EX-10.1



 





EXHIBIT 10.1




HAIGHTS CROSS COMMUNICATIONS, INC.



TRANSACTION BONUS PLAN




Article 1. Purpose




     The Haights Cross Communications, Inc. Transaction Bonus Plan (the “Plan”) is intended
to reward selected employees of Haights Cross Communications, Inc. (the “Company”) and
certain of its subsidiaries and/or Business Units who continue to provide services to the Company
until the consummation of a sale or sales of all the Company’s various Business Unit’s capital
stock, LLC membership interests and/or substantially all of its assets and to reward their
contributions towards maximizing a Business Unit’s Sales Proceeds (as defined below).



Article 2. Definitions.




     (a) “Acquisition Agreement” means one or more definitive purchase agreements between
the Company and the acquirer to acquire either its capital stock, LLC membership interests and/or
substantially all of its assets, and/or agreements to acquire the capital stock, LLC membership
interests or substantially all of the assets of a Business Unit.



     (b) “Board” shall mean the Board of Directors of the Company.



     (c) “Business Unit” shall mean one of the Company’s subsidiaries and/or divisions
including the following: Oakstone Publishing, Recorded Books, Sundance/Newbridge and Triumph
Learning/Buckle Down/Options Publishing.



     (d) “Cause” shall have the meaning set forth in the employment or severance agreement,
if any, between the Company and the Participant; provided that if no agreement containing such
definition is in effect, then “Cause” shall mean the Board’s determination of the following: (i)
the willful failure or refusal of such Participant to perform his or her duties with the Company;
(ii) willful misconduct that has a material adverse effect to the Company; (iii) the
Participant has any unauthorized contact or communication with a prospective buyer of any Business
Unit without authorization of Company or Board; (iv) conviction, indictment or plead of nolo
contendre by Participant of a felony; (v) Participant has committed fraud, embezzlement, theft, or
misappropriation against or from the Company; or (vi) alcohol or drug abuse which adversely affects
the performance of the Participant’s duties. The Board shall determine in reasonable good faith
whether any of the events or actions described herein have occurred and provide Participant of
written notification of such determination within ninety (90) days following the Company’s
knowledge of its existence and Participant shall have thirty (30) days to cure the act or behavior.



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     (e) “Closing Date” shall mean the date upon which the sale of Company and/or a
Business Unit has been consummated and the Company has received Sales Proceeds contemplated to be
received on such Closing Date.



     (f) “Code” means the Internal Revenue Code of 1986, as amended.



     (g) “Company” has the meaning set forth in Article 1 of the Plan.



     (h) “Committee” shall mean one or more committees or subcommittees of the Board
delegated to act on behalf of the Board. If so delegated, all references in the Plan to the
“Board” shall mean such Committee or the Board.



     (i) “Disability” means physical or mental incapacity qualifying the Participant for
long-term disability under the Company’s long-term disability plan.



     (j) “Good Reason” shall mean the existence or occurrence of one or more of the
following conditions or events: (i) a material diminution in the Participant’s base salary or
bonus opportunity if the Board has approved a bonus plan for such fiscal year; or (ii) a material
adverse change in geographic location at which the Employee must provide services to the Company.
Good Reason shall not exist, unless the Participant has provided written notice to the Company
within ninety (90) days of the initial existence of the Good Reason condition(s), describing the
condition(s) in specific and adequate detail, and the Company has had thirty (30) days to cure such
condition(s) after the date on which the Participant has given such notice to the Company.



     (k) “Participant” means each employee of the Company who is listed on Schedule A
hereto. A Participant will be assigned to a particular Business Unit as described on Schedule A,
which assignment may be amended by the Board in its sole discretion to reflect any consolidation of
one or more Business Units.



     (l) “Participant Bonus Letter” shall mean a personalized letter to be received by each
Participant outlining the specific provisions of the Plan unique to such Participant, including but
not limited to Business Unit’s Sale Proceeds goals and such Participant’s Transaction Incentive
Bonus opportunity at various levels of Sale Proceeds.



     (m) “Plan” means this Transaction Bonus Plan.



     (n) “Sale Proceeds” shall mean with respect to a Business Unit an amount equal to (i)
the aggregate cash proceeds or fair market value of property received for its LLC membership
interests or capital stock or (ii) with respect to a sale of assets, the aggregate cash proceeds or
fair market value of property received, including any assumption of indebtedness for borrowed
money, both (i) and (ii) including any escrow amount or holdback withheld by the purchaser, and
both (i) and (ii) adjusted for any net working capital adjustment which may affect the aggregate
cash proceeds received by the Company; provided, however, for purposes of determining Sales
Proceeds, no value will be attributable to any contingent payments, such as an earn-out, until such
amount is actually paid to the shareholders of the Company.



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     (o) “Transaction” means one or more sales of the Company’s and/or Business Unit’s
capital stock, LLC membership interests and/or substantially all of their assets.



     (p) “Transaction Incentive Bonus” means the bonus for which a Participant is eligible
pursuant to Article 5 of the Plan and their Participant Bonus Letter.



Article 3. Effective Date of Plan.




     This Plan is effective as of October 1, 2007, provided, however, that with respect to each
Participant, if one or more definitive Acquisition Agreements have not been executed prior to
December 31, 2008 to sell the Participant’s Business Unit’s (as defined on Schedule A) capital
stock, LLC membership interests and/or substantially all of its assets, then the Company’s
obligations hereunder shall automatically terminate with respect to such Participant(s) at the same
time. The provisions of this Plan shall continue in full effect subsequent to December 31, 2008
with respect to all Acquisition Agreements executed prior to December 31, 2008 consummated in
accordance with the applicable Acquisition Agreement.



Article 4. Eligibility.




     Participants in the Plan shall include only those employees of the Company designated by the
Board as eligible participants who are listed on Schedule A hereto.



Article 5. Transaction Incentive Bonuses.




     (a) Each Business Unit Participant listed on Schedule A hereto shall be entitled to a
Transaction Incentive Bonus as described in their Participant Bonus Letter if (i) the Company has
announced that it is selling the Participant’s respective Business Unit; (ii) the minimum Business
Unit Sales Proceeds for a Participant’s assigned Business Unit described in a Participant’s Bonus
Letter is achieved or exceeded; and (iii) if the Participant remains continuously employed by the
Company from the date he or she becomes a Participant in the Plan through the payment dates
described in Article 5(c)(i) and 5(c)(ii).



     (b) In the event the Participant dies or is permanently disabled prior to the payment dates
described in Article 5(c)(ii) or 5(c)(ii), then Participant or, if applicable, his or her estate or
heirs shall be entitled to receive any unpaid Transaction Incentive Bonus to be paid to
Participant, but for his death or disability, pursuant to such section.



     (c) The Company shall pay the Participant a Transaction Incentive Bonus equal to an amount
described in the Participant Bonus Letter as follows:



          (i) fifty (50%) percent of the Transaction Incentive Bonus shall be paid on the thirtieth day
following the Closing Date with respect to the Business Unit; and



          (ii) the remaining fifty (50%) percent of a Participant’s Transaction Incentive Bonus shall be
paid on the one (1) year anniversary of such Closing Date;



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provided, that this amount shall also include the value of any additional amounts that would
have been Sale Proceeds, but for the fact that such payments were contingent payments as of the
Closing Date and the value of such contingent payments to be included in the Transaction Incentive
Bonus shall be calculated by the Company’s financial advisors.



          (iii) provided, however, in no event will the Participant be paid any earned but unpaid
Transaction Incentive Bonus if he or she is no longer employed by the Company, respective Business
Unit, or if applicable, the successor thereto and such termination of employment was for Cause or
resignation was for other than Good Reason.



     (d) Notwithstanding anything to the contrary in Article 5(a) or Article 5(c) above, in the
event the Participant is terminated without Cause or resigns for Good Reason (i) prior to the
Closing Date for his or her respective Business Unit, (ii) after the Closing Date for his or her
respective Business, but prior to payment of the first fifty (50%) percent of the Transaction
Incentive Bonus, or (iii) following the payment of the first fifty (50%) percent of the Transaction
Incentive Bonus, but prior to payment of the second fifty (50%) percent of the Transaction
Incentive Bonus as provided for in Article 5(c)(i)(ii), then with respect to a termination
described in clause (i) the Company shall pay the Participant his or her Transaction Incentive
Bonus within thirty (30) days of the Closing Date for his respective Business Unit or with respect
to a termination described in either clause (ii) and (iii) pay the Participant his or her remaining
unpaid Transaction Incentive Bonus within thirty (30) days of the date of Participant’s
termination. In no event will a Participant be entitled to a Transaction Incentive Bonus if their
employment is terminated by the Company with or without cause or by Participant with or without
Good Reason prior to the Company announcing that the Participant’s respective Business Unit is
being put up for sale.



Article 6. Administration.




     The Plan will be administered by the Board or Committee. The Board, in its sole discretion,
shall have the authority to adopt, amend and repeal rules relating to the Plan and to interpret and
correct the provisions of the Plan. The Board shall have authority, subject to the express
limitations of the Plan, (i) to prescribe, amend and rescind rules and regulations relating to the
Plan, (ii) to make all other determinations in the judgment of the Board necessary or desirable
for the administration and interpretation of the Plan, (iii) to determine the fair market value of
any property received, (iv) to consolidate any one or more Business Units into a single Business
Unit, and (v) to allocate the Sale Proceeds received by shareholders or Company with respect to a
Transaction involving the Company or one or more Business Units to each Business Unit in its
reasonable discretion. The Board may correct any defect or supply any omission or reconcile any
inconsistency in the Plan in the manner and to the extent it shall deem expedient to carry out the
Plan, and it shall be the sole and final judge of such expediency. All decisions by the Board shall
be final and binding on all interested persons. Neither the Company nor any member of the Board
shall be liable for any action or determination relating to the Plan.



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Article 7. Amendment and Termination.




     The Plan shall terminate when the total amount of all Transaction Incentive Bonuses has been
paid to the respective Participants, or at such earlier time pursuant to Article 3 of the Plan.
The Plan may not be amended in any manner that is adverse to a Participant without the written
consent of such Participant, except pursuant to Article 6 and as necessary to comply with or
qualify for an exemption from Section 409A of the Code or other applicable law.



Article 8. Miscellaneous.




     8.1. No Transaction Incentive Bonus shall be taken into consideration for the calculation of
any pension, severance or other benefit under any employee benefit plan, program or arrangement,
except as shall be required by applicable law.



     8.2. The right of a Participant to receive a Transaction Incentive Bonus shall not be deemed a
right to continued employment prior to or after the Closing Date and shall not entitle the
Participant to additional payments under any other benefit program implemented by the Company.



     8.3. No person shall have the power or right to transfer (other than by will or the laws of
descent and distribution), alienate or otherwise encumber such person’s interest under the Plan.
The provisions of the Plan shall inure to the benefit of each Participant and the Participant’s
beneficiaries, heirs, executors, administrators and successors in interest. In the event of a
Participant’s death after the Closing Date, the Company shall pay out the Transaction Incentive
Bonus to which the Participant is entitled pursuant to Article 5 of the Plan, if any, to the
Participant’s beneficiary, heirs, executor, administrator or successors in interest.



     8.4. The Company may make such provisions and take such action as it may deem necessary or
appropriate for the withholding of any taxes that the Company believes to be required by any law or
regulation of any governmental authority, whether Federal, state or local, to withhold in
connection with any Transaction Incentive Bonus.



     8.5. The Plan is binding on all persons entitled to benefits hereunder and their respective
heirs and legal representatives, on the Company and its successor, whether by way of merger,
consolidation, purchase or otherwise.



     8.6. The Plan and all determinations made and actions taken under the Plan shall be governed
by the laws of New York (excluding the choice of law provisions thereof).



     8.7. If any provision of the Plan is held unlawful or otherwise invalid or unenforceable, in
whole or in part, the unlawfulness, invalidity or unenforceability shall not affect any other parts
of the Plan, which parts shall remain in full force and effect.



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     8.8. In the event of any dispute or controversy concerning entitlement to benefits hereunder,
the Company and Participant agree to submit such dispute to binding arbitration before the American
Arbitration Association (“AAA”). Such arbitration shall take place in New York, New York before a
single arbitrator in accordance with AAA’s then current National Rules for the Resolution of
Employment Disputes. In the event a Participant is required to initiate arbitration proceedings
hereunder to resolve a dispute over his entitlement to benefits under the Plan, the Company shall
reimburse the Participant for his reasonable attorney’s fees incurred in initiating such
arbitration if the Participant prevails in such dispute.



     8.9. All questions of interpretation, construction or application arising under or concerning
the terms of this Plan shall be decided by the Company, in its sole and final discretion, whose
decision shall be final, binding and conclusive upon all persons. This Plan shall constitute the
entire understanding and agreement between the parties hereto with regard to all matters herein.
Subject to the foregoing sentence, this Plan is intended by the parties to supersede in the
entirety any and all agreements, whether written or oral, between the parties.



Adopted by Company: October 10, 2007




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Schedule A




Participants




	 	 	 
	Name	 	Business Unit
	Linda Koons

	 	Haights Cross Corporate
	Mark Kurtz

	 	Haights Cross Corporate
	Melissa Linsky

	 	Haights Cross Corporate
	Julie Latzer

	 	Haights Cross Corporate
	Nancy McMeekin

	 	Oakstone Publishing
	Dean Celia

	 	Oakstone Publishing
	Charles Dismuke

	 	Oakstone Publishing
	Brian Barze

	 	Oakstone Publishing
	David Berset

	 	Recorded Books
	Brian Downing

	 	Recorded Books
	Neil Tress

	 	Recorded Books
	Paul Konowitch

	 	Sundance/Newbridge
	Jeffrey Leist

	 	Sundance/Newbridge
	Kevin McAliley

	 	Triumph Learning/Buckle Down/Options Publishing
	Tom Emrick

	 	Triumph Learning/Buckle Down/Options Publishing
	Eric Conlin

	 	Triumph Learning/Buckle Down/Options Publishing
	Brian Gurley

	 	Triumph Learning/Buckle Down/Options Publishing







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