Document:

Exhibit
10.25

 

March 8, 2007

 

Ms. Suzanne Grimes

506 Highbrook Avenue

Pelham Manor, NY  10803

 

Dear Suzanne:

 

I am pleased to confirm
the verbal offer of employment extended to you for the position of President,
Food and Entertaining, reporting to Mary Berner, Chief Executive Officer,
Reader’s Digest Association, Inc., the details of which are outlined
below.

 

COMPENSATION AND BENEFITS

 

1.               As previously
discussed, your annual base salary will be $500,000 payable in biweekly
installments.  Your base salary is
subject to periodic increases based upon performance.

 

2.               You
will receive a sign-on bonus paid in the gross amount of $150,000, less
appropriate tax withholding, payable at the end of thirty days of your
employment with Reader’s Digest and a subsequent payment in the gross amount of
$150,000, less appropriate tax withholding, payable in August 2007.  You will also receive an annual guaranteed
payment in the gross amount of $300,000, less appropriate withholding, payable
each August, commencing in August 2008. 
By accepting this offer, you agree that, in the event that you
voluntarily leave Reader’s Digest, or if you are terminated by the company for
cause within the twelve months following receipt of payment, you will repay the
full amount of the payment prior to the last day of your employment. By
accepting this offer, you further agree that Reader’s Digest may deduct this
amount from any other amounts Reader’s Digest owes you should you be obligated
to repay this amount.

 

3.               You will be
eligible to participate in our annual bonus plan, the Reader’s Digest
Management Incentive Plan, with a bonus target for this position of $300,000
and a range of opportunity of up to 200% of target (or up to $600,000).  For FY2007 (July 1, 2006 – June 30,
2007), the bonus target will be pro-rated based upon date of hire.  Awards are based on Company, Unit and
individual performance against pre-established goals.  Receipt of a bonus requires that you be on
the active payroll at the time awards are paid, which is typically in August.

 

 

4.               You will receive an
equity stake in the company, commensurate with your level of responsibility and
consistent with other senior executive positions, the value of which will be
based on the future performance and value of the company.

 

5.               You will be
eligible to participate in Reader’s Digest’s Senior Executive Long-Term
Incentive Program (LTIP).  This plan
measures and rewards performance over a multi-year period.  A new performance cycle begins each year.  The award earned can range up to 250% of
target depending on the extent to which the performance goals are
achieved.  Performance cycles and
incentive targets are outlined below.

 

	
  Cycle

  	
   

  	
  Target

  	
   

  	
  Anticipated

  Payout Date

  	
   

  
	
  2008-2009

  	
   

  	
  $

  	
  300,000

  	
   

  	
  December 2009

  	
   

  
	
  2008-2010

  	
   

  	
  $

  	
  300,000

  	
   

  	
  December 2010

  	
   

  

 

6.               You will be
eligible to participate in the benefit programs that are made generally
available to Reader’s Digest employees in accordance with their terms, as from
time to time in effect, including The Reader’s Digest Association, Inc.
Retirement Plan (cash balance account), which currently provides an annual
age-based contribution ranging from 3% to 12% of eligible compensation, The 401(k) Partnership
of The Reader’s Digest Association, Inc., a savings plan which currently
provides a 50% match on the first 6% of pre-tax contributions, and medical,
dental, life insurance, short- and long-term disability plans.  Details of these benefit plans are included
in the attached information packet.

 

7.               You will be
eligible for the following executive level perquisites:  an annual payment in the gross amount of
$7,000 (less appropriate tax withholding) in lieu of financial planning
assistance provided by Ayco, the company’s service provider, and an annual
payment in the gross amount of $25,500 (less appropriate tax withholding) to
cover transportation costs, which will be in lieu of participation in the
Flexnet Program (the executive flexible perquisite account).

 

8.               You will be
eligible for severance under The Reader’s Digest Association, Inc.
Severance Plan. Under the terms of that plan, you are eligible for severance
totaling 52 weeks of base pay if your employment is terminated under certain
circumstances, subject to and in accordance with the terms of that plan.  However, we are increasing that to 104 weeks
of base pay under the same terms.

 

9.               Your employment is
contingent upon verification of the accuracy of information obtained in the
employment process through an independently conducted background investigation,
and authorization to work pursuant to the Immigration Reform and Control Act of
1986 (“IRCA”).  Your employment cannot
commence until these conditions have been satisfied.

 

10.         By virtue of accepting
these terms of employment with Reader’s Digest, you also agree that, during
employment and for a period of 12 months following your termination of
employment, you will not, without the written consent of the Chief Executive
Officer of Reader’s Digest (upon prior consultation with the Chief Human
Resources Officer of Reader’s Digest), directly or indirectly, whether or not
for compensation, work for, provide services to or otherwise engage in any
activity on behalf of the following companies (and any of their affiliates or
subsidiaries):  Conde Nast, Hearst Corporation,
Hachette Filipacchi Magazines, Meredith Corporation, Rodale Inc., Time Warner.

 

 

11.         You further agree that
for the 12 month period following your termination for any reason at any time,
you will not, directly or indirectly, solicit any employee of Reader’s Digest
(or their affiliates or subsidiaries) to cease employment with those entities
or seek employment elsewhere.

 

Suzanne, while this
letter provides you with information about compensation and benefits, neither
this letter nor any conversation is intended to create an employment contract.  In all instances mentioned above, the
specific terms of the applicable plans and awards govern, and Reader’s Digest
reserves the right to amend or terminate those plans or policies in accordance
with their terms.  Additionally, our
policy is that “all employment by the Company is at will and the Company
reserves the right to terminate any employee at any time with or without cause.”

 

We look forward to you
joining the leadership team of Reader’s Digest and are confident that you will
make a significant difference for our Company.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lisa Cribari

  
	
   

  	
  Vice President,

  
	
   

  	
  Global Human Resources

  

 

cc:  Mary BernerExhibit
10.26

 

March 6, 2007

 

Ms. Eva Dillon

58 West 15th
Street, Apartment 2

New York, NY 10011

 

Dear Eva:

 

I am pleased to confirm
the verbal offer of employment extended to you, and which you have accepted,
for the position of President and Publisher, reporting to Mary Berner, Chief
Executive Officer, Reader’s Digest Association, Inc., the details of which
are outlined below.

 

COMPENSATION AND BENEFITS

 

1.               As previously
discussed, your annual base salary will be $500,000 payable in biweekly
installments.  Your base salary is
subject to periodic increases based upon performance.

 

2.               You
will receive a sign-on bonus paid in the gross amount of $100,000, less
appropriate tax withholding, payable at the end of thirty days of your
employment with Reader’s Digest.  By
accepting this offer, you agree that, in the event that you voluntarily leave
Reader’s Digest, or if you are terminated by the company for cause within the
twelve months following receipt of payment, you will repay the full amount of
the payment prior to the last day of your employment. By accepting this offer,
you further agree that Reader’s Digest may deduct this amount from any other
amounts Reader’s Digest owes you should you be obligated to repay this amount.

 

3.               You will be
eligible to participate in a customized annual incentive plan with a bonus
target for this position of $400,000 and a range of opportunity of up to 200%
of target (or up to $800,000).  For
FY2007 (July 1, 2006 – June 30, 2007), the bonus target will be
pro-rated based upon date of hire.  The
plan measures and goals will be determined by the Chief Executive Officer,
Reader’s Digest.  Receipt of a bonus
requires that you be on the active payroll at the time awards are paid, which
is typically in August.

 

4.               You will receive an
equity stake in the company, commensurate with your level of responsibility and
consistent with other senior executive positions, the value of which will be
based on the future performance and value of the company.

 

5.               You will be
eligible to participate in Reader’s Digest’s Senior Executive Long-Term
Incentive Program (LTIP).  This plan
measures and rewards performance over a multi-year period.  A new 

 

 

performance cycle begins each year.  The award earned can range up to 250% of
target depending on the extent to which the performance goals are
achieved.  Performance cycles and
incentive targets are outlined below.

 

	
  Cycle

  	
   

  	
  Target

  	
   

  	
  Anticipated

  Payout Date

  	
   

  
	
  2008-2009

  	
   

  	
  $

  	
   300,000

  	
   

  	
  December 2009

  	
   

  
	
  2008-2010

  	
   

  	
  $

  	
   300,000

  	
   

  	
  December 2010

  	
   

  

 

6.               You will be eligible
to participate in the benefit programs that are made generally available to
Reader’s Digest employees in accordance with their terms, as from time to time
in effect, including The Reader’s Digest Association, Inc. Retirement Plan
(cash balance account), which currently provides annual age-based contributions
ranging from 3% to 12% of eligible compensation, The 401(k) Partnership of
The Reader’s Digest Association, Inc., a savings plan which currently
provides a 50% match on the first 6% of pre-tax contributions, and medical,
dental, life insurance, short- and long-term disability plans.  Details of these benefit plans are included
in the attached information packet.

 

7.               You will be
eligible for the following executive level perquisites:  financial planning assistance provided by
Ayco, the company’s service provider and, an annual calendar year flexible
perquisite account of $12,500 under the Flexnet Program.  Further details about these programs will be
provided to you upon employment.

 

8.               You will be
eligible for severance under The Reader’s Digest Association, Inc.
Severance Plan. Under the terms of that plan, you are eligible for severance
totaling 52 weeks of base pay if your employment is terminated under certain
circumstances, subject to and in accordance with the terms of that plan.

 

9.               Your employment is
contingent upon verification of the accuracy of information obtained in the
employment process through an independently conducted background investigation,
and authorization to work pursuant to the Immigration Reform and Control Act of
1986 (“IRCA”).  Your employment cannot
commence until these conditions have been satisfied.

 

10.         By virtue of accepting
these terms of employment with Reader’s Digest, you also agree that, during
employment and for a period of 12 months following your termination of
employment, you will not, without the written consent of the Chief Executive
Officer of Reader’s Digest (upon prior consultation with the Chief Human
Resources Officer of Reader’s Digest), directly or indirectly, whether or not
for compensation, work for, provide services to or otherwise engage in any
activity on behalf of the following companies (and any of their affiliates or
subsidiaries):  Conde Nast, Hearst Corporation,
Hachette Filipacchi Magazines, Meredith Corporation, Rodale Inc., Time Warner.

 

11.         You further agree that
for the 12 month period following your termination for any reason at any time,
you will not, directly or indirectly, solicit any employee of Reader’s Digest
(or their affiliates or subsidiaries) to cease employment with those entities
or seek employment elsewhere.

 

Eva, while this letter
provides you with information about compensation and benefits, neither this
letter nor any conversation is intended to create an employment contract.  In all instances mentioned above, 

 

 

the specific terms of the
applicable plans and awards govern, and Reader’s Digest reserves the right to
amend or terminate those plans or policies in accordance with their terms.  Additionally, our policy is that “all
employment by the Company is at will and the Company reserves the right to
terminate any employee at any time with or without cause.”

 

We look forward to you
joining the leadership team of Reader’s Digest and are confident that you will
make a significant difference for our Company.

 

	
   

  	
  Sincerely,

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Lisa Cribari

  
	
   

  	
  Vice President,

  
	
   

  	
  Global Human Resources

  

 

 

cc:  Mary Berner

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