<PAGE>
Exhibit 10.19
EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is effective December 6, 1999,
between EARLYCHILDHOOD.COM LLC ("Employer") and JUDITH MCGUINN ("Employee").
RECITALS
Employer desires the services of Employee in order to retain Employee's
experience, abilities, and knowledge, and is therefore willing to engage her
services on the terms and conditions set forth. Employee desires to be employed
by Employer and is willing to do so on the terms and conditions set forth below.
THEREFORE, in consideration of the above recitals and of the mutual
promises and conditions set forth in this Agreement, it is agreed as follows:
1. DURATION: Subject to earlier termination as provided in this Agreement,
Employee shall be employed for a term beginning December 6, 1999, and
continuing through December 5, 2002. If Employer intends to employ Employee
after the termination of this Agreement, the parties will meet at least sixty
(60) days prior to the expiration of this Agreement to make a good faith
attempt to negotiate a new agreement.
2. PLACE OF EMPLOYMENT: Unless the parties agree otherwise in writing, during
the employment term Employee shall perform the services Employee is required
to perform under this Agreement at Employer's headquarters (which are
currently located at 2 Lower Ragsdale Drive, Suite 200, Monterey, California
93940); provided, however, that Employer may from time to time require
Employee to travel temporarily to other locations on Employer's business.
3. DUTIES AND AUTHORITY: Employer shall employ Employee as Vice-President E-
Content and Publishing or in such other capacity or capacities as Employer
may from time to time prescribe. Employee shall have the full power and
authority to manage and conduct business for the Employer, subject to the
directions and policies of Employer as they may be, from time to time, stated
either orally or in writing.
4. REASONABLE TIME AND EFFORT: During Employee's employment, Employee shall
devote such time, interest, and effort to the performance of this Agreement
as may be fairly and reasonably necessary.
5. SALARY: During the term of this Agreement, Employer agrees to pay Employee a
base salary of $150,000 per year. The base salary shall be payable as a
current salary on a semi-monthly basis. Employer, in its sole discretion, may
increase Employee's base salary or any other benefits but may not decrease
Employee's salary during the term of this Agreement. At Employee's request,
Employee will receive a salary review at or near the end of each twelve (12)
month period during the term.
<PAGE>
If during the term of this Agreement Employee's position is eliminated for
any reason and/or Employee's employment with Employer is otherwise
involuntarily terminated because 1) Employee's title is lowered,
2) Employee's reporting assignment is changed, without Employee's consent, to
anyone other than Ronald Elliott while Ronald Elliott remains employed by
Employer, 3) if Employee resigns (which shall, for purposes of this provision
3) only, be considered to be an "involuntary termination") because Ronald
Elliott ceases to be President of Employer, 4) if Employee's place of
business is relocated at least thirty (30) miles from Employer's headquarters
on the effective date of this Agreement, or 5) any reason apart from the
reasons set forth in the sections below titled "Termination," "Termination
Because of Death," and/or "Termination Because of Disability," Employer shall
continue to pay Employee's base salary in effect at the time of Employee's
termination of employment through December 5, 2002. In such case, Employee
will have no obligation to mitigate her lost compensation. In such case,
Employer will also reimburse Employee's insurance premiums incurred as a
result of the continuation of Employee's benefits coverage required by COBRA.
Whenever compensation is payable to Employee during a time when Employee is
partially or totally disabled and such disability would entitle Employee to
disability income or to salary continuation payments from Employer according
to the terms of any plan now or hereafter provided by Employer or according
to any policy of Employer in effect at the time of such disability, Employee
shall apply for such disability income or salary continuation, and the
compensation payable to Employee under this Agreement shall be inclusive of
any such disability income or salary continuation and shall not be in
addition to such disability income or salary continuation. If disability
income is payable to Employee by an insurance company under an insurance
policy paid for by Employer, the compensation payable to Employee under this
Agreement shall be inclusive of the amounts paid to Employee by that
insurance company and shall not be in addition to the amounts paid to
Employee by that insurance company.
6. RELOCATION EXPENSES: Employer shall be responsible for payment of all
reasonable moving expenses incurred by Employee as a result of her relocation
from New York, New York to Monterey, California.
7. RENTAL EXPENSES: Employer shall reimburse Employee, up to a maximum of $5000,
for the cost of rental housing for Employee in or near Monterey. Such
reimbursement shall be limited to the time Employee is paying rental
expenses at her apartment in New York while at the same time paying for
temporary rental housing in or near Monterey.
8. ADDITIONAL RELOCATION EXPENSES: Employer shall be responsible for payment of
all reasonable moving expenses incurred by Employee as a result of her
relocation, within one year from the effective date of this agreement, from
temporary housing in or near Monterey to permanent housing in or near
Monterey.
<PAGE>
9. SIGNING BONUS: Employee shall be entitled to a "signing bonus" of $9,000
"net" (after normal withholding). Such "signing bonus" shall be paid to
Employee during the first month following her first day of employment with
Employer.
10. REIMBURSEMENT OF FOREGONE BONUS: Employer shall reimburse Employee, up to a
maximum of $14,000, for any bonus Employee would otherwise have received
from her former employer, Time Warner Trade Publishing, but for Employer's
hiring of Employee to begin work prior to December 31, 1999.
11. ADDITIONAL BENEFITS: During the employment term, Employee shall be entitled
to receive all other benefits of employment generally available to
Employer's other managerial employees as she becomes eligible for them,
including medical, dental, life and disability insurance benefits, and
participation in Employer's Management Incentive Plan, pension plan,
quarterly bonus plan and/or profit-sharing plan.
Employer reserves the right to modify, suspend or discontinue any and all of
the above benefit plans, policies and practices at any time without notice
to or recourse to Employee so long as such action is taken generally with
respect to other similarly situated persons and does not single out
Employee.
12. VACATION: Employee shall be entitled to four weeks (20 business days) of
paid vacation each calendar year, which shall accrue on a prorata basis from
the date employment commences under this Agreement. Vacation time will
continue to accrue so long as Employee's total accrued vacation does not
exceed four weeks (20 business days). In the event Employee's accrued
vacation should reach four weeks (20 business days), Employee will cease to
accrue further vacation until Employee's accrued vacation time falls below
that level.
Employee agrees to inform Employer of her vacation schedule as soon as
reasonably possible but not later than 30 days in advance of taking such
vacation. Employee further agrees to schedule Employee's vacation at a time
that is not disruptive to the company's business.
13. PAID TIME OFF: In addition to vacation accrual as set forth in the
"Vacation" section above, Employee shall be entitled to nine (9) business
days of Paid Time Off ("PTO") each calendar year. PTO will continue to
accrue so long as Employee's total accrued PTO does not exceed fourteen (14)
business days. In the event Employee's accrued PTO should reach fourteen
(14) business days, Employee will cease to accrue further PTO until
Employee's accrued PTO falls below that level. Other than the accrual and
maximum accrual of PTO as set forth in this section of the Agreement,
Employee's PTO shall be governed by the PTO provisions of the
Earlychildhood.com Employee Manual.
14. EXPENSE REIMBURSEMENT: During the employment term, to the extent that such
expenditures satisfy the criteria under the Internal Revenue Code for
deductibility by Employer (whether or not fully deductible) for federal
income tax purposes as
3
<PAGE>
ordinary and necessary business expenses, Employer shall reimburse Employee
promptly for reasonable business expenses, including travel, entertainment,
parking, business meetings, and professional dues, made and substantiated in
accordance with the policies and procedures established from time to time by
Employer with respect to Employer's other similarly situated employees.
15. TERMINATION: Employer may terminate this Agreement at any time for cause.
Under this Agreement, the term "cause" shall mean (i) misappropriation of any
material funds or property of Employer or of any of its related companies;
(ii) unjustifiable neglect of duties under this Agreement; (iii) conviction of a
felony involving moral turpitude; (iv) gross misconduct and/or the failure to
act in good faith to the material detriment of Employer, or (v) willful and bad
faith failure to obey reasonable and material orders given by Employer; provided
that in each such case (other than (i) or (iii)) prompt written notice of such
cause is given to Employee specifying in reasonable detail the facts giving rise
to the notice and that continuation of such cause will result in termination of
employment, and such cause is not cured within three (3) business days after
receipt by Employee of such notice. If Employee is terminated as set forth in
this paragraph, then payment of the specified salary earned and benefits accrued
as of the date of the termination shall be payment in full of all compensation
payable under this Agreement.
Employer may, at Employer's election, suspend the operation of this Agreement
both as to the rendition of Employee's services and as to Employee's
compensation for and during the continuance of any period(s) during which
Employer shall be materially hampered, interrupted or interfered with in the
normal conduct of Employer's business by reason of any epidemic, fire, action of
the elements, strike, walkout, labor dispute, governmental order, court order or
order of any other legally constituted authority, act of God or public enemy,
riot, civil commotion, inability to procure materials and equipment or any other
cause or causes beyond Employer's control, whether of the same or any other
nature. If any suspension by reason of the preceding sentence shall continue for
more than eight (8) consecutive weeks, then Employer may terminate this
Agreement for the then-remaining portion of the Term. If Employer suspends
Employee's services and compensation pursuant to this paragraph for a period of
eight (8) consecutive weeks or longer, Employee shall have the right to
terminate the Agreement on five (5) days written notice unless Employer resumes
payment of Employee's compensation hereunder within five (5) days of receipt of
such notice. If Employee is terminated as set forth in this paragraph, Employer
shall be released and discharged of and from all further obligations under this
Agreement, except for any monies due and owing to Employee and then unpaid which
shall have vested prior to such termination. Notwithstanding the foregoing,
Employer shall not suspend or terminate the operation of this Agreement pursuant
to this paragraph (which shall be known as the "Force Majeure" paragraph) unless
the agreements of employees based at Employer's headquarters, of a status of
vice president or higher are simultaneously suspended or terminated.
4
<PAGE>
16. TERMINATION BECAUSE OF DEATH: In the event that Employee dies during the
term of this Agreement, this Agreement shall be terminated on the last day of
the calendar month of her death and Employer shall be required to pay to
Employee's estate the specified salary and any additional benefits accrued by
Employee at the time of her death.
17. TERMINATION BECAUSE OF DISABILITY: If, at the end of any calendar month
during the initial term or any renewal term of this Agreement, Employee is and
has been for the three (3) consecutive full calendar months then ending, or for
80% or more of the normal working days during the six (6) consecutive full
calendar months then ending, unable due to mental or physical illness or injury
to perform Employee's duties under this Agreement, Employer shall have the right
to, subject to applicable federal and state law, terminate Employee's
employment, and Employer shall only be obligated to pay Employee the specified
compensation earned and benefits accrued by Employee at the time of her
termination by Employer.
18. AGREEMENT SURVIVES COMBINATION OR DISSOLUTION: This Agreement shall not be
terminated by Employer's voluntary or involuntary dissolution or by any merger
in which Employer is not the surviving or resulting corporation, or on any
transfer of all or substantially all of Employer's assets. In the event of any
such merger or transfer of assets, the provisions of this Agreement shall be
binding on and inure to the benefit of the surviving business entity or the
business entity to which such assets shall be transferred.
19. NOTICES: All notices that either party is required or may desire to serve
upon the other may be served either personally or sent Certified Mail/Return
Receipt Requested addressed to the other party to be served as follows:
To Employer: Ron Elliott, 2 Lower Ragsdale Dr., #200, Monterey, CA 93940.
To Employee: Judith McGuinn, 1121 Roosevelt Street, Monterey, CA 93940.
20. EMPLOYEE MANUAL: Employee acknowledges that Employee has been provided a
copy of the Earlychildhood.com Employee Manual, attached hereto as Exhibit A. It
is agreed and understood that the Employee Manual represents guidelines that the
Company may change from time to time in its sole discretion. It is not intended
to be a contract. To the extent that this Agreement conflicts with the Employee
Manual, the terms of this Agreement pertain to Employee's employment.
21. NONDISCLOSURE OF CONFIDENTIAL INFORMATION OR TRADE SECRETS: In the course
of Employee's employment with Employer, Employee will have access to
confidential records and data pertaining to Employer's customers and its
operations. Such information is considered secret and is disclosed to Employee
in confidence. Furthermore, all memoranda, notes, records, computer files, and
other documents or tangible material made or compiled by Employee, or made
available to Employee during the term of this Agreement concerning the business
of Employer, shall be the sole property of Employer and shall be delivered to
Employer on the expiration or
5
<PAGE>
termination of this Agreement, or at another time on request. During
Employee's employment with Employer and thereafter, Employee shall keep in
confidence and shall not directly or indirectly disclose any secret or
confidential information belonging to Employer or any of its related
companies except as required in the course of Employee's employment by
Employer and/or authorized in writing by Employer, or required by law.
22. GOVERNING LAW: This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
23. WAIVER: The failure by either party to exercise or enforce any terms or
conditions under this Agreement shall not be deemed to be a waiver of that
party's right to exercise or enforce any such term or condition in the
future. The waiver by either party of any breach, default, or omission in
the performance of any of the terms or conditions of this Agreement by the
other party shall not be deemed to be a waiver of any other breach, default,
or omission.
24. SEVERABILITY: If any part of this Agreement is invalided or rendered
unenforceable by any court of competent jurisdiction or by any regulation or
legislation to which it is subject, the remaining provisions and that
provision found invalid or unenforceable as it may apply to other
circumstances, shall remain in full force and effect. In such event, the
parties shall promptly negotiate in good faith to amend this Agreement by
replacing such stricken provision with a valid and enforceable provision
that fulfills the original intention of the invalid or unenforceable
provision.
25. ENTIRE AGREEMENT: This Agreement constitutes the entire Agreement of the
parties with respect to the subject matter hereof and cancels and supersedes
all previous agreements or understandings relating thereto, whether written
or oral, between the parties.
26. ARBITRATION: In the event that there shall be a dispute between the parties
arising out of or relating to this Agreement or the breach thereof, other
than Section 22 hereof, the parties agree that such dispute shall be
resolved by final and binding arbitration before a sole arbitrator in
Monterey, California administered by the American Arbitration Association
("AAA") in accordance with AAA's Labor Arbitration Rules then in effect.
Depositions may be taken and other discovery may be obtained during such
arbitration proceedings to the same extent as authorized in civil judicial
proceedings. Any award issued as a result of such arbitration shall be final
and binding between the parties thereto, and shall be enforceable by any
court having jurisdiction over the party against whom enforcement is sought.
The prevailing party in any legal action (including arbitration) shall be
entitled to recover any and all reasonable attorneys' fees and other costs
reasonably incurred in connection therewith.
27. AMENDMENT: This agreement shall only be amended or waived by a writing that
explicitly refers to this Agreement and that is signed by both parties.
6
<PAGE>
28. EXECUTION: The parties, having carefully read this Agreement and having
consulted or having been given an opportunity to consult legal counsel,
hereby acknowledge their agreement to all of the foregoing terms and
conditions by executing this Agreement. Each signatory hereto represents and
warrants that it is authorized to sign this Agreement on behalf of the
respective party. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be an original and together
they shall constitute one agreement.
EMPLOYER EMPLOYEE
By: By:
/s/ Ronald Elliott /s/ Judith McGuinn
------------------ ------------------
Ronald Elliott Judith McGuinn
President - Earlychildhood.com LLC
Date: Jan. 3, 2000 Date: Jan. 3, 2000
------ ------
7
