AUDIO BOOK CLUB, INC.





January 29, 1999



Mr. Steve McLaughlin
4311 Greenbriar Lane
Weston, Florida  33331

Re:  AUDIO BOOK CLUB, INC.


Dear Steve:

This letter is our agreement for your  employment at Audio Book Club,  Inc. (the
"Company")  as  Executive  Vice  President/Chief  Technical  Officer  which will
commence on or before February 15, 1999 and end on the second (2nd)  anniversary
of your start date of employment with the Company, subject, however, to the next
sentence.  The Company may  terminate  your  employment at any time for cause as
determined by the Board of Directors of the Company.

Audio Book Club,  Inc.  will pay you a salary,  while you are  employed at Audio
Book Club,  Inc.,  at the annual rate of $150,000  (One Hundred  Fifty  Thousand
Dollars)  commencing on your start date of employment.  Such salary will be paid
monthly in arrears  on the last day of the month at the rate of  $12,500.00  per
month,  prorated  for your first and last month,  for the actual  number of days
employed during each month.

In addition,  you may receive a performance-based  bonus to be determined by the
Chief Executive  Officer in his sole and absolute  discretion at the end of your
first year of employment, provided you are still employed by the Company at that
time, in the amount of $15,000.  Such bonus shall be paid within forty-five (45)
days of the end of such year.

You will also  receive  upon your  start  date of  employment  with the  Company
options to acquire  8,000 shares of Common  Stock at an exercise  price of $0.10
per share, which shall vest upon your start day of employment.

You will also receive  options to acquire  150,000 shares of Common Stock in the
Company pursuant to and in accordance with the Company's stock option plan. Such
options  shall vest as to 25,000 of the shares  covered  thereby upon your start
date of  employment,  25,000 at the end of year  one,  30,000 at the end of year
two,  35,000  at the end of  year  three  and  35,000  at the  end of year  four
provided, however, that such options shall terminate and be canceled if you


<PAGE>


Mr. Steve McLaughlin
January 29, 1999
Page 2




are no longer  employed by the Company prior to the date such options vest. Such
options  shall be  exercisable  at a price per  share  equal to 100% of the fair
market value as of the date of the signing of this  agreement  ($9.75 per share)
and will be exercisable for a period of five years  commencing  immediately upon
vesting,  provided,  however,  if you are no longer employed by the Company such
options  shall  expire on the earlier of 30 days  following  the date you are no
longer  employed  by the  Company  or five  years  from  the date  such  options
initially become exercisable. All unvested options shall immediately vest upon a
person (or  persons  acting  together),  other  than the  current  officers  and
directors of the Company,  becoming the  beneficial  owner of 50% or more of the
Company's outstanding Common Stock.

You will also  receive  $10,000 as  reimbursement  for any  moving  and  closing
expenses associated with your move to the Morristown,  New Jersey area, which is
a condition  of your  employment  with the  Company as well as an  interest-free
loan,  paid back  self-liquidating  over five  years in the amount of $35,000 to
cover the  down-payment  on a house  associated  with your move to New Jersey as
described  above,  provided that, if the Company is to go bankrupt while you are
still employed by the Company, such loan shall be forgiven and you shall have no
obligation  to repay  such loan to the  Company.  The  balance  of the loan will
become due upon termination of your employment for any reason other than because
of bankruptcy.

You will also be named Chairman of the Company's Technology Advisory Board.

If you are still  employed at the Company after the  conclusion of one year, you
will then be  eligible  for the  Company's  standard  401K  Plan.  You will also
receive the  Company's  normal  medical  insurance for yourself and family after
thirty days of employment.

It is further  agreed that you shall be  permitted  to work a minimal  number of
hours in respect of your consulting  relationship with Tom Payne for a period of
one year from your start date of employment with the Company,  provided that any
work done in connection with such  relationship  occur on your own personal time
and  provided  further  that it in no way  conflicts  with the  business  of the
Company including your performance,  responsibilities and hours spent working in
the Company.

You acknowledge and agree that: all mailing lists, customer, member and prospect
names;  licensor  arrangements;  front end and back end  marketing  performance;
financial statements;  operating system;  proprietary technology;  web marketing
strategies  and  advertising  or other  contracts;  database and other  computer
software  specific to the Company;  and all information which is known by you to
be subject to a confidentiality agreement or obligation of confidentiality, even
without a confidentiality agreement between the Company and another


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Mr. Steve McLaughlin
January 29, 1999
Page 3



person or party,  shall be  maintained by you in a  confidential  manner and you
agree that you will not use such  information to the detriment of the Company or
disclose such information to any third party,  except as may be necessary in the
course of  performing  your job  responsibilities.  You further  agree that your
obligations of  confidentiality  with respect to such information shall continue
for five years after you cease to be employed by the Company.

You   acknowledge   that  this  letter   embodies  and  constitutes  the  entire
understanding between the Company and you with respect to your employment by the
Company.


Very truly yours,

AUDIO BOOK CLUB, INC.



Norton Herrick
Chairman & CEO


AGREED AND ACCEPTED this 29th
day of January, 1999



_____________________________
Steve McLaughlin



cc:      Mike Herrick, Vice Chairman & Co-CEO
         John levy, CFO