EMPLOYMENT AGREEMENT
Exhibit 10.1
EXECUTION COPY
This Employment Agreement (this “Agreement”) is entered into as of this 15th day of
March, 2011 by and between Archipelago Learning, LLC, a Delaware limited liability company (the
“Company”), and Xxxxx Xxxxxxxxx (the “Executive”).
WHEREAS, the Company desires to retain the services of the Executive and the Executive desires
to be employed by the Company;
WHEREAS, the Company desires to be assured that the unique and expert services of the
Executive will be available to the Company, and that the Executive is willing and able to render
such services on the terms and conditions hereinafter set forth; and
WHEREAS, the Company desires to be assured that the confidential information and good will of
the Company will be preserved for the exclusive benefit of the Company.
NOW, THEREFORE, in consideration of such employment and the mutual covenants and promises
herein contained, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive agree as follows:
1 EMPLOYMENT AND RESPONSIBILITIES
Effective as of January 1, 2011 (the “Start Date”), the Company will employ the
Executive in the position of Executive Vice President, Chief Strategy Officer. The Executive shall
report to the Chief Executive Officer. The Executive will have such authority, and will perform
all of the duties, normally associated with this position as well as other duties as may be
reasonably assigned to her from time to time by the Chief Executive Officer, in each case
consistent with her position as Executive Vice President, Chief Strategy Officer.
2 ATTENTION AND EFFORT
The Executive will devote all of her business time, ability, attention and best efforts to the
performance of her duties hereunder in a manner which will faithfully and diligently further the
Company’s business to the exclusion of all other business activities. However, the Executive may
devote reasonable periods of time to engaging in charitable or community service activities, so
long as none of these activities interfere with her duties under this Agreement. Executive agrees
to perform her duties and responsibilities within Company policies, standard work hours and
attendance and general work practices.
3 TERM
The Executive’s employment hereunder initially shall be for a term ending on the day preceding
the second anniversary of the Start Date, subject to earlier termination in accordance with
Section 6 below. The Agreement shall be automatically extended from year to year thereafter
unless either party gives not less than sixty (60) days prior written notice to the other
that such party elects to have the Agreement terminated effective at the end of the initial or
then current renewal term.
4 COMPENSATION
During the term of employment under this Agreement, the Company agrees to pay to the
Executive, and the Executive agrees to accept in full consideration for all services performed by
her, the following compensation:
4.1 Base Salary: The Company will pay the Executive an annual base salary of three hundred
thousand dollars ($300,000), before all customary payroll deductions. This annual base salary will
be paid in accordance with the usual payroll practices of the Company. The Company may make such
increases in the base salary as the Company may, in its sole discretion, deem appropriate.
4.2 Bonus: The Executive will participate in the Company-wide bonus plan in which all
employees of the Company participate based on such bonus plan’s policies and procedures then in
effect. In addition, the Executive will be eligible to receive a bonus (the “Bonus”) in
respect of each fiscal year of the Company in an amount equal to up to 50% of her earned base
salary (pro rated for partial years) based on performance targets; provided, that if the
performance targets in any fiscal year are exceeded, the maximum bonus the Executive shall be
eligible to receive shall equal up to 60% of her base salary. Such targets shall be based: (i) 27%
on the GAAP revenue targets set forth in the operating plan approved from time to time by the
Company; (ii) 40% on operating income, free cash flow and EPS targets, each as set forth in the
operating plan approved from time to time by the Company; and (iii) 33% on key business objectives,
to be determined by the Company: (a) for 2011, within 30 days of the Start Date; and (b) for
subsequent years, prior to the beginning of each such year.
4.3 Incentive Equity: The Executive will have the right to participate in the stock option
plan of the Company’s indirect parent, Archipelago Learning, Inc. (“ARCL”), with an initial
grant of 50,000 stock options. The form, terms and provisions applicable to such options shall be
as set forth in the applicable option agreement, any applicable grant notice and the 2009 Omnibus
Incentive Plan of ARCL.
4.4 Withholding: The Company may withhold from any compensation and benefits payable to the
Executive, including any compensation or benefits payable pursuant to Section 7 hereof, all
applicable federal, state and local withholding taxes.
5 BENEFITS
5.1 Description of Benefits: During the term of employment under this Agreement, the Executive
will be entitled to participate in all employee incentive, pension and welfare benefit plans and
programs made available generally to other senior executives of the Company, as such plans or
programs may be in effect from time to time (including, without limitation, incentive equity,
profit sharing, savings and other pension and retirement plans or programs, medical, dental,
hospitalization, short-term and long-term disability and life insurance plans and
accidental death and dismemberment protection, provided, that the Executive meets the
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eligibility requirements and other terms, conditions and restrictions of the respective plans and
programs). Payment for such coverages will be the sole responsibility of the Executive, unless the
Company makes such coverages available to similarly situated executives on a shared cost basis. In
addition, the Executive will be entitled to 20 days of paid vacation per year, subject to standard
Company policies. The Company will pay for all reasonable expenses actually incurred by the
Executive directly in connection with the business affairs of the Company and the performance of
her duties hereunder, upon presentation of proper receipts or other proof of expenditure and
subject to such reasonable guidelines or limitations provided by the Company from time to time.
6 TERMINATION
The Executive’s employment under this Agreement may be terminated as follows, but in the event
of any such termination, the provisions of Sections 7 and 8 will survive the
termination of the Executive’s employment.
6.1 By the Company: The Company may terminate the employment of the Executive, with or without
Cause (as defined in Section 7.5 hereof), at any time during the term hereof by delivery of
a Notice of Termination (as defined below) to the Executive.
6.2 By the Executive: The Executive may terminate her employment at any time, for any reason,
by delivery of a Notice of Termination to the Company.
6.3 Death; Disability: The Executive’s employment will terminate automatically upon the
Executive’s death or total disability. The term “total disability” will mean the
Executive’s inability to perform the duties set forth in Section 1 hereof for a period of
sixteen (16) consecutive weeks, or a cumulative period of 120 business days in any 12-month period,
as a result of physical or mental illness or loss of legal capacity.
6.4 Notice: The term “Notice of Termination” means at least thirty (30) days prior
written notice of termination of the Executive’s employment (the “Advance Notice Period”),
during which period the Executive’s employment and performance of services will continue;
provided, that: (i) the Executive may, upon termination of her employment with Good Reason,
make such notice effective immediately; (ii) the Company may, upon termination of her employment
with Cause, make such notice effective immediately; and (iii) the Company may, upon notice to the
Executive and without reducing compensation during any Advance Notice Period, excuse her from any
or all of her duties during any Advance Notice Period. The effective date of termination of
employment (the “Termination Date”) will be the date on which such Advance Notice Period
expires (or the date of notice, if the Company exercises its rights under clause (ii) hereof or if
the Executive exercises her rights under clause (i) hereof) or as otherwise provided in Section
3 above.
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7 TERMINATION PAYMENTS
In the event of termination of the employment of the Executive, all compensation and benefits
set forth in this Agreement will terminate as of the Termination Date except as specifically
provided in this Section 7:
7.1 Termination by the Company:
(a) If the Company terminates the Executive’s employment without Cause or as a result of
non-renewal pursuant to Section 3 (other than as result of death or total disability), and
such termination constitutes a “separation from service” under Section 409A of the Internal Revenue
Code of 1986, as amended (“Section 409A”), the Executive will not be entitled to receive
any of the payments or benefits provided for herein except the Company shall: (i) pay her base
salary through the Termination Date; (ii) pay her a Bonus or a pro-rated Bonus for the calendar
year in which the Termination Date fell, based on the number of days of such calendar year that the
Executive was employed by the Company (the “Pro-Rated Bonus”), as applicable; (iii) pay her
an amount equal to her base salary during the Severance Period (as defined in Section 7.7
below) payable in equal installments, in accordance with the Company’s normal payroll practices,
beginning with the first payroll date following the 45th day after the Termination Date; (iv)
provide the Executive with all benefits that are accrued but unpaid as of the Termination Date; (v)
provide the Executive with all benefits expressly available upon termination of employment in
accordance with the plans and programs of the Company applicable to the Executive on the
Termination Date (but without duplication of any benefits or payments otherwise provided for
hereunder); and (vi) until the earlier of: (a) the end of the Severance Period; or (b) the date the
Executive commences new employment, pay the Executive an amount (which shall be includable in the
Executive’s gross income) equal to the applicable premium rate under the Consolidated Omnibus
Reconciliation Act of 1985, as amended (“COBRA”), if any, for the Executive and the
Executive’s covered beneficiaries with respect to any welfare benefits for which the Executive and
the Executive’s covered beneficiaries timely elect COBRA coverage. Notwithstanding anything herein
to the contrary, for the avoidance of doubt, when calculating the Pro Rated Bonus under this
Section 7.1 or any other Section of this Agreement such calculation shall be determined
based on the actual performance achieved by the Company during the applicable fiscal period, and
shall be paid by the Company when other bonus payments are made to similarly situated employees.
(b) If the Company terminates the Executive’s employment for Cause, the Executive will not be
entitled to receive any of the payments or benefits provided for herein except the Company shall:
(i) pay her base salary through the Termination Date; (ii) provide the Executive with all benefits
that are accrued but unpaid as of the Termination Date; and (iii) provide the Executive with all
benefits expressly available upon termination of employment in accordance with the plans and
programs of the Company applicable to the Executive on the Termination Date (but without
duplication of any benefits or payments otherwise provided for hereunder).
7.2 Termination by the Executive:
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(a) If the Executive terminates her employment with the Company with Good Reason (as
hereinafter defined), and such termination constitutes a “separation from service” under Section
409A, the Executive will not be entitled to receive any of the payments or benefits provided for
herein except the Company shall: (i) pay her base salary through the Termination Date; (ii) pay her
a Pro-Rated Bonus; (iii) pay her an amount equal to her base salary during the Severance Period
payable in equal installments, in accordance with the Company’s normal payroll practices, beginning
with the first payroll date following the 45th day after the Termination Date; (iv) provide the
Executive with all benefits that are accrued but unpaid as of the Termination Date; (v) provide the
Executive with all benefits expressly available upon termination of employment in accordance with
the plans and programs of the Company applicable to the Executive on the Termination Date (but
without duplication of any benefits or payments otherwise provided for hereunder); and (vi) until
the earlier of: (a) the end of the Severance Period; or (b) the date the Executive commences new
employment, pay the Executive an amount (which shall be includable in the Executive’s gross income)
equal to the applicable premium rate under COBRA, if any, for the Executive and the Executive’s
covered beneficiaries with respect to any welfare benefits for which the Executive and the
Executive’s covered beneficiaries timely elect COBRA coverage.
(b) If the Executive terminates her employment with the Company without Good Reason, the
Executive will not be entitled to any payments or benefits provided for herein except the Company
shall: (i) pay her base salary through the Termination Date; (ii) provide the Executive with all
benefits that are accrued but unpaid as of the Termination Date; and (iii) provide the Executive
with all benefits expressly available upon termination of employment in accordance with the plans
and programs of the Company applicable to the Executive on the Termination Date (but without
duplication of any benefits or payments otherwise provided for hereunder).
7.3 Death or Disability: If the Executive’s employment is terminated pursuant to Section
6.3 hereof as a result of her death or total disability, the Executive will not be entitled to
any payments or benefits, except the Company shall: (i) pay her base salary through the Termination
Date; (ii) provide the Executive with all benefits that are accrued but unpaid as of the
Termination Date; and (iii) provide the Executive with all benefits expressly available upon
termination of employment in accordance with the plans and programs of the Company applicable to
the Executive on the Termination Date (but without duplication of any benefits or payments
otherwise provided for hereunder).
7.4 Payment Schedule: All payments of base salary under this Section 7 (excluding
wages for services performed prior to the Termination Date) shall be paid in accordance with the
Company’s normal payroll practices, beginning with the first payroll date following the 45th day
after the Termination Date. Payment of wages for services performed prior to the Termination Date
shall be paid in accordance with the Company’s normal payroll practices without regard to the 45
day delay. Any bonus amounts due under this Section 7 shall be paid promptly following the
Company’s receipt of its audited financial statements for the year during which the Termination
Date occurs, but in no event later than the 15th day of the third calendar month of the fiscal year
following the fiscal year in which the Termination Date occurred, and in no event
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earlier than the 45th day following the Termination Date. Each payment made in accordance
with this Section 7 shall be treated as a separate payment for purposes of Section 409A, to
the extent Section 409A applies to such payments.
7.5 Cause: Wherever reference is made in this Agreement to termination being with or without
Cause, “Cause” shall mean: (i) the Executive repeatedly refuses or fails to perform any of
her duties and responsibilities as determined from time to time by the Company, including, without
limitation: (a) the Executive’s persistent neglect of duty or chronic unapproved absenteeism (other
than for a temporary or permanent disability) which remains uncured to the reasonable satisfaction
of the Company following thirty (30) days’ written notice from the Company of such alleged fault;
and (b) the Executive’s refusal to comply with any reasonable and lawful directive or policy of the
Company which refusal is not cured by the Executive within thirty (30) days of such written notice
from the Company; provided, that the Company shall not be required to give the Executive
more than two cure periods with respect to this clause (i); (ii) the Executive acts (including a
failure to act) in a manner which constitutes gross and willful misconduct or gross negligence in
the performance of her duties; (iii) the Executive commits a material act of fraud, personal
dishonesty or misappropriation relating to the Company or its affiliates; (iv) the Executive
commits a material act of dishonesty, embezzlement, unauthorized use or disclosure of Confidential
Information or other intellectual property or trade secrets, common law fraud or other fraud with
respect thereto; (v) a breach by the Executive of a material provision of this Agreement or any
other written agreement with the Company; (vi) the Executive’s indictment for or conviction (or the
entry of a plea of a nolo contendere or equivalent plea) in a court of competent jurisdiction of a
felony or any misdemeanor involving material dishonesty or moral turpitude; or (vii) the
Executive’s habitual or repeated misuse of, or habitual or repeated performance of the Executive’s
duties under the influence of, alcohol or controlled substances.
7.6 Good Reason: Whenever reference is made in this Agreement to termination being with or
without Good Reason, “Good Reason” shall mean the occurrence of any of the following events
without the Executive’s express written consent: (i) any breach by the Company of any material
provision of this Agreement or any other written agreement with the Executive; (ii) a reduction in
the Executive’s base salary; (iii) a material reduction or diminution of the Executive’s duties,
responsibilities or authorities, which are caused by an act of the Company; or (iv) any requirement
by the Company that the Executive relocate her principal place of employment to a location that is
in excess of 60 miles from the Company’s current headquarters in Dallas, Texas. The Company shall
have 30 days after receipt of notice from the Executive setting forth the specific conduct that
constitutes Good Reason, to cure such conduct that would result in Good Reason. The Executive may
not resign her employment for Good Reason unless the Executive has provided the Company with at
least 30 days prior written notice of her intent to resign for Good Reason (which notice must be
provided within 60 days following: (x) the occurrence of the event(s) purported to constitute Good
Reason; or (y) if the Executive did not know of the occurrence of any of such events, the date on
which the Executive had actual knowledge of the occurrence of any of such events) and has set forth
in reasonable detail the specific conduct that constitutes Good Reason and the specific provisions
of this Agreement on which the Executive relies.
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7.7 Severance Period: Whenever reference is made in this Agreement to the Severance Period,
“Severance Period” shall mean the period commencing on the Termination Date and ending on
the twelve-month anniversary of the Termination Date.
7.8 Payments Contingent on Release: The Company’s obligation to make any salary continuation,
bonus or COBRA coverage payments under this Section 7 (other than wages for services
performed prior to the Termination Date) shall be contingent upon the Executive executing a general
release concerning the Executive’s employment in form and substance reasonably acceptable to the
Company and the Executive, within 45 days following the Termination Date.
8 NONCOMPETITION, NONSOLICITATION, PROTECTION OF CONFIDENTIAL INFORMATION
8.1 Applicability: This Section 8 will survive the termination of this Agreement and
the Executive’s employment with the Company. As used in this Section 8, “Company”
shall mean ARCL, the Company and all of the Company’s current and future direct and indirect parent
companies and subsidiaries. It is understood and agreed that the Company and the Executive
consider the restrictions contained in this Section 8 to be reasonable and necessary for
the purposes of preserving and protecting the Confidential Information (as defined below) and other
legitimate business interests of the Company.
8.2 Restricted Period: As used in this Agreement, the “Restricted Period” means the
period commencing on the Start Date and ending on the date twelve months after the Termination
Date.
8.3 Noncompetition: During the Restricted Period, the Executive will not engage in any
business in any manner, directly or indirectly, individually or as a consultant to, or as an
employee, officer, director, stockholder, partner or other owner or participant of, any entity
that: (i) is in competition with any business of the Company or any business in which, to the
Executive’s knowledge, the Company had plans to engage or was considering engaging as of the
Termination Date, except the Executive may own up to five percent (5%) of any class of issued and
outstanding securities of a competitive corporation whose shares are regularly traded on a national
securities exchange or on the over-the-counter market; or (ii) inevitably will result in the
disclosure or use of the Company’s Confidential Information, as defined in Section 8.5 below, in
either case in any state in the United States where the Company does business as of the Termination
Date or where, to the Executive’s knowledge, the Company had plans to engage or was considering
engaging as of the Termination Date.
8.4 Nonsolicitation: As used in this Agreement, “Solicitation” means, directly or
indirectly, individually or as a consultant to, or as an employee, officer, director, stockholder,
partner or other owner or participant of, any entity: (a) the solicitation of, inducement of, or
attempt to induce, any employee, agent or consultant (including freelance writers and content
providers) of the Company to leave the employ of, or stop providing services to, the Company; (b)
the offering or aiding another to offer employment to, or interfering or attempting to interfere
with the Company’s relationship with, any employees or consultants (including freelance writers
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and content providers) of the Company; (c) the solicitation of, or assistance to any entity or
person in solicitation of, any customers or suppliers (including freelance writers and content
providers) of the Company to discontinue doing business with the Company; or (d) interfering with
any relationship between the Company and any of its customers or suppliers (including freelance
writers and content providers). During the Restricted Period, the Executive will not engage in or
attempt to engage in any Solicitation, provided that Solicitation will not be considered to have
occurred by the general advertising for or hiring of any employee by entities with which the
Executive is associated, as long as the Executive does not directly or indirectly: (i) induce such
employee to leave the Company; (ii) contact such employee prior to her departure from the Company
regarding employment; or (iii) in the case of hiring such employee, control such entity or have any
input in the decision to hire such employee.
8.5 Protection of the Company’s Confidential Information: As used in this Agreement,
“Confidential Information” means all information that relates to the business, technology,
manner of operation, suppliers, panelists, customers, finances, employees, plans, proposals or
practices of the Company or of any third parties doing business with the Company, and includes,
without limitation, the identities of and other information regarding the Company’s suppliers,
panelists, customers and prospects, supplier lists, panelist list employee information, business
plans and proposals, software programs, marketing plans and proposals, technical plans and
proposals, research and development, budgets and projections, nonpublic financial information, and
all other information the Company designates as “confidential” or intends to keep as confidential
or proprietary. Excluded from the definition of Confidential Information is information that is or
becomes generally known to the public, other than through the breach of this Agreement by the
Executive. For this purpose, information known or available generally within the trade or industry
of the Company shall be deemed to be generally known to the public. The Executive understands and
agrees that Confidential Information will be considered the trade secrets of the Company and will
be entitled to all protections given by law to trade secrets and that the provisions of this
Agreement apply to every form in which Confidential Information exists, including, without
limitation, written or printed information, films, tapes, computer disks or data, or any other form
of memory device, media or method by which information is stored or maintained. The Executive
acknowledges that in the course of employment with the Company, the Executive has received and may
receive Confidential Information of the Company. The Executive further acknowledges that
Confidential Information is a valuable, unique and special asset belonging to the Company. For
these reasons, and except as otherwise directed by the Company, the Executive agrees, during her
employment, and at all times after the termination of her employment with the Company, that the
Executive will not disclose or disseminate to anyone outside the Company, nor use for any purpose
other than as required by her work for the Company, nor assist anyone else in any such disclosure
or use of, any Confidential Information. Upon the Company’s request at any time and for any reason,
the Executive shall immediately deliver to the Company all materials (including all soft and hard
copies) in the Executive’s possession which contain or relate to Confidential Information.
8.6 Ownership of Intellectual Property: All inventions, modifications, discoveries, designs,
developments, improvements, processes, software programs, works of authorship, documentation,
formulae, data, techniques, know-how, trade secrets or intellectual property rights or any interest
therein (collectively, the “Developments”) made by the Executive, either
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alone or in conjunction with others, at anytime or at any place during the Executive’s
employment with the Company, whether or not reduced to writing or practice during such period of
employment, which relate to the business in which the Company is engaged or, to the knowledge of
the Executive, in which the Company intends to engage, shall be and hereby are the exclusive
property of the Company without any further compensation to the Executive. In addition, without
limiting the generality of the prior sentence, all Developments which are copyrightable work by the
Executive are intended to be “work made for hire” as defined in Section 101 of the Copyright Act of
1976, and shall be and hereby are the property of the Company.
The Executive shall promptly disclose any Developments to the Company. If any Development is
not the property of the Company by operation of law, other provisions of this Agreement or
otherwise, the Executive will, and hereby does, assign to the Company all right, title and interest
in such Development, without further consideration, and will assist the Company and its nominees in
every way, at the Company’s expense, to secure, maintain and defend the Company’s rights in such
Development. The Executive shall sign all instruments necessary for the filing and prosecution of
any applications for, or extension or renewals of, letters patent (or other intellectual property
registrations or filings) of the United States or any foreign country which the Company desires to
file and relates to any Development. The Executive hereby irrevocably designates and appoints the
Company and its duly authorized officers and agents as such Executive’s agent and attorney-in-fact
(which designation and appointment shall be deemed coupled with an interest and shall survive the
Executive’s death or incapacity), to act for and in the Executive’s behalf to execute and file any
such applications, extensions or renewals and to do all other lawfully permitted acts to further
the prosecution and issuance of such letters patent, other intellectual property registrations or
filings, or such other similar documents with the same legal force and effect as if executed by the
Executive.
8.7 Equitable Relief: The Executive acknowledges that: (a) the provisions of this Section
8 are essential to the Company; (b) that the Company would not enter into this Agreement if it
did not include this Section 8; and (c) that damages sustained by the Company as a result
of a breach of this Section 8 cannot be adequately remedied by monetary damages.
Furthermore, the Executive agrees that the Company, notwithstanding any other provision of this
Agreement, and in addition to any other remedy it may have under this Agreement, or at law, will be
entitled to injunctive and other equitable relief to prevent or curtail any breach of this
Section 8.
9 FORM OF NOTICE
All notices given hereunder shall be given in writing, shall specifically refer to this
Agreement and shall be personally delivered or sent by telecopy or other electronic facsimile
transmission or by registered or certified mail, return receipt requested, at the address set forth
below or at such other address as may hereafter be designated by notice given in compliance with
the terms hereof:
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If to Executive:
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Xxxxx Xxxxxxxxx 0000 Xxxxxx Xxxxxxxxx Xxxxxx, Xxxxx 00000 Telephone: (000) 000-0000 |
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If to the Company:
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c/o Archipelago Learning, LLC 0000 XxXxxxxx Xxxxxx, Xxxxx 000 Xxxxxx, Xxxxx 00000 Attention: Xxx XxXxxx Telephone: (000) 000-0000 Facsimile: (000) 000-0000 |
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with a copy:
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Weil, Gotshal & Xxxxxx LLP 000 Xxxxxxx Xxxxxx 00xx Xxxxx Xxxxxx, Xxxxxxxxxxxxx 00000 Attention: Xxxxx X. Xxxxxxxx, Esq. Telephone: (000) 000-0000 Facsimile: (0000) 000-0000 |
If notice is mailed, such notice shall be effective upon mailing, or if notice is personally
delivered or sent by telecopy or other electronic facsimile transmission, it shall be effective
upon receipt.
10 ASSIGNMENT
This Agreement and all rights under this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective personal or legal
representatives, executors, administrators, heirs, distributees, devisees, legatees, successors and
assigns. Nothing in this Agreement shall be construed to confer any right, benefit or remedy upon
any person that is neither a party hereto nor a personal or legal representative, executor,
administrator, heir, distributee, devisee, legatee, successor or assign of a party hereto. This
Agreement is personal in nature, and none of the parties to this Agreement shall, without the
written consent of the others, assign or transfer this Agreement or any one or more of its rights
or obligations under this Agreement to any other person or entity, except that the Company may
assign its rights and delegate its obligations under this Agreement to any entity that acquires all
or substantially all of its business, whether by sale of assets, merger or like transaction. If the
Executive should die while any amounts are still payable, or any benefits are still required to be
provided, to the Executive hereunder, all such amounts or benefits, unless otherwise provided
herein, shall be paid or provided in accordance with the terms of this Agreement to the Executive’s
devisee, legatee or other designee or, if there be no such person, to the Executive’s estate.
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11 WAIVERS
No delay or failure by any party hereto in exercising, protecting or enforcing any of its
rights, titles, interests or remedies under this Agreement, and no course of dealing or performance
with respect thereto, will constitute a waiver thereof. The express waiver by a party hereto of any
right, title, interest or remedy in a particular instance or circumstance will not constitute a
waiver thereof in any other instance or circumstance. All rights and remedies shall be cumulative
and not exclusive of any other rights or remedies.
12 AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any provision of this
Agreement, nor consent to any departure therefrom by either party, will in any event be effective
unless the same is in writing, specifically identifying this Agreement and the provision intended
to be amended, modified, waived, terminated or discharged and signed by the Company and the
Executive. Each amendment, modification, waiver, termination or discharge will be effective only in
the specific instance and for the specific purpose for which given. No provision of this Agreement
will be varied, contradicted or explained by any oral agreement, course of dealing or performance
or any other matter not set forth in an agreement in writing and signed by the Company and the
Executive.
13 APPLICABLE LAW
This Agreement will in all respects, including all matters of construction, validity and
performance, be governed by, and construed and enforced in accordance with, the laws of the State
of Delaware, without regard to any rules governing conflicts of laws.
14 SEVERABILITY
If any provision of this Agreement is held invalid, illegal or unenforceable under applicable
law, for any reason, including, without limitation, the duration of such provision, its
geographical scope or the extent of the activities prohibited or required by it, then, to the full
extent permitted by law: (a) all other provisions will remain in full force and effect and will be
liberally construed in order to carry out the intent of the parties hereto as nearly as may be
possible; (b) such invalidity, illegality or unenforceability will not affect the validity,
legality or enforceability of any other provision hereof; and (c) any court or arbitrator having
jurisdiction thereover shall (and will have the power to) reform such provision to the extent
necessary for such provision to be enforceable under applicable law.
15 COUNTERPARTS
This Agreement, and any amendment or modification entered into pursuant to Section 12
hereof, may be executed in any number of counterparts (including facsimile counterparts), each of
which counterparts, when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, will constitute one and the same instrument.
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16 NO CONFLICTING AGREEMENTS
The Executive represents and warrants to the Company that the Executive is not a party to or
bound by any confidentiality, noncompetition, nonsolicitation, employment, consulting or other
agreement or restriction which could conflict with, or be violated by, the performance of the
Executive’s duties to the Company or obligations under this Agreement.
17 KEY PERSON LIFE INSURANCE
The Executive acknowledges that the Company may wish to purchase insurance on the life of the
Executive, the proceeds of which would be payable to the Company, at the Company’s expense. The
Executive hereby consents to such insurance and agrees to submit to any medical examination and
release of medical records required to obtain such insurance.
18 ENTIRE AGREEMENT
This Agreement on and as of the date hereof, constitutes the entire agreement between the
Company and the Executive relating to employment of the Executive with the Company, and supersedes
and cancels any and all previous or contemporaneous contracts, arrangements or understandings,
whether oral or written, between the Company and the Executive relating to her employment with or
termination from the Company, including the offer letter sent by the Company to the Executive on
November 15, 2010 (though dated as of that same date in 2011), but excluding: (i) the Standards of
Business Conduct and Conditions of Employment; and (ii) the Employee Confidentiality and Assignment
Statement. In the event of any conflict between this Agreement, on the one hand, and the terms of
Standards of Business Conduct and Conditions of Employment or the Employee Confidentiality and
Assignment Statement, on the other hand, the terms of this Agreement shall govern.
19 SECTION 409A
(a) Compliance. The intent of the parties is that payments and benefits under this
Agreement are either exempt from or comply with Section 409A and, accordingly, to the maximum
extent permitted, the Agreement shall be interpreted to that end. The Parties acknowledge and
agree that the interpretation of Section 409A and its application to the terms of this Agreement is
uncertain and may be subject to change as additional guidance and interpretations become available.
In no event whatsoever shall the Company be liable for any tax, interest or penalties that may be
imposed on the Executive by Section 409A or any damages for failing to comply with Section 409A.
(b) Six Month Delay for Specified Employees. If any payment, compensation or other
benefit provided to the Executive in connection with his employment termination is determined, in
whole or in part, to constitute “nonqualified deferred compensation” within the meaning of Section
409A and the Executive is a “specified employee” as defined in Section 409A, no part of such
payments shall be paid before the day that is six (6) months plus one (1) day after the Executive’s
date of termination or, if earlier, the Executive’s death (the “New
12
Payment Date”). The aggregate of any payments that otherwise would have been paid to the
Executive during the period between the date of termination and the New Payment Date shall be paid
to the Executive in a lump sum on such New Payment Date. Thereafter, any payments that remain
outstanding as of the day immediately following the New Payment Date shall be paid without delay
over the time period originally scheduled.
(c) Payments for Reimbursements and In-Kind Benefits. All reimbursements for costs
and expenses under this Agreement shall be paid in no event later than the end of the calendar year
following the calendar year in which the Executive incurs such expense. With regard to any
provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except
as permitted by Section 409A, (i) the right to reimbursement or in-kind benefits shall not be
subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible
for reimbursements or in-kind benefits provided during any taxable year shall not affect the
expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year.
The next page is the signature page.
13
IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set
forth above.
| EXECUTIVE: |
||||
| /s/ Xxxxx Xxxxxxxxx | ||||
| Xxxxx Xxxxxxxxx | ||||
| ARCHIPELAGO LEARNING, LLC |
||||
| /s/ Xxx XxXxxx | ||||
| Name: | Xxx XxXxxx | |||
| Title: | Chief Executive Officer | |||
[Signature Page 1 of 1 — Xxxxx Xxxxxxxxx/ARCL LLC Employment Agreement]
