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EXHIBIT 10.24
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of January 1, 1997, between UNIVERSITY
ONLINE, INC., a corporation organized and existing under the laws of the State
of Delaware ("UOL") and XXXXXXX X. XXXXXXXX ("Xxxxxxxx").
WHEREAS, UOL desires to employ Xxxxxxxx and Xxxxxxxx desires to accept
such employment on the terms and conditions hereinafter set forth; and
WHEREAS, the parties hereby acknowledge that the goodwill, continued
patronage, names, addresses and specific business requirements of UOL's clients
and customers, and the designs, procedures, systems, strategies, business
methods and know-how of UOL, having been acquired through UOL's efforts and the
expenditure of considerable time and money, are among the principal assets of
UOL; and
WHEREAS, the parties hereby acknowledge that as a result of the
position(s) in which Xxxxxxxx is and will be employed, Xxxxxxxx has developed
and will continue to develop special skills and knowledge peculiar to UOL's
business, whereby he has become and will continue to become, through his
employment with UOL, acquainted with the identities of the clients and
customers of UOL, and has acquired and will continue to acquire access to the
techniques of UOL in carrying on its business, as well as other confidential
and proprietary information; and
WHEREAS, the parties hereto acknowledge that the Covenants set forth
in Section 8 of this Agreement are necessary for the reasonable and proper
protection of UOL's confidential and proprietary information (as defined
herein), customer relationships, and the goodwill of UOL's business, and that
such Covenants constitute a material portion of the consideration for
Xxxxxxxx'x employment hereunder.
NOW, THEREFORE, in consideration of the premises and mutual promises
and covenants contained herein, and for other good and valuable consideration,
the receipt and legal sufficiency of which are hereby acknowledged, the parties
agree as follows:
1. Term. UOL agrees to employ Xxxxxxxx, and Xxxxxxxx agrees to
be employed, as Vice President of Technology and Operations of UOL, or in such
other position as the Board of Directors may from time to time assign, for a
term of two (2) years commencing January 1, 1997 and ending December 31, 1998
(the "Initial Term"), unless such employment is sooner terminated as provided
herein.
2. Renewal Terms. Unless either party provides written notice
to the other of its/his intention not to renew this Agreement at least sixty
(60) days prior to the expiration of the Initial Term (or then-current renewal
term hereof), this Agreement shall be automatically renewed for consecutive
additional one (1) year renewal terms, subject to the termination provisions
set forth in Section 8 hereof.
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3. Compensation. In consideration of Xxxxxxxx'x services
hereunder, UOL shall, beginning with the pay period commencing May 1, 1996, pay
Xxxxxxxx a minimum annual base salary of $One Hundred Twenty Thousand and
00/100 ($120,000) per annum, payable in equal monthly installments in
accordance with UOL's normal payroll practices, plus an annual performance
bonus of up to fifty percent (50%) of Xxxxxxxx'x base salary in an amount to be
determined by the Board of Directors of UOL in its sole discretion, based upon
the achievement of specified goals to be established by the Board during the
term hereof. Xxxxxxxx'x total compensation shall be reviewed by the Board of
Directors of UOL on an annual basis during the term hereof (including renewal
terms) and may be increased as UOL deems appropriate in its sole discretion.
4. Employee Benefits; Vacation. During the term of this
Agreement, Xxxxxxxx shall be eligible to receive and/or participate in all
employee benefits that are offered by UOL to its executive employees,
including, without limitation, UOL's contributory (80% paid by UOL and 20% paid
by employee) major medical, dental and life insurance plan, and coverage under
UOL's long term disability plan (100% paid by employee). During the term
hereof, Xxxxxxxx shall be entitled to receive thirteen (13) hours of paid
vacation for each month of completed service (i.e., four weeks per calendar
year) during the term hereof. No more than forty hours (i.e., five (5) days)
of accrued but unused vacation may be carried over by Xxxxxxxx from one
calendar year to the next during the term hereof without prior written approval
of UOL.
5. Reimbursement of Expenses. Xxxxxxxx is authorized to incur
reasonable expenses in connection with the business of UOL including expenses
for travel and similar items. UOL will reimburse Xxxxxxxx for all previously
approved reasonable expenses upon itemized account of expenditures.
6. Illness or Disability. Xxxxxxxx shall receive full
compensation for any period of illness or disability during the term of this
Agreement until such time as he receives benefits under the long term
disability insurance coverage referred to in Section 4, supra; provided,
however, that such interim period of compensation for illness or disability
shall not exceed six (6) months. Notwithstanding the foregoing, UOL shall have
the right to terminate this Agreement without further obligation to Xxxxxxxx
if such illness or disability shall be of such a character as totally to
disable Xxxxxxxx from rendering any services to UOL for a period of more than
six (6) consecutive months on giving at least thirty (30) days' written notice
of intention to do so.
7. Termination of Employment. Xxxxxxxx'x employment hereunder is
employment at will, and either UOL or Xxxxxxxx may terminate this Agreement and
Xxxxxxxx'x employment at any time, with or without cause.
x. Xxxxxxxxx Benefit Payable. If Xxxxxxxx terminates
this Agreement for Good Reason (as defined below), or if UOL terminates the
Agreement other than (i) for Cause (defined below) or (ii) due to Xxxxxxxx'x
Disability as described in Section 6 hereof, Xxxxxxxx
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shall be entitled to receive, as his exclusive remedy for such termination, the
severance benefit set forth in subsection 8d hereof (the "Severance Benefit").
Such Severance Benefit shall be payable to Xxxxxxxx in equal monthly
installments consistent with UOL's standard payroll practices, the first of
such installments to be due within thirty (30) days after termination hereof.
In order, however, to invoke termination for "Good Reason" hereunder, Xxxxxxxx
must communicate such termination in advance and by written notice to UOL,
which written notice (i) indicates the specific termination provision in this
Agreement relied upon, (ii) sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Xxxxxxxx'x
employment under the provision so indicated and (iii) specifies the termination
date (which date shall not be more than thirty (30) days after the giving of
such notice).
b. Good Reason. For purposes of this Agreement, "Good
Reason" shall mean any request that Xxxxxxxx relocate outside the Washington,
D.C. metropolitan area, or any material reduction in Xxxxxxxx'x duties, titles,
authority or position with UOL, excluding any isolated, unsubstantial or
inadvertent action not taken in bad faith and which is remedied by UOL promptly
after receipt of notice thereof given by Xxxxxxxx; provided, however, that no
severance benefit shall be payable to Xxxxxxxx based upon a termination of this
Agreement for Good Reason unless such termination is properly noticed and takes
effect within thirty (30) days after the occurrence of such Good Reason.
c. Cause. For purposes of this Agreement, "Cause" shall
mean drug or alcohol abuse, conviction of a felony or crime involving moral
turpitude, a material breach of this Agreement, or any willful or grossly
negligent act or omission by Xxxxxxxx having a material adverse effect on the
business of UOL.
d. Amount of Severance Benefit. The amount of the
Severance Benefit shall equal nine (9) months of Xxxxxxxx'x Base Salary, less
applicable withholdings for taxes, plus six (6) months of those employer-paid
benefits customarily provided by UOL to its executive employees.
8. Restrictive Covenants.
a. Noncompetition. Xxxxxxxx agrees that during, and for
a period of two (2) years after, the later of termination or expiration of this
Agreement and his employment with UOL, he will not: (a) engage in, manage,
operate, control or supervise, or participate in the management, operation,
control or supervision of, any business or entity that provides products or
services competitive with those currently provided by UOL or those UOL is
providing as of the date of termination of Xxxxxxxx'x employment with UOL; or
(b) have any ownership or financial interest, directly or indirectly, in any
entity that provides products or services competitive with those currently
provided by UOL or those UOL is providing as of the date of termination of
Xxxxxxxx'x employment with UOL, including, without limitation, as an
individual, partner, shareholder (other than as a shareholder of a
publicly-owned corporation in which Xxxxxxxx owns less than 2% of the
outstanding shares of such corporation), officer, director, employee, member,
associate, principal, agent, representative or consultant, and shall not in any
other manner, directly or indirectly, compete to any extent
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with such business of UOL. Notwithstanding the foregoing, Xxxxxxxx shall not
be bound by the terms of this subsection 8a if the Agreement is terminated by
UOL and such termination is without Cause as defined herein.
b. Nonsolicitation. During Xxxxxxxx'x employment with
UOL, and for the two (2) year period of time described in Section 8a hereof,
Xxxxxxxx agrees not to solicit or conduct business with any client or customer
of UOL (past or present), whether or not UOL is doing work for such client or
customer as of the date of termination of Xxxxxxxx'x employment with UOL, as
well as any prospective client or customer of UOL, or to contact, solicit,
interfere with or attempt to entice in any form, fashion or manner any employee
of UOL for the purpose of inducing that employee to terminate his/her
employment with UOL or act in any way that would be contrary to the best
interests of UOL.
c. Nondisclosure. During and after Xxxxxxxx'x
employment with UOL, Xxxxxxxx agrees not to disclose, or to knowingly allow any
other employee to disclose, to any other person or business entity, or use for
personal profit or gain, any confidential or proprietary information of UOL,
regardless of whether the same shall be or may have been originated, discovered
or invented by Xxxxxxxx or by Xxxxxxxx in conjunction with others. For
purposes of this Agreement, the term "confidential or proprietary information"
shall include, without limitation: the names, addresses and telephone numbers
of past, present and prospective clients or customers of UOL, as well as
products, designs, business plans, proposed business development, marketing
strategies, customers requirements, contractual provisions, employee
capabilities, proposed marketing initiatives, pricing methods, company
earnings, computer software and reporting systems; and the procedures, systems
and business methods of UOL.
d. Geographic Scope of Restrictive Covenants. The
geographic area in which Xxxxxxxx shall not engage in any of the prohibited
activities listed in subsections 8a and 8b hereof shall be limited to: (a) the
continental United States; (b) the State of California; (c) the State of Texas;
(d) the State of Virginia; (e) all other states in which UOL has customers or
otherwise conducts business; (f) the area within a 50 mile radius of UOL's
place of business in Falls Church, Virginia; and (g) the area within a 50 mile
radius of Waxahachie, Texas.
e. Additional Consideration. As additional
consideration for Xxxxxxxx'x agreement to be bound by the terms of this Section
8, Xxxxxxxx shall receive from UOL a lump sum payment of Two Thousand Five
Hundred and 00/100 Dollars ($2,500) (the "Additional Consideration"). Xxxxxxxx
hereby acknowledges that he would not be entitled to receive the Additional
Consideration but for his agreement to be bound by the provisions of this
Section 8.
9. Remedies for Breach. Xxxxxxxx hereby acknowledges and agrees
that a violation of any of the covenants set forth in Section 8 hereof (the
"Covenants") would result in immediate and irreparable harm to UOL, and that
UOL's remedies at law, including, without limitation, the award of money
damages, would be inadequate relief to UOL for any such violation. Therefore,
any violation or threatened violation by Xxxxxxxx of the Covenants shall
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give UOL the right to enforce such Covenants through specific performance,
temporary restraining order, preliminary or permanent injunction, and other
equitable relief. Such remedies shall be cumulative and in addition to any
other remedies UOL may have, at law or in equity.
10. Notice of Subsequent Employment; Etc. Xxxxxxxx agrees that he
shall, during the two (2) year period following the termination of his
employment with UOL, give reasonable written notice to UOL of the names and
addresses of each person, firm, corporation or other entity by whom he is
employed or for whom he acts as director, agent, representative, member,
associate or consultant. Xxxxxxxx further agrees that if at any time during
such two (2) year period he conducts business on his own account, or through a
proprietary interest in any business, firm, partnership or other entity, or as
contractor, or owns any stock in a corporation, Xxxxxxxx shall give written
notice to UOL of the name, address and nature of any such business.
11. Return of UOL Property; Assignment of Inventions.
a. Return of Property. Upon the termination of Xxxxxxxx'x
employment with UOL for any reason, Xxxxxxxx shall leave with or return to UOL
all personal property belonging to UOL ("UOL Property") that is in Xxxxxxxx'x
possession or control as of the date of such termination of employment,
including, without limitation, all records, papers, drawings, notebooks,
specifications, marketing materials, software, reports, proposals, equipment,
or any other device, document or possession, however obtained, whether or not
such UOL Property contains confidential or proprietary information of UOL as
described in Section 8c hereof.
b. Assignment of Inventions. If at any time or times
during Xxxxxxxx'x employment, Xxxxxxxx shall (either alone or with others)
make, conceive, discover or reduce to practice any invention, modification,
discovery, design, development, improvement, process, software program, work of
authorship, documentation, formula, data, technique, know-how, secret or
intellectual property right whatsoever or any interest therein (whether or not
patentable or registrable under copyright or similar statutes or subject to
analogous protection) (herein called "Developments") that (a) relates to the
business of UOL or any of the products or services being developed,
manufactured or sold by UOL or that may be used in relation therewith, (b)
results from tasks assigned him by UOL or (c) results from the use of premises
or personal property (whether tangible or intangible) owned, leased or
contracted for by UOL, such Developments and the benefits thereof shall
immediately become the sole and absolute property of UOL and its assigns, and
Xxxxxxxx shall promptly disclose to UOL (or any persons designated by it) each
such Development and hereby assigns any rights Xxxxxxxx may have or acquire in
the Developments and benefits and/or rights resulting therefrom to UOL and its
assigns without further compensation and shall communicate, without cost or
delay, and without publishing the same, all available information relating
thereto (with all necessary plans and models) to UOL.
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Upon disclosure of each Development to UOL, Xxxxxxxx will, during his
employment and at any time thereafter, at the request and expense of UOL, sign,
execute, make and do all such deeds, documents, acts and things as UOL and its
duly authorized agents may reasonably require:
(i) to apply for, obtain and vest in the name of
UOL alone (unless UOL otherwise directs) letters
patent, copyrights or other analogous protection in
any country throughout the world and when so obtained
or vested to renew and restore the same; and
(ii) to defend any opposition proceedings in
respect of such applications and any opposition
proceedings or petitions or applications for
revocation of such letters patent, copyright or other
analogous protection.
In the event UOL is unable, after reasonable effort, to secure
Xxxxxxxx'x signature on any letters patent, copyright or other analogous
protection relating to a Development, whether because of Xxxxxxxx'x physical or
mental incapacity or for any other reason, Xxxxxxxx hereby irrevocably
designates and appoints UOL and its duly authorized officers and agents as
Xxxxxxxx'x agents and attorneys-in-fact, to act for and in behalf of Xxxxxxxx
and xxxxx to execute and file any such application or applications and to do
all other lawfully permitted acts to further the prosecution and issuance of
letters patent, copyright or other analogous protection thereon with the same
legal force and effect as if executed by Xxxxxxxx.
12. Survival. The provisions of Sections 8, 9, 10 and 11 hereof
shall survive the termination of this Agreement, regardless of the manner or
cause of such termination.
13. Effect of Agreement. This Agreement sets forth the final and
complete Agreement of the parties. It shall not be assigned by Xxxxxxxx and
may not be modified except by way of a writing executed by both parties. All
the terms and provisions of this Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their successors
and assigns.
14. Governing Law. The provisions of this Agreement and any
disputes arising hereunder shall be governed by and construed in accordance
with the laws of the State of Virginia.
[The next page is the Signature Page.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and their seals affixed hereto as of the day and year first
above written.
UNIVERSITY ONLINE, INC.
By: /s/ Xxxx X. Xxxxx
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Name: /s/ Xxxx X. Xxxxx
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Title: President
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/s/ Xxxxxxx X. Xxxxxxxx (SEAL)
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Xxxxxxx X. Xxxxxxxx
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