October, 2005
NONCOMPETITION, NONSOLICITATION,
AND CONFIDENTIALITY AGREEMENT
THIS
NONCOMPETITION, NONSOLICITATION, AND CONFIDENTIALITY AGREEMENT,
dated
as of the 31st day of October, 2005, by and
among Eric W. Schrier (the
"Executive"), and The Reader's Digest
Association, Inc., a Delaware corporation
located at Pleasantville, New York
("Corporation "). References to Corporation
shall include affiliated companies of
Corporation, where applicable.
WHEREAS, Executive has been
offered the position of President and Chief
Executive Officer of Corporation, with
enhanced compensation and benefits
arrangements, in accordance with the terms
of a letter to Executive from
Corporation dated October 26, 2005 (the
"Letter"); and
WHEREAS, the
Letter expressly conditions same upon the execution of this
Agreement wherein Executive is agreeing to
certain restrictions on his use of
confidential information and his activities
both during and after employment
with Corporation as set forth herein.
NOW, THEREFORE,
the parties hereto agree as follows:
1. Confidential
Information. (a) During Executive's employment with
Corporation and at all times thereafter,
Executive shall hold all Confidential
Information (as defined in Section 1(c)
below) in confidence for the benefit of
Corporation, and shall not, without the
prior written consent of Corporation or
as may otherwise be required by law or
legal process (provided Corporation has
been given notice of and opportunity to
challenge or limit the scope of
disclosure purportedly so required),
communicate or divulge any of the
Confidential Information to anyone other
than Corporation and those designated
by Corporation or to an attorney retained
by Executive to provide legal advice
with respect to this Section 1 and who has
agreed to keep such information
confidential. The foregoing shall not be
considered to be violated by any
communications made by Executive to other
employees or agents of Corporation in
the ordinary course of his employment with
Corporation.
(b) All records,
files, memoranda, reports, customer lists, plans,
documents and the like that Executive uses,
prepares or comes into contact with
during the course of Executive's employment
by Corporation, including any
reproductions thereof, shall remain the
sole property of Corporation and shall
be turned over to Corporation upon
Executive's termination of employment with
Corporation.
(c)
"Confidential Information" means all information, knowledge or
data
relating to Corporation and any of its
affiliates and their respective
businesses which is obtained or possessed
by Executive during the period in
which Executive is employed by Corporation
that is not "public" as defined
below. Confidential Information includes,
but is not limited to, know-how, trade
secrets, operating procedures, methods and
programs, strategies and plans.
Information is "public" if it is known
generally or available to the public or
is ascertainable from public sources,
and/or relevant industry or published
information, provided that information
shall not be deemed to be publicly
available merely because individual
features or combinations thereof are
publicly available and provided further
that the information cannot be available
as a result of Executive's breach of this
Agreement.
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2.
Nonsolicitation. Executive agrees that during Executive's
employment and
for the duration of the "Applicable Period"
(as defined in Section 4 below),
Executive shall not, directly or
indirectly, either on Executive's own behalf or
on behalf of any other person, firm,
corporation or other entity, without the
prior written consent of the Compensation
and Nominating Committee of the Board
of Directors of Corporation (which consent
shall be in its sole discretion),
solicit, induce or hire (or identify for
solicitation, inducement or hire) any
non-clerical employee of Corporation to be
employed by or to perform services
for Executive or any such other person,
firm, corporation or other entity.
3.
Noncompetition. Executive agrees that during Executive's employment
with
Corporation and for the duration of the
Applicable Period, Executive shall not,
without the prior written consent of the
Compensation and Nominating Committee
of the Board of Directors of Corporation
(which consent shall be in its sole
discretion), become associated with any of
the organizations and businesses
listed on Exhibit A anywhere within the
United States or Canada. For purposes of
this Section 3, Executive shall be
considered to have become associated with an
entity if Executive becomes directly or
indirectly involved with such entity as
an owner, principal, employee, officer,
director, independent contractor,
consultant, representative, stockholder,
financial backer, agent, partner,
advisor, lender, or in any other individual
or representative capacity.
Notwithstanding the foregoing, Executive
shall not be considered to have become
associated with an entity solely by virtue
of Executive making or retaining
investments in less than one percent of the
equity of any entity if such equity
is listed on a national securities exchange
or regularly traded in an
over-the-counter market.
4. Applicable
Period. The "Applicable Period" shall mean:
(a) a period of
twenty-four (24) months following the date of the
termination of Executive's employment with
Corporation in the event of the
resignation or retirement by Executive, or
in the event of a termination for
"Cause"(as "Cause" is defined in Section
4.5(b) of The Reader's Digest
Association, Inc. 2001 Income Continuation
Plan for
