Contract
Exhibit
10.6
EMPLOYMENT
AGREEMENT (this “Agreement”),
dated
as of February 1, 2007, between LINCOLN EDUCATIONAL SERVICES CORPORATION,
a New
Jersey corporation (the “Company”),
and
Xxxxx X. XxXxxxxx (the “Executive”).
WHEREAS,
the Executive is currently employed by the Company;
WHEREAS,
the Executive and the Company entered into an Employment Agreement, dated
September 26, 2006 (the “Original
Agreement”),
which
set forth the terms and conditions of the Executive’s employment with the
Company;
WHEREAS,
the Original Agreement was amended on January 24, 2007 (the
“Amendment”);
WHEREAS,
the parties desire that this Agreement supersede the Original Agreement and
the
Amendment;
NOW,
THEREFORE, in consideration of the covenants and agreements hereinafter set
forth, the parties hereto agree as follows:
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1.
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EFFECTIVENESS
OF AGREEMENT
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This
Agreement shall become effective, and shall supersede the Original Agreement
and
the Amendment as of the date hereof (the “Effective
Date”).
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2.
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EMPLOYMENT
AND DUTIES
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2.1 Position
and Duties.
The
Company hereby continues to employ the Executive, and the Executive agrees
to
serve, as President and Chief Operating Officer of the Company, upon the
terms
and conditions contained in this Agreement. The Executive shall report to
the Chairman of the Board of Directors of the Company (the “Board”)
and
the Chief Executive Officer of the Company and perform duties and services
for
the Company commensurate with the Executive’s position. Except as may
otherwise be approved in advance by the Board or the Compensation Committee
of
the Board (the “Committee”),
the
Executive shall render his services exclusively to the Company during his
employment under this Agreement and shall devote substantially all of his
working time and efforts to the business and affairs of the
Company.
2.2 Term
of Employment.
The
Executive’s employment under this Agreement shall terminate on December 31,
2008, unless terminated earlier pursuant to Section 5 or extended pursuant
to
Section 6.1 (the “Employment
Period”).
2.3 Location
of Work.
The
Executive shall be based in the United States in West Orange, New Jersey.
However, the Executive agrees to undertake whatever domestic and worldwide
travel is required by the Company. The Executive shall not be required or
permitted to relocate without the mutual, written consent of the Executive
and
the Company.
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3.
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COMPENSATION
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3.1 Base
Salary.
Subject
to the provisions of Sections 5 and 6, the Executive shall be entitled to
receive a base salary (the “Base
Salary”)
at a
rate of $300,000 per annum during the Employment Period, such rate to be
effective as of January 1, 2007. Such rate may be adjusted upwards, but not
downwards, from time to time by the Board or the Committee, in their sole
discretion. The Base Salary shall be paid in equal installments on a biweekly
basis or in accordance with the Company’s current payroll practices, less all
required deductions. The Base Salary shall be pro-rated for any period of
service less than a full year.
3.2 Annual
Bonus.
Subject
to the provisions of Sections 5 and 6, the Executive shall be eligible to
earn
an annual bonus for 2007 and each full calendar year thereafter during the
Employment Period (the “Annual
Bonus”),
the
amount of which shall be based upon performance targets or such other criteria
that are determined by the Board or the Committee pursuant to the provisions
of
the Company’s Key Management Team Incentive Compensation Plan ( the
“Incentive
Plan”)
in
effect for the applicable calendar year. The Company shall pay the Annual
Bonus
to the Executive no later than three weeks following receipt by the Board
or the
Committee of the Company’s audited financial statements for the applicable
fiscal year. The Annual Bonus shall be prorated for any year in which the
Executive’s employment is terminated due to death or Disability (as defined in
Appendix A). If
during
the Employment Period the Executive’s employment is terminated by the Company
(or any successor thereto) for Cause (as defined in Exhibit A) or the Executive
resigns from his employment other than for Good Reason (as defined in Exhibit
A)
prior to the payout of any Annual Bonus due for a completed calendar, the
Executive shall not receive such Annual Bonus.
3.3 Reimbursement
of Expenses.
The
Company shall reimburse the Executive for reasonable travel and other business
expenses incurred by him in the fulfillment of his duties hereunder upon
presentation by the Executive of an itemized account of such expenditures,
in
accordance with Company practices.
3.4 Future
Compensation Actions.
At such
time or times during the Term as salary increases or equity-based incentive
awards are being considered for other executive officers of the Company,
the
Executive shall also be considered for such an increase or award.
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4.
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EMPLOYEE
BENEFITS
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4.1 General.
The
Executive shall, during the Employment Period, be included, to the extent
eligible thereunder, in all employee benefit plans, programs and arrangements
(including, without limitation, any plans, programs or arrangements providing
for retirement benefits, profit sharing, disability benefits, health and
life
insurance or vacation and paid holidays) that shall be established by the
Company for, or made available to, its senior executives. In addition, the
Company shall furnish the Executive with coverage by the Company’s customary
director and officer indemnification arrangements, subject to applicable
law.
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4.2 Automobile.
During
the Employment Period, the Company shall provide the Executive with an
automobile for business and personal use and pay for associated costs, including
automobile insurance, parking and fuel, in accordance with the Company’s
practices as consistently applied to other key employees.
4.3 Relocation.
The
Company shall pay and reimburse the Executive the reasonable costs of his
relocation from Denver, Colorado to West Orange, New Jersey. Such relocation
assistance shall include the purchase by the Company of the Executive’s home in
Denver, Colorado, the price of which shall be equal to the average of three
appraisals provided by three independent appraisers selected by the Company
and
reasonably acceptable to the Executive.
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5.
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TERMINATION
OF EMPLOYMENT
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5.1 Effect
of an Involuntary Termination.
Subject
to the provisions of Sections 6, 9.5 and 11.2, if during the Employment Period
there is an “Involuntary Termination” (as defined below) of the Executive’s
employment, the Company shall pay to the Executive:
(i) an
amount
equal to one and one half times the sum of (x) the Executive’s annual Base
Salary, at a rate in effect at the date of such termination plus (y) the
average
of the Annual Bonuses paid to the Executive for the two years immediately
prior
to the year in which the Involuntary Termination occurs;
(ii) all
outstanding reasonable travel and other business expenses that he incurred
as of
the date of his termination; and
(iii) the
employer portion of the premiums necessary to continue the Executive’s health
care coverage until the earlier of (1) the first anniversary of the date
of such
Involuntary Termination and (2) the date on which the Executive is covered
under
another group health plan (which coverage, once obtained, must be promptly
disclosed by the Executive to the Company).
The
Executive shall also be entitled to (i) the continued use of an automobile
and
payment of associated costs by the Company pursuant to Section 4.2 until
the
later of (x) the first anniversary of the date of such Involuntary Termination
and (y) the second anniversary of the Effective Date and (ii) receive any
other
accrued compensation and benefits otherwise payable to him as of the date
of his
termination, including, without limitation, any Annual Bonus due for a completed
calendar year. All payments made under Sections 5.1(a)(i) and (ii) above
shall
be made by the Company (or its successor) in a lump-sum amount no later than
thirty days after the date of the Executive’s termination of employment;
provided,
however,
that
the payment of such lump sum shall be deferred for six months and one day
following such termination (i) if necessary to comply with Section 409A of
the
Internal Revenue Code of 1986, as amended (the “Code”) or (ii) in the event such
payment, as determined in the sole discretion of the Company (or its successor),
could cause the Executive to be subject to interest and penalties under Section
409A of the Code.
3
For
purposes of this Agreement, “Involuntary
Termination”
means
the termination of the Executive’s employment (i) by the Company (or any
successor thereto) without Cause, as defined in Appendix A, or (ii) by the
Executive for Good Reason, as defined in Appendix A.
5.2 Effect
of a Termination for Cause or Resignation without Good Reason.
Subject
to the provisions of Sections 3.2 and 6, if during the Employment Period,
the
Executive’s employment is terminated by the Company (or any successor thereto)
for Cause or the Executive resigns from his employment other than for Good
Reason, the Company shall pay to the Executive, any (i) accrued but unpaid
Base
Salary earned through the date of his termination, (ii) unreimbursed
expenses, plus (iii) accrued but unpaid employee benefits set forth in Section
4.1 above as determined in accordance with the provisions of the applicable
employee benefit plans or programs of the Company.
5.3 Effect
of a Termination due to Death or Disability.
Subject
to the provisions of Sections 3.2 and 6, if during the Employment Period,
the
Executive’s employment is terminated by the Company (or any successor thereto)
due to death or Disability, as defined in Appendix A, the Company shall pay
to
the Executive, or if applicable his estate any (i) accrued but unpaid Base
Salary earned through the date of his termination, (ii) unreimbursed expenses,
plus (iii) accrued but unpaid employee benefits set forth in Section 4.1
above
as determined in accordance with the provisions of the applicable employee
benefit plans or programs of the Company including, without limitation, any
Annual Bonus due but not yet paid for a completed calendar year.
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6.
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EFFECT
OF A CHANGE IN CONTROL
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6.1 New
Term of Employment.
Notwithstanding anything to the contrary in this Agreement, upon the occurrence
of a Change in Control, as defined in Appendix A, during the Employment Period,
the Company (or its successor) shall renew this Agreement for a period of
two
years commencing on the date of the Change in Control and ending on the second
anniversary of the date of the Change in Control.
6.2 Acceleration
of Options.
Notwithstanding anything to the contrary in any of the Option Documents,
as
defined in Appendix A, upon a Change in Control, all outstanding stock options
granted by the Company or any of its affiliates to the Executive shall become
fully vested and immediately exercisable on the date of the Change in
Control.
6.3 Right
of Termination.
Notwithstanding anything to the contrary in this Agreement, during a thirty-day
period commencing on the first anniversary of the date of the Change in Control,
the Executive shall have the right to resign from his employment with the
Company (or its successor) for any reason and receive an amount equal to
(i) one
times the amount of his Base Salary, as is then in effect, plus (ii) one
times
the average of the Annual Bonuses paid to the Executive for the two years
immediately prior to the year in which such resignation occurs; provided,
however,
that,
if such resignation constitutes an Involuntary Termination, Section 5.1 shall
apply (in lieu of this Section 6.3). All payments made under this Section
6.3
shall be made by the Company (or its successor) in a lump-sum amount no later
than thirty days after the date of the Executive’s termination of employment;
provided,
however,
that
the payment of such lump sum shall be deferred for six months and one day
following such termination (i) if necessary to comply with Section 409A of
the
Code or (ii) in the event such payment, as determined in the sole discretion
of
the Company (or its successor), could cause the Executive to be subject to
interest and penalties under Section 409A of the Code.
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7.
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REDUCTION
OF PAYMENTS
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If
any
amounts due to the Executive under this Agreement and any other agreement,
plan
or arrangement of or with the Company or any of its affiliates constitute
a
“parachute payment” as such term is defined in Section 280G(b)(2) of
the Code,
and
the amount of the parachute payment, reduced by all federal, state and local
taxes applicable thereto, including the excise tax imposed pursuant to Section
4999 of the Code, is less than the amount the Executive would receive if
he was
paid three times his “base amount”, as defined in Section 280G(b)(3) of the
Code, less $1.00, reduced by all federal, state and local taxes applicable
thereto, then the aggregate of the amounts constituting the parachute payment
will be reduced (or returned by the Executive if it has already been paid
to
him) to an amount that will equal three times the Executive’s base amount less
$1.00. Any determination to be made with respect to this Section 7 shall
be made
by an accounting firm jointly selected by the Company and the Executive and
paid
for by the Company, and which may be the Company’s independent auditors.
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8.
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NO
ADDITIONAL RIGHTS
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The
Executive shall have no right to receive any compensation or benefits upon
his
termination or resignation of employment, except (i) as expressly set forth
in
Sections 5 and 6 above, where applicable, or (ii) as determined in accordance
with the provisions of the employee benefit plans or programs of the
Company.
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9.
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RESTRICTIVE
COVENANTS
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9.1 Noncompetition.
During
the term of the Executive’s employment with the Company (or any successor
thereto) and continuing for one year thereafter, the Executive shall not,
without the prior written consent of the Company, directly or indirectly,
own,
manage, operate, join, control, or participate in the ownership, management,
operation or control of, or be employed by or connected in any manner with,
any
Competing Business, whether for compensation or otherwise; provided,
however,
that
the Executive shall be permitted to hold, directly or indirectly, less than
1%
of any class of securities of any entity that is listed on a national securities
exchange or on the NASDAQ National Market System. Notwithstanding the foregoing,
this Section 9.1 shall cease to apply upon the termination of the Executive’s
employment with the Company (or any successor thereto) resulting from (i)
an
Involuntary Termination or (ii) the Executive’s resignation pursuant to Section
6.3. For purposes of this Agreement, “Competing
Business”
means
any business within the United States that involves for-profit, post secondary
education.
9.2 Nonsolicitation.
During
the term of the Executive’s employment with the Company (or any successor
thereto) and continuing for one year thereafter, the Executive shall not,
without the prior written consent of the Company, directly or indirectly,
as a
sole proprietor, member of a partnership, stockholder, investor, officer
or
director of a corporation, or as an employee, associate, consultant or agent
of
any person, partnership, corporation or other business organization or entity
other than a member of the Company or any of its subsidiaries or affiliates
(the
“Company
Group”)
(i)
solicit or endeavor to entice away from any member of the Company Group,
any
person or entity who is, or was on the date of this Agreement, employed by,
or
serving as a key consultant of, any member of the Company Group or (ii) solicit
or endeavor to entice away from any member of the Company Group, any person
or
entity who is, or was on the date of this Agreement, a customer or client
(or
reasonably anticipated to become a customer or client) of any member of the
Company Group.
5
9.3 Confidentiality.
The
Executive shall not at any time, except in performance of his obligations
to the
Company Group under the provisions of this Agreement and as an employee of
the
Company, directly or indirectly, disclose or use any secret or protected
information that he may learn or has learned by reason of his association
with
any member of the Company Group. The term “protected information” includes trade
secrets and confidential and proprietary business information of the Company
Group, including, but not limited to, customers (including potential customers),
sources of supply, processes, methods, plans, apparatus, specifications,
materials, pricing information, intellectual property (including applications
and rights in discoveries, inventions or patents), internal memoranda, marketing
plans, contracts, finances, personnel, research and internal policies, but
shall
exclude any information which (i)
is or
becomes available to the public or is generally known in the industry or
industries in which the Company Group operates other than as a result of
disclosure by the Executive in violation of this Section 9.3 or (ii)
the
Executive is required to disclose under any applicable laws, regulations
or
directives of any government agency, tribunal or authority having jurisdiction
in the matter or under subpoena or other process of law.
9.4 Exclusive
Property.
The
Executive confirms that all protected information is and shall remain the
exclusive property of the Company Group. All business records, papers and
documents kept or made by the Executive relating to the business of the Company
shall be and remain the property of the Company Group.
9.5 Compliance
with Restrictive Covenants.
Without
intending to limit any other remedies available to the Company Group and
except
as required by law, in the event that the Executive breaches or threatens
to
breach any of the covenants set forth in this Section 9, (i) the Company
Group shall be entitled to seek a temporary restraining order and/or a
preliminary or permanent injunction restraining the Executive from engaging
in
activities prohibited by this Section 9 or such other relief as may be required
to enforce any of such covenants and (ii) all obligations of the Company
to make
payments and provide benefits under this Agreement shall immediately
cease.
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10.
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ARBITRATION
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10.1 General.
Subject
to Section 9.5 above, any dispute or controversy arising under or in connection
with this Agreement that cannot be mutually resolved by the Executive and
the
Company shall be settled exclusively by arbitration in West Orange, New Jersey
before three arbitrators of exemplary qualifications and stature. The Executive
and the Company shall each select one arbitrator. The arbitrators selected
by
the Executive and the Company shall jointly select the third arbitrator.
Judgment may be entered on the arbitrators’ award in any court having
jurisdiction. The Executive and the Company hereby agree that the arbitrators
shall be empowered to enter an equitable decree mandating specific enforcement
of the provisions of this Agreement.
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10.2 Associated
Costs.
The
cost of the arbitration shall be borne by the parties in the manner determined
by the arbitrators. If, however, the dispute concerns contractual rights
that
arise in the event of or subsequent to a Change in Control, the costs of
arbitration (and any reasonable attorney’s fees incurred by the Executive) shall
be borne by the Company, unless the arbitrators determine that the Executive
commenced such arbitration on unfounded or unreasonable grounds.
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11.
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MISCELLANEOUS
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11.1 Communications.
All
notices and other communications given or made pursuant hereto shall be in
writing and shall be deemed to have been duly given or made as of the date
delivered, or on the fifth business day after mailed if delivered personally
or
mailed by registered or certified mail (postage prepaid, return receipt
requested), to the relevant party at the following address (or at such other
address for a party as shall be specified by like notice, except that notices
of
change of address shall be effective upon receipt):
if
to the
Company:
000
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention:
General Counsel
if
to the
Executive:
000
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx
Xxxxxx, Xxx Xxxxxx 00000
11.2 Waiver
and Release.
As a
condition to receiving the payments set forth in Section 5.1 or Section 6.3,
as
applicable, the Executive shall be required to execute and not revoke a Waiver
and Release (relating to the Executive’s release of claims against the Company
Group) substantially in the form attached hereto as Appendix B.
11.3 Waiver
of Breach; Severability.
(a)
The
waiver by the Executive or the Company of a breach of any provision of this
Agreement by the other party hereto shall not operate or be construed as
a
waiver of any subsequent breach by either party.
(b)
The
parties hereto recognize that the laws and public policies of various
jurisdictions may differ as to the validity and enforceability of covenants
similar to those set forth herein. It is the intention of the parties that
the
provisions of this Agreement be enforced to the fullest extent permissible
under
the laws and policies of each jurisdiction in which enforcement may be sought,
and that the unenforceability (or the modification to conform to such laws
or
policies) of any provisions hereof shall not render unenforceable, or impair,
the remainder of the provisions hereof. Accordingly, if at the time of
enforcement of any provision hereof, a court of competent jurisdiction holds
that the restrictions stated herein are unreasonable under circumstances
then
existing, the parties hereto agree that the maximum period, scope, or geographic
area reasonable under such circumstances shall be substituted for the stated
period, scope or geographical area and that such court shall be allowed to
revise the restrictions contained herein to cover the maximum period, scope
and
geographical area permitted by law.
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11.4 Assignment;
Successors.
No
right, benefit or interest hereunder shall be assigned, encumbered, charged,
pledged, hypothecated or be subject to any setoff or recoupment by the
Executive. This Agreement shall inure to the benefit of and be binding upon
the
successors and assigns of the Company.
11.5 Entire
Agreement.
This
Agreement and the Option Documents represent the entire agreement of the
parties
and shall supersede any and all previous contracts, arrangements or
understandings between the Company and the Executive relating to the subject
matter hereof, including, without limitation, the Original Agreement and
the
Amendment. This Agreement may be amended at any time by mutual written agreement
of the parties hereto.
11.6 Withholding.
The
payment of any amount pursuant to this Agreement shall be subject to applicable
withholding and payroll taxes, and such other deductions as may be required
under the Company’s employee benefit plans, if any.
11.7 Governing
Law.
This
Agreement shall be governed by, and construed in accordance with, the laws
of
the State of New Jersey.
11.8 Headings.
The
headings in this Agreement are for convenience only and shall not be used
to
interpret or construe any of its provisions.
11.9 Counterparts.
This
Agreement may be executed in two or more counterparts, each of which shall
be
deemed an original but all of which together shall constitute one and the
same
instrument.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and
the Executive has hereunto set his hand as of the day and year first written
above.
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By:
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/s/
Xxxxx X. Xxxxxx
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Name:
Xxxxx X. Xxxxxx
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Title:
Chairman & CEO
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EXECUTIVE
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/s/
Xxxxx X. XxXxxxxx
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Xxxxx
X. XxXxxxxx
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APPENDIX
A
“Cause”
shall
mean, with respect to the Executive, the following:
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(a)
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prior
to a Change in Control, (i) the Executive’s willful failure to perform the
duties of his employment in any material respect, (ii) malfeasance
or
gross negligence in the performance of the Executive’s duties of
employment, (iii) the Executive’s conviction of a felony under the laws of
the United States or any state thereof (whether or not in connection
with
his employment), (iv) the Executive’s intentional or reckless disclosure
of protected information respecting any member of the Company Group’s
business to any individual or entity which is not in the performance
of
the duties of his employment, (v) the Executive’s commission of an act or
acts of sexual harassment that would normally constitute grounds
for
termination, or (vi) any other act or omission by the Executive
(other
than an act or omission resulting from the exercise by the Executive
of
good faith business judgment), which is materially injurious to
the
financial condition or business reputation of any member of the
Company
Group; provided,
however,
that in the case of (i) and (ii) above, the Executive shall not
be deemed
to have been terminated for cause unless he has received written
notice of
the alleged basis therefor from the Company, and fails to remedy
the
matter within 30 days after he has received such notice, except
that no
such “cure opportunity” shall be required in the case of two separate
episodes occurring within any 12-month period that give the Company
the
right to terminate for cause for such reason;
or
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(b)
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on
or after a Change in Control, (i) the Executive’s willful failure to
perform the duties of his employment in any material respect, (ii)
malfeasance or gross negligence in the performance of the Executive’s
duties of employment, (iii) the Executive’s conviction of a felony under
the laws of the United States or any state thereof (whether or
not in
connection with his employment), (iv) the Executive’s intentional or
reckless disclosure of protected information respecting any member
of the
Company Group’s business to any individual or entity which is not in the
performance of the duties of his employment; provided,
however,
that in the case of (i) and (ii) above, the Executive shall not
be deemed
to have been terminated for cause unless he has received written
notice of
the alleged basis therefor from the Company, and fails to remedy
the
matter within 30 days after he has received such notice, except
that no
such “cure opportunity” shall be required in the case of two separate
episodes occurring within any 12-month period that give the Company
the
right to terminate for cause for such
reason.
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“Change
in Control”
shall
mean:
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(a)
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when
a “person” (as defined in Section 3(a)(9) of the Exchange Act), including
a “group” (as defined in Section 13(d) and 14(d) of the Exchange Act),
either directly or indirectly becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act) of 25% or more of either
(1) the
then outstanding Common Stock, or (2) the combined voting power
of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors; provided,
however,
that
the following acquisitions shall not constitute a Change in Control:
(1)
any acquisition directly from the Company; (2) any acquisition
by the
Company; or (3) any acquisition by an employee benefit plan (or
related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company;
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A-1
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(b)
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when,
during any period of 24 consecutive months during the Employment
Period,
the individuals who, at the beginning of such period, constitute
the Board
(the “Company
Incumbent Directors”)
cease for any reason other than death to constitute at least a
majority
thereof; provided,
however,
that a director who was not a director at the beginning of such
24-month
period shall be deemed to be a Company Incumbent Director if such
director
was elected by, or on the recommendation of or with the approval
of at
least two-thirds of the directors of the Company, who then qualified
as
Company Incumbent Directors;
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(c)
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when
the stockholders of the Company approve a reorganization, merger
or
consolidation of the Company without the consent or approval of
a majority
of the Company Incumbent Directors;
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(d)
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consummation
of a merger, amalgamation or consolidation of the Company with
any other
corporation, the issuance of voting securities of the Company in
connection with a merger, amalgamation or consolidation of the
Company or
sale or other disposition of all or substantially all of the assets
of the
Company or the acquisition of assets of another corporation (each,
a
“Business
Combination”),
unless, in each case of a Business Combination, immediately following
such
Business Combination, all or substantially all of the individuals
and
entities who were the beneficial owners of the Common Stock outstanding
immediately prior to such Business Combination beneficially own,
directly
or indirectly, more than 50% of the then outstanding shares of
common
stock and 50% of the combined voting power of the then outstanding
voting
securities entitled to vote generally in the election of directors,
as the
case may be, of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of
such
transaction owns the Company or all or substantially all of the
Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior
to such Business Combination, of the Common Stock;
or
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(e)
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a
complete liquidation or dissolution of the Company or the sale
or other
disposition of all or substantially all of the assets of the
Company;
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A-2
provided,
however,
that in
no event shall a Change in Control be deemed to have occurred so long as
Stonington Partners, Inc., together with Five Mile River Capital, LLC and
any of
their respective affiliates, remain the person or group with the largest
single
beneficial ownership stake in the outstanding Common Stock and combined voting
power of the then outstanding voting securities of the Company entitled to
vote
generally in the election of the Company’s directors.
“Disability”
shall
mean the inability of the Executive to perform substantially his duties and
responsibilities to the Company or any of its subsidiaries by reason of a
physical or mental disability or infirmity (a) for a continuous period of
six
months or (b) at such earlier time as the Executive submits medical evidence
of
such disability to the reasonable satisfaction of the Committee that the
Executive has a physical or mental disability or infirmity that shall likely
prevent him from substantially performing his duties and responsibilities
for
six months or longer. The date of such Disability shall be on the last day
of
such six-month period or the day on which the Committee determines that the
Executive has a physical or mental disability or infirmity as provided in
clause
(b) herein.
“Good
Reason”
shall
mean, with respect to the Executive, the occurrence of any of the following
(without his written consent): (a) a reduction in the Executive’s Base Salary or
minimum guaranteed Annual Bonus; (b) an adverse change in the Executive’s title,
authority, duties, responsibilities or reporting lines as specified in Section
2.1; (c) the relocation of the Executive’s principal place of employment to a
location more than 10 miles from West Orange, New Jersey; (d) a failure by
the
Company to pay material compensation when due in connection with the Executive’s
employment; or (e) a material breach of this Agreement by the Company;
provided,
however,
that,
if any such Good Reason is reasonably susceptible to cure, then the Executive
shall not terminate his employment hereunder unless the Executive first provides
the Company with written notice of his intention to terminate and of the
grounds
for such termination, and the Company has not, within 10 business days following
receipt of such written notice, cured such Good Reason.
“Option
Documents"
shall
mean, with respect to the Executive, each of the following documents to the
extent applicable: (a) the Lincoln Technical Institute Management Stock Option
Plan, effective January 1, 2002, and any stock option agreement thereunder;
and
(b) the Lincoln Education Services Corporation 2005 Long Term Incentive Plan,
and any stock option agreement thereunder.
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