EMPLOYMENT AGREEMENT
Exhibit 10.5
Execution Copy
This Employment Agreement (this “Agreement”) is entered into as of this 10th day of
January, 2007, by and between Study Island, LLC, a Delaware limited liability company (the
“Company”), and Xxxxxxx Xxxxxxxx (the “Executive”).
WHEREAS, the Company desires to engage the services of the Executive and the Executive
desires to be employed by the Company;
WHEREAS, the Company desires to be assured that the unique and expert services of the
Executive will be available to the Company, and that the Executive is willing and able to render
such services on the terms and conditions hereinafter set forth;
WHEREAS, the Company desires to be assured that the confidential information and good will of
the Company will be preserved for the exclusive benefit of the Company.
NOW, THEREFORE, in consideration of such employment and the mutual covenants and promises
herein contained, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Company and the Executive agree as follows:
1 EMPLOYMENT AND RESPONSIBILITIES
The Company will employ the Executive in the position of Founder and Manager, beginning on the
date hereof (the “Start Date”). The Executive will have such authority, and will perform
all of the duties, normally associated with this position as well as other duties as may be
reasonably assigned to him from time to time by the Board of Managers of the Company (the
“Board”) consistent with his position as Founder and Manager.
2 ATTENTION AND EFFORT
The Executive will devote all of his business time, ability, attention and best efforts to the
performance of his duties hereunder in a manner which will faithfully and diligently further the
Company’s business to the exclusion of all other business activities. However, the Executive may
devote reasonable periods of time to engaging in charitable or community service activities, so
long as none of these activities interfere with his duties under this Agreement. Executive agrees
to perform his duties and responsibilities within Company policies, standard work hours and
attendance and general work practices.
3 TERM
This Agreement shall be effective on the Start Date and will remain in effect until it is
terminated in accordance with Section 6 below.
4 COMPENSATION
During the term of employment under this Agreement, the Company agrees to pay to the
Executive, and he agrees to accept in full consideration for all services performed by him, the
following compensation:
4.1 Base Salary: The Company will pay the Executive an annual base salary of One Hundred and
Twenty-five thousand dollars ($125,000), before all customary payroll deductions. This annual base
salary will be paid in accordance with the usual payroll practices of the Company.
4.2 Bonus: During the Executive’s employment term, the Executive will participate in the
Company-wide bonus plan in which all employees of the Company participate based on the bonus plan’s
policies and procedures then in effect. In addition, Executive will be eligible to receive in
respect of each fiscal year of the Company (commencing with the fiscal year ending on December 31,
2007) an annual bonus in an amount equal to up to two-thirds (2/3’s) of his base salary based on,
among other things, performance targets established by the Board of Managers by reference to the
operating plan approved from time to time by the Board of Managers.
4.3 Incentive Equity: On the Start Date, Executive will be granted incentive equity pursuant
to the long term incentive equity program of the Company’s parent company, Study Island Holdings
LLC (“Holdings”), on the terms and conditions set forth in Exhibit A.
4.4 Withholding: The Company may withhold from any compensation and benefits payable to the
Executive all applicable federal, state and local withholding taxes.
5 BENEFITS
5.1 Description of Benefits: During the term of employment under this Agreement, the
Executive will be entitled to participate in all employee incentive, pension and welfare benefit
plans and programs made available generally to other senior executives of the Company, as such
plans or programs may be in effect from time to time (including, without limitation, incentive
equity, profit sharing, savings and other pension and retirement plans or programs, medical,
dental, hospitalization, short-term and long-term disability and life insurance plans, accidental
death and dismemberment protection, and any other pension or retirement plans or programs and any
other employee incentive compensation plans, employee welfare benefit plans or programs that may be
sponsored by the Company from time to time and provided that Executive meets the eligibility
requirements and other terms, conditions and restrictions of the respective plans and programs,
including any plans that supplement the above-listed types of plans or programs, whether funded or
unfunded). Payment for such coverages will be the sole responsibility of the Executive, unless
the Company makes such coverages available to similarly situated executives on a shared cost basis.
In addition, the Executive will be entitled to four weeks of paid vacation per year. The
Company will pay for all reasonable expenses actually incurred by the Executive directly in
connection with the business affairs of the Company and the performance of his duties hereunder,
upon presentation of proper receipts or other proof of expenditure and subject to such reasonable
guidelines or limitations provided by the Company from time to time.
6 TERMINATION
The Executive’s employment under this Agreement may be terminated as follows, but in the event
of any such termination, the provisions of Sections 7 and 8 will survive the termination of
the Executive’s employment.
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6.1 By the Company: The Company may terminate the employment of the Executive, with or
without Cause (as defined in Section 7.5 hereof), at any time during the term hereof by
delivery of a Notice of Termination (as defined below) to the Executive.
6.2 By the Executive: The Executive may terminate his employment at any time, for any
reason, by delivery of a Notice of Termination to the Company.
6.3 Term: The Executive’s employment hereunder initially shall be for a term commencing on
the Start Date and ending on the day preceding the second anniversary of the Start Date. The
Agreement shall be automatically extended from year to year thereafter unless either party gives
not less than sixty (60) days prior written notice to the other that such party elects to have the
Agreement terminated effective at the end of the initial or then current renewal term. The
provision of the foregoing notice shall result in the expiration of this Agreement at the end of
the then current term and shall not be deemed a termination of Executive’s employment by the
Company. The Executive’s employment will terminate automatically upon the Executive’s death or
total disability. The term “total disability” will mean the Executive’s inability to
perform the duties set forth in Section 1 hereof for a period of twelve (12) consecutive
weeks, or a cumulative period of 90 business days in any
12-month period, as a result of physical or mental illness or loss of legal capacity.
12-month period, as a result of physical or mental illness or loss of legal capacity.
6.4 Notice: The term “Notice of Termination” means at least one hundred twenty (120)
days’ prior written notice of termination of the Executive’s employment (the “Advance Notice
Period”), during which period the Executive’s employment and performance of services will
continue; provided, however, that (i) the Executive may, upon termination of his employment for
Good Reason, make such notice effective immediately, (ii) the Company may, upon termination of his
employment with or without Cause, make such notice immediately and (iii) the Company may, upon
notice to the Executive and without reducing compensation during any Advance Notice Period, excuse
him from any or all of his duties during any Advance Notice Period. The effective date of
termination of employment (the “Termination Date”) will be the date on which such Advance
Notice Period expires (or the date of notice, if the Company exercises its rights under clause (ii)
hereof or if the Executive exercises his rights under clause (i) hereof) or as otherwise provided
in Section 6.3 above.
7 TERMINATION PAYMENTS
In the event of termination of the employment of the Executive, all compensation and benefits
set forth in this Agreement will terminate as of the Termination Date except as specifically
provided in this Section 7:
7.1 Termination by the Company:
(a) If the Company terminates the Executive’s employment without Cause (other than as
result of death or total disability), he will not be entitled to receive any of the payments or
benefits provided for herein except the Company shall (i) pay his base salary through the
Termination Date, (ii) pay his base salary during the Severance Period (as defined in Section
7.7 below) payable at the same time such payment would be made during Executive’s regular
employment with the Company, (iii) provide Executive with all benefits that are accrued but
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unpaid as of the Termination Date, and (iv) provide the Executive with all benefits expressly
available upon termination of employment in accordance with the plans and programs of the Company
applicable to the Executive on the Termination Date (but without duplication of any benefits or
payments otherwise provided for hereunder).
(b) If the Company terminates the Executive’s employment for Cause, he will not be entitled to
receive any of the payments or benefits provided for herein except the Company shall (i) pay his
base salary through the Termination Date, (ii) provide the Executive with all benefits that are
accrued but unpaid as of the Termination Date, and (iii) provide the Executive with all benefits
expressly available upon termination of employment in accordance with the plans and programs of the
Company applicable to the Executive on the Termination Date (but without duplication of any
benefits or payments otherwise provided for hereunder).
7.2 Termination by the Executive:
(a) If the Executive terminates his employment with the Company with Good Reason (as
hereinafter defined), he will not be entitled to receive any of the payments or benefits provided
for herein except the Company shall (i) pay his base salary through the Termination Date, (ii) pay
his base salary during the Severance Period payable at the same time such payment would have been
made during the Executive’s regular employment with the Company, (iii) provide Executive with all
benefits that are accrued but unpaid as of the Termination Date and (iv) provide the Executive with
all benefits expressly available upon termination of employment in accordance with the plans and
programs of the Company applicable to the Executive on the Termination Date (but without
duplication of any benefits or payments otherwise provided for hereunder).
(b) If the Executive terminates his employment with the Company without Good Reason, he will
not be entitled to any payments or benefits provided for herein except the Company shall (i) pay
his base salary through the Termination Date, (ii) provide the Executive with all benefits that are
accrued but unpaid as of the Termination Date, and (iii) provide the Executive with all benefits
expressly available upon termination of employment in accordance with the plans and programs of the
Company applicable to the Executive on the Termination Date (but without duplication of any
benefits or payments otherwise provided for hereunder).
7.3 Expiration of Term, Death or Disability: If the Executive’s employment is terminated
pursuant to Section 6.3 hereof as a result of the expiration of the term of such
employment, or his death or total disability, he will not be entitled to any payments or benefits,
except the Company shall (i) pay his base salary through the Termination Date, (ii) provide
Executive with all benefits that are accrued but unpaid as of the Termination Date, and (iii)
provide the Executive with all benefits expressly available upon termination of employment in
accordance with the plans and programs of the Company applicable to the Executive on the
Termination Date (but without duplication of any benefits or payments otherwise provided for
hereunder).
7.4 Payment Schedule: All payments of base salary under this Section 7 (including
wages for services performed prior to the Termination Date) shall be paid in accordance with the
Company’s normal payroll practices.
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7.5 Cause: Wherever reference is made in this Agreement to termination being with or without
Cause, “Cause” shall mean (i) Executive refuses or fails to perform any of his duties and
responsibilities as determined from time to time by the Board, including, without limitation (a)
Executive’s persistent neglect of duty or chronic unapproved absenteeism (other than for a
temporary or permanent disability) which remains uncured to the reasonable satisfaction of the
Board following thirty (30) days’ written notice from the Company of such alleged fault and (b)
Executive’s refusal to comply with any lawful directive or policy of the Board which refusal is not
cured by Executive within thirty (30) days of such written notice from the Company; provided,
however, that the Company shall not be required to give Executive a cure period with respect to
this clause (i) on more than one occasion; (as used in this Section 7.5, “Company”
shall mean Holdings, the Company and each of the Company’s subsidiaries), (ii) Executive acts
(including a failure to act) in a manner which constitutes willful misconduct, gross negligence, or
insubordination, (iii) the Company determines that, in the reasonable judgment of the Board, (x)
Executive has committed an act of fraud, personal dishonesty or misappropriation relating to the
Company or Holdings, has violated any material provision of any written policy of the Company or
Holdings or (y) Executive has committed any other act causing material harm to the Company’s or
Holding’s standing or reputation, or any act of dishonesty, embezzlement, unauthorized use or
disclosure of Confidential Information or other intellectual property or trade secrets, common law
fraud or other fraud with respect thereto, (iv) a material breach by the Executive of this
Agreement, any other written agreement with the Company, any fiduciary duty to the Company, (v)
Executive’s arrest, indictment for or conviction (or the entry of a plea of a nolo contendere or
equivalent plea) in a court of competent jurisdiction of a felony or any misdemeanor involving
material dishonesty or moral turpitude, or (vi) the Executive’s habitual or repeated misuse of, or
habitual or repeated performance of the Executive’s duties under the influence of, alcohol or
controlled substances.
7.6 Good Reason: Whenever reference is made in this Agreement to termination being with or
without Good Reason, “Good Reason” shall mean the occurrence of any of the following events without
the Executive’s express written consent: (i) any breach by the Company of any material provision
of this Agreement for which the Company has received a written notice that specifies the Company’s
violation and for which the Company has been given a reasonable opportunity to cure and fails to
cure, (ii) a reduction in the Executive’s base salary or (iii) a material reduction or diminution
of the Executive’s duties, responsibilities or authorities which are caused by an act of the
Company.
7.7 Severance Period: Whenever reference is made in this Agreement to the Severance Period,
“Severance Period” shall mean the period commencing on the Termination Date and ending on
the twelve-month anniversary of the Termination Date.
7.8 Payments Contingent on Release: The Company’s obligation to make any payments of salary
or bonus under this Section 7 shall be contingent upon the Executive executing a general
release concerning the Executive’s employment in form and substance reasonably acceptable to the
Company and the Executive. No such contingency shall apply to any obligation to provide benefits
under this Section 7.
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8 NONCOMPETITION, NONSOLICITATION, PROTECTION OF CONFIDENTIAL INFORMATION
8.1 Applicability: This Section 8 will survive the termination of this Agreement and
the Executive’s employment with the Company. The Executive acknowledges and agrees that the
consideration for the covenants made by him herein includes the transactions and promises made
under the Purchase Agreement (defined below). As used in this Section 8, “Company”
shall mean Holdings, the Company and all of the Company’s subsidiaries.
8.2 Restricted Period: As used in this Agreement, the “Restricted Period” means the
period commencing on the Start Date and ending two years following the Termination Date (the
“Trigger Date”).
8.3 Noncompetition: During the Restricted Period, the Executive will not engage in any
business in any manner, directly or indirectly, individually or as a consultant to, or as an
employee, officer, director, stockholder, partner or other owner or participant of, any entity that
(i) is in competition with the Business (as defined in the Asset Purchase Agreement dated as of the
date hereof by and among the Company, the Executive and the other selling parties thereto (the
“Purchase Agreement”)) or any business in which, to the Executive’s knowledge, the Company
had plans to engage or was considering engaging as of the Trigger Date, or (ii) inevitably will
result in the disclosure or use of the Company’s Confidential Information, as defined in
Section 8.5 below, in either case in any state in the United States where the Company does
business as of the Trigger Date or where, to the Executive’s knowledge, the Company had plans to
engage or was considering engaging as of the Trigger Date.
8.4 Nonsolicitation: As used in this Agreement, “Solicitation” means, directly or
indirectly, individually or as a consultant to, or as an employee, officer, director, stockholder,
partner or other owner or participant of, any entity, (a) the solicitation of, inducement of, or
attempt to induce, any employee, agent or consultant (including freelance writers and content
providers) of the Company to leave the employ of, or stop providing services to, the Company; (b)
the offering or aiding another to offer employment to, or interfering or attempting to interfere
with the Company’s relationship with, any employees or consultants (including freelance writers and
content providers) of the Company; (c) the solicitation of, or assistance to any entity or person
in solicitation of, any customers suppliers (including freelance writers and content providers) of
the Company to discontinue doing business with the Company; or (d) interfering with any
relationship between the Company and any of its customers or suppliers (including freelance writers
and content providers).
During the Restricted Period, the Executive will not engage in or attempt to engage in any
Solicitation, provided that Solicitation will not be considered to have occurred by the general
advertising for or hiring of any employee by entities with which the Executive is associated, as
long as he does not directly or indirectly (i) induce such employee to leave the Company, (ii)
contact such employee prior to his departure from the Company regarding employment, or (iii) in the
case of hiring such employee, control such entity or have any input in the decision to hire such
employee.
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8.5 Protection of the Company’s Confidential Information: As used in this Agreement,
“Confidential Information” means all information that relates to the business, technology,
manner of operation, suppliers, panelists, customers, finances, employees, plans, proposals or
practices of the Company or of any third parties doing business with the Company, and includes,
without limitation, the identities of and other information regarding the Company’s suppliers,
panelists, customers and prospects, supplier lists, panelist list employee information, business
plans and proposals, software programs, marketing plans and proposals, technical plans and
proposals, research and development, budgets and projections, nonpublic financial information, and
all other information the Company designates as “confidential” or intends to keep as confidential
or proprietary. Excluded from the definition of Confidential Information is information that is
or becomes generally known to the public, other than through the breach of this Agreement by the
Executive. For this purpose, information known or available generally within the trade or
industry of the Company shall be deemed to be generally known to the public.
The Executive understands and agrees that Confidential Information will be considered the
trade secrets of the Company and will be entitled to all protections given by law to trade secrets
and that the provisions of this Agreement apply to every form in which Confidential Information
exists, including, without limitation, written or printed information, films, tapes, computer disks
or data, or any other form of memory device, media or method by which information is stored or
maintained. The Executive acknowledges that in the course of employment with the Company, he has
received and may receive Confidential Information of the Company. The Executive further
acknowledges that Confidential Information is a valuable, unique and special asset belonging to the
Company. For these reasons, and except as otherwise directed by the Company, the Executive
agrees, during his employment, and at all times after the termination of his employment with the
Company, that he will not disclose or disseminate to anyone outside the Company, nor use for any
purpose other than as required by his work for the Company, nor assist anyone else in any such
disclosure or use of, any Confidential Information. Upon the Company’s request at any time and
for any reason, the Executive shall immediately deliver to the Company all materials (including all
soft and hard copies) in the Executive’s possession which contain or relate to Confidential
Information.
8.6 Ownership of Intellectual Property: All inventions, modifications, discoveries, designs,
developments, improvements, processes, software programs, works of authorship, documentation,
formulae, data, techniques, know-how, trade secrets or intellectual property rights or any interest
therein (collectively, the “Developments”) made by the Executive, either alone or in
conjunction with others, at anytime or at any place during the Executive’s employment with the
Company, whether or not reduced to writing or practice during such period of employment, which
relate to the business in which the Company is engaged or, to the knowledge of the Executive, in
which the Company intends to engage, shall be and hereby are the exclusive property of the Company
without any farther compensation to the Executive. In addition, without limiting the generality
of the prior sentence, all Developments which are copyrightable work by the Executive are intended
to be “work made for hire” as defined in Section 101 of the Copyright Act of 1976, and shall be and
hereby are the property of the Company.
The Executive shall promptly disclose any Developments to the Company. If any Development is
not the property of the Company by operation of law, other provisions of this Agreement or
otherwise, the Executive will, and hereby does, assign to the Company all right, title
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and interest in such Development, without further consideration, and will assist the Company and
its nominees in every way, at the Company’s expense, to secure, maintain and defend the Company’s
rights in such Development. The Executive shall sign all instruments necessary for the filing and
prosecution of any applications for, or extension or renewals of, letters patent (or other
intellectual property registrations or filings) of the United States or any foreign country which
the Company desires to file and relates to any Development. The Executive hereby irrevocably
designates and appoints the Company and its duly authorized officers and agents as such Executive’s
agent and attorney-in-fact (which designation and appointment shall be deemed coupled with an
interest and shall survive the Executive’s death or incapacity), to act for and in the Executive’s
behalf to execute and file any such applications, extensions or renewals and to do all other
lawfully permitted acts to further the prosecution and issuance of such letters patent, other
intellectual property registrations or filings, or such other similar documents with the same legal
force and effect as if executed by the Executive.
8.7 Equitable Relief: The Executive acknowledges that (a) the provisions of this Section
8 are essential to the Company; (b) that the Company would not enter into this Agreement if it
did not include this Section 8; and (c) that damages sustained by the Company as a result
of a breach of this Section 8 cannot be adequately remedied by monetary damages.
Furthermore, the Executive agrees that the Company, notwithstanding any other provision of this
Agreement, and in addition to any other remedy it may have under this Agreement, or at law, will
be entitled to injunctive and other equitable relief to prevent or curtail any breach of this
Section 8.
9 FORM OF NOTICE
All notices given hereunder shall be given in writing, shall specifically refer to this
Agreement and shall be personally delivered or sent by telecopy or other electronic facsimile
transmission or by registered or certified mail, return receipt requested, at the address set forth
below or at such other address as may hereafter be designated by notice given in compliance with
the terms hereof:
If to Executive:
|
Xxxxxxx Xxxxxxxx | |
| 0000 Xxxxxxxxxxx Xxx. | ||
| Xxxxxx, Xxxxx 00000 | ||
If to the Company:
|
c/o Providence Equity Partners Inc. | |
| 00 Xxxxxxx Xxxxx, 00xx Xxxxx | ||
| Xxxxxxxxxx, Xxxxx Xxxxxx 00000 | ||
| Attention: Xxxxx X. Xxxxx, Xx. | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 | ||
with a copy:
|
Weil, Gotshal & Xxxxxx LLP | |
| 000 Xxxxxxx Xxxxxx, 00xx Xxxxx | ||
| Xxxxxx, XX 00000 | ||
| Attention: Xxxxx X. Xxxxxxxx, Esq. | ||
| Telephone: (000) 000-0000 | ||
| Facsimile: (000) 000-0000 |
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If notice is mailed, such notice shall be effective upon mailing, or if notice is personally
delivered or sent by electronic facsimile transmission, it shall be effective upon receipt.
10 ASSIGNMENT
This Agreement and all rights under this Agreement shall be binding upon and inure to the
benefit of and be enforceable by the parties hereto and their respective personal or legal
representatives, executors, administrators, heirs, distributees, devisees, legatees, successors and
assigns. Nothing in this Agreement shall be construed to confer any right, benefit or remedy upon
any person that is neither a party hereto nor a personal or legal representative, executor,
administrator, heir, distributee, devisee, legatee, successor or assign of a party hereto. This
Agreement is personal in nature, and none of the parties to this Agreement shall, without the
written consent of the others, assign or transfer this Agreement or any one or more of its rights
or obligations under this Agreement to any other person or entity, except that the Company may
assign its rights and delegate its obligations under this Agreement to any entity that acquires all
or substantially all of its business, whether by sale of assets, merger or like transaction. If
the Executive should die while any amounts are still payable, or any benefits are still required to
be provided, to the Executive hereunder, all such amounts or benefits, unless otherwise provided
herein, shall be paid or provided in accordance with the terms of this Agreement to the Executive’s
devisee, legatee or other designee or, if there be no such person, to the Executive’s estate.
11 WAIVERS
No delay or failure by any party hereto in exercising, protecting or enforcing any of its
rights, titles, interests or remedies under this Agreement, and no course of dealing or
performance with respect thereto, will constitute a waiver thereof. The express waiver by a party
hereto of any right, title, interest or remedy in a particular instance or circumstance will not
constitute a waiver thereof in any other instance or circumstance. All rights and remedies shall
be cumulative and not exclusive of any other rights or remedies.
12 AMENDMENTS IN WRITING
No amendment, modification, waiver, termination or discharge of any provision of this
Agreement, nor consent to any departure therefrom by either party, will in any event be effective
unless the same is in writing, specifically identifying this Agreement and the provision intended
to be amended, modified, waived, terminated or discharged and signed by the Company and the
Executive. Each amendment, modification, waiver, termination or discharge will be effective only
in the specific instance and for the specific purpose for which given. No provision of this
Agreement will be varied, contradicted or explained by any oral agreement, course of dealing or
performance or any other matter not set forth in an agreement in writing and signed by the Company
and the Executive.
13 APPLICABLE LAW
This Agreement will in all respects, including all matters of construction, validity and
performance, be governed by, and construed and enforced in accordance with, the laws of the State
of Delaware, without regard to any rules governing conflicts of laws.
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14 SEVERABILITY
If any provision of this Agreement is held invalid, illegal or unenforceable under applicable
law, for any reason, including, without limitation, the duration of such provision, its
geographical scope or the extent of the activities prohibited or required by it, then, to the full
extent permitted by law (a) all other provisions will remain in full force and effect and will be
liberally construed in order to carry out the intent of the parties hereto as nearly as may be
possible, (b) such invalidity, illegality or unenforceability will not affect the validity,
legality or enforceability of any other provision hereof, and (c) any court or arbitrator having
jurisdiction thereover shall (and will have the power to) reform such provision to the extent
necessary for such provision to be enforceable under applicable law.
15 COUNTERPARTS
This Agreement, and any amendment or modification entered into pursuant to Section 12
hereof, may be executed in any number of counterparts (including facsimile counterparts), each
of which counterparts, when so executed and delivered, shall be deemed to be an original and all of
which counterparts, taken together, will constitute one and the same instrument.
16 NO CONFLICTING AGREEMENTS
The Executive represents and warrants to the Company that the Executive is not a party to or
bound by any confidentiality, noncompetition, nonsolicitation, employment, consulting or other
agreement or restriction which could conflict with, or be violated by, the performance of the
Executive’s duties to the Company or obligations under this Agreement.
17 KEY PERSON LIFE INSURANCE
The Executive acknowledges that the Company may wish to purchase insurance on the life of the
Executive, the proceeds of which would be payable to the Company. The Executive hereby consents to
such insurance and agrees to submit to any medical examination and release of medical records
required to obtain such insurance.
18 ENTIRE AGREEMENT
This Agreement on and as of the date hereof constitutes the entire agreement between the
Company and the Executive relating to employment of the Executive with the Company, and supersedes
and cancels any and all previous or contemporaneous contracts, arrangements or understandings,
whether oral or written between the Company and the Executive relating to his employment with or
termination from the Company. For the avoidance of doubt, Executive and the Company agree that
this Agreement does not affect either party’s rights or obligations under the Purchase Agreement,
and that the rights and obligations of the Company and the Executive thereunder shall be
independent of this Agreement and may be separately enforced.
The next page is the signature page
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IN WITNESS WHEREOF, the parties have executed and entered into this Agreement on the date set
forth above.
| EXECUTIVE: | ||||||
| /s/ Xxxxxxx Xxxxxxxx | ||||||
| STUDY ISLAND, LLC | ||||||
| By: | /s/ Xxxxx Xxxxxxxx | |||||
| Name: | ||||||
| Title: | ||||||
[Signature page to Chalmers’ Employment Agreement]
Exhibit A
Terms of Incentive Equity
Capitalized terms used in this Exhibit A and not otherwise defined in the Employment
Agreement shall have the meaning ascribed to them in the Amended and Restated Limited Liability
Company Agreement of Holdings.
Agreement shall have the meaning ascribed to them in the Amended and Restated Limited Liability
Company Agreement of Holdings.
Type of equity
|
Class B Shares and Class C Shares, collectively, non-voting Participation Shares | |
Incentive equity pool
|
The Class B Shares and Class C Shares will each initially represent 5% of the total capitalization of Holdings | |
Executive’s Share of Pool
|
15% of the Participation Shares (split evenly between Class B Shares and Class C Shares) | |
Vesting
|
50% of the Participation Shares will be Class B Shares subject to time based
vesting over five (5) years, with 20% of such Class B Shares vesting per year. 50% of the Participation Shares will be Class C Shares subject to performance based vesting on the following terms: |
| • | 16 2/3% shall vest upon receipt of non-tax cash distributions to the investors equal to 3x of Aggregate Net Members Contribution; | ||
| • | 16 2/3% shall vest upon receipt of non-tax cash distributions to the investors equal to 4x of Aggregate Net Members Contribution; and | ||
| • | 16 2/3% shall vest upon receipt of non-tax cash distributions to the investors equal to 5x of Aggregate Net Members Contribution. |
| Aggregate Net Members Contribution and cash distributions will exclude proceeds from any post-closing recapitalization completed within six (6) months of closing under the Asset Purchase Agreement. For example, if total capital contributions are initially $109 million and post closing recapitalization is $25 million, the total capital contribution multiple will be based on $84 million and the $25 million of recapitalization proceeds will not be considered cash distributions toward the multiple target. | ||
Price/Hurdle
|
Aggregate Net Members Contribution plus preferred return | |
Other
|
Other customary terms to be set forth in Holdings’ standard Participation Share Agreement |
