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EXHIBIT 10.3
EMP Group L.L.C.
April 13, 1999
Mr. David J. Pecker
c/o Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attn: Scott Price, Esq.
Dear David:
Reference is made to the employment agreement dated February
16, 1999 between EMP Acquisition Corp. (the "Holding Company") and you (the
"Employment Agreement"). Capitalized terms used herein without definition have
the meanings specified in the Employment Agreement.
Pursuant to Section 4(a)(i) of the Employment Agreement, on
March 31, 1999 (the "Scheduled Payment Date") EMP Group L.L.C. (the "Holding
Company") became obligated to pay you a portion of the Make-Whole Payments in
an amount sufficient on an after-tax basis to repay your loan from Hachette
Filipachhi Magazines, Inc. (the "Hachette Loan"), after taking into account
certain bonuses payable pursuant to your employment agreement with Hachette
Filipachhi Magazines, Inc. (the "Loan Make-Whole Payment Amount").
The parties hereby acknowledge that, as of the Scheduled
Payment Date, and as of the date hereof, the parties were and remain unable to
reach a mutually satisfactory agreement as to the calculation of the Loan
Make-Whole Payment Amount, relating principally to the proper calculation of
your potential tax liability. Nevertheless, in order to enable you to repay the
Hachette Loan when due, on March 31, 1999 the Holding Company loaned you, as an
advance (the "Advance") the aggregate amount of $1,217,524.63 (representing
your repayment obligation under the Hachette Loan of $1,177,292.59 plus your
capital contribution obligation to the Holding Company of $40,232.05 relating
to the ultimate funding of the Loan Make-Whole Payment Amount). The Advance
will be mandatorily repayable by you to the Holding Company, together with
accrued interest thereon, upon the earliest to occur of (a) the parties mutual
satisfactory agreement as to the calculation of the Loan Make-Whole Payment
Amount, (b) the Effective Date and (c) April 15, 2000 (the "Advance Repayment
Date"); PROVIDED THAT in the case of clauses (b) and (c), the Holding Company
will determine the Loan Make-Whole Payment Amount.
The Advance shall bear interest at the rate of 4.67% per
annum, compounded annually, from the Scheduled Payment Date to the Advance
Repayment Date.
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Upon, and subject to, your repayment to the Holding Company
of the Advance on the Advance Repayment Date, the Holding Company or the
Company will pay you the Loan Make-Whole Payment Amount as contemplated by, and
subject to the terms of, the Employment Agreement (specifically including any
refund obligations with respect thereto thereunder), together with interest
thereon from the Scheduled Payment Date to the Advance Repayment Date at the
rate of 4.67% per annum, less any applicable withholding taxes.
You agree that, except for the Holding Company's or the
Company's obligation to satisfy any applicable withholding requirements with
respect to the payment to you of the Loan Make-Whole Payment Amount upon your
repayment of the Advance on the Advance Repayment Date (and any withholding
requirements with respect to any future payment of any additional portion of
the Make-Whole Payments), you shall be solely responsible for the payment of
any federal, state or local income or payroll taxes (including any imputed
income taxes) associated with the payment of the Loan Payment Amount or the
Advance hereunder and the remaining Make-Whole Payments, generally, and shall
indemnify and hold the Holding Company, the Company and their affiliates, and
each of their respective officers, directors and employees harmless from any
liability (including, without limitation, interest and penalties) arising from
the failure to withhold from such amounts prior to the Advance Repayment Date
and for any failure resulting from the Holding Company's or the Company's
reliance on your representative's calculation of your tax liability relating
thereto.
You agree that the provisions of this letter agreement will
constitute complete satisfaction of the Holding Company's and the Company's
obligations to you with respect to the Loan Payment Amount but shall not affect
the Holding Company's or the Company's obligations, or rights, with respect to
the payment or refund of any other portion of the Make-Whole Payments.
This letter agreement shall be governed by and construed in
accordance with the laws of the State of New York, without regard to conflicts
of laws principles thereof and may be signed in counterparts, each of which
shall be an original, with the same effect as if the signatures thereto and
hereto were upon the same instrument.
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Please indicate your agreement to the foregoing by executing
a copy of this letter agreement where indicated below.
EMP GROUP L.L.C.
By: EVERCORE CAPITAL PARTNERS L.P.,
Authorized Person
By: EVERCORE PARTNERS L.L.C.,
its general partner
By: /s/ Austin M. Beutner
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Name: Austin M. Beutner
Title: Member
EMP ACQUISITION CORP.
By: /s/ Austin M. Beutner
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Name: Austin M. Beutner
Title: President
Agreed to and acknowledged as of the
date first above written:
/s/ David J. Pecker
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David J. Pecker
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Schedule 3.05(b)
to the
Credit Agreement
Intellectual Property
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Schedule 3.06
to the
Credit Agreement
Disclosed Matters
None.
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Schedule 3.13
to the
Credit Agreement
Insurance