Document:

Exhibit 10.19

 

CONSULTING
AGREEMENT

 

                THIS CONSULTING AGREEMENT (the “Agreement”) is entered into
as of March 7, 2008, by and among The Reader’s Digest Association, Inc.
(together with its subsidiaries and affiliated entities, the “Company”), Platinum
Strategic Partners, LLC (the “Consultant”) and Jean B. Clifton (“Clifton”).

 

WITNESSETH

 

                WHEREAS, Clifton has heretofore been employed by the Company
as its Senior Vice President and Chief Financial Officer;

 

                WHEREAS, effective February 11, 2008, Clifton stepped
down as Chief Financial Officer of the Company for personal reasons, while remaining
with the Company as an employee with the title of Senior Vice President;

 

                WHEREAS, Clifton has informed the Chief Executive Officer of
the Company that she will terminate employment with the Company, effective as
of March 14, 2008;

 

                WHEREAS, the Company will accept Clifton’s resignation of
employment with the Company effective as of March 14, 2008;

 

                WHEREAS, the Company desires to retain Consultant 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 undertaking contained in this Agreement, and intending
to be legally bound, the parties hereto agree as follows:

 

                1.             Separation
of Employment.  Effective
as of March 14, 2008 (the “Termination Date”), the employment relationship
between the Company and Clifton shall terminate and Clifton shall no longer
serve as a Senior Vice President of the Company or in any other position she
then holds as an officer or member of the board of directors of any of the
Company’s subsidiaries or affiliates. 
The termination is a voluntary resignation and will be considered as
such for purposes of all Company benefit plans and policies.

 

                2.             Consulting
Term.  Subject to the provisions of Section 5
of this Agreement, Consultant shall be retained as a consultant by the Company
for a period commencing on March 15, 2008 (the “Effective Date”) and
ending on December 14, 2008 (the “Term”). 
Consultant shall cause Clifton to provide the Consulting Services (as
hereinafter defined) to the Company.  For
purposes of this Agreement, a “Month” shall refer to the period commencing on
the 15th day of any calendar month and ending on the 14th day of the immediately
succeeding calendar month.

 

               3.             Consulting
Services.  The Company
hereby retains Consultant as a consultant, and 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 cause Clifton to, at the direction of the Chief 

 

 

 

Executive Officer of the Company and on a non-exclusive basis, provide
her expertise, advice and assistance with special projects for the Company,
particularly relating to strategic initiatives, including reassessment or
realignment of the business and operations of the Company (the “Consulting
Services”); provided that in no event shall Consultant be required to provide
services in excess of twenty (20) hours per Month.  It is understood that the Consulting Services
shall be incidental to, and shall not interfere with, the other business
activities, consulting work, future employment opportunities and/or commitments
of Consultant or Clifton.

 

                4.             Fees for Services.  In consideration of Consultant’s provision of
the Consulting Services, during the Term, the Company shall pay to Consultant fees
for services of $87,500 per Month, payable at the beginning of each respective
Month.  In the event travel is required
in connection with the Services, Clifton or Consultant shall be reimbursed for
reasonable travel and related expenses, upon submission of substantiating
documentation.  In the event a payment is
more than 30 days overdue, interest shall accrue at a rate of 10% per annum.

 

                5.             Termination.

 

                                (a)           Consultant may terminate this
Agreement upon thirty (30) days prior written notice to the Company.

 

                                (b)           The Company may only terminate this
Agreement for Cause.  For purposes of
this Agreement, “Cause” shall mean (i) Consultant’s or Clifton’s material breach
of Section 10 (confidentiality) or Section 14 (non-solicitation) of
this Agreement, or (ii) the willful engagement by Clifton in illegal
conduct that is materially and demonstrably injurious to the Company after an
independent determination by a mutually agreed to third-party, or if such
third-party cannot be agreed to, by the American Arbitration Association in New
York, New York.   The Company shall
provide Consultant written notice of its intent to terminate this Agreement for
Cause, and shall provide Consultant with the opportunity, for a period of not
less than thirty (30) days, to contest such decision or to cure the basis for
Cause.

 

                                (c)           Upon the termination of this
Agreement, no party shall have any further obligation to any other party under
the terms of this Agreement, other than (i) any accrued or incurred
obligations as of the date of termination, including any payments due to
consultant pursuant to Section 4 of this Agreement (ii) provisions
which by their explicit terms survive termination of this Agreement, and (iii) Sections
9 and 10, and the indemnification provisions of Section 7 and 13, or as
otherwise agreed in writing by the parties.

 

                6.             Representations and
Warranties; Limitation of Authority.

 

                                (a)           Each of the Company, Consultant and Clifton
represents and warrants that it or she has full right, power, and authority to
enter into this Agreement, to perform the Consulting Services, and to grant the
rights specified herein.  In the event Consultant
or Clifton create any written or artistic material for the Company in the
course of providing the Consulting Services hereunder, it is further warranted
that the material will be original (or will identify the copyright owner of the
material), will not be libelous, and will not violate any copyright, trademark,
right of privacy, or any other right of any third party.

 

 

                                (b)           Each of Consultant and Clifton hereby
acknowledges that it or she has no authority to make any commitments or to
enter into any agreements on behalf of the Company, and each of Consultant and Clifton
agrees not to represent to any third party that it or she has such authority.

 

                7.             Ownership.

 

Consultant
hereby grants, transfers and assigns to the Company all right, title and
interest in any and all work created by Consultant or Clifton in the course of
providing the Consulting Services to the Company for any and all uses now known
or hereafter transferred throughout the world for eternity.  This shall include, but not be limited to,
any reports, recommendations, or other documents that Consultant provides to
the Company.  However, the company shall
fully indemnify and hold harmless Consultant and Clifton for any such use,
provided there was no breach or alleged breach of Section 6(a) by
Consultant or Clifton.

 

                8.             Relationship of the
Parties.  Consultant shall
perform the Consulting Services as an independent contractor of the
Company.  Neither Consultant nor Clifton shall
be an employee of the Company, and none of the parties shall engage in any
actions that would cause Consultant or Clifton to be considered an employee of
the Company.  This will include, by way
of example only, that the Company shall exercise no day-to-day or similar
control over Consultant or Clifton. Neither Consultant nor Clifton shall be
entitled, by virtue of this Agreement or providing the Consulting Services, 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
shall not represent to the contrary to any person.  Consultant shall only consult, render advice
and perform such tasks as 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.

 

                9.             Taxes.  It is intended that the Fees for Services 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 and all federal, state or local taxes
(including, without limitation, income or payroll taxes).  Upon request by the Company, Consultant agrees
to deliver to the Company properly completed and signed IRS Forms 4669,
Statement of payments received, with respect to any payments received by Consultant
from the Company.

 

                10.           Confidentiality.  The Company and its affiliates have developed
and continue to develop valuable and unique confidential information which is
not generally known by others including, without limitation, financial, sales
and marketing, and product development information (“Confidential Information”).  Each of Consultant and Clifton agrees, in
consideration of this Agreement and the payments made under it, that during the
Term hereof and following the Termination Date, it or she will not use,
publish, disseminate, or otherwise disclose, any secret or Confidential
Information, knowledge or data relating to the Company, its subsidiaries and
affiliates, and their respective businesses, which information, knowledge or
data shall have been obtained by (i) Clifton during Clifton’s employment
by the Company or (ii) during performance of the Consulting Services under
this Agreement.  Neither Consultant nor Clifton
shall, without the prior written consent of the Company or as may otherwise be
required by law or legal process, communicate or divulge any such information,
knowledge or data to 

 

 

anyone
other than the Company and those persons designated by the Company.  Each of Consultant and Clifton agrees to
return all written materials (and any copies thereof) provided to Consultant or
Clifton by the Company or containing any Confidential Information, promptly
after the termination of this Agreement.  Notwithstanding the foregoing, the following
information shall not be deemed to be Confidential Information:  information that (a) is or becomes
generally available to the public other than as a result of the wrongful
disclosure by the Consultant or Clifton; (b) was known by the Consultant
or Clifton (and was not wrongfully obtained and was not subject to a
confidentiality requirement) prior to being furnished to it or her by the
Company; or (c) becomes rightfully available to the Consultant or Clifton
on a non-confidential basis from a source other than the Company, provided that
the source is not bound by a confidentiality agreement with respect to such
information.

 

                11.           Cooperation.  Clifton shall make herself reasonably
available to the Company following the Termination Date to assist the Company,
as may be reasonably requested by the Company at convenient times and places,
with respect to pending and future litigations, arbitrations, governmental
investigations or other dispute resolutions relating to matters that arose
during Clifton’s employment with the Company prior to the Termination Date or
during Consultant’s provision of the Consulting Services. The Company will
reimburse Clifton or Consultant for all reasonable expenses and costs she or it
may incur as a result of providing assistance under this Section 11, upon
receipt of proper documentation thereof.

 

                12.           Release.  Simultaneous with the execution of this
Agreement, the Company and Clifton shall execute mutual releases of claims in
the form set forth as Exhibit A hereto.

 

                13.           Indemnification.  The Company hereby confirms to Clifton its
indemnification obligations under its charter, by-laws, Directors’ and Officers’
insurance, and applicable law as in effect on and prior to the Termination Date.  Such coverage shall apply to the period of
Clifton’s employment and is equivalent to those provided to CEO and other directors
and officers of the Company.  The Company
hereby agrees to indemnify and hold each of Consultant and Clifton harmless
from and against any and all third party claims, judgments, lawsuits and
liabilities arising out of her provision of the Consulting Services, other than
to the extent resulting from a breach of its or her obligations hereunder.

 

                14.           Continuing Obligations.  Clifton hereby confirms to the
Company that her non-solicitation obligations initially set forth in the offer
letter from the Company to Clifton dated August 7, 2007 remain in effect
by virtue of this Agreement.  For
avoidance of doubt, Clifton agrees that, for the twenty-four (24) calendar month
period commencing on the Termination Date, Clifton will not, directly, solicit
(or instruct  a third party to solicit on
her behalf) any employee of the Company (or its affiliates or subsidiaries) to
cease employment with those entities or seek employment elsewhere.

 

                15.           Governing Law and
Jurisdiction; Modification, Waiver.  The parties hereby consent to the exclusive
jurisdiction of the courts of the State of New York and, if the jurisdictional
prerequisites exist, the U.S. District Court for the Southern District of New
York, with venue in Westchester County, over any action, suit, or proceeding
arising out of or relating to this Agreement. 
This Agreement shall be governed by and construed in accordance with the
substantive laws of the State of New York and may not be modified except by a
writing executed by both parties.  A
waiver of any breach shall not be construed as a waiver of any subsequent
breach.

 

 

 

               16.           Assignment.  Neither Consultant nor Clifton may assign or
delegate any of its or her rights or obligations under this Agreement, except
that Consultant shall cause Clifton to provide the Consulting Services on its
behalf.  Any purported assignment or
delegation in violation hereof shall be null and void.

 

                17.           Integration.  This Agreement sets forth the entire
agreement between the parties with respect to the subject matter hereof, supersedes
all prior written or oral representations or understandings between the parties
prior to the date hereof with respect to the subject matter hereof, and shall
not be altered or amended except by express written agreement of the parties.  This Agreement shall not be binding on the
Company until it is fully executed and delivered.

 

18.           Amendment.  This Agreement may be amended, modified or
changed only by a written instrument executed by the parties hereto.

 

19.           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

 

 

 

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

 

	
   

  	
  THE READER’S DIGEST ASSOCIATION, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Todd C. McCarty

  
	
   

  	
  Name:

  	
  Todd C. McCarty

  
	
   

  	
  Title:

  	
  Senior Vice
  President, Global Human Resources

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PLATINUM STRATEGIC PARTNERS, LLC

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Jean B. Clifton

  
	
   

  	
  Name:

  	
  Jean B. Clifton

  
	
   

  	
  Title:

  	
  Sole Member

  
	
   

  	
   

  	
   

  
	
   

  	
  EIN#

  	
  43-2112622

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Jean B.
  Clifton

  
	
   

  	
  JEAN B. CLIFTONExhibit 10.1

 

MICRO COMPONENT TECHNOLOGY, INC.

 

2008 NON-QUALIFIED STOCK OPTION PLAN

 

Adopted June 19, 2008

 

ARTICLE I.

 

PURPOSE

 

The purpose of this Plan is to provide a means whereby
Micro Component Technology, Inc. (the “Company”), may be able, by granting
non-qualified stock options (“Options”), to attract, retain and motivate
capable and loyal employees, directors, consultants and advisors of the Company
and its subsidiaries, for the benefit of the Company and its shareholders.  All options granted under the Plan shall be
non-qualified stock options which do not qualify for favorable tax treatment.

 

ARTICLE II.

 

RESERVATION OF SHARES

 

A total of 5,000,000 shares of Common Stock of the
Company (“Shares”) are reserved for issuance pursuant to Options granted under
the Plan.  If any Option expires or
terminates for any reason without being exercised in full, the unpurchased
Shares shall become available for additional Options.  Shares reserved for issue as provided herein
shall cease to be reserved upon termination of the Plan.

 

ARTICLE III.

 

ADMINISTRATION

 

(a)  The Plan shall be administered by the
Compensation Committee of the Board of Directors of the Company (the “Committee”).  The Committee shall be appointed by the Board
of Directors and shall be comprised solely of two or more “non-employee
directors” within the meaning of SEC Rule 16b-3.  Vacancies in the Committee shall be filled by
the Board.

 

(b)  The Committee shall have full power to
construe and interpret the Plan and to establish and amend rules and
regulations for its administration, subject to the express provisions of the
Plan.

 

 

(c)  The Committee shall determine which
persons shall be granted Options under the Plan, the number of Shares included
in each Option, any limitations on the exercise or vesting of Options in
addition to those imposed by this Plan, and any other terms and conditions of
Options.  The Committee may also approve
amendments to outstanding Options, provided there is no conflict with the terms
of the Plan, applicable law, or applicable stock market rules and
regulations.

 

(d)  The Committee shall not approve any
repricing of outstanding Options without prior shareholder approval.  The term “repricing” means (i) a
reduction in the exercise price of an Option after it has been granted, (ii) the
cancellation of an Option in exchange for a new Option, unless pursuant to a
merger or similar transaction, or (iii) any similar action which would be
treated as a repricing under applicable accounting rules.

 

ARTICLE IV.

 

ELIGIBILITY

 

An
Option may be granted to any employee, director, consultant or advisor of the
Company or its subsidiaries, except that no consultant or advisor shall be
granted Options in connection with the offer and sale of securities in a
capital raising transaction on behalf of the Company.

 

ARTICLE V.

 

CHANGES IN PRESENT STOCK

 

In the
event of a recapitalization, merger, consolidation, reorganization, stock
dividend, stock split or other change in capitalization affecting the Company’s
present capital stock, appropriate adjustment may be made by the Committee in
the number and kind of shares included in any Option, and the exercise or
purchase price of any Option.

 

ARTICLE
VI.

 

OPTIONS

 

(a)           Option
Exercise Price.  The per share
exercise price for each Option shall be determined by the Committee at the time
of grant, provided that the per share exercise price for any Option shall be
not less than the fair market value of the Common Stock on the date the Option
is granted.  The fair market value of the
Common Stock as of any date shall be the closing market price for the Common
Stock on such date, or on the trading day closest to such date if the Common
Stock does not trade on such date.  If
there is no closing market price for the 

 

 

Common Stock, the Committee shall use such other information deemed
appropriate by the Committee.

 

(b)           Exercise
of Options.  An optionee shall
exercise an Option by delivery of a signed, written notice to the Company,
specifying the number of Shares to be purchased, together with payment of the
full purchase price for the Shares.  The
Company may accept payment from a broker on behalf of the optionee and may,
upon receipt of signed, written instructions from the optionee, deliver the
Shares directly to the broker.  The date
of receipt by the Company of the final item required under this paragraph shall
be the date of exercise of the Option.

 

(c)           Option
Agreement Provisions.  Each Option
granted under the Plan shall be evidenced by a Stock Option Agreement executed
by the Company and the optionee, and shall be subject to the following terms
and conditions, and such other terms and conditions as may be prescribed by the
Committee:

 

(i)     Payment.  The full purchase price of the Shares
acquired upon exercise of any Option shall be paid in cash, by certified or
cashier’s check, or in the form of Shares of the Company’s Common Stock with a
fair market value equal to the full purchase price and free and clear of all
liens and encumbrances.

 

The Committee in its sole discretion may also permit the
“cashless exercise” of an Option.  In the
event of a cashless exercise, the optionee shall surrender the Option to the
Company, and the Company shall issue the optionee the number of Shares
determined as follows:

 

	
  X = Y (A-B) /A
  where:

  
	
   

  
	
  X = the number
  of Shares to be issued to the optionee.

  
	
   

  
	
  Y = the number
  of Shares with respect to which the Option is being exercised.

  
	
   

  
	
  A = the closing sale price of the Common Stock on
  the date of exercise, or in the absence thereof, the fair market value on the
  date of exercise.

  
	
   

  
	
  B = the Option
  exercise price.

  

 

(ii)     Exercise
Period.  The period within which an
Option must be exercised shall be determined by the Committee at the time of
grant, subject to a maximum of ten years. 
The Committee may impose different or additional conditions with respect
to length of service or 

 

 

attainment of specified performance goals which must be satisfied prior
to exercise of all or any part of an Option. 
To the extent exercisable, an Option may be exercised in whole or in
part.

 

Outstanding
Options shall become immediately exercisable in full in the event that the
Company is acquired by merger, purchase of all or substantially all of the
Company’s assets, or purchase of a majority of the outstanding stock by a
single party or a group acting in concert.

 

(iii)     Rights
of Optionee Before Exercise.  The
holder of an Option shall not have the rights of a shareholder with respect to
the Shares covered by the Option until the Shares have been issued to him or
her upon exercise of the Option.

 

(iv)     Termination
of Employment.  If an optionee’s
employment is terminated other than for conduct which is contrary to the best
interests of his or her employer, the optionee (or his or her personal
representative in the event of death) may, within one year after such
termination (or longer, if approved by the Committee), exercise any unexercised
portion of his or her Option to the extent he or she was entitled to do so at
the time of such termination.

 

If an
optionee’s employment is terminated by his or her employer for conduct which is
contrary to the best interests of the employer, as determined by the employer
in its sole discretion, the unexercised portion of the optionee’s Option shall
expire automatically on the date of termination of his or her employment.

 

Notwithstanding
the foregoing, no Option shall be exercisable subsequent to the date of
expiration of the Option term and no Option shall be exercisable subsequent to
the termination of the optionee’s employment except as specifically provided in
this paragraph (iv).

 

(v)     Non-transferability
of Option.  No Option shall be
transferable by the optionee otherwise than by will or by the laws of descent
and distribution, and each Option shall be exercisable during the optionee’s
lifetime only by the optionee.  No Option
may be attached or subject to levy by an optionee’s creditors.

 

(vi)     Date
of Grant.  The date on which the
exercise price becomes fixed for an Option shall be considered the date on
which the Option is granted.

 

ARTICLE VII.

 

GENERAL

 

(a)           No
Right to Continued Employment. 
Nothing in the Plan or in any Plan document shall be construed to confer
upon any employee any right to continue in the employ of 

 

 

the Company or a subsidiary, or to interfere in any way with the right
of the Company or a subsidiary as employer to terminate his or her employment
at any time, nor to derogate from the terms of any written employment agreement
between such corporation and the optionee.

 

(b)           Section 16 Compliance.  The Plan is
intended to comply in all respects with SEC Rule 16b-3, as amended, and in
all events the Plan shall be construed in accordance with the requirements of Rule 16b-3.  If any Plan provision does not comply with Rule 16b-3,
the provision shall be deemed inoperative. 
The Board of Directors, in its absolute discretion, may bifurcate the
Plan so as to restrict, limit or condition the use of any provision of the Plan
with respect to persons who are officers or directors subject to Section 16
of the Securities and Exchange Act of 1934, as amended, without so restricting,
limiting or conditioning the Plan with respect to other Participants.

 

ARTICLE VIII.

 

WITHHOLDING OF TAXES

 

The Company shall make such provisions and take such
steps as it may deem necessary or appropriate for the withholding of any taxes
that the Company is required by any law or regulation to withhold in connection
with any Option including, but not limited to, withholding a portion of the
Shares issuable pursuant to exercise of the Option, or requiring the optionee
to pay to the Company, in cash, an amount sufficient to cover the Company’s
withholding obligations.

 

ARTICLE IX.

 

EFFECTIVE DATE OF PLAN

 

The
effective date of the Plan shall be the date of its original adoption by the
Board of Directors of the Company.

 

ARTICLE X.

 

DURATION OF THE PLAN

 

The Plan shall terminate ten years after the date of
its approval by the Board of Directors, unless sooner terminated by issuance of
all Shares reserved for issuance hereunder. 
No Option shall be granted under the Plan after such termination
date.  Options granted under the Plan
prior to its termination date shall continue until they are exercised or expire
or terminate in accordance with their terms.

 

 

ARTICLE XI.

 

TERMINATION OR AMENDMENT OF THE PLAN

 

The
Board of Directors of the Company may at any time terminate the Plan, or make
such modifications of the Plan as it shall deem advisable.  No termination or amendment of the Plan may,
without the consent of optionees to whom any Options shall previously have been
granted, adversely affect the rights of such optionees under such Options.

 

ARTICLE XII.

 

INTERPRETATION

 

The
Plan shall be interpreted in accordance with Minnesota law.

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