Document:

Employment Agreement

 EXHIBIT 10.25 
 School Specialty, Inc. 
 W6316 Design Drive 

Greenville, WI 54942 
 P.O. Box 1579 
 Appleton, WI 54912-1579 

Phone: 888-388-3224 
 Fax: 888-388-6344 
 www.schoolspecialty.com 

March 19, 2012 
 Kathryn Pepper-Miller

 3810 Williams Street 
 Denver, CO
80205 
 Dear Kathryn, 
 I am pleased
to offer you the position of Chief Marketing Officer for School Specialty, Inc. (SSI). This position will report directly to the President and CEO, Michael Lavelle. 
 The following highlights key aspects of our offer of employment: 
  

	•	 	 Start Date: On or before Monday, April 16, 2012. 

 

	•	 	 Employment: Your employment is contingent on the successful completion of a background check and pre-employment drug screen. A background check
form will be sent to you, if not already. Please complete and email or fax the form to the attention of Rachel McKinney at (920) 882-5814. The drug screen will be completed on site during your first day of employment with us.

  

	•	 	 Total Compensation: The following describes the compensation elements of our offer, which include: 

 

	 	•	 	 Base Salary: Your will receive a base salary of $290,000.00 on an annualized basis or at a biweekly rate of $11,153.84.

  

	 	•	 	 Bonus Plan: You are eligible for participation in the Annual Bonus Plan Program of School Specialty starting with SSI’s fiscal 2013 year
which begins May 1st. This position has a targeted payout of 40% of annual base salary and a potential payout of up to 100% of your base salary. 

  

	 	•	 	 Long Term Incentive: This position is eligible to participate in the School Specialty Long Term Equity Incentive Program. Given the level of
this position, there are several equity vehicles that make up your new hire long term incentive award, each of which will be evidenced by a separate written agreement. 

 

	 	•	 	 Restricted Stock Units (NSU) award: Upon your start date, you will receive an RSU award consisting of 10,000 shares. This is a time-based vesting award
and shares will vest ratably over a 3-year period starting with the first third vesting on the one year anniversary date of your hire into this role. The second third will vest upon the completion of your second anniversary date, and the final third
will vest upon completion of your third anniversary. 

	 	•	 	 Stock Option Grant (with no requirement to purchase stock): Upon your start date, you receive a Stock Option award consisting of 15,000 options. The
options are subject to a four-year vesting program at 25% per year starting with your first anniversary date of hire into this position and are valid for ten years. 

 

	 	•	 	 Stock Option Grant (with requirement to purchase stock): Upon your start date, you be issued a Stock Option award consisting of 25,000 options.
However, to initiate vesting of these options, you will first be required to accumulate $40,000 in purchased shares. Once this is completed, this award will vest: 25% upon an SSI stock price achievement of $5.00 per share; 25% upon an SSI stock
price achievement of $10.00 per share; 25% upon an SSI stock price achievement of $15.00 per share; and 25% upon an SSI stock price achievement of $20.00 per share. Additionally, even if the share price targets are achieved, no options are
exercisable during your first year of employment. Assuming share price targets are met, you may exercise up to, but nor more than, one-third of this award upon the first anniversary date of your hire into this position. A second third may be
exercised upon your second anniversary date, and the final third upon your third anniversary date, assuming share price target are met each of the years. The award has a 10-year term. 

 

	•	 	 Sign-On Bonus and Retention Bonus: To assist you with your career transition into this position, you will receive a one-time $30,000 gross
payment, payable July 2012. Additionally, assuming you are in good standing with the organization July 2013, you will receive a one-time $20,000 gross retention payment. 

 

	•	 	 Benefits: During the term of your employment with the Company, you will receive all benefits customarily provided by the Company to its
similarly situated employees. The Company shall have the right in its sole discretion to modify or eliminate any benefits provided to its associates. A Summary of your Benefits is included with the hard copy package that is mailed to you.

  

	•	 	 Vacation (PTO): You will accrue 4 weeks of vacation or Paid Time Off (PTO) annually. 

 

	•	 	 Relocation: The Company agrees to relocate you and your family to the Appleton, WI area with the understanding that your relocation will take
place no later than September 2012. Please refer to the relocation information included with this letter. Please note, in lieu of 3 months of temporary housing as stated in the relocation policy, you will be provided a one-time gross payment of
$18,000 to cover temporary housing and lease breakage costs, payable within 30 days of your start date. Given the level and the importance of this role, in addition to the elements contained in the relocation policy, School Specialty will also
provide the following: 

  

	 	•	 	 Reimbursement of Realtor fees and relevant closing costs relating to the sale of your existing home; 

 

	 	•	 	 Reimbursement of closing cost associated with the purchase of your new home in the Appleton area; 

 

	 	•	 	 Gross up of incurred expenses that are considered by the government as personal income as it relates to the above mentioned points.

 It is understood that should you leave the company of your own volition with less than two years of service
with the Company, you will owe the company a pro-rated amount against the total relocation expenditures. 
  

	•	 	 Covenants and Conditions: Associate agrees to the covenants and conditions as listed in Exhibit A attached. There are two (2) copies of
this offer letter and of Exhibit A, please sign both, retain a copy of each for your file and fax or email the other copies to Rachel McKinney – Chief Human Resources Officer at (920) 882-5814. Then, please bring an original Exhibit A and
an original signed offer letter with you when you start for our files. 

  

	•	 	 Severance: Should your employment be terminated for reasons other than “cause,” and assuming you are in this role or in a role at an
equivalent level upon termination, you will be eligible to receive the standard severance package for your executive level which includes one (1) year of severance based on your current annual salary at the date of termination. The severance
payment is contingent upon your execution of a written separation agreement (including a general release of claims) in a form acceptable to the Company within thirty (30) days of the date of your termination and will be paid to you in
accordance with the Company’s regular payroll practices over the one-year period following such termination. 

	 	•	 	 Definition of “Cause”: Definition of “Cause”: “Cause” shall mean any of the following: (1) Employee has
materially breached any agreement to which Employee 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, Employee’s substantial failure or willful refusal to perform his duties and responsibilities to the Company, (2) Employee has committed gross negligence, willful misconduct or any violation of law in the
performance of Employee’s duties for the Company; (3) Employee has taken any action substantially likely to result in discredit to or loss of business, reputation or goodwill of the Company; (4) Employee has failed to follow
reasonable instructions from the Board, officer, body or other entity or individual to whom Employee reports concerning the operations or business of the Company; (5) Employee has been convicted or pled nolo contendere to a felony or other
crime, the circumstances of which substantially relate to Employee’s employment duties with the Company; (6) Employee has misappropriated funds or property of the Company or engaged in any material act of dishonesty; (7) Employee has
attempted to obtain a personal profit from any transaction in which the Company has an 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 Company’s Board after full disclosure of all details relating to such transaction. For the purposes of this definition of “Cause,” no act or failure to act on Employee’s part will be deemed “willful”
unless done or omitted to be done, by the Employee in bad faith. 

  

	•	 	 In Addition: You also warrant and represent to School Specialty, Inc. that as of the date of this employment offer, you are not subject to any
employment, consulting, service agreement or any restrictive covenants or agreements of any type, which would conflict or prohibit you from fully carrying out the duties of the position being offered to you. In addition, you warrant and represent to
School Specialty, Inc. that you have not and will not retain or use for the benefit of School Specialty, Inc., any confidential information, records, trade secrets or other property of a former employer. 

Kathryn, on behalf of all of us at School Specialty, Inc., we are very much looking forward to the value you will bring to this role. Should you have any
questions, please do not hesitate to contact me directly at (920) 882-5800. 
 Sincerely, 

/s/ Michael Lavelle 
 Michael Lavelle

 President and CEO 
 School Specialty,
Inc. 
 cc: Corporate Human Resources 
  

 
 I, /s/ Kathryn Pepper-Miller, accept the terms
as outlined in this offer of employment. 
 (Printed Name) 

 

							
	/s/ Kathryn Pepper-Miller	 		  	 April 2, 2012
	 	
	Signature	 		  	DateStock Option Agreement

 EXHIBIT 10.26 
 SCHOOL SPECIALTY, INC. 

STOCK OPTION AGREEMENT 

School Specialty, Inc. (the “Company”) has granted you an option (the “Option”) pursuant to this Stock
Option Agreement (the “Agreement”). The Option lets you purchase a specified number of shares of the Company’s common stock (the “Option Shares”), at a specified price per share (the “Exercise
Price”). The Exercise Price per Option Share is 100% of the Fair Market Value of the Company’s common stock, $0.0001 par value (“Common Stock”), on the Date of Grant set forth in Schedule I. The “Fair
Market Value” of the Common Stock is the closing sale price of the Common Stock on the NASDAQ Stock Market as reported in the Midwest Edition of the Wall Street Journal or other authoritative source on the indicated date. If no sales of Common
Stock were made on said exchange on that date, “Fair Market Value” shall mean the closing sale price of Common Stock as reported for the most recent preceding day on which sales of Common Stock were made on said exchange, or, failing any
such sales, such other market price as the Board of Directors of the Company (“Board”) or the Compensation Committee of the Board may determine in conformity with pertinent law and regulations of the Treasury Department. 

Schedule I to this Agreement provides the details for your grant. It specifies the number of Option Shares, the Exercise Price,
the Date of Grant, the latest date the Option will expire (the “Term Expiration Date”), and any special rules that apply to your Option. Schedule I also specifies that the Company intends this Option to be a nonqualified
stock option (“NQSO”), not subject the rules contained in Section 422 of the Internal Revenue Code of 1986, as amended (“Code”). References to the Agreement also include Schedule I, unless the context
provides otherwise. 
 The following terms and restrictions apply to the Option: 

 

			
	 Administrator
	  	The Agreement, and the Option contained therein, shall be administered by the Compensation Committee of the Board (the “Administrator”). The Administrator shall have
full and exclusive power to administer and interpret the Agreement and to grant waivers to restrictions that govern the Option. All determinations made by the Administrator shall be binding and conclusive as regards the Company, you, and any other
interested persons, including your beneficiaries.
		
	 Option
	  	While your Option remains in effect under the Expiration section below,
		
	 Exercisability
	  	you may exercise any exercisable portions of that Option (and buy the Option Shares) under the timing rules Schedule I specified under “Option Exercisability
Provisions.”
		
	Method of Exercise and Payment for Shares	  	Subject to this Agreement, you may exercise all or part of the Option (in whole shares only) by providing a written notice (or notice through another previously approved method,
which could include a voice- or e-mail system) to the Assistant Secretary of the Company or to whomever the Administrator designates, on or before the date the Option expires. Each such notice must satisfy whatever procedures then apply to the
Option and must contain such representations (statements from you about your situation) as the Company requires. You must, at the same time, pay the Exercise Price using one or more of the methods described below. Please note that until the Company
notifies you otherwise, or unless you indicate otherwise on your notice of option exercise, all exercises of the Option will be done or a “Net Exercise” basis.

 
			
	Net Exercise	  	The Company delivers the number of shares to you that equals the number of Option Shares for which the Option was exercised, reduced by the number of whole shares of common stock
with a Fair Market Value on the date of exercise equal to the Exercise Price and the minimum tax withholding required by law; to the extent the combined value of the whole shares of common stock, valued at their Fair Market Value on the date of
exercise, is not sufficient to equal the Exercise Price and minimum tax withholding obligation, the Company will withhold the additional amount from your next pay check, or if you are not employed by the Company, you must pay the additional amount
in cash to the Company before delivery of the shares will be made to you;
		
	Cashless Exercise	  	an approved cashless exercise method, including directing the Company to send the stock certificates (or other acceptable evidence of ownership) to be issued under the Option to a
licensed broker acceptable to the Company as your agent in exchange for the broker’s tendering to the Company cash (or acceptable cash equivalents) equal to the Exercise Price and any required tax withholdings (at the minimum required level);
or
		
	Cash/Check	  	cash, a cashier’s or certified check in the amount of the Exercise Price, and any required tax withholdings, payable to the order of the Company.

  

			
	 Tax Withholding
	  	The Company shall have the right to deduct applicable federal and state income and employment taxes upon the exercise of all or any portion of the Option, but in no event in excess
of the minimum withholding required by law. If the Option is exercised using the Net Exercise method referenced above, the minimum level of tax withholding shall be satisfied for purposes of this paragraph, provided payment for the fractional share,
if any, is made in accordance with the Net Exercise paragraph set forth above.
		
	Other Benefit and Compensation Programs	  	Payments and other benefits received by you pursuant to this Agreement shall not be deemed a part of your regular, recurring compensation for purposes of the termination or
severance plans of the Company and shall not be included in, nor have any effect on, the determination of benefits under any employee benefit plan, contract or similar arrangement, unless the Administrator expressly determines
otherwise.
		
	 Death or Disability
	  	If you die, your estate or beneficiaries shall have the period of time specified in Schedule I within which to exercise any portion of the Option which is then exercisable
pursuant to the terms of this Agreement. Rights to the Option shall pass by will or the laws of descent and distribution in the following order: (a) to beneficiaries so designated by you; if none, then (b) to your legal representative; if
none, then (c) to the persons entitled thereto as determined by applicable law or, absent applicable law, a court of competent jurisdiction. If you have a Disability, as defined in Schedule I hereto, the Option shall be exercisable for
the period of time specified in Schedule I. The Option may be exercised by you, if legally competent, or a legally designated guardian or representative if you are legally incompetent by reason of such Disability. After your death or
Disability, the Administrator may, in its sole discretion at any time, (1) terminate any restrictions in this Agreement, (2) accelerate vesting or (3) extend the exercise period except to the extent such extension is treated as an
extension for purposes of Code Section 409A.

  
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	Expiration	  	You cannot exercise the Option after it has expired. The Option will expire no later than the close of business on the Term Expiration Date shown on Schedule I. The “Option
Expiration Rules” in Schedule I provide the circumstances under which the Option will terminate before the Term Expiration Date because of, for example, your termination of employment. The Administrator can override the expiration provisions of
Schedule I.
		
	Compliance with Law	  	You may not exercise the Option if the Company’s issuing stock upon such exercise would violate any applicable federal or state securities laws or other laws or regulations.
You may not sell or otherwise dispose of the Option Shares in violation of applicable law. As part of this prohibition, you may not use the Cashless Exercise method if the Company’s insider trading policy then prohibits you from selling to the
market.
		
	Additional Conditions to Exercise	  	The Company may postpone issuing and delivering any Option Shares for so long as the Company determines to be advisable to satisfy the following:
		
		  	 its completing or amending any securities registration or qualification of the Option Shares or its or your satisfying any exemption from
registration under any federal or state law, rule, or regulation;

		
		  	 its receiving proof it considers satisfactory that a person seeking to exercise the Option after your death or Disability is authorized and entitled
to do so; and

		
		  	 your complying with any federal or state tax withholding obligations.

		
	Additional Representations from You	  	If you exercise the Option at a time when the Company does not have a current registration statement (generally on Form S-8) under the Securities Act of 1933 (the
“Act”) that covers issuances of shares to you, you must comply with the following before the Company will issue the Option Shares to you. You must —
		
		  	 represent to the Company, in a manner satisfactory to the Company’s counsel, that you are acquiring the Option Shares for your own account and
not with a view to reselling or distributing the Option Shares; and

		
		  	 agree that you will not sell, transfer, or otherwise dispose of the Option Shares unless:

		
		  	 a registration statement under the Act is effective at the time of disposition with respect to the Option Shares you propose to sell, transfer, or
otherwise dispose of; or

		
		  	 the Company has received an opinion of counsel or other information and representations it considers satisfactory to the effect that, because of Rule
144 under the Act or otherwise, no registration under the Act is required.

  
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	No Effect on No Effect on Employment or Other Relationship	  	Nothing in this Agreement restricts the Company’s rights or those of any of its affiliates to terminate your employment or other relationship at any time, with or without
Cause, as defined in Schedule I. The termination of any employment or other relationship, whether by the Company or any of its affiliates or otherwise, and regardless of the reason for such termination, has the consequences provided for under
this Agreement and any applicable employment or severance agreement or plan.
		
	Not a Shareholder	  	You understand and agree that the Company will not consider you a shareholder for any purpose with respect to any of the Option Shares until you have exercised the Option, paid for
the shares, and received evidence of ownership.
		
	Nonassignability	  	Except in the case of your death or Disability, as set forth above, or in this paragraph, the Option is not assignable or transferable, or payable to or exercisable by anyone other
than you. Notwithstanding the foregoing, the Administrator may permit the Option to be transferred to members of your immediate family, to trusts for the benefit of you and/or your immediate family members, or to partnerships or other entities in
which you and/or your immediate family members own all the equity interests. For purposes of the preceding sentence, “immediate family” means your spouse, issue and spouse of your issue.
		
	Adjustments	  	In the event of any change in the outstanding Common Stock of the Company by reason of a stock split, stock dividend, combination or reclassification of shares, recapitalization,
merger or similar event, the Administrator shall adjust proportionally (a) the number of shares of Common Stock covered by the Option and (b) the per share Exercise Price. In the event of any other change affecting the Common Stock or any
distribution (other than normal cash dividends) to holders of Common Stock, such adjustments as may be deemed equitable by the Administrator, including adjustments to avoid fractional shares, shall be made to give proper effect to such event. In the
event of a merger, consolidation, statutory share exchange, acquisition of property or stock, separation, sale or disposition of all or substantially all of the assets, reorganization or liquidation, the Administrator shall be authorized to
(A) issue or assume the Option, whether or not in a transaction to which Code Section 424(a) applies, by means of substitution of a new award for the Option or an assumption of the Option or (B) convert the Option, if in-the-money,
into cash on a basis to be determined by the Administrator in its sole discretion, and cancel the Option if it is underwater. Any such adjustment, waiver, conversion or other action taken by the Administrator under this paragraph shall be conclusive
and binding on you, the Company and your respective successors, assigns and beneficiaries.
		
		  	Any adjustments made pursuant to the paragraph above shall be made in such a manner as to ensure that, after such adjustment, the Option either continues not to be subject to Code
Section 409A or complies with the requirements of Code Section 409A and the Administrator shall not have the authority to make any adjustments pursuant to the paragraph above to the extent that the existence of such authority would cause
the Option to be subject to Code Section 409A.
		
	Governing Law	  	The laws of the State of Wisconsin will govern all matters relating to this Agreement, without regard to the principles of conflict of laws, except to the extent superseded by the
laws of the United States of America.
		  	

  
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Notices                    

	  	Any notice you give to the Company must follow the procedures then in effect. If no other procedures apply, you must deliver your notice in writing by hand or by mail to the office
of the Corporate Assistant Secretary. If mailed, you should address it to the Company’s Corporate Assistant Secretary at the Company’s then corporate headquarters, unless the Company directs optionees to send notices to another corporate
department or to a third party administrator or specifies another method of transmitting notice. The Company will address any notices to you at your office or home address as reflected on the Company’s personnel or other business records. You
and the Company may change the address for notice by like notice to the other, and the Company can also change the address for notice by general announcements to optionees.

  
 5 

 SCHOOL SPECIALTY, INC. 

OPTIONEE ACKNOWLEDGMENT 
 By signing where indicated on Schedule I, I accept this Option, subject to all of its terms and provisions. I agree to accept as binding, conclusive, and final all decisions or interpretations of
the Administrator concerning any questions arising under this Agreement. 
 NO ONE
MAY SELL, TRANSFER, OR DISTRIBUTE THE OPTION OR THE SECURITIES THAT
MAY BE PURCHASED UPON EXERCISE OF THE OPTION WITHOUT AN EFFECTIVE
REGISTRATION STATEMENT RELATING THERETO OR AN OPINION OF COUNSEL SATISFACTORY TO
SCHOOL SPECIALTY, INC. OR OTHER INFORMATION AND REPRESENTATIONS SATISFACTORY TO
SCHOOL SPECIALTY, INC. THAT SUCH REGISTRATION IS NOT REQUIRED. 

  
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 SCHOOL SPECIALTY, INC. 

STOCK OPTION AGREEMENT 
 Schedule I 
  

			
		
	 Optionee Information:
	 	
		
	 Name:             Kathryn L. Pepper-Miller
	 	
		
	 Option Information:
	 	
		
	 Option Shares: 15,000
	 	Exercise Price per Share: $3.16
		
	 Date of Grant: April 16, 2012
	 	Term Expiration Date: April 16, 2022
		
	 Type of Option: NQSO
	 	

  

			
	Option Exercisability Provisions	  	 This Option will become exercisable as to one-fourth of the Option Shares on each of the first, second, third and fourth anniversaries
of the Date of Grant, assuming you have been continuously employed by the Company since the Date of Grant on such anniversary. The unexpired portion of your Option will become exercisable upon termination of your employment due to your death or
Disability with respect to a number of Option Shares equal to the number of Option Shares that would have become exercisable on the next anniversary of the Date of Grant following the termination of your employment, multiplied by a fraction, the
numerator of which is the number of days following the most recent date on which a portion of the Option became exercisable up to and including the date of termination of your employment and the denominator of which is 365. In addition, any
unexpired portions of the Option will become fully exercisable upon the occurrence of a Change in Control, provided however that if the consideration to be received by the shareholders of the Company pursuant to the Change in Control consists in
part or in whole of publicly traded equity securities and the Option will be converted into the right to purchase such publicly traded equity securities, then the unexpired portions of the Option will become fully exercisable upon the first to occur
of (a) the date on which such Option would otherwise become exercisable, (b) the date on which your employment terminates due to death, Disability or termination of employment by the successor to the Company without Cause or (c) upon a subsequent
Change in Control of the successor to the Company.
  
 For purposes of this
Option, the term “Cause” has the same meaning ascribed to such term in the Offer of Employment between the Company and you dated as of April 16, 2012 (the “Employment Agreement”). For purposes of this Option,
the terms “Change in Control” and “Disability” have the meanings set forth in the Company’s 2008 Equity Incentive Plan.

  
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	 Option Expiration Rules
	  	Any unexercisable portions of the Option will expire immediately when you cease to be employed by the Company. Exercisable portions of the Option will remain exercisable
until the earliest of the following to occur, and then immediately expire:
		
		  	 •        the 90th day after
termination of your employment by the Company without Cause or by you
  
 •        termination of your employment by the Company for Cause
  

•        the earlier of (i) the first anniversary of your
termination of employment due to a Disability and (ii) 30 days after you cease to have a Disability that resulted in the termination of your employment
  

•        the second anniversary of the termination of your
employment due to your death
  

•        a violation by you of the covenants set forth in Exhibit A
of the Employment Agreement
  

•        the Term Expiration
Date

  

									
	Employee	 		 	SCHOOL SPECIALTY, INC.
					
	By:	 	/s/ Kathryn L. Pepper-Miller	 		 	By:	 	/s/ Michael Lavelle
		 	Kathryn L. Pepper-Miller	 		 	Title:	 	Chief Executive Officer
					
	Date:	 	April 16, 2012	 		 	Date:	 	April 16, 2012

  
 8

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