Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (“Agreement”) is executed as of this 12th day of
January 2012 (“the Effective Date”), by and between Michael P. Lavelle
(“Executive”) and School Specialty, Inc. (the “Company”).

RECITALS

The Company desires to employ Executive as its President and Chief Executive
Officer, and Executive desires to be employed by the Company in such capacity,
on the terms and conditions set forth herein.

As a result of Executive’s employment with the Company, Executive will have
access to and be entrusted with valuable information about the Company’s
business and customers, including trade secrets and confidential information;
and

The parties believe it is in their best interests to make provision for certain
aspects of their relationship during and after the period in which Executive is
employed by the Company.

NOW, THEREFORE, in consideration of the promises and the mutual agreements and
covenants contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by the Company and
Executive (jointly, the “Parties”), the Parties agree as follows:

ARTICLE I

EMPLOYMENT

1.1.

Position and Duties. Executive shall be employed in the position of President
and Chief Executive Officer of the Company and shall be subject to the authority
of, and shall report to, the Company’s Board of Directors (the “Board”).
 Executive’s duties and responsibilities shall include all those customarily
attendant to the position of President and Chief Executive Officer, and such
other duties and responsibilities as may be assigned from time to time by the
Board.  In addition, Executive shall serve as an officer and/or member of the
board of directors of an Affiliate of the Company (a “Related Company”, and
jointly, “Related Companies”) to which he may be appointed or elected.  An
“Affiliate” means an entity which, directly or indirectly, controls, is
controlled by, or is under common control with, the Company, with control
measured by the ability to vote a majority of the stock or other ownership
interests in such entity.  Executive shall devote Executive’s entire business
time, attention and energies exclusively to the business interests of the
Company and Related Companies while employed by the Company, except as otherwise
specifically approved in writing by the Board.

1.2.

Term of Employment. The Company employs Executive, and Executive accepts
employment by the Company, for the period commencing on the Effective Date  and
ending on June 30, 2015 (the “Employment Term”), subject to earlier termination
as hereinafter set forth in Article III.  Upon the termination of Executive’s
employment for any reason, he will be deemed

to have resigned all of his positions with the Company and any Related Company
as an officer or member of their respective boards of directors, including the
Board.

1.3

Board Service.  Effective as of the first day of Executive’s employment with the
Company, Executive will serve as a Class I member of the Board until the earlier
of the next annual meeting of the Company or the termination of his employment
with the Company for any reason.   Thereafter, for so long as he remains the
President and Chief Executive Officer of the Company, he will be nominated to
serve as a member of the Board.  Executive will be an employee director, and as
such, he will not receive any additional compensation for serving as a member of
the Board.

ARTICLE II

COMPENSATION AND OTHER BENEFITS

2.1

Base Salary.  During the Employment Term, the Company shall pay Executive in
substantially equal monthly or more frequent installments, an annual salary of
Six Hundred Twenty-Five Thousand Dollars ($625,000) (“Base Salary”), payable in
accordance with the normal payroll practices and schedule of the Company.
 Executive’s Base Salary shall be reviewed at least annually and may be
increased at any time and from time to time as the Compensation Committee of the
Board (the “Compensation Committee”) and the Board as required, in their sole
discretion, shall deem appropriate. The term “Base Salary”, as utilized in this
Agreement, shall refer to Base Salary as so increased.  Any increase in Base
Salary shall not serve to limit or reduce any other obligation to Executive
under this Agreement.  Base Salary shall not be reduced at any time during the
Employment Term, except with the consent of the Executive.  All amounts in this
Agreement are stated prior to deductions for federal and state income and
employment tax withholding.

2.2

Incentive Compensation.

(a)

In General.  During the Employment Term, Executive shall participate in annual
incentive bonus plans and long-term incentive compensation plans (the latter to
consist of plans offering stock options, restricted stock and/or other long-term
incentive compensation) offered by the Company to its senior executives.
 Specifically, as regards the Company’s annual cash incentive bonus plan,
Executive will commence participation for fiscal year 2013, and as regards
long-term incentive compensation, Executive will commence participation with the
annual grants made in fiscal year 2013.  The amount and type of grants, any
vesting criteria and performance metrics for such compensation, as well as any
other material terms, shall be determined by the Compensation Committee and the
Board as required, in their sole discretion, after consultation with Executive.

(b)

Awards on First Day of Employment.  In addition to, and notwithstanding the
foregoing, Executive shall receive the long-term incentive awards set out in
Exhibits A, B and C hereto on the first date of employment by the Company.

2.3

 Other Benefits.

(a)

In General.  During the Employment  Term and subject to any limitation on
participation provided by applicable law: (i) the Executive shall be entitled to

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participate in all applicable qualified and nonqualified retirement plans,
practices, policies and programs of the Company to the same extent as other
senior executives of the Company, and (ii) Executive and/or Executive’s family,
as the case may be, shall be eligible for all applicable welfare benefit plans,
practices, policies and programs provided by the Company and its Affiliates,
other than severance plans, practices, policies and programs, to the same extent
as other senior executives of the Company.  Nothing herein shall be deemed to
limit the Company’s ability to amend, terminate or otherwise change any of the
referenced plans, practices, polices and programs at any time, and from time to
time.

(b)

Paid Time Off.  During the Employment Term, Executive shall be entitled to 20
days of Paid Time Off per calendar year, which shall accrue in accordance with
the Company’s policy. As used herein, “Paid Time Off” means sick days, personal
days and vacation days.  Carryovers of Paid Time Off will be determined pursuant
to the Company’s written policy.

(c)

Relocation Benefits.  In addition to those benefits provided in the Company’s
relocation policy, Executive shall be entitled to such additional benefits as
shall be agreed to between Executive and the Chair of the Compensation
Committee, including, but not limited to, reimbursement to Executive for
reasonable commuting expenses between Orlando, Florida and Appleton, Wisconsin
until such time as Executive relocates his family to Appleton, Wisconsin, which
shall be no later than June 30, 2012.  Any payment or reimbursement of any
relocation expense shall be paid on or before the end of the calendar year
following the calendar year in which such expense was incurred and the amount of
relocation expenses eligible for payment or reimbursement during any calendar
year may not affect the relocation expenses eligible for payment or
reimbursement in any other calendar year.  Further, Executive may not liquidate
or exchange the right to payment or reimbursement of relocation expenses for any
other benefit.

2.4

Expense Reimbursement.  The Company shall pay or reimburse Executive for all
reasonable out-of- pocket expenses incurred by Executive in the course of
performing Executive’s duties for the Company in accordance with the Company’s
reimbursement policies for senior executives as in effect from time to time.
Executive shall keep accurate records and receipts of such expenditures and
shall submit such accounts and proof thereof as may from time to time be
required in accordance with such expense account or reimbursement policies that
the Company may establish for its senior executives generally.  The Company’s
obligation to pay or reimburse Executive for certain expenses will comply with
the requirements set forth in Section 1.409A-3(i)(1)(iv) of the regulations (the
“409A Regulations”), promulgated under Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), including the requirement that the amount of
expenses eligible for reimbursement during any calendar year may not affect the
expenses eligible for reimbursement in any other taxable year.  Further,
reimbursement of eligible expenses shall be made on or before the last day of
the calendar year following the calendar year in which the expense was incurred,
as required by Section 1.409A-3(i)(1)(iv) of the 409A Regulations.

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ARTICLE III

TERMINATION

3.1

Right to Terminate; Automatic Termination.  During the Employment Term,
Executive’s employment may terminate for any of the reasons set out in
paragraphs (a) through (e) hereof.

(a)

Termination by Death or Disability.  Executive’s employment and the Company’s
obligations under this Agreement, except as provided in Section 3.2(a), below,
shall terminate automatically, effective immediately and without any notice
being necessary, upon Executive’s death or a determination of Disability of
Executive.  For purposes of this Agreement, “Disability” means the inability of
Executive, due to a physical or mental impairment, to perform the essential
functions of Executive’s job with the Company, with reasonable accommodation,
for a period of 90 days (whether or not consecutive) in any consecutive 365-day
period, as determined by a physician selected by the Company and Executive.  If
the Company and Executive cannot agree on a physician, each party shall select a
physician and the two physicians shall select a third who shall make the
determination as to whether Executive meets the definition of Disability.
Executive shall cooperate with any reasonable efforts to make such
determination.  In the event Executive is unable to select a physician, such
selection shall be made by his spouse, and if she is unable to select a
physician, such selection shall be made by Executive’s legal representative.
 Any such determination shall be conclusive and binding on the Parties.  Any
determination of Disability under this Section 3.1(a) is not intended to alter
any benefits any party may be entitled to receive under any long-term disability
insurance policy carried by either the Company or Executive with respect to
Executive, which benefits shall be governed solely by the terms of any such
insurance policy.

(b)

Termination For Cause.  The Company may terminate Executive’s employment and all
of the Company’s obligations under this Agreement, except as provided in Section
3.2(a), below, at any time for Cause (as defined below) by giving written notice
to Executive stating the basis for such termination, effective immediately upon
giving such notice or at such other time thereafter as the Company may
designate. “Cause” shall mean any of the following: (1) Executive has materially
breached this Agreement, any other agreement to which Executive and the Company
are parties, or any Company policy (including the Company’s policy against
unlawful harassment), or has materially breached any other obligation or duty
owed to the Company, including, but not limited to, Executive’s substantial
failure or willful refusal to perform his duties and responsibilities to the
Company; (2) Executive has committed gross negligence, willful misconduct or any
violation of law in the performance of Executive’s duties for the Company; (3)
Executive has taken any action substantially likely to result in discredit to or
loss of business, reputation or goodwill of the Company; (4) Executive has
failed to follow reasonable instructions from the Board concerning the
operations or business of the Company; (5) Executive has been convicted of or
plead nolo contendere to a felony or other crime, the circumstances of which
substantially relate to Executive’s employment duties with the Company; (6)
Executive has misappropriated funds or property of the Company or engaged in any
material act of dishonesty; (7) Executive has attempted to obtain a personal
profit from any transaction in which the Company has an

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interest, and which constitutes a corporate opportunity of the Company, or which
is adverse to the interests of the Company, unless the transaction was approved
in writing by the  Board after full disclosure of all details relating to such
transaction.  For purposes of this Section 3.1(b), no act, or failure to act, on
Executive’s part will be deemed “willful” unless done, or omitted to be done, by
the employee in bad faith.

(c)

Termination by Resignation.  Executive’s employment and the Company’s
obligations under this Agreement shall terminate automatically, except as
provided in Section 3.2(a), below, when Executive voluntarily terminates his
employment with the Company other than with Good Reason (as described in Section
3.1(e), below), with ninety (90) days’ prior notice, or at such other earlier
time as may be mutually agreed between the Parties following the provision of
such notice.

(d)

Termination Without Cause.  The Company may terminate Executive’s employment and
all of the Company’s obligations under this Agreement, except as provided in
Section 3.2(b), below, at any time and for any reason.  Such termination shall
be effective immediately upon the Company providing notice to Executive that he
is terminated without Cause, or such other time thereafter as the Company shall
designate.  If the Executive is employed by the Company at the end of the
Employment Term, and the Employment Term is not extended beyond June 30, 2015,
such non-extension shall be treated as a termination without Cause under this
Section 3.1(d) and Executive’s termination date shall be June 30, 2015.

(e)

Termination By Executive With Good Reason.  Executive may terminate this
Agreement with Good Reason, at which time Executive’s employment and all of the
Company’s obligations under this Agreement shall terminate, except as provided
in Section 3.2(b). “Good Reason” shall mean the occurrence of any of the
following conditions without Executive’s written consent, provided that
Executive shall provide notice to the Company of the existence of the condition
within 90 days of the initial existence of such condition, the Company shall
have 30 days from the date it receives the notice (the “Cure Period”) within
which to cure such condition, and the Executive must terminate his employment
within no more than 30 days after the expiration of the Cure Period if the
Company does not cure the condition within the Cure Period: (A) a reduction in
Executive’s title such that he is no longer President and Chief Executive
Officer of the Company, (B) a material reduction in (i) Executive’s current
level of Base Salary under Section 2.1 hereof or (ii) Executive’s incentive
compensation under Section 2.2(a) hereof, or (C) a material breach by the
Company of any material provision of this Agreement.

3.2

Obligations Upon Termination.

(a)

Section 3.1(a)-(c) Terminations. If Executive’s employment is terminated
pursuant to Section 3.1(a) or (b), above, or if Executive resigns pursuant to
Section 3.1(c), above, Executive or Executive’s estate shall have no further
rights against the Company hereunder, except for the right to receive (i) any
unpaid Base Salary with respect to the period prior to the effective date of
termination of employment, (ii) payment of any accrued but unused Paid Time-Off,
consistent with the Company’s policy

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related to carryovers of unused time and applicable law, (iii) all vested
benefits to which Executive is entitled under any benefit plans set forth in
Section 2.3(a) hereof in accordance with the terms of such plans through the
date employment terminates and (iv) reimbursement of expenses to which Executive
may be entitled under Sections 2.3(c) and 2.4 hereof (collectively, the “Accrued
Obligations”).  The treatment of Executive’s incentive compensation provided
under Section 2.2 hereof shall be governed by the terms of the applicable plans
or grant agreements, except as explicitly provided to the contrary pursuant to
this Agreement.

(b)

Termination Without Cause or For Good Reason Prior to a Change in Control or
After the Protected Period.

i.

Company Obligations.   If Executive’s employment is terminated pursuant to
Section 3.1(d) or (e), above, prior to a Change in Control as defined in the
Company’s 2008 Equity Incentive Plan (a “Change in Control”) or after the
Protected Period as defined in Section 3.2(c), below, Executive shall have no
further rights against the Company hereunder, except for the right to receive
(i) the Accrued Obligations and (ii) Severance Payments, as defined below, but
only for so long as Executive complies with the requirements of Articles IV, V,
VI, VII, VIII, IX and X, below.  For purposes of this Agreement, “Severance
Payments” means (A) twelve (12) months of Base Salary continuation, (B) a
pro-rated annual incentive bonus payment (based on the number of days worked in
that fiscal year) for the fiscal year in which termination of employment occurs
based on actual performance-based bonus attainments for such fiscal year in a
lump sum, and (C) reimbursement for that portion of the premiums paid by
Executive to obtain COBRA continuation health coverage that equals the Company’s
subsidy for health coverage for active employees with family coverage (“COBRA
Continuation Payments”) for twelve (12) months following the date employment
terminates  (provided that Executive has not obtained health coverage from any
other source and is not eligible to receive health coverage from any other
employer, in which event Executive shall no longer be entitled to
reimbursement), at the times provided in subsection (iii), below.  The treatment
of Executive’s incentive compensation provided under Section 2.2 hereof shall be
governed by the terms of the Company’s applicable plans or grant agreements,
except as explicitly provided to the contrary pursuant to this Agreement.  

ii.

Release Requirement.    Notwithstanding the foregoing, the Company shall not pay
to Executive, and Executive shall not have any right to receive, the Severance
Payments unless, on or before the forty-fifth (45th) day following the date of
termination of employment, (1) Executive has executed and delivered to the
Company a release of all employment-related claims against the Company, its
Affiliates, successor companies, and their past and current directors, officers,
employees and agents, in a form provided to Executive by the Company, and (2)
the statutory rescission period for such release has expired.

iii.

Timing of Payment of Severance Payments.    Base Salary continuation shall
commence on the first payroll date after the forty-fifth (45th)

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day following the date of Executive’s termination of employment, provided that
 (1) and (2) of Section 3.2(b)(ii) have been satisfied by such date, and shall
be paid over a twelve (12) month period in accordance with the normal payroll
practices and schedule of the Company.  The pro-rated annual incentive bonus
payment shall be made at such time as other participants in the plan receive
their payment, or, if later, on the forty-fifth (45th) day following the date of
Executive’s termination of employment, provided that (1) and (2) of Section
3.2(b)(ii) have been satisfied by such date.  COBRA Continuation Payments shall
be paid on a monthly basis after Executive has paid the applicable COBRA premium
payment, provided that  (1) and (2) of Section 3.2(b)(ii) have been satisfied by
such date, over a 12-month period.  Notwithstanding anything to the contrary
contained in this Agreement, if (1) Employee is a “specified employee” within
the meaning of Section 1.409A-1(i) of the 409A Regulations, and (2) the
Severance Payments do not qualify for exemption from Section 409A under the
short-term deferral exception to deferred compensation of Section 1.409A-1(b)(4)
of the 409A Regulations, the separation pay plan exception to deferred
compensation of  Section 1.409A-1(b)(9) of the 409A Regulations, or any other
exception under the 409A Regulations, that portion of the Severance Payments not
exempt from Section 409A of the Code shall be made in accordance with the terms
of this Agreement, but in no event earlier than the first to occur of (a) the
day after the six-month anniversary of Employee’s termination of employment, or
(b) Employee’s death.  Any payments delayed pursuant to the prior sentence shall
be made in a lump sum, on the first business day after the six-month anniversary
of Employee’s termination of employment along with interest thereon payable at
the short-term applicable federal rate for monthly payments, as determined under
Section 1274(d) of the Code, for the month in which Employee’s employment
terminated.

iv.

Treatment of Severance Payments for Tax and Benefit Purposes.  The Severance
Payments shall be treated as ordinary income and shall be reduced by any
applicable income or employment taxes which are required to be withheld under
applicable law, and all amounts are stated before any such deduction.
Furthermore, the Severance Payments shall not be included as compensation for
purposes of any qualified or nonqualified retirement or welfare benefit plan,
program or policy of the Company.

(c)

Termination Without Cause or For Good Reason After a Change in Control and Prior
to the Expiration of the Protected Period.

(i)

Company Obligations.   If Executive’s employment is terminated pursuant to
Section 3.1(d) or (e), above, after a Change in Control that is a change in
control for purposes of Section 409A of the Code and within two years after such
Change in Control (the “Protected Period”), Executive shall have no further
rights against the Company hereunder, except for the right to receive (i) the
Accrued Obligations and (ii) CIC Severance Payments and Health Care
Continuation, as defined below, but only for so long as Executive complies with
the requirements of Articles IV, V, VI, VII, VIII, IX and X, below.  For
purposes

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of this Agreement, “CIC Severance Payments” means (A) twenty-four (24) months of
Base Salary in a lump sum and (B) a pro-rated annual incentive bonus payment
(based on the number of days worked in that fiscal year) for the fiscal year in
which termination of employment occurs based on the target bonus for such fiscal
year in a lump sum, at the times provided in subsection (iii).  The Company, its
successor or such other entity that would be required to provide COBRA
continuation coverage to “M&A qualified beneficiaries” shall provide group
health benefits under that entity’s then-current group health plans for
Executive and Executive’s spouse and dependents, if applicable, for up to
twenty-four (24) months following Executive’s termination of employment on the
same basis as if Executive had continued to be employed during that period (such
continuation coverage hereinafter referred to as the “Health Care
Continuation”), provided that (1) Executive timely pays the premiums toward the
cost of such benefits that an active employee would be required to pay for the
same benefits, and (2) Executive has not obtained health coverage from any other
source and is not eligible to receive health coverage from any other employer.
  The Health Care Continuation shall terminate on the earlier of the effective
date of Executive’s health coverage from any other source or Executive’s
eligibility to receive health coverage from any other employer of Executive.
 Further, the COBRA health care continuation coverage period under Section 4980B
of the Code shall run concurrently with the Health Care Continuation period.  In
addition, the Health Care Continuation will be on an after-tax basis with the
portion of the monthly cost of coverage paid by the Company (or another entity)
being taxable income to Executive.  The treatment of Executive’s incentive
compensation provided under Section 2.2 hereof shall be governed by the terms of
the Company’s applicable plans or grant agreements, except as explicitly
provided to the contrary pursuant to this Agreement.

(ii)

Release Requirement.  Notwithstanding the foregoing, the Company shall not pay
to Executive, and Executive shall not have any right to receive, the CIC
Severance Payments or Health Care Continuation unless, on or before the
forty-fifth (45th) day following the date of termination of employment,
(1) Executive has executed and delivered to the Company a release of all
employment-related claims against the Company, its Affiliates, successor
companies, and their past and current directors, officers, employees and agents,
in a form provided to Executive by the Company, and (ii) the statutory
rescission period for such release has expired.

(iii)

Timing of Payment of CIC Severance Payments.    The lump sum payment of
twenty-four (24) months of Base Salary and the pro-rated annual incentive
payment shall be made on the forty-fifth (45th) day following the date of
Executive’s termination of employment, provided that (1) and (2) of Section
3.2(c)(ii) have been satisfied by such date.  Notwithstanding anything to the
contrary contained in this Agreement, if (1) Employee is a “specified employee”
within the meaning of Section 1.409A-1(i) of the 409A Regulations, and (2) the
CIC Severance Payments do not qualify for exemption from Section 409A under the
short-term deferral exception to deferred compensation of Section 1.409A-

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1(b)(4) of the 409A Regulations, the separation pay plan exception to deferred
compensation of Section 1.409A-1(b)(9) of the Treasury Regulations, or any other
exception under the 409A Regulations, that portion of the CIC Severance Payments
not exempt from Section 409A of the Code shall be made in accordance with the
terms of this Agreement, but in no event earlier than the first to occur of (a)
the day after the six-month anniversary of Employee’s termination of employment,
or (b) Employee’s death.  Any payments delayed pursuant to the prior sentence
shall be made in a lump sum, on the first business day after the six-month
anniversary of Employee’s termination of employment along with interest thereon
payable at the short-term applicable federal rate for monthly payments, as
determined under Section 1274(d) of the Code, for the month in which Employee’s
employment terminated.  

(iv)

Treatment of CIC Severance Payments for Tax and Benefit Purposes.  The CIC
Severance Payments shall be treated as ordinary income and shall be reduced by
any applicable income or employment taxes which are required to be withheld
under applicable law, and all amounts are stated before any such deduction.
Furthermore, the CIC Severance Payments shall not be included as compensation
for purposes of any qualified or nonqualified retirement or welfare benefit
plan, program or policy of the Company.

(d)

Parachute Payments.  Notwithstanding anything contained in this Agreement to the
contrary, the Company, based on the advice of its legal or tax counsel, shall
compute whether there would be any “excess parachute payments” payable to
Executive, within the meaning of Section 280G of the Code, taking into account
the total ‘‘parachute payments,” within the meaning of Section 280G of the Code,
payable to Executive by the Company under this Agreement and any other plan,
agreement or otherwise.  If there would be any excess parachute payments, the
Company, based on the advice of its legal or tax counsel, shall compute the net
after-tax proceeds related to such parachute payments, taking into account the
excise tax imposed by Section 4999 of the Code, as if (i) such parachute
payments were reduced, but not below zero, such that the total parachute
payments payable to Executive would not exceed three (3) times the “base amount”
as defined in Section 280G of the Code, less One Dollar ($1.00), or (ii) the
full amount of such parachute payments were not reduced.  If reducing the amount
of such parachute payments otherwise payable would result in a greater after-tax
amount to Executive, such reduced amount shall be paid to Executive and the
remainder shall be forfeited as of the date Executive’s employment terminates.
 If not reducing such parachute payments otherwise payable would result in a
greater after-tax amount to Executive, then such parachute payments shall not be
reduced.  If such parachute payments are reduced pursuant to the foregoing, they
will be reduced in the following order:  first, by reducing any cash severance
payments, then by reducing any fringe or other severance benefits, and finally
by reducing any payments or benefits otherwise payable with respect to, or
measured by, the Company’s common stock (including without limitation by
eliminating accelerated vesting, in each case starting with the installment or
tranche last eligible to become vested absent the occurrence of the Change in
Control).  Notwithstanding the foregoing, to the extent the parties agree that
any of the foregoing amounts are not parachute payments, such amounts shall not
be reduced.  To

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the extent the parties cannot agree as to whether any of the payments are in
fact parachute payments, the parties will designate, by mutual agreement, an
unrelated third-party with tax expertise to make the determination.
 Notwithstanding any provision of this Section 3.2(d) to the contrary, no amount
shall be subject to reduction pursuant to this Section 3.2(d) to the extent the
reduction would result in a violation of any applicable law.

ARTICLE IV

CONFIDENTIALITY

4.1

Confidentiality Obligations. Executive will not, during the term of Executive’s
employment, directly or indirectly use or disclose any Confidential Information
or Trade Secrets except in the interest and for the benefit of the Company.
After the end, for any reason, of Executive’s employment with the Company,
Executive will not directly or indirectly use or disclose any Trade Secrets.
 For a period of twenty-four (24) months following the end, for any reason, of
Executive’s employment with the Company, Executive will not directly or
indirectly use or disclose any Confidential Information.  Executive further
agrees not to use or disclose at any time information received by the Company
from others except in accordance with the Company’s contractual or other legal
obligations; the Company’s Customers are third party beneficiaries of this
obligation.

4.2

Definitions.

(a)

Trade Secret.  The term “Trade Secret” has that meaning set forth under the
Uniform Trade Secrets Act or, if the definition in Wisconsin law varies from
that in the Uniform Trade Secrets Act at the time of such determination,
Wisconsin law.  The term includes, but is not limited to, all computer source
code and/or related data created by or for the Company or a Related Company.

(b)

Confidential Information.  The term “Confidential Information” means all
non-Trade Secret or proprietary information of the Company which has value to
the Company and which is not known to the public or the Company’s competitors,
generally. Confidential Information includes, but is not limited to: (i)
inventions, product specifications, information about products under
development, research, development or business plans, production know-how and
processes, manufacturing techniques, operational methods, equipment design and
layout, test results, financial information, customer lists, information about
orders and transactions with customers, sales and marketing strategies, plans
and techniques, pricing strategies, information relating to sources of materials
and production costs, purchasing and accounting information, personnel
information and all business records; (ii) information which is marked or
otherwise designated as confidential or proprietary by the Company; and (iii)
information received by the Company from others which the Company has an
obligation to treat as confidential.

(c)

Exclusions.  Notwithstanding the foregoing, the terms “Trade Secret” and
“Confidential Information” shall not include, and the obligations set forth in
this Agreement shall not apply to, any information which: (i) can be
demonstrated by Executive to have been known by Executive prior to Executive’s
employment by the

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Company; (ii) is or becomes generally available to the public through no act or
omission of Executive; (iii) is obtained by Executive in good faith from a third
party who discloses such information to Executive on a non-confidential basis
outside the scope of Executive’s employment without violating any obligation of
confidentiality or secrecy relating to the information disclosed; or (iv) is
independently developed by Executive outside the scope of Executive’s employment
without use of Confidential Information or Trade Secrets.

(d)

Company.  For all purposes of this Article IV, references to the Company also
refer to all Related Companies.

ARTICLE V

NON-COMPETITION

5.1

Restrictions on Competition During Employment.  During the term of Executive’s
employment with the Company, Executive shall not directly or indirectly compete
against the Company, or directly or indirectly divert or attempt to divert any
Customer’s business from the Company anywhere the Company does or is taking
steps to do business.

5.2

Post-Employment Non-Solicitation of Restricted Customers.  For twelve (12)
months (or for twenty-four (24) months where any CIC Severance Payments are
governed by Section 3.2(c) of this Agreement) following termination of
Executive’s employment with the Company for any reason, Executive agrees not to
directly or indirectly solicit or attempt to solicit any business from any
Restricted Customer in any manner which competes with the services or products
offered by the Company in the twelve (12) months preceding termination of
Executive’s employment with the Company, or to directly or indirectly divert or
attempt to divert any Restricted Customer’s business from the Company.

5.3

Post-Employment Restricted Services Obligation.  For twelve (12) months (or for
twenty-four (24) months where any CIC Severance Payments are governed by Section
3.2(c) of this Agreement) following termination of Executive’s employment with
the Company, for any reason, Executive agrees not to provide Restricted Services
to any Competitor in any geographic area in which the Company sold
pre-kindergarten through 12th grade educational products and services during the
twelve (12) month period preceding termination of Executive’s employment. During
such twelve (12) month (twenty-four (24) months where any CIC Severance Payments
are governed by Section 3.2(c) of this Agreement) period, Executive also will
not provide any Competitor with any advice or counsel concerning the provision
of Restricted Services anywhere in such geographic area.

5.4

Definitions.

(a)

Customer.  The term “Customer” means any individual or entity for whom/which the
Company has provided services or products or made a proposal to perform services
or provide products.

(b)

Restricted Customer.  The term “Restricted Customer” means any individual or
entity (i) for whom/which the Company provided services or products and (ii)
with whom/which Executive had direct contact on behalf of the Company or about

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whom/which Executive acquired non-public information in connection with
Executive’s employment by the Company during the twenty-four (24) months
preceding the end, for any reason, of Executive’s employment with the Company;
provided, however, that the term “Restricted Customer” shall not include any
individual or entity who/which, through no direct or indirect act or omission of
Executive, has terminated its business relationship with the Company.

(c)

Restricted Services.  The term “Restricted Services” means services of any kind
or character comparable to those Executive provided to the Company during the
twelve (12) months preceding the termination of Executive’s employment with the
Company relating to pre-kindergarten through 12th grade educational products and
services of the type sold by the Company within any geographic area in which the
Company engaged in the sale of such products or services within the last twelve
(12) month period preceding termination of Executive’s employment.

(d)

Competitor.  The term “Competitor” means any business which is engaged in the
sale of pre-kindergarten through 12th grade educational products and services of
the type sold by the Company within any geographic area in which the Company
engaged in the sale of such products or services within the twelve (12) month
period preceding termination of Executive’s employment.

(e)

Company.  For all purposes of this Article V, references to the Company also
refer to all Related Companies.

ARTICLE VI

BUSINESS IDEA RIGHTS

6.1

Assignment.  The Company will own, and Executive hereby assigns to the Company
and agrees to assign to the Company, all rights in all Business Ideas which
Executive originates or develops whether alone or working with others while
Executive is employed by the Company.  All Business Ideas which are or form the
basis for copyrightable works are hereby assigned to the Company and/or shall be
assigned to the Company or shall be considered “works for hire” as that term is
defined by United States Copyright Law.

6.2

Definition of Business Ideas.  The term “Business Ideas” means all ideas,
designs, modifications, formulations, specifications, concepts, know-how, trade
secrets, discoveries, inventions, data, software, developments and copyrightable
works, whether or not patentable or registrable, which Executive originates or
develops, either alone or jointly with others while Executive is employed by the
Company and which are (i) related to any business known to Executive to be
engaged in or contemplated by the Company; (ii) originated or developed during
Executive’s working hours; or (iii) originated or developed in whole or in part
using materials, labor, facilities or equipment furnished by the Company.

6.3

Disclosure.  While employed by the Company, Executive will promptly disclose all
Business Ideas to the Company.

6.4

Execution of Documentation.  Executive, at any time during or after the term of
Executive’s employment with the Company, will promptly execute all documents
which the

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Company may reasonably require to perfect its patent, copyright and other rights
to such Business Ideas throughout the world.

6.5

Definition of Company.  For all purposes of this Article VI, references to the
Company also refer to all Related Companies.

ARTICLE VII

NON-SOLICITATION OF EMPLOYEES

During the term of Executive’s employment with the Company and for twelve (12)
months (or for twenty-four (24) months where any CIC Severance Payments are
governed by Section 3.2(c) of this Agreement) thereafter, Executive shall not
directly or indirectly encourage any Company employee to terminate employment
with the Company or solicit such an individual for employment outside the
Company in any manner which would end or diminish that employee’s services to
the Company.  For all purposes of this Article VII, references to the Company
also refer to all Related Companies.

ARTICLE VIII

EMPLOYEE DISCLOSURES AND ACKNOWLEDGMENTS

8.1

Confidential Information of Others.  Executive warrants and represents to the
Company that Executive is not subject to any employment, consulting or services
agreement, or any restrictive covenants or agreements of any type, which would
conflict or prohibit Executive from fully carrying out Executive’s duties as
described under the terms of this Agreement. Further, Executive warrants and
represents to the Company that Executive has not and will not retain or use, for
the benefit of the Company, any confidential information, records, trade
secrets, or other property of a former employer.

8.2

Scope of Restrictions.  Executive acknowledges that during the course of
Executive’s employment with the Company, Executive will gain knowledge of
Confidential Information and Trade Secrets of the Company and Related Companies.
 Executive acknowledges that the Confidential Information and Trade Secrets of
the Company and Related Companies are necessarily shared with Executive on a
routine basis in the course of performing Executive’s job duties and that the
Company and Related Companies have a legitimate protectable interest in such
Confidential Information and Trade Secrets, and in the goodwill and business
prospects associated therewith.  Executive acknowledges that the Company and
Related Companies sell pre-kindergarten through 12th grade educational products
and services to all states in the United States and in Canada.  Accordingly,
Executive acknowledges that the scope of the restrictions contained in this
Agreement are appropriate, necessary and reasonable for the protection of the
business, goodwill and property rights of the Company and Related Companies, and
that the restrictions imposed will not prevent Executive from earning a living
in the event of, and after, the end, for any reason, of Executive’s employment
with the Company.

8.3

Prospective Employers. Executive agrees, during the term of any restriction
contained in Articles IV, V, VI, VII, VIII, IX and X of this Agreement, to
disclose this Agreement to any entity which offers employment to Executive.
 Executive further agrees that

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 the Company may send a copy of this Agreement to, or otherwise make the
provisions hereof known to, any of Executive’s potential employers.

8.4

Third Party Beneficiaries. All Related Companies are  third party beneficiaries
with respect to Executive’s performance of Executive’s duties under this
Agreement and the undertakings and covenants contained in this Agreement, and
the Company and any
Related Company, enjoying the benefits thereof, may enforce this Agreement
directly against Executive.

8.5

Survival. The Covenants set forth in Articles IV, V, VI, VII, VIII, IX and X of
this Agreement shall survive the termination of this Agreement.

8.6

Injunctive Relief.  Executive acknowledges that the services to be rendered by
Executive hereunder are of a special, unique, and extraordinary character and,
in connection with such services, Executive will have access to Confidential
Information and Trade Secrets that are vital to the Company’s and the Related
Companies’ business.  Executive consents and agrees that, in the event of the
breach or a threatened breach by Executive of any of the provisions of this
Agreement, the Company and the Related Companies would sustain irreparable harm
and that damages at law would not be an adequate remedy for a violation of this
Agreement, and, in addition to any other rights or remedies that the Company and
the Related Companies may have under this Agreement, common or statutory law or
otherwise, the Company and Related Companies shall be entitled to specific
performance and/or injunctive or other equitable relief from a court of
competent jurisdiction enforcing this Agreement and/or restraining Executive
from committing, threatening to commit, or continuing any violation of this
Agreement (in each case without posting a bond or other security), including,
but not limited to, restraining Executive from disclosing, using for any
purpose, selling, transferring, or otherwise disposing of, in whole or in part,
any Confidential Information.  In addition, in the event of a breach or
violation by Executive of the provisions of Articles IV, V and VII, the number
of months set forth therein that relate to the term of the provisions shall be
automatically extended by the amount of time between the initial occurrence of
the breach or violation and when such breach or violation has been duly cured.
 Nothing contained herein shall be construed as prohibiting the Company or the
Related Companies from pursuing any other remedies available to it for any
breach or threatened breach of any provision of this Agreement, including, but
not limited to, the recovery of damages, costs, and fees, including the recovery
of any prior Severance Payments or CIC Severance Payments made to Executive.

ARTICLE IX

RETURN OF RECORDS

Upon the end, for any reason, of Executive’s employment with the Company, or
upon request by the Company at any time, Executive shall immediately return to
the Company all documents, records, equipment (including computers, laptops,
tablet computers, cell phones and other such equipment (“Electronic Equipment”))
and materials belonging and/or relating to the Company (except Executive’s own
personnel and wage and benefit materials relating solely to Executive and
Executive’s personal Electronic Equipment which is not owned by the Company),
and all copies of all such materials. Upon the end, for any reason, of
Executive’s employment with the Company, or upon request of the Company at any
time, Executive further agrees to

14

destroy such records maintained by Executive on Executive’s personally-owned
Electronic Equipment, which destruction Company may reasonably confirm.

ARTICLE X

NONDISPARAGEMENT

Executive agrees that Executive will not, at any time (whether during or after
the Employment Term), publish or communicate to any person or entity any
Disparaging (as defined below) remarks, comments or statements concerning the
Company and any Related Company and their respective present and former members,
partners, directors, officers, shareholders, employees, agents, attorneys,
successors and assigns, except as required by law, rule or regulation.  The
Company agrees to instruct its executive officers and directors to refrain from
publishing or communicating to any person or entity any Disparaging remarks,
comments or statements concerning the Executive during or after the Employment
Term, except as required by law, rule or regulation.  “Disparaging” remarks,
comments or statements are those that impugn the character, honesty, integrity
or morality or business acumen or abilities in connection with any aspect of the
operation of business of the individual or entity being disparaged.

ARTICLE XI

MISCELLANEOUS

11.1

Notice.  Notices and all other communications provided for in this Agreement
shall be in writing and shall be delivered personally or sent by registered or
certified mail, return receipt requested, postage prepaid, or sent by facsimile,
electronic mail or prepaid overnight courier to the parties at the addresses set
forth below (or such other address as shall be specified by the parties by like
notice pursuant to this Section 11.1):

To the Company:

School Specialty, Inc.

W6316 Design Drive

P.O. Box 1579

Appleton WI 54912-1579

Attention:  Chief Human Resources Officer

Fax: 1-920-882-5863

Email:  rachel.mckinney@schoolspecialty.com

With a copy to:

Godfrey & Kahn, S.C.

780 N. Water St.

Milwaukee, WI  53202

Attention:  Dennis F. Connolly

       Debra S. Koenig

Fax:  1-414-273-5198

Email:  dconnoll@gklaw.com

 dkoenig@gklaw.com

And :

Franzoi & Franzoi, S.C.

514 Racine Street

Menasha, WI  54952

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Attention:  Joseph F. Franzoi IV

Fax:  1-920-725-0998

Email:  jffiv@franzoi.com

To Executive:

     

Michael  P. Lavelle

8402 Lake Burden Circle

Windermere, FL  34786

Email:  mikelavelle@hotmail.com

With a copy to:

Joyce Ackerbaum Cox

Baker Hostetler

200 S. Orange Avenue, Ste 2300

Orlando, FL 32801

Fax: 407 841 0168

E-mail: jacox@bakerlaw.com

Such notices and communications shall be deemed given upon personal delivery or
receipt at the address, facsimile or email account of the party stated above or
at any other address specified by such party to the other party in writing,
except that if delivery is refused or cannot be made for any reason, then such
notice shall be deemed given on the third day after it is sent.

11.2

Entire Agreement; Amendment; Waiver.  This Agreement (including any documents
referred to herein) sets forth the entire understanding of the parties hereto
with respect to the subject matter contemplated hereby.  Any and all previous
agreements and understandings between or among the Parties regarding the subject
matter hereof, whether written or oral, are superseded by this Agreement. This
Agreement shall not be amended or modified except by a written instrument duly
executed by each of the parties hereto. Any extension or waiver by any party of
any provision hereto shall be valid only if set forth in an instrument in
writing signed on behalf of such party.

11.3

Headings.  The headings of sections and paragraphs of this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any of its provisions.

11.4

Attorneys’ Fees; Expenses.  Each party hereto shall bear and pay all of the
respective fees, expenses and disbursements of their agents, representatives,
accountants and counsel incurred in connection with negotiating this Agreement.
 In a dispute between the Parties concerning the subject matter of this
Agreement, including a dispute whether Executive has breached the terms of
Articles IV, V, VI, VII, VIII, IX, or X, above, the reasonable attorneys’ fees,
expenses and costs incurred by the prevailing party shall be paid by the other
party to the prevailing party within thirty (30) days after conclusion of the
litigation including any appeals.

11.5

Waiver of Breach.  The waiver by either party of the breach of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach by either party.

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11.6

Severability.  If any court of competent jurisdiction determines that any
provision of this Agreement is invalid or unenforceable, then such invalidity or
unenforceability shall have no effect on the other provisions hereof, which
shall remain valid, binding and enforceable and in full force and effect, and,
to the extent allowed by law, such invalid or unenforceable provision shall be
construed in a manner so as to give the maximum valid and enforceable effect to
the intent of the Parties expressed therein.

11.7

Governing Law.  This Agreement shall in all respects be construed according to
the laws of the State of Wisconsin, without regard to its conflict of laws
principles.

11.8

Future Cooperation.  Executive agrees that, during his employment and following
the termination of Executive’s employment for any reason, Executive will
cooperate with requests by the Company to assist in the defense or prosecution
of any lawsuits or claims in which the Company, any Related Company or its
officers, directors or employees may be or become involved and in connection
with any internal investigation or administrative, regulatory or judicial
proceeding, in each case which relates to matters occurring while Executive was
employed by the Company, at such times and at such places as shall be mutually
convenient for Executive and the Company, taking into account any employment
commitments which Executive then has.  Executive shall be compensated by the
Company at a rate comparable to that which he earned while an employee of the
Company or that which he is currently earning, whichever is greater; provided,
however, that Executive shall not be paid for such future cooperation during
such time as Executive is receiving Severance Payments or CIC Severance Payments
pursuant to Section 3.2(b) or 3.2(c) of this Agreement, respectively.

11.9

Compliance with Section 409A of the Code and the 409A Regulations.  This
Agreement shall be interpreted and administered in compliance with Section 409A
of the Code, the 409A Regulations and any authority promulgated thereunder.  Any
term used in this Agreement which is defined in Code Section 409A or the 409A
Regulations shall have the meaning set forth therein unless otherwise
specifically defined herein.  Any obligations under this Agreement that arise in
connection with the Executive’s “termination of employment”, “termination” or
other similar references shall only be triggered if the termination of
employment or termination qualifies as a “separation from service” within the
meaning of Section 1.409A-1(h) of the 409A Regulations.  Notwithstanding any
other provision of this Agreement, if at the time of the termination of the
Executive’s employment, the Executive is a “specified employee,” as defined in
Section 409A or the 409A Regulations, and any payments upon such termination
under this Agreement hereof will result in additional tax or interest to the
Executive under Code Section 409A, Executive will not be entitled to receive
such payments until the date which is six (6) months after the termination of
the Executive’s employment for any reason, other than as a result of the
Executive’s death or disability (as such term is defined in Code Section 409A or
the 409A Regulations).

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed as of the date first written above.

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EXECUTIVE:

 

 

 

 

 

/s/ Michael P. Lavelle

 

Michael P. Lavelle

 

 

 

Date:  

January 12, 2012

 

 

 

SCHOOL SPECIALTY, INC.:

 

 

 

 

 

By:  

/s/ Terry L. Lay

 

 

 

Title:  

Chairman of the Board

 

 

 

Date:  

January 12, 2012

 

 

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