AMENDMENT TO EMPLOYMENT
AGREEMENT
This Amendment to
Employment Agreement (the “ Amendment ”), dated
as of the 26th day of June, 2009, is made by and between
Cambium-Voyager Holdings, Inc. (the “ Corporation
”), Cambium Learning, Inc. (“ Cambium ”)
and David Cappellucci (the “ Executive
”).
WHEREAS, Cambium
and the Executive are parties to that certain Employment Agreement,
dated as of April 12, 2007 (the “ Employment
Agreement ”); and
WHEREAS,
VSS-Cambium Holdings II Corp., the indirect parent of Cambium, has
entered into that certain Agreement and Plan of Mergers, dated as
of June 20, 2009, by and among Voyager Learning Company, the
Corporation, Vowel Acquisition Corp., VSS-Cambium Holdings II
Corp., Consonant Acquisition Corp., and certain other entities
signatory thereto (the “Merger Agreement”);
and
WHEREAS, in
connection with the Mergers (as defined in the Merger Agreement),
Cambium shall become a wholly owned subsidiary of the Corporation;
and
WHEREAS, subject
to and contingent upon the consummation of the Mergers, the
Corporation and the Executive mutually desire the Executive to
serve as the President of the Corporation, pursuant to the terms of
the Employment Agreement, as amended hereby; and
WHEREAS, subject
to and contingent upon the consummation of the Mergers, in order to
facilitate the foregoing, the Corporation, Cambium and the
Executive desire to amend the Employment Agreement on the terms and
conditions set forth herein.
NOW THEREFORE, in
consideration of the foregoing premises and for other good and
valuable consideration the receipt of which is hereby acknowledged,
the Corporation, Cambium and the Executive hereby agree as
follows:
1.
Sections 2 through and including Section 15
of this Amendment are subject to and contingent upon, the
consummation of the Mergers, and such sections shall become
effective only as of the Effective Time (as defined in the Merger
Agreement). If the Merger Agreement is terminated for any reason,
then all such sections of this Amendment shall be void ab
initio.
2. At the
Effective Time, Cambium hereby transfers and assigns the Employment
Agreement, as amended hereby, and all liabilities and obligations
thereunder, to the Corporation, the Corporation hereby acknowledges
and accepts such transfer and assignment, and the Executive hereby
consents to such transfer and assignment. All references to the
“Company” set forth in the Employment Agreement shall
mean the Corporation. Capitalized terms used in this Amendment but
not defined herein shall have the meanings set forth in the
Employment Agreement.
3. Notwithstanding
any provision of Section 1.1 of the Employment Agreement or
any other provision of the Employment Agreement to the contrary,
during the period commencing as of the Effective Time, the
Executive shall serve the Corporation as its President, and shall
report directly to the Chief Executive Officer of the Corporation,
and shall have primary responsibility for the Corporation’s
intervention-focused businesses.
(a) Upon
the 180 th
day after the Effective Time (the
“ Initial Period ”), the Executive may elect to
transition from President to Vice Chairman of the Corporation on
such amended terms regarding his role and responsibilities (such
amendments pertaining solely to Section 1.1. of the
Employment
Agreement) as the Corporation and the Executive may mutually agree
in writing (the “Transition Amendment”) by his
delivering written notice thereof to the Corporation upon
expiration of the Initial Period; provided , however
, (i) if the Executive does not elect such transition, then he
shall be entitled to remain as the President of the Corporation in
accordance with the terms of his Employment Agreement, as amended
hereby or (ii) if the Executive does elect such transition,
the terms of the Employment Agreement, as amended in accordance
with the Transition Amendment, shall govern his Vice Chairman role;
provided, however, that the Executive shall remain President of the
Corporation under the terms of the Employment Agreement as amended
hereby, and shall not assume the position of Vice Chairman unless
and until the Transition Amendment becomes effective. If the
Executive does elect such transition, but the Corporation and the
Executive do not enter into the Transition Amendment prior to the
270 th
day after the Effective Time (the
“ End Date ”), the Executive’s employment
by the Corporation shall terminate upon the End Date, and he shall
not at any time be entitled to any of the compensation or benefits
under Section 5 of the Employment Agreement. If, after making
such election, the Executive’s employment terminates on the
End Date (by reason of the failure of the parties to enter into the
Transition Amendment), so long as he has not resigned without Good
Reason (other than due to death or Disability) or his employment
has not been terminated for Cause, he shall be entitled to receive
the following compensation, in lieu of any other compensation or
benefits that may be available under Section 5 of the
Employment Agreement: (i) his Base Salary through the date of
termination of his employment, (ii) the amount of all then
unpaid expense reimbursements due to the Executive under
Section 4.2 of the Employment Agreement for periods prior to
the date of termination, (iii) additional payments as
severance equal to his Base Salary (at the rate in effect on the
date of termination) for a period of twelve months after
termination of his employment, payable in installments at the same
times as the Executive’s salary would have been payable if
the Executive’s employment had not terminated, (iv) a
pro rated bonus equal to the amount of bonus that the Executive
would have earned in respect of the calendar year in which
termination occurs, multiplied by a fraction, the numerator of
which is equal to the number days the Executive worked during such
calendar year, and the denominator of which is equal to 365, and
(v) continuation during that twelve month period of the health
and dental insurance benefits provided to the Executive and his
covered dependents under the Corporation’s insurance plans in
effect as of the date of termination (except that the Executive
shall pay that portion of the cost of such insurance as the
Executive was required to pay as of the date of termination of
employment and, if the Executive and his dependents become eligible
for comparable health and dental benefits provided by any other
employer, the Corporation may cease to provide those benefits to
the Executive and his dependents). The bonus described in clause
(iv) shall be paid at or about the same time annual bonuses
are paid to other executives of the Corporation. Notwithstanding
anything in the Employment Agreement to the contrary, the salary
continuation payments described in clause (iii) above shall
immediately be reduced dollar for dollar if, and in the amount
which, he receives compensation or other remuneration from any
employment or the performance of services (whether for the
Corporation, another company, himself or any other business
enterprise) during the period of such continuation payments. From
and after the End Date (or earlier termination of employment), the
Executive shall be subject to Article 6 of the Employment
Agreement, as amended hereby; provided , however ,
that solely in the event that the Executive becomes entitled to the
payments and benefits provided in clauses (i) through
(v) of this paragraph, and solely for purposes of this
Section 3(a), “Restricted Period” as defined in
Section 6.2 of the Employment Agreement shall mean the twelve
month period commencing immediately following the Executive’s
termination of employment, unless the Corporation elects (in
writing to the Executive no later than 30 days following the
Executive’s termination of employment) to extend such
Restricted Period for an additional 12 month period (
i.e. , 24 months in the aggregate) during which
extended period the Corporation shall be obligated to continue to
provide the Executive with the payments and benefits set forth in
clauses (iii) and (v) of this paragraph, above. For
clarity, if the Executive remains employed with the Corporation
following the End Date, then the payments and benefits described in
clauses (i) through (v) of this paragraph shall not be
paid or provided, and the Executive’s employment shall remain
subject to the Employment Agreement, as amended hereby, and as
further amended as contemplated under the first sentence of this
paragraph in connection with his transition to Vice Chairman of the
Corporation.
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