Document:

Exhibit 10.18

 

EXECUTION COPY

 

CONSULTING AGREEMENT

 

THIS CONSULTING
AGREEMENT (this “Agreement”) is entered into as of March 5, 2007, by and
between The Reader’s Digest Association, Inc. (“Company”) and Eric
W. Schrier (“Consultant”).

 

W I T N E
S S E T H:

 

WHEREAS, Consultant
has heretofore been employed by the Company as President and Chief Executive
Officer of the Company;

 

WHEREAS, as of the
closing date of the Agreement and Plan of Merger, dated as of November 16,
2006, among RDA Holding Co. (“Parent”), Doctor Acquisition Co. and the
Company (the “Merger”), Consultant no longer serves as President and
Chief Executive Officer of the Company;

 

WHEREAS, as of the
closing date of the Merger, Consultant has provided notice to the board of
directors of the Company that he will terminate employment with the Company,
effective immediately prior to the Effective Date (as defined below), due to
Constructive Termination (as defined in The Reader’s Digest Association, Inc.
2001 Income Continuation Plan for Senior Management);

 

WHEREAS, the Company
will accept Consultant’s termination of employment with the Company, effective
immediately prior to the Effective Date, due to Constructive Termination;

 

WHEREAS, the Company
desires to retain Consultant on the Effective Date as a consultant to the
Company and to enter into an agreement embodying the terms of such retention;

 

WHEREAS, Consultant
desires to accept such retention and enter into such an agreement;

 

NOW, THEREFORE, for
and in consideration of the mutual promises, covenants, and undertakings
contained in this Agreement, and intending to be legally bound, the parties
hereto agree as follows:

 

I.                                         Term.  Subject
to the provisions of Section VI of this Agreement, Consultant shall be
retained as a consultant by the Company for a period commencing on March 19, 2007 (the “Effective Date”)
and ending on March 18, 2008 (the “Term”).

 

II.                                     Consulting Services.  The
Company hereby retains the Consultant, and the Consultant hereby agrees to
serve as a consultant to the Company, on the terms and conditions set forth in
this Agreement. During the Term, Consultant will, at 

 

 

the direction
of the Chief Executive Officer of the Company and on a non-exclusive basis, provide
his expertise, advice and assistance with special projects for the Company (the
“Consulting Services”). It is understood that the Consulting Services
shall be incidental to, and shall not interfere with, the other business
activities and commitments of the Consultant (in particular, the Consultant’s
services and activities as an “industrial partner” of Ripplewood Holdings
L.L.C.), and that the other business activities and commitments of the
Consultant shall not interfere with the Consulting Services.

 

III.                                 Annual Retainer.  The Company shall pay to Consultant an annual retainer of $840,000.00
(the “Annual Retainer”), which shall be paid, in advance, in monthly
installments.

 

IV.                                 Assistant.  In order to facilitate Consultant’s provision
of the Consulting Services, the Company shall make available to Consultant the
following:

 

A.                                   An
office in Westchester County, NY, which shall be to the reasonable satisfaction
of Consultant, and an office in New York, NY, located in the Parent’s
headquarters.

 

B.                                     Secretarial
support consistent with the secretarial support provided to Consultant during
the period of Consultant’s employment with the Company or any of its affiliates
prior to the Effective Date; provided that Consultant may decide the location at
which and hours during which such secretarial support is to be provided.

 

V.                                     Business Expenses.  Consultant shall be entitled to receive
prompt reimbursement for all expenses incurred by Consultant in the performance
of his Consulting Services hereunder, subject to the Company’s expense
reimbursement policy and such written documentation as the Company may
reasonably require.

 

VI.                                 Termination.  Upon termination of this Agreement by the
Company without Cause, the Company shall pay Consultant (or his beneficiaries,
as applicable), within ten (10) days of such termination, the balance of
the Annual Retainer for the Term in which such termination occurs. For any
other termination of this Agreement, Consultant shall return to the Company, on
a pro rata basis, any unearned Annual Retainer for the month in which such
termination occurs and shall not be entitled to recover the remaining
installments of the Annual Retainer for the Term.

 

A.                                   For
purposes of this Agreement, “Cause” shall mean (A) conviction of,
or a plea of nolo  contendere to, (x) a felony (other than
traffic-related) under the laws of the United States or any state thereof or
any similar criminal act in a jurisdiction outside the United States or (y) a
crime involving moral turpitude that could be injurious to the Company or its
reputation, (B) Consultant’s willful malfeasance or willful misconduct
which is 

 

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materially and
demonstrably injurious to the Company, (C) any act of fraud by Consultant
in the performance of Consultant’s duties hereunder or (D) Consultant’s
continued failure to perform the Consulting Services reasonably required of him
hereunder after written notice of such failure is given to Consultant.

 

VII.                             Status as a Consultant.  Consultant shall perform the Consulting Services
as an independent contractor of the Company. Consultant shall not be an
employee of the Company and neither Consultant nor the Company shall engage in
any actions that would cause Consultant to be considered an employee of the
Company. Consultant shall not be entitled to participate in any employee
benefit plans or other benefits or conditions of employment available to active
employees of the Company. Consultant shall have no authority to act as an agent
of the Company, except on authority specifically so delegated, and he shall not
represent to the contrary to any person. Consultant shall only consult, render
advice and perform such tasks as Consultant determines are necessary to achieve
the results specified by the Company. Consultant shall not direct the work of
any employee of the Company without the consent of the Chief Executive Officer
of the Company or make any management decisions, or undertake to commit the
Company to any course of action in relation to third persons. This Agreement
shall not be construed, in any way, as a contract of employment with the
Company.

 

VIII.                         Taxes.  It is intended that the Annual Retainer paid
hereunder shall constitute revenues to Consultant. To the extent consistent
with applicable law, the Company will not withhold any amounts therefrom as
federal income tax withholding from wages or as employee contributions under
the Federal Insurance Contributions Act or any other state or federal laws. Consultant
shall be solely responsible for the withholding and/or payment of any federal,
state or local income or payroll taxes and shall hold the Company, its
officers, directors and employees harmless from any liabilities arising from
the failure to withhold such amounts.

 

IX.                                Indemnification.  Company and its successors and/or assigns
will indemnify, hold harmless, and defend Consultant to the fullest extent
permitted by applicable law and the by-laws and certificate of incorporation of
the Company with respect to any claims that may be brought against Consultant that
arise out of relate to any action taken or not taken (i) while Consultant
was an employee of the Company or any of its affiliates prior to the Effective
Date and (ii) in Consultant’s capacity as a consultant to the Company or
any of its affiliates after the Effective Date, including, without limitation,
the advancement of legal fees and expenses, as such fees and expenses are
incurred by Consultant, in each case if Consultant acted in good faith and in a
manner reasonably believed to be in the best interests of the Company, and,
with respect to any criminal action or proceeding, if Consultant’s actions were
not unlawful. In addition, Company acknowledges that Consultant shall be
covered, in respect of Consultant’s activities as an officer of the Company or
any of its affiliates prior to the Effective Date, by the Company’s (or any of
its 

 

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affiliates’)
Directors and Officers liability policy or other comparable policies, if any,
obtained by the Company’s (or any of its affiliates’) successors, to the fullest
extent permitted by such policies.

 

X.                                    Notices.  For purposes of this Agreement, notices,
demands, and all other communications provided for in this Agreement shall be
in writing and shall be deemed to have been duly given when (a) delivered
by hand; (b) sent by prepaid first class mail (airmail if to an address
outside the country of posting); or (c) sent by facsimile transmission
with confirmation of transmission, as follows:

 

If to Consultant, addressed to:

 

Eric W. Schrier

P.O. Box 283

Waccabuc, New York 10597

 

with a copy to:

 

Weil Gotshal & Manges, LLP

767 Fifth Avenue

New York, NY 
10153

Attn: 
Michael Nissan, Esq.

 

If to the Company, addressed to:

 

Reader’s Digest Association, Inc.

Roaring Brook Road

Pleasantville, New York 10570

Attn: 
General Counsel

 

with a copy to:

 

Ripplewood Holdings L.L.C.

One Rockefeller Plaza, 32nd Floor

New York, NY  10020

Attention: Christopher Minnetian

Fax:  212-218-2769

 

XI.                                Assignment/Successor Obligations.  The rights and obligations of the Company
under this Agreement shall inure to the benefit of and be binding upon any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) of the Company. As used in this Agreement, “Company” shall mean the
Company as hereinbefore defined and any successor thereto. This Agreement shall
not be assignable by the Company without the prior written consent of 

 

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Consultant (which
shall not be unreasonably withheld). Company shall be jointly and severally
liable for all obligations and liabilities set forth in this Agreement.

 

XII.                            Amendment.  This Agreement may not be amended or
modified except by an instrument in writing executed by the parties hereto.

 

XIII.                        Entire Agreement.   This Agreement constitutes the entire
agreement and understanding between the Company and Consultant with respect to
the subject matter hereof and supersedes all prior agreements and
understandings (whether written or oral), between Consultant and the Company,
relating to such subject matter; provided that Consultant shall continue to be
bound by the Non Solicitation Agreement (the form of which is Exhibit A to
the Reader’s Digest Association, Inc. 2001 Income Continuation Plan for
Senior Management), between Consultant and the Company, in accordance with the
terms thereof. None of the parties shall be liable or bound to any other party
in any manner by any representations and warranties or covenants relating to
such subject matter except as specifically set forth herein

 

XIV.                        Dispute Resolution.  Any dispute or controversy arising under or
in connection with this Agreement shall be subject to the exclusive
jurisdiction of the federal or state courts of Westchester County in New York
State. Each party shall pay its own fees and expenses of counsel and other
experts retained in connection with such dispute or controversy, on a current
basis as they may be incurred, provided that the Company shall reimburse the
Consultant for any amounts so paid if at least one material matter in dispute
or controversy is decided in favor of Consultant.

 

XV.                            Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without regard
to any choice of law or conflicts of law doctrines (whether of the State of New
York or any other jurisdiction) that would cause the application of the laws of
any jurisdiction other than the State of New York.

 

XVI.                        Validity.  The provisions of this Agreement shall be
deemed to be severable, and the invalidity or unenforceability of any provision
shall not affect the validity or enforceability of any other provision. The
parties hereto agree that a court of competent jurisdiction making a
determination of the invalidity or unenforceability of any term or provision of
this Agreement shall have the power to reduce the scope, duration or area of
any such term or provision, to delete specific words or phrases or to replace
any invalid or unenforceable term or provision in this Agreement with a term or
provision that is valid and enforceable and that comes closest to expressing
the intention of the invalid or unenforceable term or provision, and this
Agreement shall be enforceable as so modified. The breach by the Company of any
obligation or duty to Consultant shall entitle Consultant to his appropriate
remedy at law but shall not, of itself, relieve Consultant of any other
obligation set forth in this Agreement.

 

5

 

XVII.                    Legal Fees.  The Company shall reimburse Consultant’s reasonable
documented legal fees in connection with the negotiation of this Agreement, to
be paid within ten (10) business date after the receipt of invoice.

 

XVIII.                Counterparts.  This Agreement may be executed in any
number of counterparts, each of which shall be considered an original for all
purposes, and all of which taken together shall constitute a single instrument
and any such counterpart may be delivered by facsimile, which shall be
considered an original for all purposes.

 

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IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first above written.

 

 

	
   

  	
  READER’S DIGEST ASSOCIATION, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
     /s/ Mary G. Berner

  	
   

  
	
   

  	
  Name: Mary G. Berner

  
	
   

  	
  Title: Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  CONSULTANT

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
     /s/ Eric W. Schrier

  	
   

  
	
   

  	
  ERIC W. SCHRIERExhibit
4.1

 

[The securities
represented by this Unit Certificate (including the underlying common stock,
warrant and the securities issuable upon exercise of the underlying warrant)
have not been registered under the Securities Act of 1933, as amended, or the
securities laws of any state or other jurisdiction, and may not be transferred
in violation of such act and laws, or an exemption from registration therefrom.

 

The securities
represented by this Unit Certificate (including the underlying common stock,
warrant and the securities issuable upon exercise of the underlying warrant)
are subject to additional restrictions on transfer and other agreements set
forth in (I) the Letter Agreement, dated as of     ,
2008, as may be amended from time to time, by and among the holder, the Company
and Banc of America Securities LLC and (II) the Warrant Agreement, dated
as of     , 2008, as may be amended from time to time (the “Warrant
Agreement”), by and between the Company and the Warrant Agent. Copies of such
agreements may be obtained by the holder hereof at the Company’s principal
place of business without charge.](1)

 

SPECIMEN
UNIT CERTIFICATE

 

	
   

  	
   

  
	
  No. U-                              

  	
                        
  UNITS

  
	
  CUSIP No.:                              

  	
   

  

 

iSTAR ACQUISITION
CORP.

 

UNITS CONSISTING
OF ONE SHARE OF COMMON STOCK AND

ONE WARRANT TO PURCHASE ONE SHARE OF COMMON STOCK

 

SEE
REVERSE FOR CERTAIN DEFINITIONS

 

THIS CERTIFIES THAT                                                                   
is the owner of                           Units.

 

Each Unit (“Unit”) consists of one (1) share
of common stock, par value $0.0001 per share (“Common Stock”), of iStar
Acquisition Corp., a Delaware corporation (the “Company”), and one (1) warrant
(the “Warrant”) of the Company. The Warrant entitles the holder to
purchase one (1) share of Common Stock for $7.00 per share (subject to
adjustment as set forth in the Warrant Agreement). The Warrant will become
exercisable on the later of (i) the Company’s consummation of an initial
Business Combination (as such term is defined in the Amended and Restated
Certificate of Incorporation of the Company) and (ii)                             ,
2009 [one year after the date of the final prospectus relating to the initial
public offering of the Units], and will expire unless exercised before 5:00 p.m.,
New York City time, on                     ,
2013 [five years after the date of the final prospectus relating to the initial
public offering of the Units], or earlier upon redemption of the Warrants by
the Company. The Common Stock and Warrants comprising the Units represented by
this certificate are not transferable separately until five business days (or
as soon as practicable thereafter) following the earlier to occur of the
expiration of the underwriter’s over-allotment option in connection with the
Company’s initial public offering (the “IPO”) or the exercise in full of
such underwriter’s over-allotment. Further, in no event will the separate
trading of the Common Stock and the Warrants comprising the Units represented
by this certificate begin until the Company has filed a Current Report on Form 8-K
with the Securities and Exchange Commission,

 

(1) Include
in initial units, private placement units and co-investment units.

 

 

which includes an audited
balance sheet reflecting the receipt by the Company of the gross proceeds of
its IPO and any proceeds received by the Company from the exercise of the
underwriter’s over-allotment option, and having issued a press release
announcing when such separate trading will begin. The terms of the Warrant are
governed by the Warrant Agreement and are subject to the terms and provisions
contained therein, all of which terms and provisions the holder of this
certificate consents to by acceptance hereof. Copies of the Warrant Agreement
are on file at the office of the Warrant Agent at 17 Battery Place, New York,
NY 10004, and are available to any holder of the Warrants on written request
and without cost.

 

This certificate is not valid unless countersigned by the Transfer
Agent and Registrar of the Company.

 

 

2

 

Witness the
facsimile seal of the Company and the facsimile signature of its duly
authorized officers.

 

iSTAR ACQUISITION
CORP.

CORPORATE

DELAWARE

SEAL

2007

 

	
  By:

  	
   

  	
   

  	
   

  
	
  Chairman

  	
   

  	
  Chief Executive
  Officer and

  Secretary

  
	
   

  	
   

  	
   

  
	
  Countersigned
  By:

  	
   

  	
   

  	
   

  
	
  Transfer Agent

  	
   

  	
   

  
					

 

iSTAR
ACQUISITION CORP.

 

The Company will
furnish without charge to each securityholder who so requests, a statement of
the powers, designations, preferences and relative, participating, optional or
other special rights of each class of security or series thereof of the Company
and the qualifications, limitations, or restrictions of such preferences and/or
rights.

 

The following
abbreviations, when used in the inscription on the face of this certificate,
shall be construed as though they were written out in full according to
applicable laws or regulations:

 

	
  TEN COM

  	
  –

  	
  as tenants in
  common

  	
   

  	
  UNIF GIFT MIN ACT
  - 

  	
   

  	
  Custodian

  	
   

  
	
  TEN ENT

  	
  –

  	
  as tenants by
  the entireties

  	
   

  	
              (Cust)          (Minor)

  
	
  JT TEN

  	
  –

  	
  as joint tenants
  with right of 

  	
   

  	
              under
  Uniform Gifts to

  
	
   

  	
   

  	
  survivorship and
  not as tenants

  	
   

  	
              Minors
  Act

  	
   

  	
   

  
	
   

  	
  in common

  	
   

  	
   

  	
  (State)

  
												

 

Additional Abbreviations may also be used though not
in the above list.

 

FOR VALUE RECEIVED,                                      
HEREBY SELL, ASSIGN AND TRANSFER UNTO

 

PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING
NUMBER OF ASSIGNEE

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

	
   

  
	
  (PLEASE PRINT OR
  TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE,

  
	
  OF ASSIGNEE)

  

 

3

 

                                                       UNITS
REPRESENTED BY THE WITHIN CERTIFICATE, AND DO HEREBY IRREVOCABLY CONSTITUTE AND
APPOINT                           
ATTORNEY TO TRANSFER THE SAID UNITS ON THE BOOKS OF THE WITHIN NAMED COMPANY
WITH FULL POWER OF SUBSTITUTION IN THE PREMISES.

 

	
  DATED:

  	
   

  	
   

  	
   

  
	
   

  	
  NOTICE:
  The signature to this assignment must correspond with the name as written
  upon the face of the certificate in every particular, without alteration or
  enlargement or any change whatever.

  

 

 

Signature(s) Guaranteed:

 

 

	
   

  	
   

  
	
  THE SIGNATURE(S) SHOULD BE

  GUARANTEED BY AN ELIGIBLE

  GUARANTOR INSTITUTION (BANKS,

  STOCKBROKERS, SAVINGS AND LOAN

  ASSOCIATIONS AND CREDIT UNIONS WITH

  MEMBERSHIP IN AN APPROVED SIGNATURE

  GUARANTEE MEDALLION PROGRAM,

  PURSUANT TO S.E.C. RULE 17Ad-15).

  

 

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