EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT, dated as of May 11, 1998 by and among LPA
HOLDING CORP., a Delaware corporation ("LPA Holdings"), LA PETITE ACADEMY,
INC., a Delaware corporation (the "Company") and Xxxxx X. Xxxx ("Executive").
RECITALS
In order to induce Executive to agree to serve as Chief Executive
Officer and President of the Company, LPA Holdings and the Company desire to
provide Executive with compensation and other benefits on the terms and
conditions set forth in this Agreement.
Executive is willing to enter into such employment and perform
services for the Company on the terms and conditions set forth in this
Agreement.
It is therefore hereby agreed by and among the parties as follows:
1. Employment.
(a) Subject to the terms and conditions of this Agreement, the
Company agrees to employ Executive during the term hereof as Chief
Executive Officer and President. In his capacity as Chief Executive
Officer and President of the Company, Executive shall have all of
the customary powers, responsibilities and authorities of presidents
and chief executive officers of corporations of the size, type and
nature of the Company, as they exist from time to time, including,
without limitation, supervision of the preparation of an operating
budget with respect to each fiscal year of the Company, which budget
(the "Annual Budget") (i) shall set forth target goals for the
Company for each such Fiscal Year and (ii) shall be submitted to the
Board of Directors of the Company (the "Board") for its approval. As
used herein, "Fiscal Year" shall mean the fiscal year ending on the
Saturday closest to the last day of August of each year. Executive's
principal office shall be at the principal executive offices of the
Company in the Kansas City Metropolitan Area.
(b) The Company shall, during the term hereof, use its best
efforts to cause the election and retention of Executive to the
position of Chairman of the Board.
(c) Subject to the terms and conditions of this Agreement,
Executive hereby accepts employment as Chief Executive Officer and
President of the Company and agrees to devote his full working time
and efforts, to the best of his ability, experience and talent, to
the performance of services, duties and responsibilities in
connection therewith. Nothing in this Agreement shall preclude
Executive from engaging, consistent with his duties and
responsibilities hereunder, in charitable and community affairs,
from managing his personal investments or, except as otherwise
provided in Section 12 hereof, from serving as a member of boards of
directors or as a trustee of other companies, associations or
entities.
2. Term of Employment. Executive's term of employment under this
Agreement shall commence on May 11, 1998 (the "Commencement Date") and,
subject to the terms hereof, shall
terminate on the last day of the Fiscal Year ending in August 2002 (the
"Termination Date"); provided, however, that on the last day of the Fiscal
Year ending in August 2002 and on each subsequent Fiscal Year end, the
Termination Date shall automatically be extended for a period of one year,
unless either party shall have given written notice to the other party not
less than ninety days prior to the Termination Date that the Termination Date
shall not be so extended.
3. Compensation.
(a) Initial Base Salary. The Company shall pay Executive a base
salary ("Base Salary") at the annual rate of $297,500 with the Base
Salary from the Commencement Date through August 29, 1998 to be the
product of $297,500 multiplied by a fraction, the numerator of which
is the number of calendar days from the Commencement Date through
August 29, 1998 and the denominator of which is 365. The Base Salary
shall be payable in accordance with the ordinary payroll practices
of the Company.
(b) Adjustments to Base Salary. Executive's annual rate of Base
Salary shall be increased on the first day of each Fiscal Year
during the term of Executive's employment hereunder (each such day
being referred to as an "Adjustment Date") by (i) a percentage equal
to the percentage increase in the Consumer Price Index for the
Kansas City metropolitan area from the first day of the Fiscal Year
preceding the Adjustment Date to the Adjustment Date, and (ii) any
such additional amount as may be specified by the Board. Once so
increased, the increased amount shall constitute Executive's Base
Salary hereunder.
(c) Annual Bonus. In addition to his Base Salary, Executive
shall be entitled to receive a cash bonus (the "Bonus") with respect
to each Fiscal Year (commencing with the Fiscal Year ending August
28, 1999). The Bonus shall be paid from the Company's two bonus
pools (the "First Bonus Pool" and the "Second Bonus Pool",
respectively) as follows:
(i) First Bonus Pool. Prior to the end of each Fiscal
Year, the Board shall determine the target EBITDA for the
immediately succeeding Fiscal Year (the "Plan EBITDA") and the
aggregate size of the bonus pool for all participants in the
First Bonus Pool based on the achievement of 95% of Plan
EBITDA, 100% of Plan EBITDA and 115% Plan EBITDA. For purposes
hereof, EBITDA shall be as defined in the Indenture dated as of
May 11, 1998, among the Company, PNC Bank, as Trustee, and the
other parties thereto. The Executive shall be entitled to a
Bonus from the First Bonus Pool in an amount up to 180% of Base
Salary as follows:
(A) On November 1, 1999 and on each succeeding
November 1 through and including the November 1 following
the termination of Executive's employment under Section
6(a) hereof, the Company shall pay to Executive in cash up
to one-quarter of the Bonus from the First Bonus Pool
based on the achievement by the Executive of his personal
management by objectives ("MBO"), as established by the
Compensation Committee of the Board (the "Committee"); and
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(B) On November 1, 1999, and on each succeeding
November 1 through and including the November 1 following
the termination of Executive's employment under Section
6(a) hereof, the Company shall pay to Executive a cash
bonus based upon the attainment of a specified percentage
of the actual EBITDA in relation to Plan EBITDA. No Bonus
will be payable in the event that actual EBITDA is less
than 95% of Plan EBITDA and the maximum bonus of
three-quarters of 180% of Base Salary is payable only when
actual EBITDA is 115% or more of Plan EBITDA. If actual
EBITDA as a percentage of Plan EBITDA falls within one of
the gradations specified below, three quarters of the
percentage of Base Salary specified below will be earned
in even increments within the relevant gradation.
Actual EBITDA As % of Base Salary
% of Plan EBITDA Earned as Bonus
---------------- ---------------
95.0%-100.0% 0.0%-60.0%
100.1%-115.0% 60.1%-180.0%
(ii) Second Bonus Pool. The aggregate amount of the Second
Bonus Pool for all its participants will be equal to 10% of the
aggregate amount of the First Bonus Pool for all its
participants. The Executive will be entitled to receive a bonus
out of the Second Bonus Pool in an amount to be determined by
the Committee based on the Executive's individual performance.
(d) Pro Rata Bonus. In the event of the termination of
Executive's employment under Section 6(a) hereof prior to the end of
a Fiscal Year, his Bonus in respect of such Fiscal Year shall be
reduced to equal the product of the amount which would otherwise be
payable to him in respect of such Fiscal Year pursuant to the
preceding subparagraph (A) multiplied by a fraction of which the
numerator is the number of calendar days from the first day of such
Fiscal Year to the date of termination of Executive's employment
hereunder and the denominator is 365.
(e) 1998 Bonus. Notwithstanding anything to the contrary
contained herein, with respect to the Bonus to be paid for Fiscal
Year 1998, Executive shall participate in the La Petite Academy
Senior Management Bonus Plan - 1998 Fiscal Year; provided, however,
that the allocations of payments to be made out of the First Bonus
Pool shall be allocated 75% based on Consolidated EBITDA and 25%
based on personal MBO.
(f) Compensation Plans and Programs. Executive shall
participate in any compensation plan or program, annual or
long-term, maintained by the Company on terms no less favorable than
those applicable to other senior management personnel of the
Company.
4. Employee Benefits.
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(a) Employee Benefit Programs, Plans and Practices. During the
term of his employment hereunder, the Company shall provide to
Executive coverage under any employee benefit programs, plans and
practices (commensurate with his positions in the Company and to the
extent possible under any employee benefit plan), in accordance with
the terms hereof, which the Company makes available to its senior
executive officers, including but not limited to (i) retirement,
pension and profit-sharing, and (ii) medical, dental,
hospitalization, life insurance, short and long-term disability,
accidental death and dismemberment and travel accident coverage.
(b) Vacation and Fringe Benefits.
(i) Executive shall be entitled to a paid vacation each
Fiscal Year of no less than four weeks (consisting of seven
calendar days each). The Company may, in its sole discretion,
grant additional vacation time to Executive.
(ii) In addition, Executive shall be entitled to all of
the perquisites and fringe benefits normally accorded the chief
executive officer of the Company, including, without
limitation, a car to be provided by the Company for Executive's
use and the expenses of a country club of Executive's choice.
5. Expenses. Executive is authorized to incur reasonable expenses in
carrying out his duties and responsibilities under this Agreement,
including without limitation, expenses for travel and similar items
related to such duties and responsibilities. The Company will reimburse
Executive for all such expenses upon presentation by Executive from time
to time of an itemized account of such expenditures.
6. Termination of Employment.
(a) Termination Not for Cause or Termination for Good Reason.
(i) (A) The Company may terminate Executive's employment
at any time, and Executive may terminate his employment at any
time. If Executive's employment is terminated by the Company
other than for Cause (as defined in Section 6(e)(ii) hereof) or
due to Executive's death or Permanent Disability (as defined in
Section 6(c) hereof) or Executive terminates his employment for
Good Reason (as defined in Section 6(a)(ii) hereof) in any of
the foregoing cases prior to the last day of the Fiscal Year
ending in August 2002, Executive shall be entitled to receive
from the Company, in lieu of any other cash compensation
provided for herein but not in substitution for compensation
already paid or earned, 26 equal bi-weekly payments (except as
provided below with respect to the Bonus) the sum of which is
equal to the sum of (A) Executive's Base Salary at its then
current annual rate and (B) the Bonus paid to or accrued by the
Company hereunder for the benefit of Executive in respect of
the Fiscal Year preceding the Fiscal Year in which such
termination occurs; provided, however, that if a termination
under this Section 6(a) occurs after February 28 of any Fiscal
Year, Executive shall instead be entitled to receive the Bonus
in respect of such Fiscal Year payable as follows: On the
November 1 following the date of termination,
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Executive shall be entitled to receive a lump sum payment in an
amount equal to the product of the Bonus amount for the Fiscal
Year in which the termination occurred multiplied by a fraction
the numerator of which is the number of months from the date of
termination to the November 1 following the date of termination
and the denominator of which is 12 and, thereafter until the
one year anniversary of Executive's termination in an amount
equal to the amount of the Bonus for the Fiscal Year in which
the termination occurred, divided by twelve, payable during
such period in accordance with the Company's then existing
payroll practices; provided, further, that in no event shall
the sum of the lump sum and monthly payments in respect of the
Bonus exceed the amount of the Bonus for the Fiscal Year in
which the termination occurred.
(B) In addition, Executive shall (1) be entitled to
receive, within a reasonable period of time after the date of
termination, a cash lump sum equal to (x) any compensation
payments deferred by Executive, together with any applicable
interest or other accruals thereon; and (y) any unpaid amounts,
as of the date of such termination, in respect of the Bonus for
the Fiscal Year ending before the Fiscal Year in which such
termination occurs; (2) for the period from the date of
termination of Executive's employment until the one year
anniversary of the Termination Date (as then in effect),
continue to be covered under and participate in the Company's
employee benefit programs, plans and practices described in
Section 4(a) hereof or under such other plans of the Company
which provide for equivalent coverage to the extent and on the
terms in effect on Executive's date of termination (other than
any disability plan for which coverage cannot be maintained
after such termination); (3) have such rights to payments under
applicable plans or programs, including but not limited to
those described in Section 3(d) hereof, as may be determined
pursuant to the terms of such plans or programs; and (4) have
provided to him at the Company's expense outplacement services,
suitable office space, secretarial services and the use of an
automobile for a period of one year from the date of
termination.
(ii) For purposes of this Agreement, "Good Reason" shall
mean the occurrence of any of the following events without
Executive's express prior written consent and which event shall
not have been cured within a reasonable period after notice
from the Executive:
(A) the assignment to Executive by the Company of
duties substantially inconsistent with Executive's
positions, duties, responsibilities, authorities, titles
and offices as set forth in Section 1 hereof, or any
material reduction by the Company of Executive's duties or
responsibilities or any removal of Executive as the Chief
Executive Officer or President of the Company, except in
connection with the termination of Executive's employment
for any other reason;
(B) a reduction by the Company in Executive's Base
Salary or Bonus (other than by reason of the terms of
Section 3(c) hereof) as in
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effect at the commencement of employment hereunder or as
the same may be increased from time to time during the
terms of this Agreement;
(C) any material breach by the Company of any material
provision of this Agreement;
(D) a relocation of the Company's executive offices
to a location more than fifty miles outside of the
Kansas City Metropolitan Area.
(b) (i) For purposes of this Agreement, "Change of Control"
shall mean the occurrence of any of the following events:
(A) the occurrence of both (A) the acquisition by an
entity of more than 30% of the outstanding capital stock
or assets of the Company, other than (x) an entity which
is an affiliate of the Company on the date hereof, or (y)
an entity in which Executive owns at least 5% of the
outstanding capital stock on a fully diluted basis
("Excluded Entities") or (B) the sale of more than 50% of
the outstanding capital stock of the Company owned by LPA
Holdings and its affiliates in the aggregate; or
(B) the approval by the shareholders of the Company,
of the merger or consolidation of the Company with any
other corporation, the sale of substantially all the
assets of the Company to any third party or the
liquidation or dissolution of the Company, other than such
a merger or consolidation with, sale to or liquidation
into a company more than 50% of whose outstanding capital
stock on a fully diluted basis is owned, after
consummation of such transaction, by the stockholders of
the Company, such stockholders' affiliates and/or any
Excluded Entity.
(ii) In the event of a Change in Control, the failure of
the Company to obtain the specific assumption of this Agreement
by any successor of the Company, or in the event of a
Termination Not for Cause or a Termination for Good Reason
following a Change in Control, Executive shall receive two
times the amounts specified in Section 6(a)(i)(A) hereunder
payable in a lump sum and shall also receive the amounts
specified in Section 6(a)(i)(B)(2) and (4) hereunder for a
period of two years from the date on which a Change of Control
occurs. For purposes of this Section 6(b)(ii), the term
"Termination Not for Cause" shall include a failure to extend
the Termination Date pursuant to Section 2.
(iii) (A) Notwithstanding anything in this Agreement to
the contrary, in the event that the provisions of the Deficit
Reduction Act of 1984 ("DEFRA") relating to "excess parachute
payments" shall be applicable to any payment or benefit
received or to be received by Executive in connection with a
Change-in-Control of the Company, then the total amount of
payments or benefits payable to Executive which are deemed to
constitute parachute payments shall be reduced to the largest
amount such that provisions of DEFRA relating to "excess
parachute payment" shall no longer be applicable. Should such a
reduction be required, the Executive shall determine, in the
exercise of his sole
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discretion, which payment or benefit to reduce or eliminate.
Pending such determination, the Company shall continue to make
all other required payments to Executive at the time and in the
manner provided herein and shall pay the largest portion of any
parachute payments such that the provisions of DEFRA relating
to "excess parachute payments" shall no longer be applicable.
(B) Due to the complexity in the application of Section
280(G) of the Code, it is possible that payments made or
benefits received hereunder should not have been made under
subparagraph (ii)(a) above (an "Overpayment"). In the event
that it is determined in writing by the Company's outside
auditors in their reasonable good faith judgment or by any
court of competent jurisdiction that an Overpayment has been
made resulting in an "Excess Parachute Payment" as defined in
Section 280G(b)(1) of the Internal Revenue Code of 1986, as
amended (the "Code"), then any such Overpayment shall be
treated for all purposes as an unsecured, long-term loan from
the Company to the Executive, his personal representative, his
successors or assigns, as the case may be, that is payable,
together with accrued interest from the date of the making of
the Overpayment at the rate of 8% per annum on the later to
occur of the third anniversary of the payment of such
Overpayment, or 6 months following the date upon which it is
determined an Overpayment was made. Should it be determined
that such an Overpayment has been made, the Executive shall
determine, in the exercise of his sole discretion, which
payments or benefits shall be deemed to constitute the
Overpayment.
(c) Permanent Disability. If (i) Executive shall fail for
a period of six consecutive months during the term of his
employment hereunder, because of illness, physical or mental
disability or other incapacity, to render the services provided
for by this Agreement or (ii) at such earlier time as Executive
or the Company submits satisfactory medical evidence that
Executive has an illness, physical or mental disability or
other incapacity which is expected to prevent him from
returning to the performance of his work duties for six months
or longer ("Permanent Disability"), the Company or Executive
may terminate Executive's employment upon written notice
thereof, setting forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of
Executive's employment under this Section 6(c), and Executive
shall receive or continue to receive, as the case may be:
(i) as soon as practicable after the date of
termination of Executive's employment pursuant to this
Section 6(c), a cash lump sum equal to any compensation
payments deferred by Executive, together with any
applicable interest or other accruals thereon;
(ii) any unpaid amounts, as of the date of such
termination, in respect of the Bonus for the Fiscal Year
ending before such termination, which shall be payable on
the date on which such Bonus is payable as specified in
Section 3(c)(i)(A) hereof;
(iii) on the November 1 following the end of the
Fiscal Year during which the termination of Executive's
employment pursuant to this Section 6(c)
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occurs, an amount in respect of the Bonus for such Fiscal
Year calculated on the basis specified in Section
3(c)(i)(B) hereof;
(iv) until the end of the term contemplated by this
Agreement (or, if earlier, the end of Executive's
Permanent Disability or upon his death), annual amounts
equal to no less than 60% of Executive's then annual Base
Salary, reduced by any amounts received by Executive under
any disability insurance policies with respect to which
the Company paid the premiums; and
(v) such rights to payments under applicable plans or
programs, including but not limited to those described in
Section 3(d) hereof, as may be appropriate pursuant to the
terms of such plans or programs.
(d) Death. In the event of Executive's death during the
term of his employment hereunder, Executive's estate or
designated beneficiaries shall receive:
(i) payments of Base Salary for a period of twelve
months after his date of death;
(ii) as soon as practicable after the date of
Executive's death, a cash lump sum equal to any
compensation payments deferred by Executive, together with
any applicable interest or other accruals thereon;
(iii) any unpaid amounts, as of the date of
Executive's death, in respect of the Bonus for the Fiscal
Year ending before his death, which shall be payable on
the date on which such Bonus is payable as specified in
Section 3(c)(i)(A) hereof;
(iv) on the November 1 following the end of the
Fiscal Year during which Executive's death occurs, an
amount in respect of the Bonus for such Fiscal Year
calculated on the basis specified in Section 3(c)(i)(B)
hereof;
(v) any death benefits provided under the employee
benefit programs, plans and practices described in Section
4(a) hereof, in accordance with their terms; and
(vi) such other payments under applicable plans or
programs, including but not limited to those described in
Section 3(d) hereof, as may be appropriate pursuant to the
terms of such plans or programs.
(e) Voluntary Termination by Executive: Discharge for
Cause.
(i) In the event that Executive's employment is
terminated by the Company for Cause, as hereinafter
defined, or by Executive other than for Good Reason or
other than as a result of Permanent Disability or death,
prior to the Termination Date, Executive shall be entitled
to receive all salary and benefits to which Executive is
entitled up to and including the date of Executive's
termination of employment hereunder, including, without
limitation, compensation payments deferred by Executive.
The obligations of the Company
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under this Agreement to make any further payments, or
provide any benefits specified herein, to Executive shall
cease and terminate on the date on which Executive's
employment is terminated by the Company for Cause or by
Executive other than for Good Reason or other than as a
result of Permanent Disability or death. Termination of
Executive in accordance with this Section 6(e) shall be
communicated to Executive pursuant to a notice of a
resolution of a majority of the Board determining that
Executive is subject to Discharge for Cause as defined
herein.
(ii) As used herein, the term "Cause" shall be
limited to (A) action by Executive involving willful
malfeasance in connection with his employment having a
material adverse effect on the Company, (B) material
breach by Executive of this Agreement or any other
agreement entered into between Executive and the Company,
(C) continuing refusal by Executive in willful breach of
this Agreement to perform the duties ordinarily performed
by a chief executive officer (other than any such failure
resulting from his reasonably documented incapacity due to
physical or mental illness) after a written demand for
substantial performance is delivered to him by the Board
which demand specifically identifies the manner in which
the Board believes that he has not substantially performed
his duties or (D) Executive being convicted of any felony
(or any misdemeanor involving the property or assets of
the Company) under the laws of the United States or any
State. Notwithstanding the foregoing, the Executive shall
not be deemed to have been terminated for Cause unless and
until there shall have been delivered to him a copy of a
resolution duly adopted by the affirmative vote of not
less than a majority of the entire Board at a meeting of
the Board (after reasonable notice to Executive and
opportunity for him, together with counsel, to be heard
before the Board), finding that the Executive was guilty
of conduct set forth above in this subsection.
7. Notices. All notices or communications hereunder shall be in writing,
addressed as follows:
To the Company and LPA Holdings
La Petite Academy, Inc.
14 Corporate Xxxxx
0000 X. 000xx Xxxxxx, Xxxxx 000
Xxxxxxxx Xxxx, Xxxxxx 00000
with a copy to:
LPA Investment LLC
c/o Chase Capital Partners
380 Madison Avenue, 12th Floor
New York, N.Y. 10017
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To Executive:
Xxxxx X. Xxxx
00000 Xx Xxxxx
Xxxxxxx, Xxxxxx 00000
Any such notice or communication shall be sent certified or registered mail,
return receipt requested, postage prepaid, addressed as above (or to such
other address as such party may designate in a notice duly delivered as
described above), and the actual date of mailing shall constitute the time at
which notice was given.
8. Separability; Legal Fees; Arbitration. If any provision of this
Agreement shall be declared to be invalid or unenforceable, in whole or in
part, such invalidity or unenforceability shall not affect the remaining
provisions hereof, which shall remain in full-force and effect. In addition,
the Company shall bear, or reimburse Executive for, all legal fees incurred in
connection with entering into this Agreement and any other agreements being
simultaneously entered into by the Company and Executive. Any controversy or
claim arising out of or relating to this Agreement or the breach of this
Agreement (other than Section 12 hereof) that cannot be resolved by Executive
on the one hand and the Company on the other, including any dispute as to the
calculation of Executive's benefits or any payments hereunder, shall be
submitted to arbitration in Chicago, Illinois in accordance with Delaware law
and the procedures of the American Arbitration Association. The determination
of the arbitrators shall be conclusive and binding on the Company and
Executive, and judgment may be entered on the arbitrators' award in any court
having jurisdiction.
9. No Obligation to Mitigate Damages. Executive shall not be required to
mitigate damages or the amount of any payment provided for under this
Agreement by seeking other employment or otherwise, nor will any payments
under Section 6 hereof be subject to offset in respect of any claims which the
Company have against Executive.
10. Assignment. This contract shall be binding upon and inure to the
benefit of the heirs and representatives of Executive and the assigns and
successors of LPA Holdings and the Company, but neither this nor any rights
hereunder shall be assignable or otherwise subject to hypothecation by
Executive (except by will or by operation of the laws of intestate succession)
or by LPA Holdings or by the Company, except that LPA Holdings and the Company
may assign this Agreement to any successor (whether by merger, purchase or
otherwise) to all or substantially all of the stock, assets or businesses of
LPA Holdings or the Company.
11. Amendment. This Agreement may only be amended by written agreement of
the parties hereto.
12. Nondisclosure of Confidential Information; Non-Competition.
(a) Executive shall not, without the prior written consent of the
Company, divulge, disclose or make accessible to any other person, firm,
partnership, corporation or other entity any Confidential Information
pertaining to the business of the Company, except (i) while employed by
the Company, in the business of and for the benefit of the Company, or
(ii) when required to do so by a court of competent jurisdiction, by any
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governmental agency having supervisory authority over the business of the
Company, or by any administrative body or legislative body (including a
committee thereof) with purported or apparent jurisdiction to order
Executive to divulge, disclose or make accessible such information. For
purposes of this Section 12(a), "Confidential Information" shall mean
non-public information concerning the Company's financial data, strategic
business plans, product development (or other proprietary product data),
customer lists, marketing plans and other non-public, proprietary and
confidential information of the Company that is not otherwise available
to the public.
(b) For a period of one year commencing on Executive's date of
termination for any reason, Executive agrees that, without the prior
written consent of the Company, he shall not, directly or indirectly, (i)
either as principal, manager, agent, consultant, officer, stockholder,
partner, investor, lender or employee or in any other capacity, carry on,
be engaged in or have any financial interest in, any business which is in
material competition with the business of the Company and/or its
affiliates or (ii) solicit any employees of the Company and/or its
affiliates.
(c) For purposes of Section 12(b) hereof, a business shall be deemed
to be in competition with the Company if it is significantly involved in
the rendering of any service significantly purchased, sold, dealt in or
rendered by the Company and/or its affiliates. As used in the preceding
sentence, the term "significantly" shall be deemed to refer to activities
generating gross annual sales of at least $25 million. Nothing in this
Section 12 shall be construed so as to preclude Executive from investing
in any publicly held company provided Executive's beneficial ownership of
any class of such company's securities does not exceed 5% of the
outstanding securities of such class.
(d) Executive and the Company agree that the foregoing covenant not
to compete is a reasonable covenant under the circumstances, and further
agree that if in the opinion of any court of competent jurisdiction such
restraint is not reasonable in any respect, such court shall have the
right, power and authority to excise or modify such provision or
provisions of such covenant as to the court shall appear not reasonable
and to enforce the remainder of the covenant as so amended. Executive
agrees that any breach of the covenants contained in this Section 12
would irreparably injure the Company. Accordingly, the Company may, in
addition to pursuing any other remedies they may have in law or in
equity, obtain an injunction against Executive from any court having
jurisdiction over the matter, restraining any further violation of this
Section 12 by Executive.
13. Beneficiaries; References. Executive shall be entitled to select (and
change, to the extent permitted under any applicable law) a beneficiary or
beneficiaries to receive any compensation or benefit payable hereunder
following Executive's death, and may change such election, in either case by
giving the Company written notice thereof. In the event of Executive's death
or a judicial determination of his incompetence, reference in this Agreement
to Executive shall be deemed, where appropriate, to refer to his beneficiary,
estate or other legal representative. Any reference to the masculine gender in
this Agreement shall include, where appropriate, the feminine.
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14. Survivorship. The respective rights and obligations of the parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations. The
provisions of this Section 14 are in addition to the survivorship provisions
of any other section of this Agreement.
15. Governing Law. This Agreement shall be construed, interpreted and
governed in accordance with the laws of the State of Delaware, without
reference to rules relating to conflict of laws.
16. Withholding. The Company shall be entitled to withhold from any
payment hereunder any amount required by law to be withheld.
17. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original.
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18. Entire Agreement. This Agreement reflects the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and replaces and supercedes any prior employment agreements, including without
limitation, that certain Employment Agreement dated as of July 23, 1993, by
and among La Petite Acquisition Corp., the Company and the Executive, as the
same may have been amended, supplemented or modified from time to time.
* * * * *
LA PETITE ACADEMY, INC.
By:
---------------------------------
Name:
Title:
LPA HOLDING CORP.
By:
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Name:
Title:
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Executive
-13-
