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SOUTHERN OF NEW YORK
LAWRENCE J. GITMAN AND MICHAEL D.
JOEHNK, on behalf of themselves and all others
similarly situated,
Plaintiffs,
v.
X
14 Civ.
CLASS ACTION
COMPLAINT
JURY TRIAL DEMANDED
0
PEARSON EDUCATION, INC., PEARSON
PLC, and PEARSON, INC.,

Defendants.
------------------------------------ X
. .,_
Lawrence J. Gitman and Michael D. Joehnk, by their attorneys, make the following
allegations and claims for their Complaint against Pearson Education, Inc. ("Pearson
Education"), Pearson PLC, and Pearson, Inc. (hereinafter referred to collectively as "Pearson"),
its divisions, predecessors, and successors in interest. The following allegations are made upon
information and belief, except as to allegations specifically pertaining to Plaintiffs, which are
made upon knowledge.
PRELIMINARY STATEMENT
1. Plaintiffs are emeritus university professors who have authored several widely
used finance textbooks and entered into publishing agreements with various predecessors in
interest to Pearson Education. Plaintiffs bring this action on their own behalf and on behalf of
other authors of textbooks to seek redress for Pearson's practice of systematically short-changing
textbook authors on the royalties they are owed.
2. Prices for college textbooks have, on average, increased by more than 82% over
the past ten years. The wholesale prices for college textbooks (which is the basis for the
calculation of royalties owed to Plaintiffs and the class they represent) have increased at a similar
rate. This increase in the retail and wholesale prices of textbooks should result in increased
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royalty payments to textbook authors, including Plaintiffs and the class they represent, who
receive a royalty that is a percentage of the selling price of their works.
3. However, even though there has been no reduction in the royalty rate Plaintiffs
are entitled to over the past ten years, Plaintiffs' royalty payments for each copy of their works
have remained constant or declined, when they should have increased.
4. For example, between the year 2000 and 2011, the retail price for Plaintiffs'
textbook FUNDAMENTALS OF INVESTING, increased from $108 to $260. Given the increase in the
retail and wholesale price of this textbook (it would be helpful to have wholesale cost since we
allege wholesale price increased commensurately), Plaintiffs' per unit royalties should have more
than doubled over this time period. However, Plaintiffs' per unit royalties remained virtually
stagnant as they moved from approximately $12.59 per copy to only $14.30 per copy, an
increase of just 1% a year, as compared to a 140% increase in retail prices during this time
period.
5. While pnces for Plaintiffs' works have increased dramatically, the sole
beneficiary of the price increases has been Pearson. A recent audit of the royalty statements
Plaintiffs received over a five-year period for four textbooks revealed that they are owed more
than $4 70,000 in additional royalties. Numerous other textbook authors who entered into
materially similar standard form agreements with Pearson Education or various predecessors in
interest have also been underpaid royalties. Extrapolating from the amount of underpaid
royalties owed to the Plaintiffs, it appears that Pearson Education has improperly retained for
itself millions of dollars in royalties owed to the proposed class. How does Pearson manage to
enrich itself at the expense of Plaintiffs and the class they represent?
6. There are seven systematic practices employed by Pearson that have permitted it
to steadily usurp an ever greater share of the revenue from sales of textbooks, all at the expense
of the textbook authors.
7. First, in order to expropriate a greater share of sales revenue from textbook
authors, Pearson Education improperly categorizes domestic sales as export sales in order to pay
the lower royalty rate applicable to export sales. Under the standard form contracts at issue,
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authors usually receive a royalty of 10% of "export" sales (i.e., sales that involve the exporting
of the book to a foreign country), and 15o/o or 18% of domestic sales. Pearson short-changes
authors by counting mere bookkeeping entries in which Pearson Education notes a "sale" from
Pearson Education to another Pearson entity controlled by Pearson PLC or Pearson, Inc., as an
"export" sale, even though the books never leave the United States as part of this purported sale.
The bookkeeping entry does not reflect an arms-length transaction between different Pearson
entities; indeed, it is generally a single Pearson employee based in the United States that makes
the bookkeeping entry reflecting the "export" sale. The actual exporting of the books occurs
only when the Pearson, Inc., or Pearson PLC subsidiary with nominal ownership of the books
actually makes a bona-fide sale to an unrelated third-party. With respect to the textbook
FUNDAMENTALS OF INVESTING, between 25% and 50o/o of total unit sales were categorized by
Pearson as "export" sales, even though a very small portion of those units were actually sold in a
foreign country.
8. Second, Pearson Education short-changes its authors by failing to use
commercially reasonable best efforts to make bona-fide export sales to unrelated third parties,
and pay authors royalties on those sales. Instead, a single Pearson employee simply makes
bookkeeping entries in which a "sale" is noted from one Pearson entity to another, at a price
determined by Pearson. Essentially, royalties are paid to authors based upon the price at which
Pearson decided to sell itself the books. If the Pearson entity with nominal ownership of the
books later sells and exports the books to an unrelated third-party at a higher price than the price
set by Pearson in its internal bookkeeping entry, Pearson does not remit additional royalties to
authors based upon the higher sale price eventually realized by Pearson. With respect to the
textbook FUNDAMENTALS OF INVESTING, the net effect of this practice is that the "sale" prices
(i.e., the royalty basis) for export sales is often less than 25% of the price realized for bona-fide
domestic sales.
9. The bottom line impact of these sham "export sales" with respect to
FUNDAMENTALS OF INVESTING is that "export sales" accounted for approximately 34% of the
total units sold, but only 12% of the royalties received by Plaintiffs. With these sham "export
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sales," Pearson artificially lowers the royalty basis and justifies applying a 10% rather than an
18% royalty.
10. Third, with respect to domestic sales, Pearson Education, in violation of its
contractual obligations that require a royalty of either 15 or 18%, simply pays a much lower
royalty rate on many domestic sales, which it arbitrarily categorizes as discounted domestic
sales. For example, with respect to Plaintiffs' textbook FUNDAMENTALS OF INVESTING, Pearson
Education, in violation of its contractual obligations, has since 2005 imposed a royalty rate of
only 1 Oo/o for "discounted" domestic sales, even though the publishing contract required a royalty
rate of 18% on all domestic sales. In 2012, Pearson Education, after introducing the My Finance
Lab product, decided to expropriate an even greater share of the sales revenue for itself, and
started to unilaterally impose royalty rates of only 5% for domestic sales of FUNDAMENTALS OF
INVESTING. This trend of Pearson Education expropriating an ever greater share of the revenue
from sales of textbooks accelerated in 2013, as Pearson Education unilaterally further reduced
the royalty rates for domestic sales of FUNDAMENTALS OF INVESTING to only 5% or 2.5o/o, despite
being contractually obligated to pay 18% on such sales. Pearson Education has engaged in this
same systematic practice of unilaterally reducing royalty rates with respect to all members of the
proposed class.
11. Fourth, Pearson also artificially lowers the basis upon which domestic royalties
are calculated by selling Plaintiffs works as part of a bundled "kit" in which a textbook (on
which royalties must be paid) is sold in a package with printed or web-based (e.g., the "My
Finance Lab" product) study guides created by Pearson Education as works for hire (on which no
royalties or a lesser royalty must be paid). The written study guides as well as the web and
software based study guides that constitute the My Lab line of products are useless without the
underlying textbook upon which they are based. However, in order to deprive Plaintiffs of their
fair share of the revenues reaped by Pearson through these "kit" sales, Pearson will
systematically inflate the value of the "royalty-free or reduced royalty" study guide products,
relative to the underlying textbook, in order to lower the basis upon which the royalties owed to
the textbook authors must be calculated. In order to cover up this practice of improperly
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allocating revenues from kit sales to "royalty-free or reduced royalty" study guide products,
Pearson creates "custom" bundles with unique ISBN numbers, and claims that this customization
justifies the reduction in the share of the royalties allocated to Plaintiffs' textbooks. For the
textbook FUNDAMENTALS OF INVESTING the number of "custom" editions with unique ISBN
numbers has more than quadrupled in the past ten years. These "custom" editions have little or
no additional material that would justify the artificially low royalty allocation to Plaintiffs
textbooks.
12. Sometimes, these "custom" editions are created as part of an academic "payola"
scam in which Pearson gives a "kickback" in the form of a "royalty" to professors who select
Pearson published books for their class. After agreeing to use a Pearson textbook in a course, a
professor or academic department will supply a small and worthless amount of material to create
a "custom" edition, and in return receive a "royalty/kickback" for the material supplied for the
custom edition. These kickbacks further reduce the royalty basis for Plaintiffs and the class they
represent. It is unknown at this juncture whether Plaintiffs have been victims of this kickback
scheme.
13. The bottom line impact of these practices with respect to the textbook
FUNDAMENTALS OF INVESTING, is that the royalty basis for these "kit" sales was typically
between 75% and 40% less than the royalty basis for regular domestic sales.
14. Fifth, in addition to lowering the royalty basis through "kit" sales, Pearson
categorizes the kit sales as "discounted" domestic sales, and apply arbitrarily low royalty rates
ranging from 2.5% to 10% to those sales, rather than the higher domestic royalty provided in the
standard form contracts entered into by Plaintiffs and the class they represent. These
"discounted" sales, as a percentage of total sales, have dramatically increased since the
development of the My Lab web-based study guides. For example, for the textbook
FUNDAMENTALS OF INVESTING, these "discounted" domestic sales now represent a majority of
the sales of that textbook. Thus, Plaintiffs are receiving a lower royalty rate calculated on an
artificially low basis, while Pearson reaps an ever-greater share of the revenue from textbook
sales.
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15. Sixth, Pearson Education breaches the covenant of good faith and fair dealing by
(i) routinely engaging in below-market sham sales in order to reduce the basis on which royalties
are calculated, and (ii) overstating the value of materials contributed by Pearson as part of any kit
sales in order to reduce the basis on which it owed royalties for the kit sales. In order to injure
the ability of authors to receive the royalties they are due and reasonably expect to receive under
the standard form contracts, Pearson Education enlists various Pearson PLC and Pearson, Inc.,
subsidiaries and related parties to participate in sales at below-market prices, and then pays the
authors a royalty based upon this below-market sales price. These below-market sales, which
Pearson Education seeks to disguise by calling them "export" sales (even though the books never
go anywhere), are designed to deprive authors of the benefits they are owed under the publishing
contracts they entered into. Then, subsidiaries of Pearson PLC and Pearson, Inc., and/or related
parties sell the books at market price and retain the proceeds, allowing Pearson to reap excess
profits at the expense of the authors. To the extent Pearson Education is permitted to engage in
these related-party transactions, it is required to act in good faith by selling the books at the
market price, so that these sales do not injure or destroy the authors' ability to reap the benefits
of their contracts with Pearson Education. With respect to kit sales, to the extent such sales are
authorized, Pearson Education must act in good faith in determining the relative value of the
components contributed by Pearson Education or other Pearson entities, so as not to deprive
authors of their fair share of royalties owed on kit sales. Instead, Pearson deliberately
understates the relative value of Plaintiffs' works in order to deprive them of royalties.
16. Seventh, Pearson PLC and Pearson, Inc., interfere with the contracts between the
authors and Pearson Education by: (i) participating in the sham bookkeeping entries reflecting
"export" sales that never actually occurred, and (ii) engaging in below-market sham transactions
with Pearson Education in order to lower the basis upon which the authors' royalties are
calculated.
JURISIDICTION AND VENUE
17. This Court has jurisdiction over all causes of action asserted herein pursuant to 28
U.S.C. 1332( d), because the aggregate claims of the Class exceed the sum or value of
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$5,000,000.00, and there 1s diversity of citizenship between proposed class members and
Defendant.
18. Venue is proper in this District under 28 U.S.C. 1391(a)(l) and (2). Defendant
Pearson, Inc., maintains its headquarters at 1330 Avenue of the Americas, New York, New York,
and otherwise conducts substantial business in this District, including conduct directed at
members of the Class, such as contracting for the publication of books and the accounting,
reporting, and payment of royalties owed to Plaintiffs and the proposed class. Defendants
Pearson, PLC and Pearson Education, Inc., engage in interstate commerce by regularly
conducting business in this district by selling, promoting, and marketing books and other items in
this District. In the past year, Pearson, PLC and its subsidiary Pearson Education, Inc., have sold
millions of dollars of textbooks, and other types of books in this District.
PARTIES
19. Plaintiff Lawrence J. Gitman is a citizen and resident of the State of California,
County of San Diego, and an Emeritus Professor of Finance at San Diego State University. Mr.
Gitman entered into standard form publishing agreements with Harper & Row Publishers for
three text books that were tentatively titled: BASIC FINANCE: A MANAGERIAL APPROACH,
PRINCIPLES OF MANAGERIAL FINANCE (2nd ed. ), ESSENTIALS OF INVESTMENTS (co-authored with
Michael Joehnk), and BASIC MANAGERIAL FINANCE. Mr. Gitman also entered into a standard
form publishing agreement with Addison Wesley-Longman for a textbook tentatively titled
INTRODUCTION TO FINANCE (co-authored with Jeff Madura). These textbooks have been widely
used for decades.
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20. Plaintiff Michael D. J oehnk is a citizen and resident of the State of Arizona,
Coconino County, and an Emeritus Professor of Finance at Arizona State University. Mr.
Joehnk entered into a standard form publishing agreement with Harper & Row Publishers for a
textbook that was tentatively titled ESSENTIALS OF INVESTMENTS (co-authored with Mr. Gitman).
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The actual names of the textbooks were changed upon publication to: FUNDAMENTALS OF
INVESTING, PRINCIPLES OF MANAGERIAL FINANCE, PRINCIPLES OF MANAGERIAL FINANCE-
BRIEF, and INTRODUCTION TO FINANCE.
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21. Defendant Pearson, PLC ("Pearson PLC") is a corporation formed under the laws
of the United Kingdom with its principal offices located in London, England and New York,
New York. Pearson PLC operates in the United States through its wholly owners subsidiaries
Pearson, Inc., headquartered in New York City, and Pearson Educational, Inc., headquartered in
Saddle River, New Jersey. One of Pearson PLC' s businesses is educational publishing, and it is
presently one of the largest publishers of educational textbooks in the world. Through a series of
acquisitions and mergers, Pearson PLC acquired the College Division of Harper & Row
Publishers as well as the publishing house Addison Wesley Longman, the entities with which
Plaintiffs entered into standard form publishing contracts.
22. Defendant Pearson, Inc. ("Pearson Inc."), is a Delaware Corporation, with its
principal place of business located in New York, New York. Pearson Inc., is a wholly owned
subsidiary of its parent Pearson PLC, and one of the entities through which Pearson PLC
operates in the United States. Pearson Inc., is one of the largest book publishers in the world.
23. Defendant Pearson Education, Inc. ("Pearson Education"), is a Delaware
Corporation with its principal place of business located in Upper Saddle River, New Jersey, and
a wholly owned subsidiary of Pearson, PLC. Pearson Education is one of the largest publishers
of educational textbooks and was created through a series of acquisitions and mergers by which
Pearson PLC acquired the educational publishing business of Prentice Hall, Simon & Schuster,
Harper Collins, and Addison Wesley.
24. Pearson Education is the successor in interest to the College Division of Harper &
Row Publishers and Addison Wesley Longman, the two publishing houses that are the actual
signatories to the publishing contracts with Plaintiffs. In 1996, Pearson PLC acquired Harper
Collins Educational Publishing (a division of Harper Collins, the successor to Harper & Row
Publishers) and merged it into Addison Wesley Longman, the educational publishing subsidiary
of Pearson PLC. In 1998, Pearson PLC purchased the educational publishing businesses of
Simon & Schuster, and merged that business with the Pearson PLC subsidiary Addison Wesley
Longman, which was renamed Pearson Education.
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GENERAL ALLEGATIONS
A. THE STANDARD FORM PUBLISHING AGREEMENTS
25. Pearson Education and its predecessor entities (e.g., the educational publishing
businesses of Harper & Row, Addison Wesley Longman, Prentice Hall, Simon & Schuster, etc.)
regularly entered into written publishing agreements with authors of textbooks and other
academic books. These publishing agreements (the "Agreements") are standard form
agreements drafted by Pearson Education or its predecessor entities with blank spaces for the
date of the contract, the title of the book to be published, and the name of the author to be filled-
In. Copies of the publishing agreements entered into by the Plaintiffs are attached hereto as
exhibits A through E.
26. These Agreements are typical publishing agreements in which the author grants
the exclusive right to publish a book to the publisher, and in return, the publisher pays to print
the book, use reasonable best efforts to try to maximize the total sales of the book by dollar
volume, and pay the author a royalty equal to a percentage of the gross receipts realized from
sales of the book. The author is not paid a fixed amount up-front in the Agreements, because it
is uncertain how many books can be sold and at what price. Thus, the Agreements contemplate
that the publisher will sell the books to various third parties, with the number of books purchased
and the price to be paid a matter of negotiation in a future arms-length transaction between the
publisher and the third parties to whom the book is sold.
27. The Agreements also invariably provide for a higher royalty rate for sales made in
the United States and Canada than for "export sales" in which the books are shipped abroad.
(The Agreements exclude sales to Canada from "export sales" and provide for payment of
royalties at the "domestic" rate for sales in Canada.) The Agreements typically provide a
standard royalty rate of 10% for export and international sales. The royalty for domestic sales
and sales to Canada is invariably higher than 10%, and typically ranges between 15o/o and 18%
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of sales. For the textbook FUNDAMENTALS OF INVESTING, the royalty rate for domestic sales is
18%.
28. With respect to the royalty basis for kit sales, many of the Agreements do not
authorize Pearson Education to sell the books as part of a kit or pay a reduced royalty for such
sales. To the extent such sales are authorized, or the Plaintiffs have permitted such sales,
Pearson is required to act in good faith and not place its own interest ahead of the Plaintiffs in
conducting of those sales and calculating royalties on those sales.
29. Plaintiffs entered into five of these standard form Agreements with Pearson. The
agreements entered into between Plaintiffs and Pearson grant Pearson the exclusive right to
publish the texts in exchange for the payment of a royalty equal to a percentage of the dollar
value of any sales. The four agreements with Harper & Row publishers for the texts BASIC
FINANCE: A MANAGERIAL APPROACH, PRINCIPLES OF MANAGERIAL FINANCE (2nd ed.),
ESSENTIALS OF INVESTMENTS, and BASIC MANAGERIAL FINANCE each provide for a royalty of
between 15% and 18% for domestic sales and export sales to Canada, and a royalty of only 10%
on export sales to countries other than Canada. The standard form publishing agreement with
Addison Wesley Longman for the text INTRODUCTION TO FINANCE, is substantively identical to
the Harper & Row contracts with respect to export royalties, and provides for a royalty of
between 15% and 18% for domestic sales and export sales to Canada, and a royalty of only 10%
on export sales to countries other than Canada.
B. ALLEGATIONS RELATED TO THE CLAIM
FOR BREACH OF CONTRACT
30. In 2011, Plaintiffs retained IP Royalty Auditors LLC, an accounting firm that
specializes in royalty audits, to conduct an audit of their royalty account with Pearson Education.
The audit, as well as a further examination of Pearson Education's business practices, revealed
that Pearson Education short-changed Plaintiffs on royalties owed under the Agreements, and
that Plaintiffs are owed more than $470,000 in additional royalties.
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Pearson Misclassi/ies U.S. and Canada Sales as ((Export" Sales
31. Pearson Education engages in the systematic practice of improperly classifying
domestic sales as export sales in order to reduce the royalty rate owed to authors under the
Agreements. Under the standard form contracts at issue, authors usually receive a royalty of
10% of "export" sales (i.e., sales that involve the exporting of the book to a foreign country other
than Canada), and 15% to 18% of domestic sales and sales to Canada. In order to pay royalties
at the lower export royalty rate, Pearson Education classifies its internal bookkeeping entries in
which Pearson Education notes a "transfer" from Pearson Education to another Pearson entity
(typically a subsidiary of Pearson PLC or Pearson, Inc., or other related party) as a bona fide
"export" sale. The books, of course, are never actually exported or sold abroad. The transaction
exists only on paper; the books never go anywhere and no money is actually exchanged. Indeed,
it is usually a single Pearson Education employee that sits on both sides of the "transaction" and
makes the bookkeeping entry. Pearson Education, however, treats these internal bookkeeping
entries as export sales, and pays royalties at the lower export rate on the books covered by these
bookkeeping entries.
32. The standard form Agreements, including the Harper & Row and Addison Wesley
Longman contracts between Plaintiffs and Pearson Education, allow for the payment of the lower
royalty rate for "export sales" only on books that are actually exported.
33. Pearson Education cannot avoid its royalty obligations by "cooking its books"
with sales that are nothing more than an internal accounting artifice. With respect to the textbook
FUNDAMENTALS OF INVESTING, between 25% and 50% of total unit sales were categorized by
Pearson Education as "export" sales, even though a very small portion of those units were
actually sold in a foreign country.
34. Pearson's wild claims as to export sales simply defy reason, logic, and common
sense. Pearson has substantially underpaid Plaintiffs royalties they are owed by falsely claiming
that 25o/o to 50% of all unit sales were export sales subject to a 10% royalty rate, rather than an
18% royalty rate.
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Pearson Education Fails to Undertake Any Efforts to Make
Bona-Fide Export Sales (or the Benefit of Plaintiffs and the Class
35. The Agreements also contemplate that Pearson Education, as the holder of the
exclusive right to publish the works aboard, will use commercially reasonable efforts to make
bona-fide export sales to unrelated third-parties and pay authors royalties on those sales. Instead
of undertaking efforts to make sales abroad for the benefit of Plaintiffs and the class, Pearson
Education takes a shortcut by estimating how many units it will sell abroad and at what price,
and making an internal bookkeeping entry reflecting such a "sale" from Pearson Education to
another Pearson entity, typically a subsidiary of Pearson PLC or Pearson, Inc., or other related
party. Rather than reaping the benefits of reasonable best efforts to sell their books abroad,
Plaintiffs and the class are paid royalties only upon these internal Pearson Education
bookkeeping entries, which do not reflect any effort to actually sell the books abroad. Indeed,
the same Pearson employee typically sits on both sides of the transaction, and decides how many
books will be sold and at what price, and makes an internal bookkeeping entry reflecting this
purported "sale."
36. If the books are later sold and exported to an unrelated third-party (i.e., the
"export" sales and sales to "independent distributors or bookstores" contemplated in the form
Agreements), at a higher price than the price set by Pearson Education in its internal
bookkeeping entry, Pearson Education does not remit additional royalties to authors based upon
the higher sale price eventually realized.
37. Pearson Education essentially turns its obligation under the Agreements to sell
and market the books abroad for the benefit of the authors on its head. Rather than undertake
such efforts for the benefit of Plaintiffs and the class, Pearson Education undertakes such efforts
only for itself. When bona-fide export sales are actually made, Pearson retains the benefits of
such efforts for itself.
38. With respect to Plaintiffs' textbook FUNDAMENTALS OF INVESTING, the net effect
of this practice is that the "sale" prices (i.e., the royalty basis) for export sales is, far more often
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than not, less than 25% of the price realized for bona-fide domestic sales. There are no cost
savings or market efficiencies related to sales of English language textbooks abroad that would
account for the substantially lower "sale" price and resulting royalty basis. The only plausible
explanation for the price difference is that the "sale" price and resulting royalty basis reflects
Pearson's efforts to reduce royalty payments to textbook authors, and retain a greater share of
sales revenue for itself.
Pearson Arbitrarily Reduced the Rovaltv Rate in Violation of the Publishing Contracts.
39. The standard form agreements require Pearson Education to pay a royalty to
textbook authors of between 15-18% on all domestic sales. For example, for Plaintiffs' textbook
FUNDAMENTALS OF INVESTING, Pearson Education is required to pay them a royalty of 18% of all
domestic sales. During 2005, in an effort to retain a greater share of the domestic sales revenues,
Pearson Education introduced a new category of sales called "discount" domestic sales, and
initially started paying royalties at rate of only 1 0% for such sales. This trend of Pearson
Education expropriating an ever-greater share of the revenue from sales of textbooks has
accelerated since 2005. In 2012, Pearson Education started to unilaterally impose royalty rates
of only 5% and 10% for "discounted" domestic textbook sales. In 2013, Pearson Education
unilaterally dropped the 10% royalty rate altogether, and unilaterally reduced royalty rates for
domestic sales of FUNDAMENTALS OF INVESTING to only 5% or 2.5o/o. Presently, rather than
receiving the 18o/o royalty they are contractually entitled to on domestic sales of FUNDAMENTALS
OF INVESTING, Plaintiffs are receiving a royalty of only 2.5% on any domestic sales that Pearson
Education chooses to categorize as a "discounted" domestic sale.
40. A royalty auditor determined that Pearson owes at least $263,878.03 in additional
royalties for the purported "export" sales of FUNDAMENTALS OF INVESTING, PRINCIPLES OF
MANAGERIAL FINANCE, FOUNDATIONS OF MANAGERIAL FINANCE, and BASIC MANAGERIAL
FINANCE.
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Pearson Underpays Royalties {or "Kit" and ''My Lab" Sales
41. Pearson Education will often commission a study guide for the textbooks it
publishes pursuant to the Agreements. The study guide is typically a "work for hire" for Pearson
Education, and Pearson Education is not required to pay any royalties to the authors of the study
guide. Pearson Education then sells the textbooks it publishes pursuant to the Agreements (and
on which it must pay royalties) as part of a "kit" with the companion study guides (on which no
royalties are typically owed).
42. In 2008, Pearson Education introduced the My Lab product, which provides web-
based textbook specific study guides for use with textbooks published by Pearson Education.
More than 9 million students are currently using a My Lab product in conjunction with textbooks
published by Pearson Education. Presently, many if not most textbooks sold by Pearson
Education, are sold as part of a kit or bundle that includes a "key" to access the related My Lab
study guide. The My Lab products are created as "works for hire" for Pearson, and as such,
Pearson Education is not required to pay royalties on sales of My Lab products.
43. In an effort to expropriate a greater share of the revenue from sales of textbooks
than it is contractually entitled to, Pearson Education underpays royalties on textbooks sold as
part of a "kit" or with the "My Lab" product. Regardless of whether a publishing contract
permits the sale of a textbook as part of a kit (and most do not), Pearson Education pays a royalty
on only the portion of the sale price of the "kit" or "My Lab" product that Pearson Education
attributes to the textbook.
44. Many of the standard form Agreements, including the four standard form Harper
& Row agreements between Plaintiffs and Pearson Education, do not authorize the publication of
the books as part of a "kit," or allow Pearson Education to pay a lower royalty on such sales by
allocating the sale price of a "kit" between the underlying text (on which royalties are owed) and
the Pearson Education-created materials (e.g., My Lab) for which royalties are generally not
owed. Pearson Education breached many of the Agreements, including the standard form Harper
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& Row agreements, by selling books as part of a "kit," without authorization, and paying a
reduced royalty (arbitrarily determined by Pearson Education) on such sales.
45. To the extent "kit" sales are permitted, Pearson Education artificially lowers the
basis upon which domestic royalties are calculated by assigning an arbitrarily low value to the
textbook component of the bundled/kit products. Of course, the written study guides as well as
the web and software based study guides that constitute the My Lab line of products are useless
without the underlying textbook upon which they are based. However, Pearson often uses a
royalty basis for the bundled kit/My Lab sales that is substantially less than the typical stand-
alone sale price for a textbook. Under Pearson's business practices, a textbook somehow
becomes worth less when sold as part of a kit or with the My Lab product.
46. Essentially, Pearson Education applies a bogus and artificially low valuation to
the textbook component of a bundle/kit product in order to reap a greater share of the revenue
from that product for itself, all at the expense of Plaintiffs and other textbook authors.
47. With respect to the textbook FUNDAMENTALS OF INVESTING, the royalty basis for
bundled/kit sales was typically between 25o/o and 60% of the regular domestic sale price.
Further, these "discounted" sales as a percentage of total sales have dramatically increased since
the development of the My Lab product line, and with respect to the textbook FUNDAMENTALS
OF INVESTING, these "discounted" domestic sales now represent a majority of sales.
48. Plaintiffs and members of the proposed class are owed additional royalties for (i)
all unauthorized "kit" sales, and/or (ii) kit sales in which Pearson underpaid royalties by
assigning an arbitrarily and unfairly low value to the textbook component of the kit. Plaintiffs'
auditor determined that Pearson owes Plaintiffs at least $187,413.18 in additional royalties for
"kit" sales of FUNDAMENTALS OF INVESTING and PRINCIPLES OF MANAGERIAL FINANCE.
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C. ALLEGATIONS RELATED TO THE CLAIM
FOR BREACH OF THE IMPLIED COVENANT
OF GOOD FAITH AND FAIR DEALING.
49. The Agreements at issue are simple publishing agreements in which the author
grants the publisher the exclusive right to publish a work, and in return, the publisher agrees to
pay a royalty based upon a percentage of the sales of the work. Plaintiffs and the class can only
reap the fruits of the Agreements if Pearson Education acts in good faith in setting the price at
which it sells the books it publishes. Pearson Education, however, routinely breaches the
covenant of good faith and fair dealing by engaging in two standard business practices to deprive
Plaintiffs and the Class of the royalties they are owed under the Agreements.
50. First, Pearson Education routinely engages in below-market sham sales in order to
reduce the basis on which royalties are calculated. Pearson Education makes "sales" at below-
market prices to Pearson PLC, Pearson Inc., and various subsidiaries and related parties, and then
pays the authors a royalty based upon this below-market sales price. Because export sales are
typically made at a lower price than domestic sales (which includes sales to Canada in the
Agreements), Pearson Education typically seeks to disguise these below market sales by calling
them "export" sales, even though the books never go anywhere. Pearson PLC, Pearson, Inc., and
various subsidiaries and related parties, then sell the books at the higher market price to third
parties, and retain the proceeds of this sale, or remit the proceeds to Pearson Education. The
authors, however, never receive a royalty based upon this subsequent sale at the higher market
price. To the extent Pearson Education is permitted to engage in these related-party transactions,
it is required to act in good faith by selling the books at the market price, so that these sales do
not injure or destroy the authors' ability to reap the benefits of their contracts with Pearson
Education.
51. The net effect of this practice is that the "sale" prices (i.e., the royalty basis) for
export sales is often less than 25% of the price realized for bona-fide domestic sales.
16
52. Second, to the extent "kit" sales are authorized under any of the form
Agreements, Pearson Education routinely overstates the relative value of the study guides and
other Pearson Education-created content to the price of the kit. By selling the textbooks as part
of a "kit," and overstating the relative value of the study guide to the overall sale price of the
"kit," Pearson Education reduces the basis on which it calculates the royalty owed on the
textbook.
53. For example, under the Addison Wesley Longman standard form agreements,
Pearson Education may sell textbooks as part of a kit with a study guide, and the proportion of
the selling price of the kit attributed to the study guide is based upon a price Pearson Education
arbitrarily sets for the study guide, which is far higher than market price for sales of the study
guide as a stand-alone product. (The study guides have little or no value to students unless
accompanied by the underlying textbook.) By setting an arbitrarily high price for the study
guides sold as part of a kit, Pearson Education lowers the royalty basis for the textbook
component of the kit, and thereby deprives Plaintiffs and the class of the fruits of the
Agreements.
54. To the extent "kit" sales are authorized, Pearson Education must act in good faith
in determining the relative value of the components contributed by Pearson, so as not to deprive
authors of their fair share of royalties owed on kit sales. Plaintiffs suffered substantial damages
on account of Pearson Education's practice of overstating the price for the study guide relative to
the price of the underlying textbook for kit sales.
55. A royalty auditor determined that Pearson Education's conduct resulted in
Pearson Education retaining at least $613,228.27 that should have been paid to Plaintiffs as
additional royalties.
CLASS ACTION ALLEGATIONS
56. Plaintiffs bring this action as a nationwide class action, pursuant to Rule 23 of the
Federal Rules of Civil Procedure (hereinafter "FRCP") on behalf of themselves and all other
authors (and any of their respective successors in interest), who, as of the date of this Complaint,
17
have entered into publishing contracts with Pearson Education (or any of its predecessors or
successors in interest) and (i) had Pearson Education purport to sell their works for "export,"
and/or (ii) had Pearson Education purport to sell their works as part of a "kit" (hereafter, referred
to as the "Class"). Excluded from the Class are the Defendants herein, and any person, firm,
trust, corporation, or other entity related to or affiliated with the Defendants including, without
limitation, persons who are officers, directors, employees, associates or partners of Pearson
Education.
57. This action is properly maintained as a class action. This Class satisfies all of the
requirements ofFRCP Rule 23 for maintaining a class action.
58. The Class is so numerous that joinder of all members is impracticable and the
disposition of their claims in a class action will provide substantial benefits to the parties and the
Court. Upon information and belief, thousands of persons have entered into Agreements with
Pearson Education, and have not been properly compensated by Pearson Education for sales of
their works that are purportedly sold "for export" or as part of a "kit."
59. There are questions of law and fact which are common to the Class and which
predominate over questions affecting any individual Class member. Defendants pursued a
common course of conduct toward the Class as alleged. This action arises out of a common
nucleus of operative facts.
60. The common questions of law and fact include, without limitation:
a. Whether Pearson Education breached the express terms of the Agreements
with members of the Class;
b. Whether Pearson Education misclassified "domestic" sales as "export"
sales, and owes Plaintiffs and the Class additional royalties for such misclassified sales;
c. Whether Pearson Education failed to undertake efforts to effect "export"
sales for the benefit of Plaintiffs and the Class;
d. Whether Pearson Education owes Plaintiffs and the Class additional
royalties on "export" sales to Pearson PLC, Pearson, Inc., and various subsidiaries and related
18
parties, where the books are subsequently sold to a third party in an arms-length transaction at a
higher price than Pearson set for the "export" sale;
e. Whether Pearson Education breached the Agreements, including the
standard form Harper & Row agreements, by selling books as part of a "kit" and paying a
reduced royalty on such sales;
f. Whether Pearson Education engaged in below market sales of works
authored by Plaintiffs and the Class in order to reduce the basis upon which royalties are
calculated, and whether additional royalties are owed;
g. Whether Pearson Education, on the one hand, and Pearson PLC, Pearson
Inc., on the other hand, engaged in below-market "sales" transactions of works covered by the
Agreements in order to enrich themselves, while depriving Plaintiffs and the Class of the benefits
they reasonably expected to receive under the Agreements;
h. Whether Pearson PLC and Pearson Education interfered with the
Agreements between the authors and Pearson Education by: (i) participating in the sham
bookkeeping entries reflecting "export" sales that never actually occur, and (ii) engaging in
below-market sham transactions with Pearson Education in order to lower the basis upon which
the authors' royalties are based;
1. To the extent "kit" sales are permitted, whether Pearson Education inflated
the price or overstated the value of study guides or other Pearson supplied components of the
"kits" in order to lower the royalty basis for the textbooks sold as part of the kits;
j. Whether Pearson Education inflated the price or overstated the value of
study guides or other Pearson supplied components of the "kits" in order to deprive Plaintiffs and
the Class of the benefits they reasonably expected to receive under the Agreements;
k. Whether Pearson Education breached the implied covenant of good faith
and fair dealing by engaging in below market sales and setting an inflated price (i.e., above
market price) for Pearson supplied components of kits;
1. Whether Plaintiff and the Class have been injured by the Defendants'
conduct;
19
m. Whether Plaintiffs and the Class sustained damages and are entitled to
restitution as a result of Defendant's wrongdoing and, if so, what is the proper measure and
appropriate statutory formula to be applied in determining such damages and restitution; and
n. Whether Plaintiffs and the Class are entitled to declaratory and/or
injunctive relief.
61. Plaintiffs' claims are typical of the claims of the Class and Plaintiffs have no
interests adverse or antagonistic to the interests of other members of the Class.
62. Plaintiffs will fairly and adequately protect the interests of the Class and have
retained experienced counsel, competent in the prosecution of class action litigation.
63. A class action is superior to other methods for the fair and efficient adjudication
of the claims asserted herein. Plaintiffs anticipate that no unusual difficulties are likely to be
encountered in the management of this class action.
64. A class action will permit a large number of similarly situated persons to
prosecute their common claims in a single forum simultaneously, efficiently, and without the
duplication of effort and expense that numerous individual actions would engender. Class
treatment will also permit the adjudication of relatively small claims by many Class members
who could not otherwise afford to seek legal redress for the wrongs complained of herein.
Absent a class action, the Class members will continue to suffer monetary damages and if
Defendants' conduct proceeds without remedy Defendants will continue to reap and retain the
proceeds of its ill-gotten gains.
65. Defendants have acted on grounds generally applicable to the entire Class,
thereby making appropriate final injunctive relief or corresponding declaratory relief with
respect to the Class as a whole.
20
FIRST CAUSE OF ACTION
Breach of Contract
(against Pearson Education)
66. Each of the above allegations set forth in paragraphs 1 through 65 is incorporated
herein as though recited verbatim and at length.
67. Pearson Education breached the express terms of the Agreements with Plaintiffs
and the Class by failing to pay the royalty rates specified in the Agreements, and instead
arbitrarily substituting far lower royalty rates.
68. Pearson Education breached the express terms of the Agreements with Plaintiffs
and the Class by misclassifying "domestic" sales as "export" sales, and paying Plaintiffs and the
Class the lower royalty rate for "export" sales on these misclassified sales.
69. Pearson Education breached the express terms of the Agreements with Plaintiffs
and the Class by failing to undertake any effort to effect bona-fide "export" sales for the benefit
of Plaintiff and the Class.
70. Pearson Education breached the express terms of the Agreements with Plaintiffs
and the Class by failing to pay to Plaintiffs and the Class additional royalties on "export" sales to
Pearson PLC, Pearson, Inc., or any of their subsidiaries or related parties, where the books are
subsequently sold to a third party in an arms-length transaction at a higher price than Pearson
Education, Pearson PLC, Pearson, Inc., or any of their subsidiaries or related parties set for the
"export" sale.
71. Pearson Education breached the express terms of the Agreements with Plaintiffs
and the Class, including the standard form Harper & Row agreements, by selling works authored
by Plaintiffs and the Class as part of "kits" and paying a reduced royalty on such sales.
72. To the extent "kit" sales are permitted, Pearson Education breached the express
terms of the Agreements with Plaintiffs and the Class by artificially inflating the value of the
Pearson content sold as part of the kit (e.g., the My lab product and study guides) relative to the
21
value of the textbook such content relates to, in order to assign an unfairly low royalty basis to
the textbook sold as part of the kit.
73. As a result of these breaches by Pearson Education, including the failure to pay
royalties owed under the Agreements, Plaintiffs and the Class have suffered damages of at least
$613,228.27, according to a royalty auditor, and continue to suffer damages.
SECOND CAUSE OF ACTION
Breach of Implied Covenant of Good Faith and Fair Dealing
(against Pearson Education)
74. Each of the above allegations set forth in paragraphs 1 through 73 is incorporated
herein as though recited verbatim and at length.
75. Pearson Education is bound by the implied covenant of good faith and fair dealing
with respect to its conduct relating to the Agreements. The implied covenant of good faith and
fair dealing precludes Pearson Education from engaging in conduct that has the effect of
depriving Plaintiffs and the Class of the benefits they are entitled to under the Agreements.
76. In order to enrich itself at the expense of Plaintiffs and the Class, Pearson
Education engaged in below market sales of works authored by Plaintiffs and Class in order to
reduce the basis upon which royalties are calculated. For example, Pearson Education might
engage in a related-party "sale" of a book for $50 a copy, even though the book could be sold for
$100 to a third-party in an arms-length transaction. Pearson Education then pays royalties on
only the $50 "sale" and not the market price of $100, thereby cutting the royalties paid to the
author of the book by 50%. These below market sales injure the ability of Plaintiffs and the
Class to receive the fruits of the Agreements. To the extent Pearson Education is permitted to
engage in related-party transactions to sell books authored by Plaintiffs and members of the
Class, Pearson Education is required to act in good faith by selling the books at the market price,
so that these related-party sales do not unfairly reduce the basis upon which royalties are
calculated.
22
77. Pearson Education also breached the implied covenant of good faith and fair
dealing by inflating the price or overstating the value of study guides or other Pearson Education
supplied components of the "kits" in order to reduce the royalty basis for the textbooks sold as
part of the "kits." For example, if the "kit" consisting of a study guide and textbook sells for
$100, Pearson Education might set an arbitrary price of $50 for the study guide and $50 for the
textbook, even though the textbook sells for $80 as a stand-alone item, and the study guide sells
for $20 as a stand-alone item. Pearson Education then pays royalties on the lower $50 value for
the textbook when sold as part of a "kit," rather than the actual stand-alone price of $80. By
inflating or overstating the price of the Pearson supplied components to the "kit," and
proportionally reducing the relative price of the textbooks sold as part of "kits," Pearson
Education is improperly lowering the basis upon which royalties paid to Plaintiff and the Class
are calculated.
78. Pearson Education must act in good faith in determining the relative value of the
components contributed by Pearson Education, so as not to deprive authors of their fair share of
royalties owed on kit sales. By arbitrarily inflating the value or price of the Pearson Education
supplied components to the "kits," and proportionally reducing the relative price of the underling
textbooks sold as part of "kits," Pearson Education is injuring the ability of Plaintiffs and the
Class to receive the benefits they reasonably expected to receive under the Agreements.
79. As a result of these breaches of the implied covenant of good faith and fair
dealing by Pearson Education, Plaintiffs and the Class have suffered damages of at least
$613,228.27, according to a royalty auditor, and continue to suffer damages.
THIRD CAUSE OF ACTION
Intentional Interference with Contract
(against Pearson PLC and Pearson, Inc.)
80. Each of the above allegations set forth in paragraphs 1 through 79 is incorporated
herein as though recited verbatim and at length.
23
81. Plaintiffs and the Class entered into the Agreements with Pearson Education,
which entitled them to royalties based upon domestic and export sales of their works.
82. Pearson PLC and Pearson, Inc., interfered with the Agreements between the
authors and Pearson Education by: (i) participating in the sham bookkeeping entries reflecting
"export" sales that never actually occurred, and (ii) engaging in below-market sham transactions
with Pearson Education in order to lower the basis upon which the authors' royalties are based.
83. Pearson PLC and Pearson, Inc., were at all times of aware of Pearson Education's
obligations under the Agreements, including the covenant of good faith and fair dealing, and
sought to interfere with the proper performance of those obligations in order to enrich Pearson
Education, Pearson PLC and Pearson, Inc., and deprive Plaintiffs and the Class of the benefits of
the Agreements.
84. Pearson PLC and Pearson Inc., were aware that there is no legitimate purpose for
the sham bookkeeping entries called "export" sales, but participated in those bookkeeping entries
in order to deprive Plaintiffs and the Class of royalties they are owed under the Agreements.
85. Similarly, Pearson PLC and Pearson Inc., were aware that there is no legitimate
purpose for the "below-market" sales to intermediaries, but Pearson PLC and Pearson Inc.,
participated in those sales in order to deprive Plaintiffs and the Class of royalties they are owed
pursuant to the Agreements.
86. Pearson PLC and Pearson Inc.'s, conduct was undertaken with the intent of
preventing Plaintiffs and the Class of reaping the benefits they are entitled to under the
Agreements. By the foregoing conduct, Pearson PLC and Pearson Inc., caused Pearson
Education to pay Plaintiffs and the Class less than what they are owed under the Agreements.
87. As a result of Pearson PLC and Pearson Inc.'s, interference with the Agreements,
Plaintiffs and the Class have suffered damages and continue to suffer damages.
PRAYER FOR RELIEF
WHEREFORE, Plaintiffs respectfully request that this Court enter judgment as follows:
a. Declaring that this action is properly maintainable as a class action and certifying
Plaintiffs as Class representatives;
24
b. Issuing a preliminary and permanent injunction restraining Defendants, its
employees, agents and successors from, inter alia, engaging in the wrongful conduct and
practices set out above;
c. Awarding Plaintiffs and the Class damages for Pearson Education's breach of
contract;
d. Awarding Plaintiffs and the Class damages for Pearson Education's breach of the
covenant of good faith and fair dealing;
e. Awarding Plaintiffs and the Class damages for Pearson PLC and Pearson Inc.'s,
intentional interference with the Agreements between Plaintiffs and Pearson Education;
f. Awarding pre- and post-judgment interest;
g. Awarding Plaintiffs and the Class costs of this action, including reasonable
attorney's fees and expenses; and
1. Awarding Plaintiffs and the Class such other and further relief as the Court may
deem just and proper.
25
JURY DEMAND
Plaintiff demands a trial by jury.
DATED: October 29,2014 MILBERGLLP
SANFORD P. DUMAIN
MILBERGLLP
Sanford P. Dumain
Leigh Smith
One Pennsylvania Plaza
New York, New York 10119
Telephone: (212) 594-5300
Facsimile: (212) 868-1229
sdumain@milberg.com
lsmith@mil berg.com
Robert I. Lax
3 80 Lexington A venue, 31st Floor
New York, NY 10168
Telephone: (212) 818-9150
Facsimile: (212) 818-1266
rlax@lax-law.com
THE SOBELSOHN LAW FIRM
Daniel E. Sobelsohn
1801 Century Park East, 24th Fl.
Los Angeles, CA 90067
Telephone: (31 0) 775-0504
Facsimile: (31 0) 861-5205
dsobelsohn@sobelsohnlaw.com
Attorneys for Plaintiffs
26
EXHIBIT A
PUBLISHER'S
AGREEMENT
made rhis . ..... l.6.t)J .. of .. ; ... J;:z_nu.ary ............... . . .
bctwec=n . . L fl.W. r .EHl
':1 . .. .. . '' ' ... ' .....
..;: .. ,.. " "' . t " ' '"' .,. . 9. __-.... .. , .- , . - -A ' "' ,. " ..,. io: ' "r , '" '' (the ti'THOR
& ROW_, PHSLISU RS, INC. (!.he Pt;BLI 'HER t:
' Thr AU'THOR. and PfiBLISRl!R th;lJ
'1. The AUTHOR will (or publication work len!. liv-ely utlcd . c; I C . f I
.. Ap.pr.oa(:b. . .. . ..... , ..... .. .. . ",. .. . .. . . ...... , . . .
referred to 3s rhc work") and the AUTHOR grams and a to rhc 1 R tht" exchuhc
ri he fO prinr, publish, nd St'll tht" work in 311 on [he t rms t forth under it own
"nd under other imprints, throughout the world during 1hc full tc:-rm f cop hr :mci 11
th f and to procure and register Unire'd therein in th(' n me of the bll'ltlfQIC
:, Qt AU'niOR; abo the cxclusi\'e rights listed in Para raph K he! w, with I & e uthority ro dispos<'
of th e righu in all countries 3nd in all I
2. Th(" f't..'BUSFI"ER co pubi.Uh th(' work, .... hen rhr
to rhc P BUSHER, 3t ir own C:q>CO$<: in uch style: nd tn;tnnc:r . th
to i . . nd to pay to the At."TIIOR:
in t.he United Slates nd it.s dependencies in .. 'lnild.:t . roy:lh
percent of thu actual recc cd ' t
r on all sold
(2) on export S. f a royalty of 10% of the a Nal mount i\'ed by the: Pt:BW.SH .R.
3. Tb P uusRER grea th t of ccounL will he rend red by m.;:.U o
and April I of e ch year for the six-month period ending chc prior Jun(' 30
3CC0rnp nied b)' l"rmtlt:lnCC forth alllYUf'( thereof,
4. A rhrough .T . . . inclwi .. e, on pag-es. 2 f, ll , .. rr p rts of
thiJ grt enc though placed before the .
.. .
oP.: .. n /
'""''
.. ,ijb ..
. ;_ -:;-_ '
.. .... .. ;' ...... :. .. .. .. .. ..... ' ' .; , .. .. ,, ,. ,., ..
. Citizenship & SociaJ Sccurily Number
.. < '
6 t. 4 t ,. ,.' e I t o o o I .,. l" ."'; I <11:- :. '-" "" "'
(fhU iAtorautioa i.J loT
and tu: purposo.)
I

.. ; "'
/. ., ,
,. . ;:. . . . ...\
I
' - \
I
-";:..... .
liJSJ.J.LJ.J'l .
. ' . . 2 ,.; ().
A. The AtrrHOR ro ddwe:: ,a coot . mmg odOOUt
- . .. ..
AUTHOR' S COPIES, J. Tb p Bt.lSH-ER grea to ')t\'e the
FREE COPIES t."THOll with any fur thC't' copies fo-r pt:N()nal u
& COPIES text r ' price. The 1\IBI....lSHER funh('T' 3Crt'(' t
SOLD AT A 1he 1 .R tbinu dcsira!Jic. royalty h I be p. iJ (111 opic."'S 1u red a:..
. , ...... ,.<,........ ...... DISCOUNT ks sold a price- equal ro. or below, th.c eo.n o manu cturc.
.

ROYALTY
STATEMENTS
DEFERRED
PAYMENTS
SEPARATE .
the dispoiidon of subsidiary sh 11 be bctw(c:u t f' no n<.l th
.LISHR. Authorization be by the Pt:BL HER ior wch u c lw urhr:- \\it t c mp ru
i( in the nt of the:" PUBLISHER such usc m v be hrncfi iJI roth" s.; 1<- of thr- \\' k. Ir th<"
ir f any of the . ubs.idiarv rit:hr.: li t d . OO\'C in lh1 s th AI 1 u
5',' o( lhe c. sh received from the said U(,(". If rh<" t n R 1 elf hJII p . c.k 1 n
thi work the A HOR will be paid r y lly of !Oc- r tbC' ra h rcccivcd Ti thf' 1.. If .R
decide that it in the imc:rest of salr o t e y,orJ... co copi of 11 dtrC" tly by v lu
{rom ch saJ shall be subject to (uturca r:e o the At7HOlt nrl r
COMPILATION Uing ch
. OF ROYAl TIES
Oep: nmcnt
:10 'll .
<TY' ,ALTERATION AND
ASSIGNMENT
0. Agreement m<ly noc b ch ngcd unl rhr: pnrri to
ignmcnc of rhc AUTHOR's interes-ts or obli ations und r thi Agrc rnrnt rn
wrilin .
Y.ith.out
t\'C p 'f / OF
., AGREEMENT
cnc: written co nt of the PVDLISI{ER, except that the Atn HtJR rnay ig11 hi' ri
menu wirhout consulting the PUBLISHER. '
wiTHHELD
TAXES. b}
INTER PRE
TAllON,
REPRESENT A ..
liVES BOUND
-?PI' on


th . um Of , t?iousand i VC undred dollars ($1,5'H')-
.t:t upon wr1tten rcqu st after the of Al ._t-
, .aAd th 1974 calc!lqar y ar, .w... "'JJ.lr ...t. . ...:... ,J,
1
:>
. The Publisher to to 1 c Author, ns a con -
tribution tow r x ense incurrt'd. in th rr of
. m!nuscri t, n outright of on t. rst,0nn)
I; ti-p\>' hi '"ri tt n request 3 ! :!.unin. of .\grecmcnt
during th 1 7 cal dar year.
r.If th rna:nuscriT't for the "o rk in 3 f or-r. S(ltisfactorv
to the Publisher hall deliv six
after the date eci ic in Par3,S!ran. A. h uhl i s!.er 11
h:Jve the of 1 ction to continue t i reement in effect
or to terminate it and to receive nck f o

all
monies paid .1e r under p rior to such
Lt, .. , ,._._-t

--'-
:.vat ......:U
, .. a;J ,,. I
t. ,-
tL

i, l
., , I
I I .,

"Rid'er to " T!1e Aut :1 or s ha ll the
ublisher at the time nrovided for d livery c f lSCri t
n Paraoraph sketches from \oJ!!ich th e r h
3 lc to prepare finished to i 11 strat e t
Pu lisher shall bear the expen e o{ ?reparing finish 1r
t-:or of up to a 11 thousand hand &ed d-o-lltt=t! (;;)! 39'6-}- .
i ,
A GREE t,\ E NT
made rhi.s . .. . ,2J,.st . . . .. . . . . d y of ... h!a.:::.ch .. .... . . . .... " . . ., . .. 197'.
rw n . . . . 9,1,,..,,. of ... . .. .. ,.
" , , . ., . . , . . . . . , . (th At,nlCOR)
#n!S; ttbRPEi\ ROW, P '8 ISH R ; (the' ' BUSHl:.R1:
The AUTHOR nd PVDLESII R. that
AUTHOR'S GRANT 1. The AUTHOR will write for 1 work tentati\'dy titled-. , ... ' . .. . , . .. , ,
. . . . . . . . . .QP:. _ION . .
(herem referred co as "the work") 3nd the AtrTliOR grants nd assi ns to the PUBL u R rh exdusi .. e
ht ro print, publish, and sell the work in aU on the t.enns fort h, und('r ir
and under other throughout the '"orld fuJI tenn of nd II
. tht"(eo(, n.d to pl"ocurc and rc:gUIU tJnit<"d States therein in the n m J lhe IX::IUCII:xJ:X
XH' AU'rnOR; rhc exclusive rights listed in ph K bclO\\', with exclusive .1ut rity t(J dts
of th rights in all countries and in 3.11 cs.
2. Th PUBI.lSJIER to publish th work, wh n the; manuscript of tl work ' ti
C ClOt)' t PVBLtsHE.R, at its own cx,pea c in such tylc ..t manner a.s the PUDLL 1 , R con 'd r
best suited to its k, and to p )' to thf' AUTICOR :
(I) on cs in til Stares and iu depcndenri nd .in
the actu l amour.t
QP . all copies sol d
(2) export sales a royaJty o( 10% o( the actual mount recci\ed hy the u .su ' R . <
3. The grccs. tha.t statements of a.ccounr will be r. . . red bv n Jil on Oc-r.ob,.r . .. 1..... ...
and April I of c ch year for the aix-mondl period ending the p.rior June SO nd December :11, re-
spectively, accompanied by for the respcctiV<" a.mounl thereof.
4. Paragraphs A throu rr: -.nd ivc. on 2 throu h . rc pan" of ,
this a cnt as rhougb placed before the si natura .



i',
I,
1
o J1 \ ,...;:.. t
1Ji5.:32..Z.:7? .
ITEMS
FURNISHED'
BY AUTHOR

PU8UCAT10N
REVISIONS
A. The AU'MIOR agrees to deliver a :manuscript, cont itung bout. .. worcls, on
apo\lt ........ . . ieb'r.uai'Y .. let .. . , ... , 19 . . ?8. see Rider
The AU1'HOR agrca that the manuscript ol dte work, na a_ny rnrisions thcreo(, wUf be
dclivCTCd in typewriucn !cmn (in the c&K o( anthologio revisions, in cccptably cypewriucn and
: printed form). will be in proper form for usc iU copy by the primer, and will be arW' ctory in content
lo the PUIIUSHZR. The AUT110R will submit two copies (retaining a third cop ).
C. The AUTHoa will read, r_t!ise, correct, and return promptly C)ll proofs lO th Y LISHER
and will pay all cb rges in cxcas of ' :J ., of the origin cost of typesetting (Qr llcr tions which th
AUTHOR shall make in the proof after type has been set io c.onfonnity with the: m nuscrip .
D. The following ircms will be coa.si<kred pJrt of the work and will be furnished by l
AUTROJt: titJc J)a!Ci preface or foreword (i! n ) rablc o{ cont.cnt.s; index; teacher' m nu J, key. or
such other aids for the instructor (if requested by rhe P R); and compl<:rc nd final copy for
all illwtrations; - .
*S Rider
f. Th AtmlOR nt . -that he: is th le author f the work; th r the work is origiJlil'l
and docs not upon ny tutory copyright or upon oy common l.:\w priv.1cy right,
proprietary or any other right whauocvcr, or contain ny scand. lih<"low. or
m uer; th t he i t-h sole owner oC the rights herc.-in conveyed ro th PU.OL.f u . A: :and rhat he: h J full
powCT to cntt'r into th' od to mak the rants h in c ntaincd The AtiTHOR h 1l <",
indemnify the PUliLUHE for, nd hold it harmless (rom. any I or c pcn.$r of .lny kind arising our
, ol any brc: ch or a.Ucged breach o( any of rht! foregoing Th c u:.r. nrrcs nd indemnities '
be dttm< to include y liability incurred by thC" Pt;DI..TSJ s I!'Suh of Ric or license o(
any subsidiary rights, and shall survhe in the rhis Agreement
F. In case of any infringement of the in rhe work. the: PL"Dt.tsUEk m3.y, r iu
.discretion, rue or employ such rcmcdin as it h.lll c:xpedicnt ; ;x[ cr deduction or
incurr< by the PUDLISKER in connection with such suit or remedy, th net proceeds or any r('covc-ry
shall be divided equaJJy bcEwn the PUBLISHER ;:md AtTTIIOft,, . .
G. The M.I'THOR, at his own expense, will deliver to the rUDUSHER from
the copyright 10 r"':proc:luce in the work all material for which ion i1 deemed
necessary either by tbe AUTHOR or by the-
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pared nd ch rhe COS( rhe AtmiOR's roy hies. nd may display in ch revision, and u
in dvcrli 'ng. then me of the person, or pc , prep in id revision. H the new c:dition rt>quir
the rc cuing of more chan of (hr wor , the royahi p y blc to the AITTH 111. nd ro any othn
contribut th reto will to the ori mal seal pecifi in rticle 2( 1) . The PUDUSHW:R may, nt
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on the said rtvis<od edition, it i a that the: " OR's p nidp tio in roy hit" on revi#d
edition h.ou!d pro r t $h3rc h J upon tht" :amount of rhc A Hok's material ppcaring
.in Q. ..ld revised edition. * * Rid r
AUTHOR'S COPIES, J. The p t.JSHI!i . . of the book and ro supply the
FREE COPIES AUTHOR with any furthc copi for pcnonal Ule, but not for r lc: t d. ount of 431JC. from 1hc
& COPIES text list pricf'. ThC" u u R (urchcr re 10 supply for review, nd su h other purposes as
SOLD AT A the thin daira le. be paid on copi istri buted ;u hove
on copies sold at a P-ric C"quaJ to, or below, the cost of m01nuf.1ctu.rt:.
SUBSIDIARY
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K. The PUBUSlrER 'hall have rhe S<>le right (0 handle the rollawi . right< in the
work: scrialiuuion, recordings or mechanical t.S; aLri mcnts; dC'criom and
hook dub: m rion pictu.rr, telc:vision anrl r. dio: rnlt' m nd m_iC'roprinr
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by tape. film, tdevision, r dio. or any othC'r mec:hanical means; n-production utilizar!on b) any
electronic or mcch.1niuJ means, including phococopying. or in n>: nformat&on storage
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ROYALTY
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ftqm the dispoSition o( subsidiary rights shall be di;ided equally between lh AUTHOR nd the P
m.ay be granted by the Pt: for such usc by otbm wit au1 compensation,
il m the Judgment of the PtJBUSHER such us(' ma ... be beneficial co rhe sale oft e work. If the rua JLER
it&d( exercises ny of the sulxidiary righrs lu:ed at><we in this paragr. ph, the AtmiOR. "'ill be paid
5% of the cash from the said 1( the ,. LtsHER itself shaU c paperback edition of
tbis work, th.r AUTHOR will bt- paid a roy hy of Jo<7
0
of cash receivetl . If the PUI lf2R shall
decide" that h is in the intcrnt of lc of the work to ell copi.a of it directly mail. the roy;.lbic.s
frorn such sale shaU be subjec1 ro furur a rcement between the AUTHOR. and Pt1BLISllR.
l. After two yean followin th(' ori nal public: tion date regular ty need
not be: issued by lhe PU8USH!R until tm fll r y h from all $0urcc:-s exceed S I 0.00 unleu
pecificaJiy b} the At.rTHOk. houfd t AtrTHO receive an twerp:lymenc o( royahy on
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: to purchase, at cost. U copic.s o( books, sheets_ plates ( r mctaJ cost ) on hand within 30
;. days or such notifi lion. If the AUTHOk not C"rcisc- thi. right, the PUBLr:slaR may or
;otherwise dispose o( any or aU boo-b, plates. nd sheets \o\ithout Liability to the: AUTIIOJt .
M. Llpon chc pubtiation of 1hr work rht' PUBLISH k 1 I br h on iu books n accoun:
to which sh Jllx credited all moun hereafter pa) ble to A11THO y the P in :accordance:
with P r p 2 ruf K D)"thln to the ontrMy in this mcnt, the
Pt:IIUSH A shall p to the AUTHOR simuJrand>us.ly with che rendition f a.ch !ocmi-annual scatcmcat
of ccoum uch h.1-ll thm l1(" credited to hi! account ex ept th. r in nt, rvem shall any
such p ymcnl . in any r '"" r. Th excel-S, if anv, of rhc tot 1
mounts credited nd n t then in with 1he provi ion hereof, shall be carried
over co the ncu CCOUIIIing pn1od and shall be paid to the- .t\UTJIOR in thC" manner nd Jmou_nt
herein provided.
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COMPILATION &cUing channels. noc be included in detarnining the sale for r y ty n .
OF ROYALTIES< ' .
, .:;AlTERATION AND 0. Thli Agreement may not be ch:tns;Cd unlas tht" parties agree to he chan c: in wricing.
' ASSIGNMENT No am nment of the AUTHOR's incerCSt$ or obligouions under this Agrc::emen( m v de wirhout
oF the written consent of chc PtraLtSKER. exc pt that the may assign his hts to rceciv
AGREEMENT menll wilhout consulting the PUat.DH a.
WITHHELD
' TAXES
\NTERPRE-
' TAllON,
REPRESENT A-
liVES BOUND
P. St tC.. Federal, and Foreign t es on the AVTHOR.'s royahic:s, when paid
by the PUBLIIHZR, shall be ag 'nst I he: AUTltOR.'J earnings under chis Agre-emen(,,
', Q. Rq .:dlca the pi of iu c:xc urion, this A cement hall he anterprctl"d under chc
laws of the S te of New York 3.nd sh II be bindin upon t ecuton. adminiltraron1 and assignS
of the AtrniOR the SUcs30r'S d . igns of the PU)LJ$1:(&R.
*Rider to Paragraph A. Ackno\\1 dgm t of acceptar:ce o! satis ...
f ctory nusoript ,;ill b rep r d. d sign by t he Editor-in-Chief
of th Publisher and ent to the Author within a r ble time aft r
hi, d liv ry of the ot the 'V:ork t:i factory to the .Publisher.
*ltid to j: c;r 'ph D. uthor sh 11 deliver to at:
tho tim provid d for deliv ry of uscript in Paragraph A, skeech ,
from which th Publisher will b bl to pr r finished artwork to
_illus tr . a..t .. e the Publisher will be r t he pf '"lreparintl. a11 ., .... . .. ,
a rt\'l<?rk as 'de 11 as any penni ss i ens costs Nfi..'t. o..;-.v.t.. i i u.s- .,
' *Rider to Pa.r I. !t i under tood And aqreed tha't,
should th Author r ceive an over . nt of roy lty arising from copies
ot any edition of the Work r eport d sold but su.bsec;uently tr.
Publisher , deduct OvcX"P4Ytn t .y sums cuE' t h il.uthor.
. . . fl. The Publisher agrees to pay the Au thor as a contribution
to lard the expenses incurred in the prcoaration of thP. manuscript t1n out-
right grant of five hundred doll rs, $500, it unders tood that oay-
ments wi 11 be made to the Author on n; written rCflUC::it uftcr tla! s lqn lnQ .. .
or thts the Puplishers r-P.ceipt of invoices. . .. .. ..... .
wi A tA: !:":: : :! ;; h;: :::: t 8:
Amend.ment - Prinoipl es
made this 6th day of August, 1992 to an
dated March 21, 1977, as amended (the "Agreement"), between
Lawrence J. Gitman, of San Diego State University, 5435
' "Calumet Avenue, La 3olla, California 92037 (th "Author")
.and HarperCollins College Publishers, a divisioJ"l ().f
Harp rcollins Educational Publishers succ sso1:s i n ,,''
interest to Harper & Row, Publishers, I nc., of 10 Est 53rd
street, New York, New York 10022 (the "Publisher"), with
r sp ct to a work entitled PRINCIPLES OF FINANCE,
Second Edition (the
J>;l..l:l':suant to 1f:, he Agreement between Author and
Publisher, Author has granted Publisher the right to oublish
nd sell the Work and J?ublisher has agreed to pay cert in

WHEREAS, pursuant Paragraph I. of the Agreeme-nt, Author
:has gree,d to prepare revisions. pf Work;
WHEREAS PUblisher intends to publish the seventh edition
the Work, tent tively entitled OF MANAGERIAL
'FINANCE, seventh Edition ("Seventh Edition"), and Publisher
and Author wish to have Author the necessary
revisions for the Seventh Edition;
NOW, THEREFORE, it is mutully no agreed as
follows:
1. Effecti v July 1, t92, with respect to the Sixth Edition
and all subsequent editions of the Work, Par 9raph 2 .(1} of
the Aqreement is her by d let d in its entirety and the
therefor:
O(l) on sales in the United States and its
; dependen;c ies and in c nada a royalty as follows:
1st based 'the amounts received by
PuplisheJ': from such
2. (a) Effective July 1, 1992, with respect to the Study
. Guide to accompany th sixth Edition of the Work, published
pursuant to a separate agreement dated November 22, 1989 by
and between Thomas M. Krueger, D. J\nthony Plath
'and the Publisher, Publisher shall pay Author a royalty
override of 2\ based on the amounts received by PublishPr on
les ot Publisher's editions of such Study
Guide ..
(b) Th royalty overrid specified in P 2.(a} of
this Amendment sh ll lso apply to sales, lass r turns, of
Publisher's ditions of the Study Guide to accompany the
all editions of Work.
Effective July 1, 1992, with respect to the Sixth Edition.
and all su.bsequent editions of the Work, Paraqr ph J. of the
Agreement is hereby del ted in its entirety and th following
substituted '
"3. The Publ.lst.ie:r agrees tha.t statements of ccount
rendered by m i l .. ;Qn July 1, October 1, January 1, nd
l of each year f O\t' the t hree-month period ending the.
prior March 31, June 30, September JO, and December 31,
r spectively, accompanied by remittance for the respective
mount thereof. "
, l 4. Publisher agrees to hold a .developmental launch !!lee ing - .
, . for the Seventh Edition at least months prior to the
delivery date specified in Paragraph 5. of this Amendment. In
ddition, Publisher shall provide Author with computer ji
disk(s) compatible with Publisher's com sJ[st m
of con a1n1.ng ext files of the J ,
Sixth Edition of the Wor . With resp ct to 11 subsequ nt
editions of the Work, Publisher aqre s to old a


dei1very d . "'
-Jt4. 0. Author shall deliver to Publisher on or ;{:nu .._.;"
1
1
1993 one copy of the complete m nuscript for the sev nth
1
computer compatible with Publisher's _ i .;.1 , 1\-:-n
1
computerl.zed system (3. 5
11
dlsk(s), v rs1.on of \ ' .,
K-kr SUl a efOr a 0. book
I pages in ength nd satisfactory to Publish r in content and
l: form. The manuscript shall consist o ta rsheet from the
s ixth edition of the Work as well s new 'l nuscript which
must be typ written and double-spaced. Author shall r etain a
copy of all m terials submitted !-R
6. (a} In consideration of the- foregoing, a grant, and not
to be charged against Author's royalty ccount ("Author's
Account
11
), Publisher shall pay to any party Author
the sum of up to $6,000 . 00 for exp nscs incurred in t he
p urchase of a co puter work station to aid in the pr eparation
of S;eventh payable upon Publisher's r&'ceipt of
invoices or o'th.er clpcu ntation supporting such
expenses.
(b) As an additional gran't, the co t o hich is not to
be charged against Author's Account, Publisher has delivered
to Author machine, receipt of whi ch hereby
... acknowledged .
(c) The prOvisions Gf . t 'his Paragraph 6 . shall not pply
to subs quent revisions Qf the Work.
7 . (a) Publish - r shall pay Xuthor as an advance the
Author's Account established for the Seventh Edition, the sum
of $5,000.00 upon Author' '-'JJ;"itten requ st te:r execution of
this Amendment.
In the event that 'Author delivers the compl te and
l/ manuscript for the Seventh Edition, satisf ctory to
1 , Publisher in content and form, and all other materi 1 to be
by Author for the Seventh Edition on or before
1993, the total advance of $5,000.00 payable
..At)1 Junder Paragraph 7. (a) of this Amendment shall be conv rted to
a grant, not to be against Account .
(c) The provisions of this Paragraph sball apply anew
to e ach subsequent of the Work.
a. Pursuant to Paragraph R. of the Agreement, Author has
: granted Publisher the right to handle subsidiary rights in
of the Work. With respect to translation rigbt
.. in the Seventh Edition and all subsequent editions o the
Work, such rights shall be revocable by th Author upon
written notice to Publisher with respect to each language or
c . o .. untry. f :o.....r: : ........ w ... hich .no lic. e.nse or op . tion h. a. s been. given w. ithin fj
fift en (15) months of Publisher's initial publicat ion of
any editions.
' -- .
9 .. Author grees to deliver to Publish r the sources for
obtaining permission from th copyright prop ietor of text
and any in the Seventh Edition that are
protected by copyright for the use of such text and
.illustrations in the exercise of to th Seventh
Edition granted to Publish r hcreund r. Publisher shall
obtain, at Publisher's expense, ny necessary permissions ,f or
.the u.se o;f text illustrations in th Seventh Edi,tion .
10. Notwithstanding the provi s.ions of Paragraph 2. of the
Agreement, Publisher tgpubllsb the Seventh Edition
four-color format.
11. The; copyriqht in the seventh Edition nd all subsequent
editions ,shall be registered to Lawrence J .
The warrarities and indemnities expressed in Paragraph E ...
the Agreement shall be extended to include any new
material added by th Author to the Seventh Edition and al l
tions ..
Paragraph t o th Agreement is hereby d l ted in its
the following substituted there or=
''C. Publisher shall submit to Author proo s for the
Work and Author shall read, correct and return uch proofs to
Publisher in a timely manner consistent with th production
schedule establish d for the Work by Publisher. If Author
does not return the corrected proofs to Publ isher in a timely
, Publisher may publish the Work in the"condition in
which it was submitted to Author. Provided Author's
. . ,alterations are submitted to Publisher in a timely manner,
.'\ Pub! isher shall incorporate such alterations n th published
of the Work. Publisher shall charge to Author
1
s
: royalty account all charges in excess of 15% of th cost of
for the Work incurred by Publisher because of any
alterations (other th n the correction of printer's errors)
made by Author on th proofs for text or artwork for the
Work . Publisher shall keep full and complete records of all
Author alter tions, including copies of Author's requested
changes , the revised text, and the pecifi c charge for the
cost of both the composition for the Work nd Author's
a,>lterations, which records shall be m de vailable to Author
,pr:.l;o,r to any deduction fr.om Author's royalty account .. '
1
14 . I of the shall be amended by addinf
the ;following provision to the end o the cl use ;

thstanding the foregoinq, if the Publisher


arranges for th preparation of revised edition of the Work
by parties of the Publisher's selection ("the-Revisors") who
have not been approved by the Author in advance, the
Publish r shall send the Author the revisions prepared for
the Work by the Revisors prior to the publication thereo .
The have 15 days from his receipt of such
4
proposed revisions to provide th Publisher with written
comments nd criticism with respect to the proposed
revisions . If the Publisher, at its discr tion, decides not
to implement the Author's written comment nd cr'ticisms i n
the proposed revisions, th Author m y dem nd tnat his name
be removed from th credits for the Work, in which event the
(Author sh 11 relinquish his right to r ceiv royalties and
any other proceeds from the s le or licensing of the revised
edition of the work from which his nam has been removed,:.n
15 . The Publisher shall riot, during the same educational
, year (running July l through June 30) in which t e Publisher
publishes a new edition of the Work, introduc a new textbook
, that competes directly with the Work. A new t xtbook will be
regarded as competing directly with the Work only if (i) the
textbook is substanti lly similar to the Work in length,
organization, level of presentation and pedagogy, gng (ii)
the textbook is to be sold to the same segment of the college
as the
EXCEPT To THE EXTENT OF THE ,fOREGOING, all of the t rrns and
conditions o,f the Aqre,el\lent ca(re. hereby ratified and
continued .
:IN WIT Ess WHEREOF, tbe parties hereto have s i gned this
to be as the d te first written bove.
AGREED:
Author:'

'-

\ Lawren.ce
, ,
HarperCcllins College
Publishers, a division of
HarperCollins Educational
Publis ers Inc. :
or
October
, .. , . da'i of ..
A G REE MENT
between .... .J . . Ci _ t 1
. and .. . Mi.chael D . . Jo.ehnk .of Teas
HARPER & ROW, PUBLJSIIERS. 1!'-.C'. (tile PUI:S ISIIFRI :
The AUTHOR nd I'IIDUSHJ;R lhJt
1. Thl" At.'TI-IOR will write for public.1tion work rrnracivdy tir.l<.'d .... ,
. .. . . Of. . . .. . . . , , , . . .
refer red ro :u "the wor-k") and rhc AIJTHOR grants and an ign), ( 'h P L llt.f< rh.
to print, pubHsh, and sdl lhc work in ;).U on the terms .. cr fonb, uodt>r its own name:"
under other imprincs, (hroucthom the durinq the:- full term f cop ,he nd U . b ,
and to prO<"ur(' and l :nited tares rhr-rciu H rt, n m" (l rhcX.lhi.U&.x
Al.'TIIOR; lso thr c::xdu iv rights liMed in K bclav., -...ath cl ' ve uth >ri tr to Cl
rights in all coum and in 111-ln u..1
2. The PC8L 1 R ro puhlish the work, v .. hrn the m au ript <J rhc work
factory to us own in $uch tvle :tnd mtlnncr a.1 he- I' I' IH.: . Ht:R con
best suirrd ro i sale' :1nd to pa to rbe ..-.vrHOR;
ty J . fv!low
Fi fteen percent of the rc c iv c by the
!ublishcr on he first 10,000 copies old in each
year, and eish teen pe rceo t (18 %) o f the
r eceived by the Publisher on c opi s sold
t here.;t.f t e x , in each calendar
(2) t'JO c;xporr
roy lty of 10% of rhe il<:tu I amount rl"c ived by che l'uu r lft:R,
3. The Pli8UJHER agncs rtut .t lCtnc:n W. oun( will fxo rrnder('d mJtl (Jn Orrohrr l
and ApriJ I e, ch .. r for the six-monrh period endi n prior June 30 and Ot
s.p..cc .. tJ . v ......e..I ... ... Y accomp:.anicd by rcminance Cor rhe ctiV' mounr rhrr('o(. .J!JJ
4 . P.:ara phs A through X. 't inc! on P es 2 lhrough . "t
lhis a cmenc as t before 1he si n tar
Au1.hor's Citizenship & Social Surity umbo-- &
n1 :- . . ... ... . >r "'".) ft'K,
?:fl7. -:-."3 . . :: ... ... . . . l 7 JGJ ..... r!.
(Thiw is rtquU"ed Cor eopyri ht I
a.ad lax
.Year o I ., c; t a fi () n . o f Work __ ........., ........ .._ __ _
.; ,. .. : ...
DE.UVIRY OF
, MANUSCRIPT
A. The .\umoR. agrees to deliver man pt. cont ining about. 2 2 5 . 0.0
or about. . ... Qc: tob.e r . . l .. . .. . ... .. 19? * s Rid c r
SUBMISSION OF B. The AtrnrOR agrea rhar the manu.teript of the work, aru:1 any rcvwons thereof, will b.:
MANUSCRIPT dcJivC1'ed io l) written form (in the of nthol a nd rcvilions, in ccc:?tably t)-pewri tcc:n and
,PROOFS AND
, ALTERATIONS
IN PROOFS
ITMS
FURNISHED
BY AUTttOit
AUTHOR'S
GUARANTEE
" - . . -
USE OF
COPYRIGHTED,
MATERJAL
CONFUCTtNG
. PUBliCA TlON

printed form), will be in propa form (or as cop y th and will be s.atisbccory in content
to the PUBUS R. The AtrrnOR will submit two copia (r r ' oing a third opy}.
C. The: AUTHOR wU1 rend, rC'\isc
1
and rurn promptly all proof to the Pli'"BLISK2lt
nd will p y a1J charges in e.xcas of 15% of he J t of typesetting for which d\e
A\lnCOR make in the proof after type h been set in conformity with them
D. The followin items wiU be cons.idC'f' port the work and will be (umuhcd by the
AVTllo :tide p c; preface or foreword (if ny): t bl of co tents; index; te:J.chcr's m nua.l, key,. Ot"
.such other ids fo-r the instructor (if requ-est-ed the PUll tSR and complete final copy for
Jl UJwtr; tio fbX * * s R 1 d e r
_;,_ ----- '
./. The AUTicOP.giaa nt r.h 1 be ii the tc author of the that the work is
and docs not infrin e upon any st tutory copyri ht r upon ny common law riqht, pri ... acy right,
proprietary ri ht, or ny other r ht wh U<)('\"Cr, or ny lit)("lous, or unl;&wfuJ
th the u the wl f che her io nvcyed ( tke ru uSHER . md thu he has full
power to cnte.r into this A te'crocnt and to make thC' grant her in contained. The AllTHOR shall
indemnify the I'UllLtsHJ:R for, nd hold it h3rrrJe: from un l or expc:n t: of <my kind out
of any breach r br c.h of ny oJ tht" fore oi Jarant .. Th nd indmmitia
sh3ll be de med to includ y li iJi1y incurred b r. c PU 1..lZII 1t s rcuh of ,alt" Of" liccnst" of
any subsidiuy ri nd s.h J rvive in the: ev nt this Agrccmenc is
F. [n case of ny infri ern nt or the in th work, the: rt:nttSIIY.A. m3)-. at it$,
discretion
1
sue or employ such rc ('di s it shall conside-r expedient: !ter dt"ductioo of cJCpensf's
incurred by the MJD t R in connection with such suit or remedy, the:: o proceeds of any reCO\'eT)'
be divided ::
1
u P} Sr,.
c to r th r a c ) te t for .. c. h. . r\e rJ,-'
? b no or he us . _ , l .
H. The Atn"'HOR crrc tiut while this Agreement is in force, he will not puhli.: h or supply , /
an)' P USJ;JE any m lcri J that will compete with the lc of the work.
,1. The A KOR a e to revise the work or 10 prep re for a revt$ed edition if in.? , ; '
the judgment ( th PU8USJ-I st such rev edition i in the t intcrett of the: work. If same shall . f.J
not be prep red to the s."ltisf ction of chc PUBUIHER within nable time, whether because of
death or dis hiht of the AUTHOR, or for ny orher 1"1 aso , the P LISHR may rcvi.s.ion prr -
p.'lred nd charge the CO$l a!(. inst the r yalti and m y display m the :md U$C
in advert in , the n me of IX on, r pc:: oru. prep rin.t:r id revi ion. If che 11cw t"dition rcquird
the reseuin of mor duan f the work, the: ro a.hks p bit: ro the AVTIIOR .:1nd m :my other
tontributor thereto will tc\"c.rt to rif(inaJ St"alr pt'ci..fied in Arricle 2( 1 }. The Pt DI . JSK&Jt may, t
its dixretion, continue to U$C rhe n me :)od/ or portr it of the AUTHOR in connection with the pub--
lication, J , r promotion of :.nv ucd edition or cdiuons. It i undentood that in noc.hcr
penon or pc N is invoJved io rhc re o of the work nd th:&t or pcr&ans paid a royah
on che id edition, it agreed th t the AUTHOJt.'s pani ip n in rophi_!;s on said
. . .. r sh r t. upon ::h: A , '";/; nng
AUTHOR'S CORIES, J. The p .. , HER . S t i c book and to supply the
FREE COPIES AUTHOR with fi rchc:r copies for pc n.3.1 UK, but ru:a for res le, "'' 3 of .. from the
& COPIES tc:xc Jist prie . The P USHl:R further e to supply for re-.1 w, nd 5u h O(hcr purpuses as
SOlD AT A the PU (. JmJt thinlu desirable. Nu royalty sh 11 be (l 1d n copi d' trihurcd :1 ,,buvc provided, or
DISCOUNT ,on copin s_old at price equal to
1
()r the cost of m nufactt" .
LtsJ a &h ll have the lc: ri ht to h ndle the ub 'diary rights in the
work: scriali rion, rccordin J or mcc anic J rcn itio ; di a; abridgcmenu. elections and
boo club: motion picture", ion . n r dio; microfilm nd microprint ('ditlom;
tion ; pr r mming; ovcr hc: d projection p rrnci oral or visual tran.smi ions
;by tape, f'ilm, television, or any oth('f' mech nic l me ; reproduclion or by any
dcctronic or mcch nical means. includin phococop rdinc;, or in anv 1nf rmauon
'And retrieval system: srndiution: and ad pt tio for 1 use. The of the net rccelpt.s
S08SIDIARY
Jt;IGHTS
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PAYMENlS --
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p
t r Colle c-
c le r royalty menu,
unl rhc p:u-tic:s agree fo 1hc: chJ.nge in "Tiling.
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REPRESENT A- of the AtmiO and the succcsson nd i of rhc P USH .R.
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*Rid r to Paragraph A: cknowl ds nt of acceptoncc of
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OVER
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cr cceptance by the Publisher the complete o s tisf ctor
J.. /l,r b 1979" Q__ ,
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towar4 exp nses incurred in th pr of the
no outright grant of fiv thou and ($5000).
understood that payments will b ade to the Author
n requ at the signing thi Asr
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Publisher
the date
right of
t rminate
hereunder
m the or in orm s tisfactory to the
hall not b deliver d rwelvo (12) conths
pee fied in P rngraph A, the Publish r shall have t he
lcction to c ntinue thi arceQ nt in eff c or to
it and to receiv bac froo the uth o r al l 1.onies paic
prior to such t roination.
.
IIKIIIBIT D
/ th-e s:ources for
obtaining
""SEE RIDER.
t 85. _ __ ___ _ _
(b) Wath thr m<.nu t.rapt . Auth r h 11 lav r . ' f r.) t1tlc . !.)bb : nt t -..il
f'lr..>blcm (if anyl,"" r.I,)S .uy, a b1bi1o ,r.trh .. . .&nd rrc .1 ld lr<worJ .wJ 5 dl ...t th,,n .. wr dw
Work Auth'-'' h.11l Jrlavcr dlu H.lh n : .: 'I' lvr
rrtp.umg dlu .. tr.Jt) "" whu..'h ll f I' f'.Jr. J. l , , rn.l.
. . (d Author hvN t.> l'ubti ... htJX:MKXX
)GX1U4<wfl tt npcrm1 aontr pnth1r 1 lt. tJndrlln.rr-.1t . n n l
,.Ht' prOtl'CI d fnr u,,. 11t m.tt rt.JI f' th 1."-..t'rrts(' u! r11:h t"' I( !I t<' \ .
(d) Withan .1 Ondble tlmt .1ft .. r :\uthur h.J' J,Jnr,J t f'dol .h r t u
h.r th(' Work dcscnb.:-d .above .at a. r,\C rv c .. I'ubbnl'r '" '- '1tt: n1 .11t d r:n. I'u
Author ..1 wntctn n tJCP l,f-' crpt.ln(C' 1.)! the W
(4?) If Publi h r ,\utht r ha.U Jl:. t" I' bit
rc-.1 on.1l>l: n: Ut." lypt,!. "' mtr,tr :- t ..1%1 ,n :rt <t\r" m.lntJI

n ,,!, . . , t ' r l t ll I
,h) .sll Vf\lt'S )Uid 10 rh {.; s .. H t rnttJ:t'' ,\ I ion .,nJ ,lf\, : f I' ao! t tur
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in any calendar year: lSS on the first 10,000 copies
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ld to <ndi-.,JuJI pur"h.l-'-'r J r ul
p.t1d to u thl purd .r,.
(c) Publishtr m.1 Aut hor's rt-pn' en t t ton . ,Jn
p.!Mil"'S f()Whtch Publh.h.-rgr.lntt ;,ny nsht to th(' Work .lnd Author shJII
wo1rrnties .and tndt"mnihC! "> wen m.1 de J ir tl ,,, r.a h rlt t'
.and mdern.n!tit"s !r C.sh:J hc.r 10 t f'm n ta n
o.(.a) If subm1ts to Author pr.:>o:.. vr :h"' Au1h \r :.h ll r ad, rr
uch proof to Pubhshcr If Author J ,\( nvt do .u W1l h an " h tm" Pubb r m y r ' -t
Publ ishe-r may pubLsh tht> W rk tn the condJtJon 111 wha h 1t w.J :. subrntll d h .r\uth r. Pubk,h r h.tll lu .r :
h.t AuthC\r'" royalty ount .ttl <h .. rgl'!. m ,.,, ... . f 15. < f th\ J lm,
rurn-d b) P1.1blrsh r becau)e C'f .1ny &lt E' r.\llon ( tlwr than ht c
1n tht rroof, ( r \lr .1rtwork fur th W rl
(b) Publi furis not r.1rt t' t t he W r n: n. ,,..,. .,1 \"'k1rh n 11 Of'Hil l n
any l'Opyrtght, th<' ord r of .my ('('urt . n,sht \lf pnv..ary ny othlr J I i n; or wh'
lib lous or ob c O" or 1 em contrJ .... .. n l..aw Aft r n. uh : 1n w1 th t h A nth r. ubl1
m.1y ny uch mtt"nJI from rhc W r\c .
(c) Pub!. hC" rm.lyed,ttht"Workfortlw r pril\ t lflf,. pr vid
Work i n t atNiJlly .1nd m.l)' nuk1 ch.lng an h . \ \ .MI.. whi h th
f!r mmJr, pun ttt hon nd p<-lltng con< tf'nt <tr wh1f'h corr t ny f llual ' ... . , ..
Dayton, Ob1o
14. rubl. t.h r mJy use Auth n.sml", hk('Of':- S, b, r phicJl J
Work J.nd '" Publi h r' ,snd thr W r " nd
whu:h rubll)ftc:'l &1otnl!lo .my h) thC'
19. Th1 Agre ont.t.n th<- tntrrc unde-r .l ,,nJsn)o\ '-' t th .His h : t , 1 ... u r 11 p , .,
'-'r.JI r Wrttt('n '" <':" .lS:nmt: nl'> .JnJ n'\._l 'y' ndt b mo.XJ:(I( . 1"1! .r r r . unl
modJii .ttl n i in wrsrrnc .Jnd 1ar,neJ by Puhla ht'r Au th,r.
WI NES,S WH(;,KEOr. the h.tn 't&rwJ th,,. th -.. t< i r
Author's SOCJ.al Secur;ty umbl"r
and diatt' of birth. (Th,s mform.llzon
is for c pyr-tght .and
tax purpos w. p
nd Publisher
RIDER 0 THE AGREEMENT DATED JANUARY 25 985 BETWEE Ll\ :RENC Gi A
1
0
HARPER PUBL I INC . FOR,. ASIC AGERI.O.L FI
23. Publisher , at Publisher's expens .. sh 1.1 h ve repa r d a Test ct n :.t ac .. o:npuny .ft./
Work.
:24. Publ ishet . agr -es to pay to Author, s a contributi o toward ex tnses incurred Co"t\0+.\,
'by Author in adapting he problem solving routines disc rw<:pc:r d by Author ..
PRINC PLES OF AGERIAL FI CE to the an outri ht g ant of up tc ssoo. qo
.upon Author
1
s '.-witt n r ques t after Publ1sher ' s cce t nc of uch disc fol
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2S. Publisher not "to publish any ot e \<1 rk which would dire tly
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.J ply to vi d ditiuns of f'lorY..

fy"w2 Pu lisher rees to publish the \-.ork i a. -color for:m.:1t .

]-a
' .
')(j A9.
inclu
to assign a developr. ntol editor to the
r agrees to publish a stud.y guide to ac.c.ootpan> the \ .. ork.
s r agrees to have prepared a t 's expense
5 part of
car r ppc ix to
Amenc1ment - Basic
AMENDMENT made this 6th day of August, 1992 to n agreement
dated January 25, 1985, as am nded (the
11
Agr m nt"), between
Lawrence J. Gitm n, of san Diego State University, 5435
Calumet Avenue, Jolla, California 92037 ( the "Author"},
and Harpercollins College Publishers, a division of
Harp rcollins Educ tional PUblishers Inc., successors in
interest to H rper & Row, Publishers, Inc., of 10 East 5Jrd
Street, New York, New York 10022 (the
11
Publisher''), with
respect to work entitled BASIC MANAGER1AL FINANCE (the
"Work")
WHEREAS, pursuant to the Agreement between Author and
Publisher, Author has qrant d Publisher the right to publisa
and sell the Work and Publisher ha.... greed to pay certain
royalties thereon;
. . ' .
WHEREAS, pursuant to Paragraph I. of the Agreement, Author
has agre d to prepare revisions of t}1e
WHEREAS Publisher intends to publish the fourth edition of
the Work, tentatively entitled BASIC MANAGERIAL FINABC,
Fourth Edition ("Fourth Edition"}, and Publi s her nd Author
wish to have Auth<;)f t .he :Qecessary rev isions for the
Fourth Edition;
is and agr ed as
Sffective July 1, 1992, with respe ct t o t he Third Ed i tion
ail subsequent editions o the Work , Paragraph 4. (a ) of
the Agreement is hereby deleted in its entirety and the
followinq substituted
(a) on all copies sold in the uni t ed States, its
territories and possessions, and Canada to Publisher' s
regul r wholesale and retail accounts, 18% based on t h
a ou11ts rec-eived by Publisher from such sal es;
(af Effective July 1, 1992, with respect to the Study
Guide to accompany the Third Edition of the Work, publ i shed
pursu nt to a separate aqreement dated May 17, 1991 by and
between Thomas M. Krueger, D. Anthony Plath and the
Publisher, Publisher shall pay Aut hor a royalty ov r ride o f
2 based on the amounts receivea 'by Publisher ' on s 1 s, less
returns, of Publisher's editions of the Study Guide .
the Stt;J.dy (;u.i.de to acebmpany the tou_r th, Edition and 11
subseqUeft:t QJ
Effective Jul1 i, 1992, with reipect to the Th ird Editi on
all subsequent editions of the Work, Paragraph 6. ( ) of
the Agreement is hereby deleted in its entirety and the
ollo!fi,ng substituted therefor:
"6.(a) The Publisher agre s that s t a tements of
account will be rendered by mail on July 1, October 1,
r_ >!,.- , 3 a nuary 1, and April 1 of each ye r for the three-month
period ending the prior March 31, unc 30 , September 30, and
December 31, respectively, accomp nied by reml:.tta nce for th.e
ct i v ., t1l.a .. :reof .. u
\ <

st

..M(:c' J
, . .. ry date for the manuscript for the Fourth Edition, s uch.
d te to b d t rmined by mutual agreement ( the
. . ... "Delivery Daten). In ddition, Publisher shall
''< ::
to all subsequent editions of the Work, Publ i her
grees to hold a developmental launch meeting for each s uch \
,, 4it.ion. C).t least prfor to each edf t 1on' )
manuscr1.pt del1very date .
s . 1\uthor shall del iver to Publisher on or before th
,..Jlei1.very Date one copy of the complete manuscript for rhe
. Fourth Edition and computer disk(s) compatible with _
Publisher's computerized syst m (3. 5" disk(s), vers i on -.;!'}
of suitable for a book of approximately
book pages eng sa 1s ac ory o Publisher Tn content \
and form. The manuscript shall consist of a tearsheet rom
the third edition of the Work as well as new manuscript hich
ust be typewritten and double-spaced. Author s hall r e t i n a
copy o all submitted to PUblisher ...
6. (a) Publisher shall pay Author as an against the
Author's Account established for the Fourth Edit ion, t he su.m
of $5,000.00 upon A:utnpr's writ ten request after of
this Amendm.ent.
(b) In the event that Author delivers the complete nd
final for, the :Fourth Edition, s ati s fa q tory t o
Ptlblisher in content: and tortn, and all other materials to be
provided by Author for the Fourth Edition on or before the
' Delivery Date, the total advance of $5,000.00 payable under
Paraqraph 6.(a) of this Amendment shall be converted to a
grant, not to be against Author's Account ..
. / ..
.
(c) The provisions of this Paragraph 6 . sball apply anew
to eacl} revision of the Work ..
7. Pursuant to Paragraph 5. (a) of the Agreement, Author ha$:
gr nted Publisher the right to exercise or dispose of th
foreign language publication rights to the Work. With
respect to translation rights in the Fourth Edition and all
subsequent editions of the Work, such right shall be
revoc ble by the Author upon writt n notic to Publisher with
respect to each language or country or which no license or
option has be n given within fifteen (15) months of the
Publisher's o ny cd_itions.
8. Author 9r es to deliver to Publish r the sources for
obtaining permission from the copyright proprietor of text
and any in the Fourth Edition that are
protected by copyriqnt for the use of such text and
illustrations in the exercise of rights to th Fourth Edition .
. ,granted to Publisher hereunder. Publisher sh 11 obtain, at
PUblisher's xpense, any necessary permissions for the use of
text ill\]strations in t}le Fourth Edition.
9 . The copyright in . the Fou.rth Edition and all subsequent
editions shall bE! -r;e,gistered t,o Lawrence J. Gitman.
10. The warranties arid indemnities e>Cpressed i n Paragraph a .
or the Agreement shall be extended to include any new
material added by the Author to the Fourth Edition and all
subsequent editions of .. w,_grk.
11. Paragraph 9.(a) Qf tfieAqreem nf is hereby de eted i n
its and tpe tuted therefor:
11
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the \-Jork and Author shall read, correct and return such
proofs to Publisher in a timely manner consistent with the
production s chedule established for the Work by Publisher.
If Author does not return the corrected proofs to Publisher
in a timely manner, Pupl ish.er may publish the Work the
3
condition in which it was sub.itted to Author. Provided
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,Author's royalty account all charges in excess o 15% of t he .
.cost of composition for the Work incurred by Publ isher
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adding th provisj..c>n to the end of the clause;
"Notwithstanding the foregoing, i the Publisher
for the preparation of revised edition of the Work
by parties of the Publisher's selection ( nthe Revisors
11
) who
have not been approved by the Author in adv nee, the
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Author hall h ve 15 d ys rom his receipt of such
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The Publisher shall not, during the same educ tional
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,IN Wt'f'NESS WHEREOF, th p rties hereto have ign d this
.amen.ment to be effective as of the date first written above.
I
.5
MarperColl ins College
Publishers, a division of
HarperCollins Educat ional
Publishers Inc .. :
Publish r
EXHIBIT E
ADDI
PU
ON WESLEY LONGMAN
L SH NG AG EEMENT
r December 1998. bet\\< L enre J. Gitm:an and J rr 1 dor
the thor. 3nd Addison We ley Lon
. In .. Publist1cr.
JJ' Tho Author i refcrm.l 10 ..you" and the PuuiJ her
Agreement Each of the Author nnd 1..kdJrCS the desire t
Agreemenl in :u1 atmosphere of muru I respect coopcrJtion in df
pro . ional stnndards. and commcrcinl succe., which each p:m:.-
or "in
Cl under
L 'UJ You agree to ere te for puhlicalion work lcntatiYely cmitl
lNTRODUCTION TO NCE
and you grant and assign exclusively to us thi work anu all right.s t t title, p:at.S
and U versions and revisions of tho woti: lha.t are n w in ex en cre:su:d herc:afto
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dw'ing the fun terms of copyright. and all of the other rigbts set forth in P gJ':'phs 13, 14,
1 S below. wilh the cxclusi\e uthonly to exercise or to di$po e of all righu in all countries and
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l<t
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_40 _ _ _
SpHt4
8
JS44C/SDNY
REV."4/2014
PLAINTIFFS
wvuvu
:t DfJ{\ilS CIVIL COlfRIEET 111 8 c
cover sheet and the information nher re\J. .r supplement go"l
pleadings or other papers as required by law, except as provide y local rules of court. This form, apprqved '
Judicial Conference of the United States in September 1974, is required for use of the Clerk of Court for the purpos
initiating the civil docket sheet.
DEFENDANTS
Lawrence J. Gitman and Michael D. Joehnk Pearson Education, Inc., Pearson PLC and Pearson, Inc.
ATTORNEYS (FIRM NAME, ADDRESS, AND TELEPHONE NUMBER ATTORNEYS (IF KNOWN)
Robert Lax, Lax LLP, 380 Lexington Avenue, 31st Floor, New York, NY
10168; Sanford P. Dumain and leigh Smith, One Pennsylvania Plaza, 49th
Floor, New York, NY 10119; and Daniel E. Sobelsohn, The Sobelsohn Law
Firm. 1801 Centura Park East. 24th Floor. los Anaeles. CA 90067
CAUSE OF ACTION (CITE THE U.S. CIVIL STATUTE UNDER WHICH YOU ARE FILING AND WRITE A BRIEF STATEMENT OF CAUSE)
(DO NOT CITE JURISDICTIONAL STATUTES UNLESS DIVERSITY)
Breach of Contract, Breach of the Implied Duty of Good Faith and Fair Dealing, and Intentional Interference with Contract
Has this action, case, or proceeding, or one essentially the same been previously filed in SONY at any time? Ncfates0Judge Previously Assigned
If yes, was this case Vol. lnvol. 0 Dismissed. No 0 Yes
If yes, give date----------& Case No.----------
IS THIS AN INTERNATIONAL ARBITRATION eASEl No [!] Yes 0
(PLACE AN {x] IN ONE BOX ONLY) NATURE OF SUIT
CONTRACT
[ ]110
[ ]120
[ ]130
[ ]140
(]150
[ ]151
[ ]152
[ ]153
[ ]160
(K) 190
[ ] 195
INSURANCE
MARINE
MILLER ACT
NEGOTIABLE
INSTRUMENT
RECOVERY OF
OVERPAYMENT &
ENFORCEMENT
OF JUDGMENT
MEDICARE ACT
RECOVERY OF
DEFAULTED
STUDENT LOANS
(EXCL VETERANS)
RECOVERY OF
OVERPAYMENT
OF VETERAN'S
BENEFITS
STOCKHOLDERS
SUITS
OTHER
CONTRACT
CONTRACT
PRODUCT
LIABILITY
[ ]196 FRANCHISE
REAL PROPERTY
I ]210 LAND
CONDEMNATION
I ]220 FORECLOSURE
[ ]230 RENT LEASE &
EJECTMENT
[ ] 240 TORTS TO LAND
[ ] 245 TORT PRODUCT
LIABILITY
I ] 290 ALL OTHER
REAL PROPERTY
TORTS
PERSONAL INJURY
[ ]310 AIRPLANE
[ J 315 AIRPLANE PRODUCT
LIABILITY
[ ] 320 ASSAULT, LIBEL &
SLANDER
[ ]330 FEDERAL
EMPLOYERS'
LIABILITY
[ I 340 MARINE
[ I 345 MARINE PRODUCT
LIABILITY
[ J 350 MOTOR VEHICLE
[ I 355 MOTOR VEHICLE
PRODUCT LIABILITY
[ ] 360 OTHER PERSONAL
INJURY
[ ] 362 PERSONAL INJURY -
MED MALPRACTICE
AtnONS UNDER STATUTES
CIVIL RIGHTS
PERSONAL INJURY FORFEITURE/PENALTY
[ I 367 HEAL THCARE/
PHARMACEUTICAL PERSONAL 1 I 625 DRUG RELATED
INJURY/PRODUCT LIABILITY SEIZURE OF PROPERTY
[ I 365 PERSONAL INJURY 21 USC 881
PRODUCT LIABILITY
[ ] 368 ASBESTOS PERSONAL [ 1
690
OTHER
INJURY PRODUCT
LIABILITY
PERSONAL PROPERTY
[ ] 370 OTHER FRAUD
[ I 371 TRUTH IN LENDING
[ ]380 OTHER PERSONAL
PROPERTY DAMAGE
[ I 385 PROPERTY DAMAGE
PRODUCT LIABILITY
PRISONER PETinONS
[ ] 463 ALIEN DETAINEE
[ ] 510 MOTIONS TO
VACATE SENTENCE
28 usc 2255
LABOR
[ I 710 FAIR LABOR
STANDARDS ACT
[ I 720 LABOR/MGMT
RELATIONS
[ ] 740 RAILWAY LABOR ACT
[ I 751 FAMILY MEDICAL
LEAVE ACT (FMLA)
[ ]530 HABEAS CORPUS [ ]790 OTHER LABOR
[ ] 535 DEATH PENALTY LITIGATION
[ ] 440 OTHER CIVIL RIGHTS ( ] 540 MANDAMUS & OTHER [ ]791 EMPL RET INC
(Non-Prisoner) SECURITY ACT
[ J 441 VOTING
IMMIGRATION
[ ]442 EMPLOYMENT PRISONER CIVIL RIGHTS
[ ] 443 HOUSING/ [ ] 462 NATURALIZATION
ACCOMMODATIONS [ ]550 CIVIL RIGHTS APPLICATION
[ ] 445 AMERICANS WITH [ ]555 PRISON CONDITION [ ]465 OTHER IMMIGRATION
DISABILITIES- [ ]560 CIVIL DETAINEE ACTIONS
EMPLOYMENT CONDITIONS OF CONFINEMENT
[ ]446 AMERICANS WITH
DISABILITIES -OTHER
[ ]448. EDUCATION
Check if demanded in complaint:
ACTIONS UNDER STATUTES
BANKRUPTCY
[ 1422 APPEAL
28 usc 158
[ I 423 WITHDRAWAL
28 usc 157
PROPERTY RIGHTS
[ J 820 COPYRIGHTS
[ ]830 PATENT
[ I 840 TRADEMARK
SOCIAL SECURITY
[ I 861 HIA (1395ff)
[ ]862 BLACK LUNG (923)
[ ] 863 DIWC/DIWW (405(g))
[ ]864 SSID TITLE XVI
[ I 865 RSI (405(g))
FEDERAL TAX SUITS
[ J 870 TAXES (U.S. Plaintiff or
Defendant)
[ I 871 IRS-THIRD PARTY
26 usc 7609
OTHER STATUTES
l
] 375 FALSE CLAIMS
}400 STATE
REAPPORTIONMENT
[ I 410 ANTITRUST
[ I 430 BANKS & BANKING
[ I 450 COMMERCE
[ 1460 DEPORTATION
[ 1470 RACKETEER INFLU-
ENCED & CORRUPT
ORGANIZATION ACT
(RICO)
[ ] 480 CONSUMER CREDIT
[ ]490 CABLE/SATELLITE TV
[ I 850 SECURITIES/
COMMODITIES/
EXCHANGE
[ 1890 OTHER STATUTORY
ACTIONS
[ ] 891 AGRICULTURAL ACTS
[ I 893 ENVIRONMENTAL
MATIERS
[ I 895 FREEDOM OF
INFORMATION ACT
[ ] 896 ARBITRATION
[I 899ADMINISTRATIVE
PROCEDURE ACT/REVIEW OR
APPEAL OF AGENCY DECISIO
[ ] 950 CONSTITUTIONALITY 0
STATE STATUTES
1.;1 CHECK IF THIS IS A CLASS ACTION
F.R.C.P. 23.
THIS CASE IS RELATED TO A CIVIL CASE NOW PENDING IN S.D.N.Y.?
DEMAND
_________ OTHER _________ JUDGE ______________________ DOCKETNUMBER. __________ _
Check YES only if demanded in CO!!]plaint
JURY DEMAND: [!]YES LNO NOTE: You must also submit at the time of filing the Statement of Relatedness form (Form IH-32;
(PLACE AN x IN ONE BOX ONLY)
{!] 1 Original
Proceeding
D 2 Removed from D 3
State Court
D a. all parties represented
D b. At least one
party is pro sa.
Remanded
from
Appellate
Court
ORIGIN
D 4 Reinstated or
Reopened
D 5 Transferred from
(Specify District)
6 Multidistrict
Litigation
D 7 Appeal to District
Judge from
Magistrate Judge
Judgment
(PLACE AN x IN ONE BOX ONLY)
0 1 U.S. PLAINTIFF 0 2 U.S. DEFENDANT
BASIS OF JURISDICTION
3 FEDERAL QUESTION
(U.S. NOT A PARTY)
{!]4 DIVERSITY
IF DIVERSITY, INDICATE
QTIZENSHIP BELOW.
CITIZENSHIP OF PRINCIPAL PARTIES (FOR DIVERSITY CASES ONLY)
(Place an [X) in one box for Plaintiff and one box for Defendant)
PTF DEF
CITIZEN OF THIS STATE
PTF DEF
[ ] 1 [ ] 1 CITIZEN OR SUBJECT OF A
FOREIGN COUNTRY
PTF DEF
[] 3 [] 3 INCORPORATED and PRINCIPAL PLACE [ ] 5 [ ]5
CITIZEN OF ANOTHER STATE [x]2 [ ] 2 INCORPORATED or PRINCIPAL PLACE [ ] 4 [ 14
OF BUSINESS IN THIS STATE
PLAINTIFF{S) ADDRESS{ES) AND COUNTY(IES)
7560 Hillside Drive, La Jolla, CA 92037 (San Diego County)
3481 Griffiths Spring, Flagstaff, AZ 86005 (Coconino County)
DEFENDANT{S) ADDRESS(ES) AND COUNTY{IES)
OF BUSINESS IN ANOTHER STATE
FOREIGN NATION
Pearson, PLC, 1330 Avenue of the Americas, New York, NY 10019 (New York County)
Pearson, Inc., 1330 Avenue of the Americas, New York, NY 10019 (New York County)
[] 6 [] 6
Pearson Education, Inc., One Lake Street, Upper Saddle River, New Jersey 07458 (Bergen County)
DEFENDANT{S) ADDRESS UNKNOWN
REPRESENTATION IS HEREBY MADE THAT, AT THIS TIME, I HAVE BEEN UNABLE, WITH REASONABLE DILIGENCE, TO ASCERTAIN
RESiaENCE ADDRESSES OF THE FOLLOWING DEFENDANTS:
Check one: THIS ACTION SHOULD BE ASSIGNED TO: 0 WHITE PLAINS [!] MANHATTAN
(DO NOT check either box if this a PRISONER PETITION/PRISONER CIVIL RIGHTS
COMPLAINT.)
DATE 10/29/14 SIGNATURE ADMITTED TO PRACTICE IN THIS DISTRICT
[ 1 NO
[K] YES (DATE ADMITTED Mo.11/01 Yr. 1982
RECEIPT# Attorney Bar Code# SD8712
Magistrate Judge is to be designated by the Clerk of the \fA-,l\,IDGt
Ruby J. Krajick, Clerk of Court by ______ Deputy Clerk, DATED ________ _
UNITED STATES DISTRICT COURT (NEW YORK SOUTHERN)
1"1"' ..... c"".""'
Drin+