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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement") is made and entered into as
of the 21 day of March, 1997, by and between Xxxxxxx X. Xxxxxxxx, Xx. (the
"Employee") and E Holdings, Inc., a Georgia corporation (the "Company").
W I T N E S S E T H:
WHEREAS, the Company operates a multi-branch educational institution
presently doing business as "The American College;" and
WHEREAS, Employee desires to become an employee of the Company, and the
Company desires to employ Employee, all in accordance with the terms and
conditions hereinafter set forth;
NOW, THEREFORE, for and in consideration of the above premises, the
mutual covenants and agreements hereinafter set forth and other good and
valuable consideration, the receipt, adequacy and sufficiency of which are
hereby acknowledged, the parties hereto covenant and agree as follows:
1. Employment and Duties.
(a) Subject to the terms and conditions set forth in this
Agreement, the Company shall employ Employee, and Employee shall serve the
Company, as Chairman and Xxxx of the School of International Business. In
connection with his duties as Chairman and Xxxx of the School of International
Business, Employee will be appointed to serve as a member of the Board of
Directors of the Company (the "Board").
(b) At all times during the term hereof, Employee shall, for the
benefit of the Company, use his skills, knowledge and specialized training to
perform the duties and exercise the powers, functions and discretions incident
to his position as Chairman and Xxxx of the School of International Business or
which from time to time, consistent with such position may be assigned to or
vested in him by the chief executive officer ("CEO"), chancellor ("Chancellor")
or Board, in an efficient and competent manner and on such terms and subject to
such restrictions as the CEO, Chancellor or Board may from time to time impose.
(c) At all times during the term hereof, Employee shall during
working hours, devote the whole of his time, attention and ability to his duties
hereunder at such location or locations as the Company may require from time to
time except as provided in Section 1(g) below.
(d) Except as otherwise provided in Section 1(g) below, at all
times during the term hereof, Employee shall comply with all reasonable
requests, instructions and regulations made by the CEO, Chancellor or Board and
give to Company such explanations, information and assistance as the CEO,
Chancellor or Board may reasonably require.
(e) At all times during the term hereof, Employee shall
faithfully serve the Company to the best of his ability and use his best efforts
to promote the interests of the Company.
(f) Except as otherwise provided in Section 1(g) below, at all
times during the term hereof, Employee agrees to be a full-time employee of the
Company and to devote his full and exclusive time, energy and skill to the
business of the Company, and to the fulfillment of Employee's obligation under
this Agreement. In addition to the foregoing and not in limitation thereof,
during the term hereof, Employee shall not carry on, engage in, or otherwise be
interested in, directly or indirectly, any other business or activity that is
competitive with the activities and business of the Company, that is of a nature
similar to the Company's business, that would result in a conflict of interest
with the Company's business, or that would materially affect Employee's ability
to perform his duties as set forth in this Agreement. Moreover, Employee shall
not take part in any activities detrimental to the Company's best interest.
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(g) Notwithstanding anything contained in this Agreement to the
contrary, the Company acknowledges and agrees that the Employee may continue his
preexisting consulting activities for a period of time expiring on the later to
occur of (i) two (2) years from the date hereof, or (ii) when Employee has
earned at least $350,000 pursuant to this Agreement during any year, beginning
on the date hereof or any anniversary date hereof. Moreover, notwithstanding
anything contained in this Agreement to the contrary, the Company acknowledges
and agrees that the Employee may act, on a part-time basis, as an independent
sales representative for Edutrek Partners, LLC ("Edutrek Partners"). The
fulfillment of such consulting activities as set forth above and the
representation of Edutrek Partners, on a part-time basis, shall not be deemed a
violation of this Agreement; provided, however, that the Employee will endeavor
in good faith to manage his time and services effectively so as to minimize any
interference with his duties to the Company.
2. Term.
The Employee's employment under this Agreement shall begin as of
the date hereof (the "Commencement Date"), and shall, unless earlier terminated
as set forth herein, end on the fifth (5th) anniversary thereof. Employee agrees
that should he elect to resign his position with the Company, Employee will
provide the Company with not less than ninety (90) days prior notice.
3. Compensation.
(a) Subject to the terms of this Agreement, in consideration of
Employee's services, the Company shall pay Employee so long as he shall be
employed under this Agreement a base salary of no less than One Hundred Sixty
Five Thousand Dollars ($165,000) per annum. The Employee's base salary shall be
reviewed by the Company on each successive anniversary of this Agreement and the
rate thereof shall be increased as of such review date by such amount as the
Company deems appropriate in its sole discretion, PROVIDED ALWAYS that the
salary in effect during the twelve (12) months period immediately preceding the
review date shall be increased each review date by an amount not less than the
percentage increase in the "Consumer Price Index" for the preceding twelve (12)
month period. For purposes of this provision, the "Consumer Price Index" shall
mean and refer to that table in the Consumer Price Index published by the U.S.
Department of Labor, Bureau of Labor Statistics, now known as the "Consumer
Price Index for All Urban Consumers: U.S. City Average--(CPI-U) All Items
(1982-84=100)." If the Consumer Price Index referenced above is changed, and
such change affects the calculations described above, the Consumer Price Index
shall be converted in accordance with the conversion factor published by the
U.S. Department of Labor, Bureau of Labor Statistics. If the Consumer Price
Index is discontinued or revised during the term of this Agreement, such other
government index or computation with which it is replaced shall be used in order
to obtain substantially the same result as would have been obtained if the
Consumer Price Index had not been discontinued or revised. If the Consumer Price
Index is discontinued and there is no substituted government index or
computation, then the most closely comparable statistics on the purchasing power
of the consumer dollar of urban consumers, as published by a responsible
financial authority and selected by the Company shall be utilized in lieu of
such index. Employee's base salary shall be payable to Employee on the regularly
reoccurring pay period established by the Company, but in no event in less than
monthly installments. Employee's salary shall be subject to all withholdings
pursuant to applicable law or regulation.
(b) In addition to the base salary provided in subsection (a)
above, Company shall provide to Employee an incentive bonus to be calculated and
paid as follows. After the close of the first full fiscal year of the Company
occurring during the term of the Employee's employment hereunder (i.e. May 31,
1998), and after the close of each subsequent fiscal year of the Company,
Company shall cause its accountants to prepare financial statements for the
quarter then ended which reflect the net tuition revenue (tuition, net of
scholarships and discounts, excluding housing revenues, student fees, books and
non-tuition related revenue) generated from the Business School Programs and
Courses (as hereinafter defined) for each of the Atlanta, Los Angeles, London
and Dubai campuses. Within thirty (30) days after the review and approval of
such financial statements by the Board, the Company shall declare and pay to
Employee a cash bonus equal to:
(i) three percent (3%) of the increase, if any, in the net
tuition revenue generated from the Business School Programs and
Courses for the Atlanta, Los Angeles and London campuses, such
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increase to be calculated by comparing, on an aggregate basis:
(x) the net tuition revenue for all three campuses for the
fiscal year then ended, to (y) the net tuition revenue for such
campuses for the preceding fiscal year; and
(ii) Employee's Percentage Participation (as hereinafter
defined) of the increase, if any, in the net tuition revenue
generated from the Business School Programs and Courses for the
Dubai campus, such increase to be calculated by comparing: (x)
the net tuition revenue for the Dubai campus for the fiscal year
then ended, to (y) the net tuition revenue for such campus for
the preceding fiscal year.
If the Company opens any new campuses or acquires additional campuses or
businesses after the Commencement Date and the Employee participates in the
operation thereof in a manner that is at least substantially equivalent to his
participation in the operation of the Atlanta, Los Angeles, London and Dubai
campuses, then the Company will provide to Employee an incentive bonus based on
the revenue generated from such new campuses, such bonus to be calculated in
such manner as may be agreed upon in writing from time to time by the Company
and Employee. Any bonus paid hereunder shall be subject to all withholdings
pursuant to applicable law and regulation. In no event shall a bonus accrue
until the day the bonus is declared and Employee is notified of the same. The
Employee will not be entitled to any bonus hereunder unless he is employed by
the Company pursuant to this Agreement, at the time the bonus is declared and
Employee is notified of the same. The financial statements prepared by the
Company's accountants and approved by the Board shall be deemed conclusive
evidence of the Company's financial results for the purposes of calculating the
bonus payable to Employee. For purposes of this provision, the following
definitions shall apply: The term "Employee's Percentage Participation" shall
mean an amount calculated as follows: three percent (3%) multiplied by a
fraction the numerator of which is the Company's percentage participation in the
revenue generated by the Dubai campus, and the denominator of which is one
hundred percent (100%), with the result rounded to the nearest half percent
(1/2%). By way of example, under the Company's current arrangements, the Company
receives thirty percent (30%) of the total revenue generated by the Dubai
campus; accordingly, Employee's Percentage Participation is one percent (1%)
calculated as follows: 3% x 30%/100% = .90% rounded to 1%. The term "Business
School Programs and Courses" shall mean all courses taken in the School of
International Business.
(c) In addition to the base salary provided in subsection (a)
above and the incentive bonus provided in subsection (b) above, Company shall at
the end of each fiscal year provide Employee with an incentive bonus not to
exceed fifty percent (50%) of the Employee's annual base salary for such fiscal
year (or the applicable portion of such base salary if Employee was not employed
by the Company pursuant to this Agreement for all of such fiscal year) if: (i)
the Company achieves certain financial goals established for such year by the
CEO in his sole discretion reasonably exercised after consultation with the
Employee; and (ii) the Employee achieves all of the business objectives and
goals established for such year by the CEO in his sole discretion reasonably
exercised after consultation with the Employee. Any bonus paid hereunder shall
be subject to all withholdings pursuant to applicable law and regulation. In no
event shall a bonus accrue until the day the bonus is declared and Employee is
notified of the same. The Employee will not be entitled to any bonus hereunder
unless he is employed by the Company pursuant to this Agreement, at the time the
bonus is declared and Employee is notified of the same.
(d) Employee hereby acknowledges that Employee may be required
to work beyond standard working hours in order to perform his duties hereunder.
Employee shall not be entitled to compensation for overtime or extra hours
worked in performance of his duties hereunder except as required by law.
(e) In addition to the compensation described in this Agreement,
Employee shall be entitled to reimbursement by the Company for all actual,
reasonable and direct expenses incurred by him in the performance of his duties
hereunder, provided such expenses are properly characterized as being business
expenses that are properly tax deductible for the Company, and further provided
that such expenses were incurred only in accordance with the policies and
procedures established by the Company from time to time. Employee shall provide
the Company with written documentation of such expenses in form complying with
the records required of the Company by the Internal Revenue Service and
appropriate state authorities for tax deductibility purposes in such cases, and
reimbursement for each item of approved expense shall be made within a
reasonable time after receipt by Company of the written documentation thereof.
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4. Employment Benefits.
(a) Employee shall have the right to participate in any and all
employee benefit programs established or maintained by the Company from time to
time, in accordance with the terms and conditions of such employee benefit
programs, including, without limitation, such medical, dental plans, retirement,
pension, profit sharing, stock bonus or stock option plans as may be established
from time to time by the Company. To the extent Employee participates in such
programs, Employee shall be subject to the terms and conditions set forth
therein. The Company reserves the right, in its sole discretion, to alter, amend
or discontinue any of such employee benefit programs at any time.
(b) Notwithstanding anything contained in Section 4(a) to the
contrary, the Company covenants and agrees that the Employee shall be entitled
to participate in any and all employee benefit programs established or
maintained by the Company for the benefit of the Company's executive officers on
terms and conditions that are no less advantageous than those made available to
the current Chairman of the Board (i.e., Xxxxxx X. Xxxxxx); provided, however,
that any obligation to provide disability income shall be calculated on a pro
rata basis based on the base annual compensation of the Chairman of the Board
and the Employee; provided further that Company shall provide Employee with a
disability income insurance policy which will pay Employee a minimum of
$6,000.00 per month if Employee is fully disabled. By way of example, if the
Chairman of the Board has a base annual salary of $250,000 per annum and the
Employee has a base annual salary of $165,000 per annum, and the Company commits
to provide the Chairman of the Board with an insurance policy providing $10,000
per month in disability income, then the Employee would be entitled to a similar
insurance policy providing not less than $6,600 per month in disability income.
(c) Pursuant to, and in accordance with, a separate agreement by
and between the Employee and the Company of even date herewith (the "Option
Agreement"), Employee shall be granted (i) an option to purchase up to 15,000
shares of the Class A Common Stock of E Holdings, Inc., the Company's indirect
parent corporation, such option to vest ratably over the initial five (5) year
duration of Employee's employment under this Agreement beginning on the date
hereof; (ii) an option to purchase an additional 1,000 shares of the Class A
Common Stock of E Holdings, Inc., if the Company's total annual revenue for the
first full fiscal year of the Company occurring during the term of Employee's
employment hereunder (i.e., May 31, 1998) has increase by at least twenty
percent (20%) over the total annual revenue for the prior fiscal year; (iii) an
option to purchase an additional 1,000 shares of the Class A Common Stock of E
Holdings, Inc., if the Company's total annual revenue for the second full fiscal
year of the Company occurring during the term of Employee's employment hereunder
(i.e., May 31, 1999) has increased by at least twenty percent (20%) over the
total annual revenue of the Company for the prior fiscal year; (iv) an option to
purchase an additional 1,000 shares of the Class A Common Stock of E Holdings,
Inc., if the Company's total annual revenue for the third full fiscal year of
the Company occurring during the term of Employee's employment hereunder (i.e.,
May 31, 2000) has increased by at least twenty percent (20%) over the total
annual revenue of the Company for the prior fiscal year; (v) an option to
purchase an additional 1,000 shares of the Class A Common Stock of E Holdings,
Inc., if the Company's total annual revenue for the fourth full fiscal year of
the Company occurring during the term of Employee's employment hereunder (i.e.,
May 31, 2001) has increased by at least twenty percent (20%) over the total
annual revenue of the Company for the prior fiscal year; and (vi) an option to
purchase an additional 1,000 shares of the Class A Common Stock of E Holdings,
Inc., if the Company's total annual revenue for the fifth full fiscal year of
the Company occurring during the term of Employee's employment hereunder (i.e.,
May 31, 2002) has increased by at least twenty percent (20%) over the total
annual revenue of the Company for the prior fiscal year; (vii) an option to
purchase 5,000 shares of the Class A Common Stock of E Holdings, Inc. less any
shares to which the Employee has already attained an option under clauses (ii)
through (vi) above, if the Company's total annual revenue for the fifth full
fiscal year of the Company occurring during the term of Employee's employment
hereunder (i.e., May 31, 2002) is not less than the Company's total annual
revenue for the fiscal year ended May 31, 1997 compounded at the rate of twenty
percent (20%) per annum (i.e. approximately $85 million). All of the foregoing
options shall vest immediately the Company's current Chairman of the Board
(i.e., Xxxxxx X. Xxxxxx) should cease to maintain control over the Company, all
is more fully described in the Option Agreement. This Section 4(c) is included
within this Agreement for information purposes only. Any options described
herein shall in all events be granted pursuant and subject to all of the terms
and conditions of the Option Agreement.
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(d) At the time of the exercise of all or a portion of the
options set forth in Section 4(c) hereof, Company shall pay to Employee a
supplemental cash compensation amount equal to the option exercise price per
share for each option exercised plus an amount equal to the state and federal
tax consequences to Employee attributable to such exercise by Employee and such
supplemental cash compensation, as determined by the Board of Directors of the
Company on date of such exercise and based upon such information and
calculations as the Board of Directors of the Company in its sole discretion
shall deem appropriate.
(e) In addition to such public holidays as are observed by the
Company, the Employee shall be entitled to twenty (20) working days paid
vacation during each calendar year (reduced pro rata on a per diem basis for any
partial calendar year occurring within the term of the Employee's employment
under this Agreement) to be taken at such time or times as may be agreed upon by
the Company's Chief Executive Officer. The Employee may not carry forward any
unused part of his vacation entitlement to any subsequent calendar year.
(f) Employee acknowledges that the Company may promulgate
employee handbooks, policies and procedures from time to time and Employee
agrees to adhere to the terms of any handbook, policy or procedures which the
Company may promulgate. The Company reserves the right, in its sole discretion,
to alter, amend or terminate any handbook, policy or procedure.
5. Illness, Incapacity or Death During Employment.
(a) If by reason of illness, injury or incapacity, Employee is
unable, despite reasonable accommodation, to perform his services or discharge
his duties hereunder on a full time basis for ninety (90) or more consecutive
days or one hundred twenty(120) days in the aggregate during any twelve (12)
month period (or any such longer periods as may be required by law), then upon
ten (10) days' prior notice, the Company may terminate the employment of
Employee, and thereupon, Employee shall be paid his base salary from the date of
termination through the 10-day notice period. If the Company maintains a long
term disability insurance policy for the benefit of Employee, then,
notwithstanding the previous sentence, the Company may by written notice to the
Employee, terminate the employment of the Employee at any time after the
Employee qualifies for the payment of benefits under such policy.
(b) In the event of Employee's death, all obligations of the
Company under this Agreement shall terminate other than Employee's rights with
respect to the payment of that portion of the base salary earned by Employee to
the date of death, a pro rata share (through the date of death) of any bonus due
Employee (based on the year ending immediately subsequent to the date of death),
plus reimbursement of all pre-approved expenses that were reasonably incurred by
Employee in performing his responsibilities and duties for the Company prior to
and including such date.
6. Termination of Employment.
(a) If during the term of this Agreement the Employee should
resign or the Company terminates Employee's employment hereunder With Cause (as
hereinafter defined) or pursuant to Section 5, all obligations of Company to
provide compensation and benefits under this Agreement shall cease, and Employee
shall have no claim against the Company for damages or otherwise by reason of
such termination. Company's election to terminate Employee's employment With
Cause shall be without prejudice to any remedy the Company may have against
Employee for the breach or non-performance of any of the provisions of this
Agreement.
(b) If during the term of this Agreement Company terminates
Employee's employment hereunder Without Cause (as hereinafter defined), then
Employee will be entitled to continue to receive Employee's base salary for
twelve (12) months after the date of termination or until the second anniversary
of the Commencement Date (as defined in Section 3(a)), whichever is longer
together with a pro rata share (through date of termination) of any bonus due
Employee (based on the year ending immediately subsequent to the date of
termination); provided, however, that post-employment compensation shall cease
to accrue and Employee shall have no further entitlement to the same from and
after the earlier of (i) the Employee's death, or (ii) the date Employee
breaches any of the post-employment covenants set forth in this Agreement.
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(c) "With Cause" means the termination of employment
resulting from:
(i) any act or omission which constitutes a material
breach by Employee of his obligations under this Agreement;
(ii) the commission by Employee of a felony or any crime
involving moral turpitude, fraud or dishonesty;
(iii) the perpetration by Employee of any act of dishonest
whether relating to the Company, the Company's employee or
otherwise;
(iv) the use of illegal drugs by the Employee, or
drunkenness or substance abuse by the Employee which interferes
with the performance of his duties hereunder;
(v) gross negligence on the part of Employee in the
performance of his duties hereunder;
(vi) the issuance of a final consent decree, cease and
desist or similar order against Employee by a regulatory agency
relating to violations or alleged violations of any federal or
state law or regulation governing the conduct of the business
of the Company; or
(vii) any other act or omission (other than an act or
omission resulting from the exercise by Employee of good faith
business judgment) which materially impairs the financial
condition or business reputation of the Company or is otherwise
materially detrimental to the Company.
provided, however, prior to giving notice to Employee of termination With Cause,
to the extent such matter is capable of being cured or corrected Company shall
give Employee thirty (30) days written notice of the right to cure or correct
the items set forth in Section 6(c)(i)(v) and (vii) above, and if Employee has
cured or corrected said items or if said items cannot be cured or corrected
within said thirty (30) days, Employee has commenced measures to cure or correct
said matter within a reasonable period of time, then Company shall not be able
to terminate Employee due to these matters; provided further that Company shall
be obligated to give only one (1) such notice during the term of this Agreement.
(d) "Without Cause" means the termination of employment
resulting from any reason other than those enumerated in subsection (c) above or
Section 5 of this Agreement.
7. Employee's Obligations upon Termination of Employment.
Upon the termination of his employment hereunder for whatever
reason Employee shall:
(a) Forthwith tender his resignation from any directorship
or office he may hold in the Company or its subsidiaries or affiliates; and
(b) Not at any time represent himself still to be connected
or to have any connection with the Company or its subsidiaries or affiliates.
8. Effect of Termination.
The provisions of this Agreement shall survive the termination
of this Agreement and the termination of Employee's employment with the Company
to the extent required to give full effect to the covenants and agreements
contained herein.
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9. Confidentiality.
(a) Employee agrees that, both during the term of his employment
and after the termination of his employment for any reason, Employee will hold
in a fiduciary capacity for the benefit of the Company, and shall not directly
or indirectly use or disclose, except as authorized by the Company in connection
with the performance of Employee's duties, any Confidential Information, as
defined hereinafter, that Employee may have or acquire (whether or not developed
or compiled by Employee and whether or not Employee has been authorized to have
access to such Confidential Information) during the term of his employment. The
term "Confidential Information" as used in this Agreement shall mean and include
any information, data and know-how relating to the business of the Company that
is disclosed to Employee by the Company or known by him as a result of his
relationship with the Company and not generally within the public domain
(whether constituting a trade secret or not), including without limitation, the
following information:
(i) financial information, such as Company's earnings,
assets, debts, prices, fee structure, volumes of purchases
or sales or other financial data, whether relating to
Company generally, or to particular products, services,
geographic areas, or time periods;
(ii) supply and service information, such as information
concerning the goods and services utilized or purchased by
the Company, the names or addresses of suppliers, terms of
supply or service contracts, or of particular transactions,
or related information about potential suppliers, to the
extent that such information is not generally known to the
public, and to the extent that the combination of suppliers
or use of a particular supplier, though generally known or
available, yields advantage to Company the details of
which are not generally known;
(iii) marketing information, such as details about ongoing
or proposed marketing programs or agreements by or on
behalf of Company, marketing forecasts or results of
marketing efforts or information about impending
transactions;
(iv) intellectual property information, such as formulas,
design details or parameters, software source code,
proprietary programs, devises, techniques and processes,
ongoing or planned activities in intellectual property
development, ongoing or planned joint venture
activities, and licensing terms or conditions;
(v) personnel information, such as employees' personal or
medical histories, compensation or other terms of
employment, actual or proposed promotions, hiring,
resignations, disciplinary actions, terminations or reasons
therefor, training methods, performance, or other
employee information;
(vi) customer information, such as any compilation of past,
existing or prospective customers, customer proposals or
agreements between customers and Company, status of
customer accounts or credit, or related information about
actual or prospective customers; and
(vii) information with respect to any customer affairs that
the Company agreed to treat as confidential.
The term "Confidential Information" does not include information that has become
generally available to the public by the act of one who has the right to
disclose such information without violating any right of the Company or the
customer to which such information pertains.
(b) The covenant contained in this Section 9 shall survive the
termination of Employee's employment with the Company for any reason for a
period of two (2) years; provided, however, that with respect to those items of
Confidential Information which constitute trade secrets under applicable law,
Employee's obligations of confidentiality and non-disclosure as set forth in
this Section 9 shall continue to survive after said two (2) year period
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to the greatest extent permitted by applicable law. These rights of the Company
are in addition to those rights the Company has under the common law or
applicable statutes for the protection of trade secrets.
10. Non-Competition.
(a) Employee expressly covenants and agrees that during the term
of his employment hereunder and after termination of his employment for any
reason, he will not, directly or indirectly, seek, obtain or accept a
"Competitive Position" in the "Restricted Territory" with a "Competitor" of the
Company (as such terms are hereafter defined). For purposes of this Agreement, a
"Competitor" of the Company means any business, individual, partnership, joint
venture, association, firm, corporation or other entity (other than the Company
or its affiliates or any nonprofit institution of higher learning) engaged,
wholly or partly, in the sale or distribution of educational products or
services that are the same as, or similar to, or competitive with the products
or services sold or distributed by the Company (or its affiliates); a
"Competitive Position" means any employment with any Competitor of the Company
whereby Employee will use or is likely to use any Confidential Information (as
that term is defined in Section 9), or whereby Employee has duties for such
Competitor that are the same as or substantially similar to those actually
performed by him pursuant to the terms hereof; and the "Restricted Territory"
means the following geographical area: the States of California and Georgia.
Employee acknowledges and agrees that he has been or will be working within the
Restricted Territory as defined above or has had or will have material contact
with actual or prospective students, alumni, student referral sources, student
out-placement sources, educators, vendors and other parties having business
dealings with the Company located within such areas. The parties agree to review
the geographical area included within the Restricted Territory from time to time
at either party's request in order that the Restricted Territory may be reformed
so that its coverage upon Employee's termination will extend only to the
geographical area in which the Employee is working at such time, including any
area where any operations performed, supervised or assisted in by the Employee
are conducted and any area where actual or prospective students, alumni, student
referral sources, student out-placement sources, educators, vendors and other
parties having business dealings with the Company are present. Any reformation
to be evidenced only by written amendment to this Agreement. Nothing contained
in this Section 10 is intended to prevent Employee from investing in stock or
other securities listed on a national securities exchange or actively traded on
the over the counter market of any corporation engaged, wholly or partly, in the
sale or distribution of educational products or services; provided, however,
that Employee and members of his immediate family shall not, directly or
indirectly, hold more than a total of five percent (5%) of all issued and
outstanding stock or other securities of any such corporation.
(b) The covenant contained in this Section 10 shall survive the
termination of Employee's employment with the Company for any reason for a
period of eighteen (18) months; provided, however, that if the Employee is
terminated Without Cause, the covenant contained in this Section 10 shall
survive until the earlier of (i) the eighteenth (18th) monthly anniversary of
the date of termination of the Employee's employment, or (ii) the date scheduled
for the final payment of post-employment compensation owing under Section 6(a)
(without regard to any premature termination of the post-employment compensation
resulting from Employee's breach of any post-employment covenants).
11. Non-Solicitation of Employees.
Employee agrees that he will, for so long as he is employed
hereunder and for a period of twenty four (24) months after termination of his
employment, refrain from recruiting or hiring, or attempting to recruit or hire,
directly or by assisting others, any other employee of the Company who is
employed by the Company or any successor or affiliate of the Company.
12. Tolling of Period of Restraint.
Employee hereby expressly acknowledges and agrees that in the
event the enforceability of any of the terms of this Agreement shall be
challenged in court or pursuant to arbitration and Employee is not enjoined from
breaching any of the restraints set forth in Sections 9 through 11, then if a
court of competent jurisdiction or arbitration panel finds that the challenged
restraint is enforceable, the time period of the restraint shall be deemed
tolled upon the
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filing of the lawsuit challenging the enforceability of the restraint until the
dispute is finally resolved and all periods of appeal have expired.
13. Acknowledgments.
Employee hereby acknowledges and agrees that the restrictions
contained in Sections 9 through 11 are fair and reasonable and necessary for the
protection of the legitimate business interests of the Company. Employee
acknowledges that in the event Employee's employment with the Company terminates
for any reason, Employee will be able to earn a livelihood without violating the
restrictions contained in Sections 9 through 11 and that Employee's ability to
earn a livelihood without violating such restrictions is a material condition to
Employee's employment and continued employment with the Company.
14. Rights to Materials.
All records, files, memoranda, reports, price lists, student
lists, lists of student out placement sources, drawings, plans, sketches,
documents and the like (together with all copies thereof) relating to the
business of the Company, which Employee shall use or prepare or come in contact
with in the course of, or as a result of, his employment shall, as between the
parties hereto, remain the sole property of the Company. Upon the termination of
his employment or upon the prior demand of the Company, he shall immediately
return all such materials and shall not thereafter cause removal thereof from
the premises of the Company.
15. Works Made for Hire.
The Company and Employee acknowledge that in the course of
Employee's employment by the Company, Employee may from time to time create for
the Company copyrightable works. Such works may consist of manuals, pamphlets,
instructional materials, computer programs, films, tapes or other copyrightable
material, or portions thereof, and may be created within or without the
Company's facilities and before, during or after normal business hours. All such
works related to or useful in the business of the Company are specifically
intended to be works made for hire and shall be the property of the Company, and
Employee shall cooperate with the Company in the protection of the Company's
copyrights therein and, to the extent deemed desirable by the Company, the
registration of such copyrights.
16. Discoveries.
Employee agrees that any inventions, discoveries or improvements
that Employee may develop or conceive during the course of Employee's employment
shall be the sole property of the Company. Employee agrees to promptly disclose
to the Company in writing all such inventions, discoveries and improvements,
whether directly or indirectly related to the business of the Company or whether
made solely by the Employee or in conjunction with others. At the Company's
request and expense, both during and after Employee's employment, Employee will
promptly execute a specific assignment of title to the Company (or any specified
member thereof) of each invention, discovery or improvement described in the
preceding paragraph, and perform all other acts reasonably necessary to enable
the Company to secure a patent therefor in the United States and in foreign
countries and to maintain, defend and assert such patents. This obligation shall
survive the termination or expiration of this Agreement.
17. Severability
Except as noted below, should any provision of this Agreement be
declared or determined by any court of competent jurisdiction to be
unenforceable or invalid for any reason, the validity of the remaining parts,
terms or provisions of this Agreement shall not be affected thereby and the
invalid or unenforceable part, term or provision shall be deemed not to be a
part of this Agreement. The covenants set forth in this Agreement are to be
reformed pursuant to Section 18 if held to be unreasonable or enforceable, in
whole or in part, and, as written and as reformed, shall be deemed to be part of
this Agreement.
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18. Reformation.
If any of the covenants or promises of this Agreement are
determined by any court of law or equity, with jurisdiction over this matter, to
be unreasonable or unenforceable, in whole or in part, as written, Employee
hereby consents to and affirmatively requests that said court reform the
covenant or promise so as to be reasonable and enforceable and that said court
enforce the covenant or promise as so reformed.
19. Injunctive Relief.
Employee understands, acknowledges and agrees that in the event
of a breach or threatened breach of any of the covenants and promises contained
in Sections 9, 10, 11, 14, 15 and 16, the Company will suffer irreparable injury
for which there is no adequate remedy at law and the Company will therefore be
entitled to injunctive relief enjoining said breach or threatened breach.
Employee further acknowledges, however, that the Company shall have the right to
seek a remedy at law as well as or in lieu of equitable relief in the event of
any such breach.
20. Assignment.
The terms and provisions of this Agreement shall inure to the
benefit of and be binding upon the Company and its successors and assigns, and
upon Employee and his heirs and personal representatives. The term "Company" as
used in this Agreement shall be deemed to include the successors and assigns of
the original or any subsequent entity constituting the Company as well as any
and all divisions, subsidiaries, or affiliates thereof.
21. Waiver.
The waiver by any party to this Agreement of a breach of any of
the provisions of this Agreement shall not operate or be construed as a waiver
of any subsequent or simultaneous breach.
22. Applicable Law and Mutual Submissions.
This Agreement has been entered into in and shall be governed by
and construed under the laws of the State of Georgia.
23. Headings and Captions.
The headings and captions used in this Agreement are for
convenience of reference only, and shall in no way define, limit, expand or
otherwise affect the meaning or construction of any provision of this Agreement.
24. Notice.
Any notice required or permitted to be given pursuant to this
Agreement shall be deemed sufficiently given when delivered in person or when
deposited in the United States mail, first class postage prepaid.
25. Gender.
All pronouns or any variations thereof contained in this
Agreement refer to the masculine, feminine or neuter, singular or plural, as the
identity of the person or persons may require.
26. Right to Arbitration.
Any controversy or claim arising out of or relating to
Employee's employment by the Company, or the termination thereof, or this
Agreement, or the breach thereof (including, without limitation, any claim that
any provision of this Agreement or any obligation of Employee is illegal or
otherwise unenforceable or voidable under law, ordinance or ruling or that
Employee's employment by the Company was illegally terminated) shall be settled
by arbitration at the
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/s/ SB
----------
Company's
Initials
/s/ SGF
----------
Employee's
Initials
office of the American Arbitration Association in Atlanta, Georgia, in
accordance with the United States Arbitration Act Company and Employee each
consents and submits to the personal jurisdiction and venue of the trial courts
of Xxxxxx County, Georgia, and also to the personal jurisdiction and venue of
the United States District Court for the Northern District of Georgia for
purposes of enforcing this provision. All awards of the arbitration shall be
binding and non-appealable except as otherwise provided in the United States
Arbitration Act. Judgment upon the award of the arbitrator may be entered in any
court having jurisdiction thereof. The arbitration shall take place at a time
noticed by the American Arbitration Association regardless of whether one of the
parties fails or refuses to participate. The arbitrator shall have no authority
to award punitive damages, but will otherwise have the authority to award any
remedy or relief that a court of competent jurisdiction could order or grant,
including, without limitation, specific performance of any obligation created
under this Agreement, the issuance of an injunction or other provisional relief,
or the imposition of sanctions for abuse or frustration of the arbitration
process. The parties shall be entitled to engage in reasonable discovery,
including a request for the production of relevant documents. Depositions may be
ordered by the arbitrator upon a showing of need. The foregoing provisions shall
not preclude the Company from bringing an action in any court of competent
jurisdiction for injunctive or other provisional relief as the Company may
determine is necessary or appropriate.
27. Prevailing Party.
In the event suit, action or other legal proceeding of any kind
(including arbitration) is brought by any party hereto against the other to
enforce such party's rights hereunder, the prevailing party shall be entitled to
an award of costs, expenses and attorneys' fees incurred in connection
therewith.
28. Entire Agreement.
This Agreement constitutes the entire agreement between the
Company and Employee with respect to the subject matter of this Agreement and
supersedes any prior agreements or understandings between the Company and
Employee with respect to such subject matter. No amendment or waiver of this
Agreement or any provision hereof shall be effective unless in writing signed by
both of the parties.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed, under seal, as of the day and year first above written.
"COMPANY"
E HOLDINGS, INC.
Attest: By: /s/ Xxxxx Xxxxxx
------------------------------- -----------------------------
Title: Title:
------------------------------- -----------------------------
[CORPORATE SEAL] "EMPLOYEE"
/s/ Xxxxxxx X. Xxxxxxxx (SEAL)
-------------------------------
XXXXXXX X. XXXXXXXX, XX.
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