EX-10.1



 







    Exhibit 10.1



 




    Employment
    Agreement

    The Princeton Review,
    Inc.



 



    This Employment Agreement (the “Agreement”) is between
    Michael J. Perik (“Perik”) and The Princeton Review,
    Inc. (“TPR”), and is subject to the terms of the
    current form of the Executive Compensation Policy Statement, a
    copy of which is attached as Exhibit A (the “Policy
    Statement”) and incorporated herein, except as expressly
    modified below. In addition, unless otherwise defined in this
    Agreement, terms used in this Agreement shall have the meanings
    ascribed to them in The Princeton Review Glossary, a copy of
    which is attached as Exhibit B and incorporated herein.
    This Agreement supersedes any previous employment agreement
    between the parties.



 


		
	    1.  
	    Job Description:  Perik shall serve as the
    Chief Executive Officer of TPR, working full time from
    TPR’s headquarters. Perik shall devote his full business
    energies to the business affairs of TPR. Further, he will use
    his best efforts, skill and abilities to promote TPR’s
    interests in accordance with guidelines, policies and objectives
    established by TPR from time to time.

	 
	    2.  
	    Base Compensation & Benefits:  TPR
    shall pay Perik a base salary of $1 per annum. Perik shall also
    receive those medical, dental, life insurance and other benefits
    made available generally by TPR to “G-0” level
    executives of TPR.

	 
	    3.  
	    Bonus Compensation:  For each calendar year of
    his employment, Perik shall be entitled to a performance bonus
    of up to $875,000 (which amount shall be pro rated for 2007 and
    increased annually thereafter by 3% per annum), based on his
    attainment of performance metrics established and revised
    annually by the Compensation Committee. Each such bonus shall be
    paid in a combination of cash and common stock issued pursuant
    to The Princeton Review 2000 Stock Incentive Plan (as amended
    and restated on March 24, 2003 and as may hereafter be
    amended) (the “Plan”), with the cash portion being an
    amount estimated by the parties to be sufficient to cover the
    income taxes and other required withholdings payable by Perik on
    account of the bonus. Perik shall, however, be solely
    responsible for the payment of all such taxes. Each bonus earned
    by Perik shall be paid to him within
    21/2 months
    following the end of the calendar year in which the bonus was
    earned. The Company shall pay cash compensation to Perik in such
    amounts and in such manner as the Company may determine
    necessary so that Perik will be deemed an exempt employee for
    purpose of applicable wage laws.

	 
	    4.  
	    Stock Option Award:  Effective on July 22,
    2007, subject to approval by the Board of Directors, TPR shall,
    as an inducement grant, grant Perik an option to purchase
    1,700,000 shares of TPR’s common stock (the
    “Option Shares”) at a per-share exercise price equal
    to the fair market value of a share of TPR common stock on the
    effective date of the grant. Subject to Perik’s continued
    employment with TPR on each vesting date, Perik’s right to
    exercise such option shall vest as to 6.25% of the Option Shares
    on October 31, 2007 and on the last day of every third
    month thereafter.

	 
	    5.  
	    Term:  This Agreement shall be effective as of
    July 22, 2007, and the initial term of employment under
    this Agreement will be for the period commencing on that date
    and continuing in effect until July 31, 2011. The initial
    term of this Agreement shall be extended for successive two
    (2) year terms at the end of the initial term and every two
    years thereafter (each, including the initial term, a
    “Term”) unless TPR gives contrary written notice to
    Perik at least six months prior to the completion of a Term that
    the Agreement shall not be extended (a “Notice Not to
    Extend”). Notwithstanding the foregoing, Perik shall be
    employed at will, and either party may terminate Perik’s
    employment with or without Cause at any time. Accordingly,
    Perik’s employment may be terminated during a Term by Perik
    voluntarily or by TPR with or without Cause in accordance with
    the Policy Statement.

	 
	    6.  
	    Severance:  In the event that Perik’s
    employment is terminated by TPR without Cause or Perik
    terminates his employment due to a material and sustained
    diminution in his authority, duties, and responsibilities, then
    in addition to the payments under Section 5.1 of the Policy
    Statement and in lieu of the payments provided under
    Sections 5.3 and 5.4 of the Policy Statement (which
    Sections shall not apply to Perik in any event), TPR will pay
    Perik a severance payment of $500,000, or, if such termination
    by TPR without Cause occurs within














 





		
		
    a12 months after a Change of Control, such severance
    payment shall be $1,000,000. Any such severance payment shall be
    paid to Perik in a lump sum, less taxes and other applicable
    withholdings, within sixty (60) days after his termination,
    provided that Perik shall have first executed and delivered to
    TPR, and not revoked, a release agreement in a form acceptable
    to TPR. 




 


		
	    7.  
	    Business Expenses.  TPR shall reimburse Perik
    or otherwise provide for or pay all reasonable expenses incurred
    by him in furtherance of or in connection with TPR’s
    business, including cell phone monthly fees and the cost for a
    high speed (DSL or cable) internet connection at his primary
    residence, and such other expenses as may be incurred in
    accordance with TPR’s policies or be approved by the
    Compensation Committee of the Board of Directors.

	 
	    8.  
	    Right to a Vehicle.  TPR shall cover the
    expenses incurred for Perik to lease a vehicle for his business
    use up to a total cost of $600 per month, and for the reasonable
    cost of parking at TPR’s offices.




 



    Agreed to this 22 day of July, 2007.



 


 



    THE PRINCETON REVIEW, INC.



 


	 	 	 	 	 
	

    By:
    


	
 
	
    /s/ JOHN KATZMAN
    
	
 
	
    /s/ MICHAEL J. PERIK
    

	
 
	
 
	
    

	
 
	
    


	
 
	
 
	
    Name: John Katzman
    
	
 
	
    Michael J. Perik
    

	
 
	
 
	
    Title: Chairman of the Board of
    Directors
    
	
 
	
 









 




    Signature
    Page to Michael J. Perik Employment Agreement
    




    

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