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July 1, 1999 EXHIBIT 10.37
Xx. Xxxxxxxxxxx X. Xxxx
The Edison Project Inc.
15th Floor
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Dear Xxxxx:
This letter agreement (the "Agreement") supercedes and replaces any
previous written or oral agreements between you and The Edison Project Inc.
("Edison" or the "Company") regarding your employment with the Company.
Position/Responsibilities. You will be employed as Edison's Chief
Operating Officer ("COO") working out of the Company's headquarters in New York
City and a Washington, D.C. office approved by me. You will report directly to
me. Your responsibilities are as set forth on Exhibit A attached hereto.
Term. The term of your employment shall be extended through July 1,
2002 unless terminated earlier by you or the Company as provided below, which
term shall automatically renew for successive one-year terms unless terminated
earlier by you or the Company as provided below.
Base Salary/Benefits. You shall be paid at an annual base salary rate
of $240,000. You will also be entitled to the standard Company benefits for
executives at your level as in effect from time to time, a current schedule of
which is attached as Exhibit B. The Company will provide you supplemental life
insurance such that your total insurance benefit is no less than $800,000,
provided that such supplemental coverage can be obtained by the Company at
standard rates for a man of your age in good physical condition. You will
receive three weeks of vacation annually in addition to the official Company
holidays. You will be considered for appropriate base salary increases annually
to reflect your performance, the Company's performance, and increases awarded to
other management executives.
Bonus. In addition to your base salary, beginning with Fiscal Year 2000
you will be eligible to receive an annual bonus of up to 50% of your base salary
for each fiscal year, half of such bonus to be directly tied to the Company's
academic results and half to be directly tied to the Company's financial
results. For each fiscal year, you and I will mutually agree on the appropriate
measures for determining the basis on which your bonus will be judged, with such
annual measures subject to review and approval by the Compensation Committee of
the Company's Board of Directors. The Compensation Committee shall also make the
final determination of your achievement of such bonus. Payment of this bonus for
each fiscal year will be made after 1) receipt of the Company's audited
financials for such year, 2) receipt of relevant information on academic
results,
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and 3) completion of the review process by the Compensation Committee.
Relocation. It is understood that you will continue to work out of
Edison's New York offices and your current office in Washington D.C. (or such
office space as shall be approved by me). At such time as you relocate to the
New York City area, Edison will pay you a relocation bonus of $50,000, such
amount to be paid within 30 days of the actual date of the move. Edison will
further reimburse you for the expenses associated with your relocation as set
forth in Exhibit C.
Expense Reimbursements. You will be reimbursed for all reasonable
business expenses you incur in fulfilling your responsibilities hereunder upon
submission of adequate documentation for such expenses and subject to the
Company's policies. Such expenses shall, subject to periodic review, include
transportation, food and lodging expenses associated with working out of
Edison's New York offices during such period as you continue to reside in
Washington, D.C.
Termination/Severance Pay. Edison shall have the right to terminate
your employment at any time without cause by giving you written notice to that
effect. The termination of employment shall be effective on the date specified
in such notice. If Edison terminates your employment without cause, Edison will
pay you as severance pay your base salary for a period beginning on the
effective date of termination and ending twelve (12) months from such date (the
"Severance Period"), provided that if you become employed elsewhere during the
Severance Period the amounts otherwise payable to you during the last six months
of the Severance Period (the "Offset Period") shall be reduced by the total
amount of any compensation you earn from such employment. You shall at your
option be entitled to treat any material uncured breach of this Agreement by the
Company as a termination without cause. Payments made to you as reimbursement
for documented expenses will not constitute compensation for purposes of this
paragraph. In consideration of such severance pay, you agree to deliver to
Edison on or promptly following the effective date of the termination of your
employment a Separation and Release in the form customarily being used by Edison
at such time. All amounts payable under the provisions of this paragraph will be
made on the dates you would have received such amounts had your employment with
Edison not been terminated.
Edison shall have the right to terminate your employment for cause by
giving you written notice to that effect. The termination of employment shall be
effective on the date specified in such notice. However, "for cause" is
restricted to (1) commission of a willful act of dishonesty in the course of
your duties with Edison which significantly injures Edison; (2) engagement in
gross or persistent
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misconduct injurious to Edison; (3) conviction of a crime of moral turpitude or
of a felony; or (4) chronic alcoholism or drug abuse. If you are terminated for
cause, Edison will pay your unpaid base salary through the effective date of
termination.
Exclusivity. In return for the compensation payments set forth in this
agreement, you agree to devote 100% of your professional time and energies to
Edison and not engage in any other business activities without prior approval of
the Board.
Confidentiality. It is understood that in order to perform your duties
at Edison, it will be necessary for Edison to divulge to you its proprietary
information, including, but not limited to, information and data relating to or
concerned with Edison's business, finances, development projects and other
affairs. You agree that you will not divulge such proprietary information to
anyone outside Edison at any time whether or not you are in the employ of
Edison, except as may otherwise be required in connection with the business and
affairs of Edison. You also agree that any developments, discoveries, or
inventions made by you alone or with others during the term of your employment
with Edison and applicable to the type of businesses or development projects
engaged in by Edison during such period shall be the sole property of Edison,
and you agree to execute all documents requested by Edison to protect Edison's
rights thereto.
Non-compete and Non-solicitation. You further agree that during your
employment with Edison and for one year after the termination of such employment
for any reason, you will not at any time engage in or participate as an
executive officer, employee, director, agent, consultant, representative,
stockholder, or partner, or have any financial interest, in any business which
"competes" with Edison or any subsidiary of Edison, or successor to the business
of Edison, provided that if restrictions regarding competition in the employment
agreements of any member of the Operating Committee are ever less restrictive
than those contained herein, the provisions of this paragraph will be similarly
modified. For the purposes hereof, a "competing" business shall mean any
business which directly competes with any of the businesses of Edison as such
business shall exist during your employment with Edison, for example, the
business of managing public and private schools for profit. Ownership by you of
publicly traded stock of any corporation conducting any such business shall not
be deemed a violation of the preceding two sentences provided you do not own
more than three percent (3%) of the stock of any such corporation. You further
agree that for a period of one year after the termination of your employment
with Edison for any reason, you will not, directly or indirectly, solicit the
employment or other services of any executive employee of Edison. For the
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purposes of the foregoing, any executive employee who within twelve months of
terminating his employment with Edison becomes employed by any entity of which
you are an officer or director or owner of more than an aggregate of 3% of the
outstanding stock or equity interest therein shall be deemed, prima facie, to
have been so solicited.
Entire Agreement. Together with the attached exhibits, this letter
agreement constitutes the entire understanding of the parties with respect to
the subject matter hereof and supersedes all prior agreements and
understandings, written or oral, among the parties with respect to such subject
matter. This agreement is governed by the substantive laws of the State of New
York.
Duplicate originals of this agreement are being provided to you. Please
sign below to evidence your agreement to the foregoing, and return one original
to me for our records.
Sincerely,
/s/ H. Xxxxxxxxxxx Xxxxxxx
H. Xxxxxxxxxxx Xxxxxxx
President/Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxxxxxxxxx X. Xxxx
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Xxxxxxxxxxx X. Xxxx
July 1, 1999
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Date
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EXHIBIT A
JOB RESPONSIBILITIES
(1) The planning, implementation and coordination of all of Edison's operating
activities at its multiple school sites to include staff recruitment, school
start-ups, school support and school oversight;
(2) General oversight of activities of the Company's curriculum division,
schools division, technology division, and business and administrative services
division;
(3) Working with Edison's CEO and Chief Financial Officer ("CFO") to prepare the
Company's annual business plan;
(4) Delivery of the Company's annual business plan results;
(5) Delivery of the Company's annual academic results;
(5) Management of the Company's employees;
(6) Systems design and implementation;
(7) Such other tasks commensurate with your position as may be assigned to you
by the CEO or Edison's Board, to include until such time as that position is
filled the responsibilities of the Company's General Counsel.
