Agreement and General Release
Exhibit
10.1
Agreement
and General Release
This
Agreement and General Release (“Agreement”) sets forth the agreement between
Career Education Corporation (“CEC” or “the Company”) and you, Xxxxxxx X.
Xxxxxx (“You”).
1. Employment
Separation. Your employment with CEC terminates
effective February 11, 2008 (the “Separation Date”). On that date,
You must resign from all of Your positions, including but not limited to
CEC
Group President and member of the American InterContinental University and
the
Colorado Technical University Governing Boards. You understand and
agree that from and after the Separation Date, except as described in provision
9, You are no longer authorized to incur any expenses, obligations or
liabilities on behalf of CEC. On its part, CEC agrees to reimburse
You, in accordance with CEC’s regular expense reimbursement processes, for any
expenses incurred through the Separation Date, provided that such expenses
are
consistent with CEC’s expense policy and practice.
2. Benefits
Following the Separation Date. You hereby
acknowledge that, after the Separation Date, You will no longer be entitled
to
participate in any employee benefit plan sponsored or maintained by the
Company, except for (a) continuation coverage that may be elected under
group health plans maintained by the Company, which coverage is intended
to
satisfy the requirements of Sections 601 through 608 of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”), and (b) any benefit provided
under the provisions of a pension plan (as defined in Section 3(2) of ERISA)
which is accrued and vested as of the Separation Date, any such benefit to
be
paid in accordance with the written terms of such pension plan.
In the event that You elect to continue the benefit
coverage described in clause (a) of the preceding sentence, the
following benefit coverage will be continued at CEC’s cost for the
thirty-two (32) week period following the Separation Date, upon the same
terms
and conditions as such coverage (if any) is provided to other
actively employed key executives of the Company generally during
such thirty-two (32) week period: (i) medical plan including vision
(normal); (ii) medical plan (Execu-Care) and (iii) dental; provided,
that You do not become eligible to receive similar benefits from a
subsequent employer.
3. Payments
by CEC. In exchange for the promises and agreements made by
You contained in this Agreement, and in lieu of the payments described in
CEC’s
Severance Plan for Executive Level Employees CEC will pay You an amount equal
to
thirty-two (32) weeks of pay (subject to taxes and withholdings), calculated
based on Your gross base wages as of Your Separation Date. The gross
amount of separation pay payable to You as calculated in accordance with
this
paragraph is $246,153.85 and will be paid to You by check, mailed to Your
last-known address according to CEC’s payroll records, within two weeks
following the receipt by the Company of the fully executed Agreement at the
address and within the fourteen (14) day time frame described in Paragraph
11 of
this Agreement. In addition the Company will pay to you on or before
March 15, 2009, a lump sum payment of Your pro-rated bonus earned (Your 2008
target bonus being 40% of base salary) during you period of employment in
calendar year 2008, calculated in accordance with the method for determining
bonuses for other similarly situated employees (it being understood that
the
amount may be zero) and paid in accordance with the normal procedures of
the
Company. The parties agree that the monies and benefits set forth in
this provision 3 constitute additional consideration, above and beyond anything
to which You are already entitled, in exchange for You executing this
Agreement.
4. Waiver
and Release of All Claims. In exchange for the consideration
described in Paragraphs 2(a) and 3, You, on behalf of Yourself, Your agents,
executors, attorneys, administrators, heirs and assigns, are waiving and
releasing all known or unknown claims or causes of action against CEC, its
divisions, subsidiaries, affiliates and predecessors, and each of their assigns,
successors, officers, directors, employees, shareholders and agents
(collectively, “the Releases”), which claims have or could have arisen out of
Your employment with and/or termination of employment from CEC and/or any
other
occurrence whatsoever arising on or before the date this Agreement is executed,
including but not limited to:
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(a)
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claims
arising under Title VII of the Civil Rights Act of 1964, as amended,
the
Civil Rights Act of 1991, the Equal Pay Act, the Americans with
Disabilities Act of 1990, the Family and Medical Leave Act of 1993,
the
Age Discrimination in Employment Act of 1967, as amended, Section
1981 of
the Civil Rights Act of 1866, the Pregnancy Discrimination Act,
the
Employee Retirement Income Security Act, as amended, the National
Labor
Relations Act, and/or any other federal, state, county, or local
employment discrimination or civil rights laws or regulations (including
but not limited to claims based on race, color, creed, sex, national
origin, religion, age, ancestry, veteran status, pregnancy, disability,
marital status, sexual orientation, gender identity, familial status,
whistleblower status, retaliation and/or attainment of benefit
plan
rights); and/or
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(b)
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claims
arising out of any other federal, state, or local statute, law,
constitution, ordinance or regulation;
and/or
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(c)
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claims
that CEC has violated its personnel policies, procedures, handbooks,
any
covenant of good faith and fair dealing, or any express or implied
contract of any kind; and/or
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(d)
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claims
of a violation of public policy, statutory or common law, including
but
not limited to claims for: personal injury; invasion of privacy;
retaliatory discharge; negligent hiring, retention or supervision;
defamation; intentional or negligent infliction of emotional distress
and/or mental anguish; intentional interference with contract;
negligence;
detrimental reliance; loss of consortium to you or any member of
your
family; and/or promissory estoppel;
and/or
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(e)
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claims
that CEC is in any way obligated for any reason to pay You damages,
expenses, litigation costs (including attorneys’ fees), back pay, front
pay, disability or other benefits (other than accrued 401(k) or
vacation
benefits), compensatory damages, punitive damages, and/or interest,
and/or
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(f)
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claims
to employment, reinstatement, or seniority with
CEC.
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You
represent that you have not commenced or joined in any claim, charge, action
or
proceeding whatsoever against CEC or any of the other Releases, arising out
of
or relating to any of the matters set forth in this Agreement. You further
agree
that You will not be entitled to any personal recovery in, and shall not
commence or join, any action or proceeding whatsoever against CEC or any
of the
Releases for any of the matters set forth in this Agreement. You acknowledge
that other than as set forth in provisions 2(a) and 3 above, the Company’s
obligations under the Agreement are in lieu of and in full satisfaction of
any
and all amounts that might otherwise be payable to You or for Your benefit
under
any contract, agreement, plan, policy, program, practice or otherwise, past
or
present, of the Company.
You
further acknowledge that, other than the Company’s obligations under this
Agreement, following the Separation Date, the Company shall have no further
obligations to You, and that You shall have no right to any other payments
or
benefits from the Company with respect to Your employment with the Company
or
the termination thereof.
5. Exclusions
from Waiver and Release of All Claims. Excluded from the
above Waiver and Release of All Claims are any claims which by law cannot
be
waived, including but not limited to the right to file a charge with or
participate in an investigation by the Equal Employment Opportunity Commission
(“EEOC). You do, however, hereby waive any right to recover any money
should the EEOC or any other agency or individual pursue any claims on Your
behalf. In addition, the above Waiver and Release of Claims will not
be construed to affect (i) Your eligibility to receive continuation coverage
in
the Company’s medical plan(s) following the Separation Date pursuant to the
Sections 601 through 608 of ERISA, provided that You timely elect such coverage,
(ii) Your right to benefits under the Company’s 401(k) plan to the extent that
You are vested therein as of the Separation Date, (iii) Your rights to
indemnification under the Company’s certificate of incorporation or bylaws of
the Company or any existing Indemnification Agreement between You and the
Company, (iv) rights to workers compensation, disability insurance benefits
and
life insurance benefits (to the extent such benefits, by their terms, may
be
available after the Separation Date), (v) rights to vested benefits under
the
Company’s deferred compensation plan, and (vi) claims to enforce this
Agreement.
6. Non-Competition,
Non-Solicitation and Confidential
Information.
6.1 Non-Competition. Commencing
on the Separation Date and for thirty-two (32) weeks thereafter, You will
not
own or engage in, either directly or indirectly, as an officer, manager,
employee, independent contractor, consultant, director, partner, sole
proprietor, stockholder, or in any other capacity, any business operating
any
post-secondary, private trade or vocational schools, that offers classes,
courses or instruction in or is otherwise engaged in any curriculum or field
of
study offered by any of the schools operated by the Company (the “Schools”) or
any other curriculum or field of study that the Company has expressed an
interest in offering, during Your employment by the Company, whether through
the
Schools or through a potential acquisition (the “Competitive
Activities”). You hereby acknowledge that the Company intends to
promote the Schools on an international basis and that the geographical scope
of
this Agreement is intended to encompass all Competitive Activities engaged
in
anywhere in the United States, its possessions and territories and any other
country where the Company and its subsidiaries are promoting the Schools
on the
Separation Date. Nothing herein shall prevent You from owning less than two
percent (2%) of the capital stock of a company whose stock is publicly traded
and that is engaged in Competitive Activities.
6.2 Non-Solicitation.
Commending on the Separation Date and for thirty-two (32) weeks thereafter,
You
will not, directly or indirectly, individually or on behalf of any Person
(as
defined below) solicit, aid or induce (a) any then-current employee of the
Company or its Affiliates to leave the Company or its Affiliates to accept
employment with or render services for You or such Person, or (b) any student,
customer, client, vendor, lender, supplier or sales representative of the
Company or its Affiliates or similar persons engaged in business with the
Company or its Affiliates to discontinue the relationship or reduce the amount
of business done with the Company or its Affiliates. “Person” means any
individual, a partnership, a corporation, an association, a limited liability
company, a joint stock company, a trust, a joint venture, an unincorporated
organization, a governmental entity, or any department, agency or political
subdivision thereof, or an accrediting body. “Affiliate” means: (i) with respect
to any natural Person, any individual related by blood or marriage to such
Person; and (ii) with respect to any other Person, any Person controlling,
controlled by or under common control with such Person.
6.3 Confidential
Information. You acknowledge and agree that throughout and as an
incident to Your employment by the Company, You have been in possession of
and
exposed to Confidential Information relating to the Company, its Affiliates
and
each School. “Confidential Information” means all proprietary or confidential
information concerning the business, finances, financial statements, curricula,
properties and operations of the Company, its Affiliates and each School,
including, without limitation, all student and prospective student and supplier
lists, know-how, trade secrets, business and marketing plans, techniques,
forecasts, projections, budgets, unpublished financial statements, price
lists,
costs, computer programs, source and object codes, algorithms, data, and
other
original works of authorship, along with all information received from third
parties and held in confidence by the Company, its Affiliates and each
School (including, without limitation, personnel files and student records).
At
all times after the Separation Date, You will hold the Confidential Information
in the strictest confidence and will not disclose or make use of (directly
or
indirectly) the Confidential Information or any portion thereof to or on
behalf
of Yourself or any third party except as required by the order of any court
or
similar tribunal or any other governmental body or agency of appropriate
jurisdiction; provided, that You will, to the extent practicable, give
the Company prior written notice of any such disclosure and will cooperate
with
the Company in obtaining a protective order or such similar protection as
the
Company may deem appropriate to preserve the confidential nature of such
information. The foregoing obligations to maintain the Confidential Information
shall not apply to any Confidential Information that is, or without any action
by You becomes, generally available to the public.
6.4 Acknowledgements.
You fully understand the nature and burdens of this provision 6. You
acknowledge that the provisions of this provision 6 are fair, reasonable,
and
not excessively broad, that they are necessary to protect important and
legitimate business interests of the Company, its Affiliates and each School,
and that in light of Your education, experience, and capabilities, You can
honor
all parts of this provision 6 without being prevented from earning a
fully adequate livelihood for Yourself and Your dependents from now throughout
any period during which Your activities are restricted hereunder.
6.5 Scope
of Restriction. The parties have attempted to limit the scope of the
covenants set forth in this provision 6 to the extent necessary to give the
Company the benefit of its bargain with respect to the other provisions of
this
Agreement. The parties agree that if the scope and duration of any of the
covenants would, but for this provision, be deemed by a court of competent
authority to be unreasonable or otherwise unenforceable, such court may modify
such covenant(s) to the extent that the court determines to be necessary
to
grant enforcement thereof as modified.
6.6 Remedies. The
parties recognize that the Company will suffer irreparable injury in the
event
of any breach or threatened or anticipated breach of the terms of this provision
6 by You, and that the remedy at law for any such actual breach or threatened
or
anticipated breach will be inadequate. Accordingly, in the event of any breach
or threatened or anticipated breach of the terms of this provision 6 by You
and/or any Persons acting for or in concert with You, the Company will be
entitled, in addition to any other remedies and damages available and without
proof of monetary or immediate damage, to seek and obtain from any court
of
competent jurisdiction a decree of specific performance and a temporary and
permanent injunction, without bond or other security, enjoining and restricting
the breach or threatened or anticipated breach.
6.7 Common
Law of Torts or Trade Secrets. The parties agree that nothing in this
Agreement will be construed to limit or negate the common law of torts or
trade
secrets where it provides the Company with broader protection than that provided
herein.
7. Non-Admission. Both
parties acknowledge that this Agreement does not constitute an admission
by
either party of any liability, wrongdoing or violation of law
whatsoever.
8. Company
Property. You represent, warrant and covenant that You
have returned to the Company (or will return to the Company on or before
the
Separation Date) all Company property in Your possession or control, including,
without limitation, all telephones, keys, access cards, security badges,
credit
cards, phone cards, equipment, computer hardware (including but not limited
to
all computers, Blackberry devices, and personal data assistants), all contents
of all such hardware, all passwords and codes needed to obtain access to
or
operate all or part of any such hardware, all electronic storage devices
(including but not limited to all hard drives, disk drives, diskettes, CDs,
CD-ROMs, DVDs, and DVD-ROMs), all contents of all such electronic storage
devices, all passwords and codes needed to obtain access to or use all or
part
of any such electronic storage device, all computer software and programs,
financial information, accounting records, computer printouts, manuals, data,
materials, papers, books, files, documents, records, policies, student
information and lists, customer information and lists, marketing information,
specifications and plans, data base information and lists, mailing lists,
and
notes, including but not limited to any property describing or containing
any
Confidential Information, and You agree that You will not retain any
copies, duplicates, reproductions or excerpts thereof in any form
whatsoever.
9. Indemnity
and Cooperation. In the event of a lawsuit or claim in
which You are sued either jointly or separately for acts arising out of the
scope of Your employment with CEC, CEC agrees to defend You and hold You
harmless in accordance with its policies and practices for defending employees
and subject to any limitations and exceptions therein. In turn, with
respect to matters as to which You obtained knowledge during Your employment
with the Company, You agree to cooperate fully, at the Company’s reasonable
request, with the Company and any of its officers, directors, attorneys or
employees (a) in connection with the defense or prosecution of any and all
charges, complaints, claims, liabilities, obligations, promises, agreements,
demands and causes of action of any nature whatsoever, which are asserted
by any
person or entity (including the Company) concerning or related to any matter
that arises out of or concerns events or occurrences during Your employment
with
the Company, and (b) concerning requests for information about the business
of
the Company or Your involvement and participation therein. You will provide
such
cooperation on reasonable notice. To the extent such cooperation (i)
is rendered at the written request of the Company and (ii) does not include
testimony given pursuant to a lawfully issued and valid subpoena or notice
of
deposition (as opposed to preparation for testimony with employees of the
Company or counsel to the Company), You will be entitled to compensation
at a
rate of $150 per hour. You will also be entitled to reimbursement,
upon receipt by the Company of suitable documentation, for reasonable and
necessary travel and other expenses not reimbursed or reimbursable by a third
party that You may incur at the specific request of the Company and as approved
in advance by the Company in accordance with its policies and
procedures. Nothing in this provision 9 should be construed as
suggesting or implying that You should testify in any way other than truthfully
or provide anything other than accurate, truthful information.
10. Non-Disparagement. You
agree that You will not disparage or speak negatively about CEC or any school
affiliated with CEC, or any former or present Company director, officer,
shareholder, agent, employee, or student, to any third parties, including
but
limited to the press, the media or the public generally, or to any current,
former or prospective employee or student of CEC, except if testifying
truthfully under oath pursuant to any lawful court order or subpoena or
otherwise responding to or providing disclosures required by
law. Likewise, CEC agrees that its executive officers and directors
shall not disparage the You to third parties in any manner likely to be harmful
to Your personal or business reputation, except if testifying truthfully
under
oath pursuant to any lawful court order or subpoena or otherwise responding
to
or providing disclosures required by law.
11. Deadline
for Return of Signed Agreement. The signed Agreement
must be returned via U.S. mail or facsimile within thirty (30) days of the
Separation Date to:
Xxxxx
X. Xxxxxx
Senior
Vice President of Human
Resources
Career
Education
Corporation
0000
Xxxxxxxxxxx Xxxxxxx
Xxxxxxx
Xxxxxxx, Xxxxxxxx
00000
(FAX)
000-000-0000
(TEL)
000-000-0000
12. Entire
Agreement. This Agreement constitutes the entire
agreement between CEC and You concerning your separation, and it supersedes
and
replaces all prior negotiations and all agreements proposed or otherwise,
whether written or oral, concerning the subject matters of the
Agreement. You represent and agree that no promises, statements or
inducements have been made to You that caused You to sign this Agreement
other
than those which are expressly stated in this Agreement. This is an
integrated document and may not be altered except by a written agreement
signed
by both parties.
13. Separability. If
any portion of this Agreement is found to be unenforceable, the remainder
of the
Agreement will remain in full force and effect. The provisions of this
Agreement shall be deemed severable and the invalidity, illegality or
unenforceability of any provision shall not affect or impair the validity,
legality or enforceability of the other provisions hereof. Moreover, if any
one
or more of the provisions of this Agreement shall be held to be excessively
broad as to duration, activity or subject, such provision shall be construed
by
limiting and reducing them so as to be enforceable to the maximum extent
allowed
by applicable law.
14. Choice
of Law. All issues and questions concerning the
construction, validity, enforcement and interpretation of this Agreement
and all
its attachments will be governed by and construed in accordance with the
laws of
the State of Illinois, without giving effect to any choice of law or conflict
of
law rules or provisions (whether of Illinois or any other jurisdiction) that
would cause the laws of any other jurisdiction other than the State of Illinois
to apply.
WHEREFORE,
You agree that You have read and voluntarily entered into this Agreement
with
full knowledge of its significance.
Career
Education
Corporation
/s/
Xxxxxxx X.
Xxxxxx By:
/s/ Xxxx X. XxXxxxxxxx
Xxxxxxx
X.
Xxxxxx Xxxx
X. XxXxxxxxxx
Date:
March 11,
2008 President
& Chief Executive Officer
Date:
March 13, 2008
