option will become exercisable for one fifth of the shares on the
first anniversary of the grant and one fifth on subsequent anniversary dates.
Exercise of the options is contingent upon your being employed by the Company.
For a further description of the terms of the options, please see the form of
option letter attached hereto as Exhibit A.
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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 the direct or indirect sale, lease, exchange or other transfer
to any entity, individual, or group of individuals of any number of shares of
capital stock which would then allow a stockholder or group of related
stockholders to (i) replace, appoint, or otherwise change a majority of the
Board of Directors (as compared to the Board of Directors at the beginning of
that fiscal year); or (ii) effect a substantial change in management, or there
is a merger, consolidation, or combination of Millbrook into or with another
corporation or entity. Change of Control shall not include any transfer of
shares to an entity or group controlling 20% of Millbrook's outstanding shares
as of the date of this Agreement.
7. Confidentiality.
7.1 Trade Secrets. 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, clients, suppliers,
employees and other business associates (all such information being 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 required by law or in the
course of your 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) and
descriptions thereof, constitute unfair competition. You promise and agree not
to engage in any
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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 any 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 aforedescribed 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 one (1) years after the expiration or earlier termination thereof for
whatever 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 in any way 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 expiration or termination of your
employment hereunder customers, suppliers, clients, authors, agents or other
business associates of Millbrook.
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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 your 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 for Cause. Millbrook reserves the right to
terminate this Agreement at any time and without notice 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 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 the 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 given 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. 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.
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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 prior to February 1, 2002 (other than for "cause"), you will be
entitled to a severance payment equal to one month of your annual salary for
every year you were employed by Millbrook. If your employment is terminated
after February 1, 2002, whether and to what extent you are entitled to severance
pay upon termination of your employment with Millbrook will be determined
according to Millbrook's severance policies, if any, at the time of such
termination.
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,
at 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 matters set forth herein.
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 this 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 New York without giving
effect to the conflict of laws principles thereunder.
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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:__________________________________________
Xxxxxx X. Xxxxxx, Chairman of the Board
of Directors
By:__________________________________________
Xxxxxxx Xxxxxx, President
Accepted and Agreed:
By:_________________________
Xxxxx Xxxxx
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