Employment Agreement [Amendment] - Reader's Digest Association Inc. and Thomas O. Ryder
AMENDMENT TO EMPLOYMENT AGREEMENT
THIS AMENDMENT dated as of November 21, 2003 (the "Amendment") to the
AGREEMENT dated as of April 28, 1998 (the "Agreement"), by and between The
Reader's Digest Association, Inc., a Delaware corporation (the "Company"),
and Thomas O. Ryder (the "Executive") (hereinafter collectively referred to
as "the parties").
WHEREAS, the Board of Directors has determined that it is in the best
interests of the Company and its stockholders to amend the Agreement; and
WHEREAS, the Executive has been offered the opportunity to have the
Amendment reviewed on his behalf by counsel other than counsel for the
Company;
NOW, THEREFORE, in consideration of the foregoing and the respective
agreements of the parties, the parties agree as follows:
1. Section 12(b) of the Agreement is hereby amended to read in its
entirety as follows:
(b) Long-Term Incentive Plan Benefits.
(i) Except as provided in Section 12(b)(ii), in the event of
the termination of the Executive's employment, Executive shall have the
right to exercise his outstanding stock options and stock appreciation
rights under the KELTIP or any successor long term incentive plan (the
"Long Term Incentive Plan"): (x) with respect to the stock options
granted pursuant to Sections 9(a), 9(b) and 5, in the manner and to the
extent provided in Exhibits A, B and C, respectively; and (y) with
respect to all other stock options and stock appreciation rights, in the
manner and to the extent provided in the terms and conditions relating
to such stock options and stock appreciation rights, except that if the
Executive's employment is terminated by the Company without Cause or by
the Executive for Good Reason, such stock options and stock appreciation
rights shall continue to vest during the Severance Period and, upon
completion of the Severance Period, shall vest and be exercisable as if
the Executive's employment was terminated at that time by the Company
without Cause or by the Executive with Good Reason.
(ii) In the event the Executive terminates his employment by
retirement (within the meaning of the pertinent stock option agreement)
on or after June 30, 2006, or in the event the Executive dies before
June 30, 2006, the Executive (or in the case of the Executive's death,
the legal representative of the Executive's estate) shall have the right
to exercise each of the Executive's outstanding stock options under the
Long Term Incentive Plan, to the extent vested in accordance with their
respective terms, until the expiration of the respective stated term of
each stock option. This Section 12(b)(ii) shall be deemed to amend each
of the Executive's outstanding stock option agreements to the extent
referred to in this Section 12(b)(ii).
(iii)Except as provided in Section 12(b)(iv), in the event of
the termination of the Executive's employment, Executive's outstanding
performance units, restricted stock and awards (other than stock options
and stock appreciation rights) under the Long Term Incentive Plan shall
(x) in the case of the restricted stock granted under Section 9(c), be
treated in the manner provided in Exhibit D and (y) in all other cases,
be treated in accordance with the terms and conditions relating to the
performance unit, restricted stock or award, except that if the
Executive's employment is terminated by the Company without Cause or by
the Executive for Good Reason, (1) such performance units, restricted
stock or awards (other than stock options and stock appreciation rights)
shall continue to be outstanding and payable during the Severance Period
as if the Executive's employment with the Company continued during the
Severance Period and, if applicable, shall vest upon completion of the
Severance Period in accordance with the terms of the award as if the
Executive's employment was terminated at that time by the Company
without Cause or by the Executive with Good Reason and (2) any such
award that is based on a period of employment shall be payable on a
prorated basis as if the Executive's employment had continued during the
Severance Period.
(iv) In the event the Executive terminates his employment by
retirement on or after June 30, 2006, or in the event the Executive dies
before June 30, 2006, the following shares of restricted stock granted
to the Executive, to the extent then outstanding, shall immediately vest
and the restrictions thereon shall immediately lapse: (x) 85,000 shares
granted on July 1, 2003 and (y) any shares of restricted stock granted
to the Executive in the future that shall be designated by the Company's
Compensation and Nominating Committee at the time of grant as a
"compensatory" grant, as distinguished from a "retention" grant. For
purposes of this Section 12(b)(iv), "retirement" shall have the meaning
of the pertinent restricted stock award agreement or, if not therein
specified, shall mean termination of employment with the Company or a
Designated Subsidiary (as defined in the Long Term Incentive Plan) on or
after age 55 after at least five years of employment by the Company
and/or a Designated Subsidiary. This Section 12(b)(iv) shall be deemed
to amend each of the Executive's restricted stock award agreements to
the extent referred to in this Section 12(b)(iv).
(v) If any benefits due under this Section 12(b) cannot be
paid under the existing or amended terms of an applicable plan or award
agreement, the Company shall pay Executive the value of such benefits at
the time they would otherwise be payable if they were payable under such
terms.
2. Entire Agreement. The Agreement, as amended by the Amendment,
constitutes the entire agreement between the parties with respect to the
subject matter of the Agreement and the Amendment and supersedes all prior
agreements, if any, understandings and arrangements, oral or written, between
the parties with respect to the subject matter of the Agreement and the
Amendment.
3. Governing Law. The Amendment shall be governed by and construed
and enforced in accordance with the laws of the State of New York without
giving effect to the conflict of law principles thereof.
IN WITNESS WHEREOF, the Company has caused the Amendment to be executed
by its duly authorized officer and the Executive has executed the Amendment
as of the day and year first above written.
THE READER'S DIGEST ASSOCIATION, INC.
By: /s/ MICHAEL A. BRIZEL
-----------------------------------------
Name: Michael A. Brizel
Title: Senior Vice President and General Counsel
/s/ T.O. RYDER
-----------------------------------------
Thomas O. Ryder