Contract
Exhibit
10.3
EMPLOYMENT
AGREEMENT (this “Agreement”),
dated
as of February 1, 2007, between LINCOLN EDUCATIONAL SERVICES CORPORATION,
a New
Jersey corporation (the “Company”),
and
Xxxxxxxx X. Xxxxx (the “Executive”).
WHEREAS,
the Executive is currently employed by the Company;
WHEREAS,
the Executive and the Company entered into an Employment Agreement, dated
January 3, 2005 (the “Original
Agreement”),
which
set forth the terms and conditions of the Executive’s employment with the
Company;
WHEREAS,
the Original Agreement was amended on March 1, 2005 and again on January
24,
2007 (the “Amendments”);
WHEREAS,
the parties desire that this Agreement supersede the Original Agreement and
the
Amendments;
NOW,
THEREFORE, in consideration of the covenants and agreements hereinafter set
forth, the parties hereto agree as follows:
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1.
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EFFECTIVENESS
OF AGREEMENT
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This
Agreement shall become effective, and shall supersede the Original Agreement
and
the Amendments as of the date hereof (the “Effective
Date”).
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2.
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EMPLOYMENT
AND DUTIES
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2.1 Position
and Duties. The Company hereby continues to employ the Executive, and the
Executive agrees to serve, as Vice Chairman of the Company, upon the terms
and
conditions contained in this Agreement. The Executive shall report to the
Chairman of the Board of Directors of the Company (the “Board”) and the
Chief Executive Officer of the Company and perform duties and services for
the
Company commensurate with the Executive’s position. Except as may
otherwise be approved in advance by the Board or the Compensation Committee
of
the Board (the “Committee”), the Executive shall render his services
exclusively to the Company during his employment under this Agreement and
shall
devote substantially all of his working time and efforts to the business
and
affairs of the Company.
2.2 Term
of Employment. The Executive’s employment under this Agreement shall
terminate on December 31, 2008, unless terminated earlier pursuant to Section
5
or extended pursuant to Section 6.1 (the “Employment
Period”).
2.3 Location
of Work. The Executive shall be based in the United States in West Orange,
New Jersey. However, the Executive agrees to undertake whatever domestic
and
worldwide travel is required by the Company. The Executive shall not be required
or permitted to relocate without the mutual, written consent of the Executive
and the Company.
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3.
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COMPENSATION
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3.1 Base
Salary. Subject to the provisions of Sections 5 and 6, the Executive shall
be entitled to receive a base salary (the “Base Salary”) at a rate of
$340,000 per annum during the Employment Period, such rate to be effective
as of
January 1, 2007. Such rate may be adjusted upwards, but not downwards, from
time
to time by the Board or the Committee, in their sole discretion. The Base
Salary
shall be paid in equal installments on a biweekly basis or in accordance
with
the Company’s current payroll practices, less all required deductions. The Base
Salary shall be pro-rated for any period of service less than a full
year.
3.2 Annual
Bonus. Subject to the provisions of Sections 5 and 6, the Executive shall be
eligible to earn an annual bonus for 2007 and each full calendar year thereafter
during the Employment Period (the “Annual Bonus”), the amount of which
shall be based upon performance targets or such other criteria that are
determined by the Board or the Committee pursuant to the provisions of the
Company’s Key Management Team Incentive Compensation Plan ( the “Incentive
Plan”) in effect for the applicable calendar year. The Company shall pay the
Annual Bonus to the Executive no later than three weeks following receipt
by the
Board or the Committee of the Company’s audited financial statements for the
applicable fiscal year. The Annual Bonus shall be prorated for any year in
which
the Executive’s employment is terminated due to death or Disability (as defined
in Appendix A). If
during
the Employment Period the Executive’s employment is terminated by the Company
(or any successor thereto) for Cause (as defined in Exhibit A) or the Executive
resigns from his employment other than for Good Reason (as defined in Exhibit
A)
prior to the payout of any Annual Bonus due for a completed calendar, the
Executive shall not receive such Annual Bonus.
3.3 Reimbursement
of Expenses. The Company shall reimburse the Executive for reasonable travel
and other business expenses incurred by him in the fulfillment of his duties
hereunder upon presentation by the Executive of an itemized account of such
expenditures, in accordance with Company practices.
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4.
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EMPLOYEE
BENEFITS
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4.1 General.
The Executive shall, during the Employment Period, be included, to the extent
eligible thereunder, in all employee benefit plans, programs and arrangements
(including, without limitation, any plans, programs or arrangements providing
for retirement benefits, profit sharing, disability benefits, health and
life
insurance or vacation and paid holidays) that shall be established by the
Company for, or made available to, its senior executives. In addition, the
Company shall furnish the Executive with coverage by the Company’s customary
director and officer indemnification arrangements, subject to applicable
law.
4.2 Automobile.
During the Employment Period, the Company shall provide the Executive with
an
automobile for business and personal use and pay for associated costs, including
automobile insurance, parking and fuel, in accordance with the Company’s
practices as consistently applied to other key employees.
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5.
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TERMINATION
OF EMPLOYMENT
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5.1 Effect
of an Involuntary Termination. Subject to the provisions of Sections 6, 9.5
and 11.2, if during the Employment Period there is an “Involuntary Termination”
(as defined below) of the Executive’s employment, the Company shall pay to the
Executive:
(i) an
amount
equal to one and one half times the sum of (x) the Executive’s annual Base
Salary, at a rate in effect at the date of such termination plus (y) the
average
of the Annual Bonuses paid to the Executive for the two years immediately
prior
to the year in which the Involuntary Termination occurs;
(ii) all
outstanding reasonable travel and other business expenses that he incurred
as of
the date of his termination; and
(iii) the
employer portion of the premiums necessary to continue the Executive’s health
care coverage until the earlier of (1) the first anniversary of the date
of such
Involuntary Termination and (2) the date on which the Executive is covered
under
another group health plan (which coverage, once obtained, must be promptly
disclosed by the Executive to the Company).
The
Executive shall also be entitled to (i) the continued use of an automobile
and
payment of associated costs by the Company pursuant to Section 4.2 until
the
later of (x) the first anniversary of the date of such Involuntary Termination
and (y) the second anniversary of the Effective Date and (ii) receive any
other
accrued compensation and benefits otherwise payable to him as of the date
of his
termination, including, without limitation, any Annual Bonus due for a completed
calendar year. All payments made under Sections 5.1(a)(i) and (ii) above
shall
be made by the Company (or its successor) in a lump-sum amount no later than
thirty days after the date of the Executive’s termination of employment;
provided,
however,
that
the payment of such lump sum shall be deferred for six months and one day
following such termination (i) if necessary to comply with Section 409A of
the
Internal Revenue Code of 1986, as amended (the “Code”) or (ii) in the event such
payment, as determined in the sole discretion of the Company (or its successor),
could cause the Executive to be subject to interest and penalties under Section
409A of the Code.
For
purposes of this Agreement, “Involuntary
Termination”
means
the termination of the Executive’s employment (i) by the Company (or any
successor thereto) without Cause, as defined in Appendix A, or (ii) by the
Executive for Good Reason, as defined in Appendix A.
5.2 Effect
of a Termination for Cause or Resignation without Good Reason. Subject to
the provisions of Sections 3.2 and 6, if during the Employment Period, the
Executive’s employment is terminated by the Company (or any successor thereto)
for Cause or the Executive resigns from his employment other than for Good
Reason, the Company shall pay to the Executive, any (i) accrued but unpaid
Base
Salary earned through the date of his termination, (ii) unreimbursed
expenses, plus (iii) accrued but unpaid employee benefits set forth in Section
4.1 above as determined in accordance with the provisions of the applicable
employee benefit plans or programs of the Company.
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5.3 Effect
of a Termination due to Death or Disability.
Subject
to the provisions of Sections 3.2 and 6, if during the Employment Period,
the
Executive’s employment is terminated by the Company (or any successor thereto)
due to death or Disability, as defined in Appendix A, the Company shall pay
to
the Executive, or if applicable his estate any (i) accrued but unpaid Base
Salary earned through the date of his termination, (ii) unreimbursed expenses,
plus (iii) accrued but unpaid employee benefits set forth in Section 4.1
above
as determined in accordance with the provisions of the applicable employee
benefit plans or programs of the Company including, without limitation, any
Annual Bonus due but not yet paid for a completed calendar year.
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6.
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EFFECT
OF A CHANGE IN CONTROL
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6.1 New
Term of Employment. Notwithstanding anything to the contrary in this
Agreement, upon the occurrence of a Change in Control, as defined in Appendix
A,
during the Employment Period, the Company (or its successor) shall renew
this
Agreement for a period of two years commencing on the date of the Change
in
Control and ending on the second anniversary of the date of the Change in
Control.
6.2 Acceleration
of Options. Notwithstanding anything to the contrary in any of the Option
Documents, as defined in Appendix A, upon a Change in Control, all outstanding
stock options granted by the Company or any of its affiliates to the Executive
shall become fully vested and immediately exercisable on the date of the
Change
in Control.
6.3 Right
of Termination. Notwithstanding anything to the contrary in this Agreement,
during a thirty-day period commencing on the first anniversary of the date
of
the Change in Control, the Executive shall have the right to resign from
his
employment with the Company (or its successor) for any reason and receive
an
amount equal to (i) one times the amount of his Base Salary, as is then in
effect, plus (ii) one times the average of the Annual Bonuses paid to the
Executive for the two years immediately prior to the year in which such
resignation occurs; provided, however, that, if such resignation
constitutes an Involuntary Termination, Section 5.1 shall apply (in lieu
of this
Section 6.3). All payments made under this Section 6.3 shall be made by the
Company (or its successor) in a lump-sum amount no later than thirty days
after
the date of the Executive’s termination of employment;
provided,however, that the payment of such lump sum shall be
deferred for six months and one day following such termination (i) if necessary
to comply with Section 409A of the Code or (ii) in the event such payment,
as
determined in the sole discretion of the Company (or its successor), could
cause
the Executive to be subject to interest and penalties under Section 409A
of the
Code.
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7.
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REDUCTION
OF PAYMENTS
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If
any
amounts due to the Executive under this Agreement and any other agreement,
plan
or arrangement of or with the Company or any of its affiliates constitute
a
“parachute payment” as such term is defined in Section 280G(b)(2) of
the Code,
and
the amount of the parachute payment, reduced by all federal, state and local
taxes applicable thereto, including the excise tax imposed pursuant to Section
4999 of the Code, is less than the amount the Executive would receive if
he was
paid three times his “base amount”, as defined in Section 280G(b)(3) of the
Code, less $1.00, reduced by all federal, state and local taxes applicable
thereto, then the aggregate of the amounts constituting the parachute payment
will be reduced (or returned by the Executive if it has already been paid
to
him) to an amount that will equal three times the Executive’s base amount less
$1.00. Any determination to be made with respect to this Section 7 shall
be made
by an accounting firm jointly selected by the Company and the Executive and
paid
for by the Company, and which may be the Company’s independent auditors.
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8.
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NO
ADDITIONAL RIGHTS
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The
Executive shall have no right to receive any compensation or benefits upon
his
termination or resignation of employment, except (i) as expressly set forth
in
Sections 5 and 6 above, where applicable, or (ii) as determined in accordance
with the provisions of the employee benefit plans or programs of the
Company.
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9.
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RESTRICTIVE
COVENANTS
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9.1 Noncompetition.
During the term of the Executive’s employment with the Company (or any successor
thereto) and continuing for one year thereafter, the Executive shall not,
without the prior written consent of the Company, directly or indirectly,
own,
manage, operate, join, control, or participate in the ownership, management,
operation or control of, or be employed by or connected in any manner with,
any
Competing Business, whether for compensation or otherwise; provided,
however, that the Executive shall be permitted to hold, directly
or
indirectly, less than 1% of any class of securities of any entity that is
listed
on a national securities exchange or on the NASDAQ National Market System.
Notwithstanding the foregoing, this Section 9.1 shall cease to apply upon
the
termination of the Executive’s employment with the Company (or any successor
thereto) resulting from (i) an Involuntary Termination or (ii) the Executive’s
resignation pursuant to Section 6.3. For purposes of this Agreement,
“Competing Business” means any business within the United States that
involves for-profit, post secondary education.
9.2 Nonsolicitation.
During the term of the Executive’s employment with the Company (or any successor
thereto) and continuing for one year thereafter, the Executive shall not,
without the prior written consent of the Company, directly or indirectly,
as a
sole proprietor, member of a partnership, stockholder, investor, officer
or
director of a corporation, or as an employee, associate, consultant or agent
of
any person, partnership, corporation or other business organization or entity
other than a member of the Company or any of its subsidiaries or affiliates
(the
“Company Group”) (i) solicit or endeavor to entice away from any member
of the Company Group, any person or entity who is, or was on the date of
this
Agreement, employed by, or serving as a key consultant of, any member of
the
Company Group or (ii) solicit or endeavor to entice away from any member
of the
Company Group, any person or entity who is, or was on the date of this
Agreement, a customer or client (or reasonably anticipated to become a customer
or client) of any member of the Company Group.
9.3 Confidentiality.
The Executive shall not at any time, except in performance of his obligations
to
the Company Group under the provisions of this Agreement and as an employee
of
the Company, directly or indirectly, disclose or use any secret or protected
information that he may learn or has learned by reason of his association
with
any member of the Company Group. The term “protected information” includes trade
secrets and confidential and proprietary business information of the Company
Group, including, but not limited to, customers (including potential customers),
sources of supply, processes, methods, plans, apparatus, specifications,
materials, pricing information, intellectual property (including applications
and rights in discoveries, inventions or patents), internal memoranda, marketing
plans, contracts, finances, personnel, research and internal policies, but
shall
exclude any information which (i)
is or
becomes available to the public or is generally known in the industry or
industries in which the Company Group operates other than as a result of
disclosure by the Executive in violation of this Section 9.3 or (ii)
the
Executive is required to disclose under any applicable laws, regulations
or
directives of any government agency, tribunal or authority having jurisdiction
in the matter or under subpoena or other process of law.
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9.4 Exclusive
Property. The Executive confirms that all protected information is and shall
remain the exclusive property of the Company Group. All business records,
papers
and documents kept or made by the Executive relating to the business of the
Company shall be and remain the property of the Company Group.
9.5 Compliance
with Restrictive Covenants. Without intending to limit any other remedies
available to the Company Group and except as required by law, in the event
that
the Executive breaches or threatens to breach any of the covenants set forth
in
this Section 9, (i) the Company Group shall be entitled to seek a temporary
restraining order and/or a preliminary or permanent injunction restraining
the
Executive from engaging in activities prohibited by this Section 9 or such
other
relief as may be required to enforce any of such covenants and (ii) all
obligations of the Company to make payments and provide benefits under this
Agreement shall immediately cease.
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10.
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ARBITRATION
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10.1 General.
Subject to Section 9.5 above, any dispute or controversy arising under or
in
connection with this Agreement that cannot be mutually resolved by the Executive
and the Company shall be settled exclusively by arbitration in West Orange,
New
Jersey before three arbitrators of exemplary qualifications and stature.
The
Executive and the Company shall each select one arbitrator. The arbitrators
selected by the Executive and the Company shall jointly select the third
arbitrator. Judgment may be entered on the arbitrators’ award in any court
having jurisdiction. The Executive and the Company hereby agree that the
arbitrators shall be empowered to enter an equitable decree mandating specific
enforcement of the provisions of this Agreement.
10.2 Associated
Costs. The cost of the arbitration shall be borne by the parties in the
manner determined by the arbitrators. If, however, the dispute concerns
contractual rights that arise in the event of or subsequent to a Change in
Control, the costs of arbitration (and any reasonable attorney’s fees incurred
by the Executive) shall be borne by the Company, unless the arbitrators
determine that the Executive commenced such arbitration on unfounded or
unreasonable grounds.
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11.
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MISCELLANEOUS
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11.1 Communications.
All notices and other communications given or made pursuant hereto shall
be in
writing and shall be deemed to have been duly given or made as of the date
delivered, or on the fifth business day after mailed if delivered personally
or
mailed by registered or certified mail (postage prepaid, return receipt
requested), to the relevant party at the following address (or at such other
address for a party as shall be specified by like notice, except that notices
of
change of address shall be effective upon receipt):
if
to the
Company:
000
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention:
General Counsel
if
to the
Executive:
000
Xxxxxxxxx Xxxxx, Xxxxx 000
Xxxx
Xxxxxx, Xxx Xxxxxx 00000
11.2 Waiver
and Release. As a condition to receiving the payments set forth in Section
5.1 or Section 6.3, as applicable, the Executive shall be required to execute
and not revoke a Waiver and Release (relating to the Executive’s release of
claims against the Company Group) substantially in the form attached hereto
as
Appendix B.
11.3 Waiver
of Breach; Severability. (a) The waiver by the Executive or the Company of a
breach of any provision of this Agreement by the other party hereto shall
not
operate or be construed as a waiver of any subsequent breach by either
party.
(b) The
parties hereto
recognize that the laws and public policies of various jurisdictions may
differ
as to the validity and enforceability of covenants similar to those set forth
herein. It is the intention of the parties that the provisions of this Agreement
be enforced to the fullest extent permissible under the laws and policies
of
each jurisdiction in which enforcement may be sought, and that the
unenforceability (or the modification to conform to such laws or policies)
of
any provisions hereof shall not render unenforceable, or impair, the remainder
of the provisions hereof. Accordingly, if at the time of enforcement of any
provision hereof, a court of competent jurisdiction holds that the restrictions
stated herein are unreasonable under circumstances then existing, the parties
hereto agree that the maximum period, scope, or geographic area reasonable
under
such circumstances shall be substituted for the stated period, scope or
geographical area and that such court shall be allowed to revise the
restrictions contained herein to cover the maximum period, scope and
geographical area permitted by law.
11.4 Assignment;
Successors. No right, benefit or interest hereunder shall be assigned,
encumbered, charged, pledged, hypothecated or be subject to any setoff or
recoupment by the Executive. This Agreement shall inure to the benefit of
and be
binding upon the successors and assigns of the Company.
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11.5 Entire
Agreement. This Agreement and the Option Documents represent the entire
agreement of the parties and shall supersede any and all previous contracts,
arrangements or understandings between the Company and the Executive relating
to
the subject matter hereof, including, without limitation, the Original Agreement
and the Amendments. This Agreement may be amended at any time by mutual written
agreement of the parties hereto.
11.6 Withholding.
The payment of any amount pursuant to this Agreement shall be subject to
applicable withholding and payroll taxes, and such other deductions as may
be
required under the Company’s employee benefit plans, if any.
11.7 Governing
Law. This Agreement shall be governed by, and construed in accordance with,
the laws of the State of New Jersey.
11.8 Headings.
The headings in this Agreement are for convenience only and shall not be
used to
interpret or construe any of its provisions.
11.9 Counterparts.
This Agreement may be executed in two or more counterparts, each of which
shall
be deemed an original but all of which together shall constitute one and
the
same instrument.
IN
WITNESS WHEREOF, the Company has caused this Agreement to be duly executed
and
the Executive has hereunto set his hand as of the day and year first written
above.
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By:
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/s/
Xxxxx X. Xxxxxx
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Name:
Xxxxx X. Xxxxxx
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Title:
Chairman & CEO
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EXECUTIVE
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/s/
Xxxxxxxx X. Xxxxx
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Xxxxxxxx
X. Xxxxx
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APPENDIX
A
“Cause”
shall
mean, with respect to the Executive, the following:
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(a)
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prior
to a Change in Control, (i) the Executive’s willful failure to perform the
duties of his employment in any material respect, (ii) malfeasance
or
gross negligence in the performance of the Executive’s duties of
employment, (iii) the Executive’s conviction of a felony under the laws of
the United States or any state thereof (whether or not in connection
with
his employment), (iv) the Executive’s intentional or reckless disclosure
of protected information respecting any member of the Company Group’s
business to any individual or entity which is not in the performance
of
the duties of his employment, (v) the Executive’s commission of an act or
acts of sexual harassment that would normally constitute grounds
for
termination, or (vi) any other act or omission by the Executive
(other
than an act or omission resulting from the exercise by the Executive
of
good faith business judgment), which is materially injurious to
the
financial condition or business reputation of any member of the
Company
Group; provided,
however,
that in the case of (i) and (ii) above, the Executive shall not
be deemed
to have been terminated for cause unless he has received written
notice of
the alleged basis therefor from the Company, and fails to remedy
the
matter within 30 days after he has received such notice, except
that no
such “cure opportunity” shall be required in the case of two separate
episodes occurring within any 12-month period that give the Company
the
right to terminate for cause for such reason;
or
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(b)
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on
or after a Change in Control, (i) the Executive’s willful failure to
perform the duties of his employment in any material respect, (ii)
malfeasance or gross negligence in the performance of the Executive’s
duties of employment, (iii) the Executive’s conviction of a felony under
the laws of the United States or any state thereof (whether or
not in
connection with his employment), (iv) the Executive’s intentional or
reckless disclosure of protected information respecting any member
of the
Company Group’s business to any individual or entity which is not in the
performance of the duties of his employment; provided,
however,
that in the case of (i) and (ii) above, the Executive shall not
be deemed
to have been terminated for cause unless he has received written
notice of
the alleged basis therefor from the Company, and fails to remedy
the
matter within 30 days after he has received such notice, except
that no
such “cure opportunity” shall be required in the case of two separate
episodes occurring within any 12-month period that give the Company
the
right to terminate for cause for such
reason.
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“Change
in Control”
shall
mean:
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(a)
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when
a “person” (as defined in Section 3(a)(9) of the Exchange Act), including
a “group” (as defined in Section 13(d) and 14(d) of the Exchange Act),
either directly or indirectly becomes the “beneficial owner” (as defined
in Rule 13d-3 under the Exchange Act) of 25% or more of either
(1) the
then outstanding Common Stock, or (2) the combined voting power
of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors; provided,
however,
that
the following acquisitions shall not constitute a Change in Control:
(1)
any acquisition directly from the Company; (2) any acquisition
by the
Company; or (3) any acquisition by an employee benefit plan (or
related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company;
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A-1
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(b)
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when,
during any period of 24 consecutive months during the Employment
Period,
the individuals who, at the beginning of such period, constitute
the Board
(the “Company
Incumbent Directors”)
cease for any reason other than death to constitute at least a
majority
thereof; provided,
however,
that a director who was not a director at the beginning of such
24-month
period shall be deemed to be a Company Incumbent Director if such
director
was elected by, or on the recommendation of or with the approval
of at
least two-thirds of the directors of the Company, who then qualified
as
Company Incumbent Directors;
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(c)
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when
the stockholders of the Company approve a reorganization, merger
or
consolidation of the Company without the consent or approval of
a majority
of the Company Incumbent Directors;
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(d)
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consummation
of a merger, amalgamation or consolidation of the Company with
any other
corporation, the issuance of voting securities of the Company in
connection with a merger, amalgamation or consolidation of the
Company or
sale or other disposition of all or substantially all of the assets
of the
Company or the acquisition of assets of another corporation (each,
a
“Business
Combination”),
unless, in each case of a Business Combination, immediately following
such
Business Combination, all or substantially all of the individuals
and
entities who were the beneficial owners of the Common Stock outstanding
immediately prior to such Business Combination beneficially own,
directly
or indirectly, more than 50% of the then outstanding shares of
common
stock and 50% of the combined voting power of the then outstanding
voting
securities entitled to vote generally in the election of directors,
as the
case may be, of the entity resulting from such Business Combination
(including, without limitation, an entity which as a result of
such
transaction owns the Company or all or substantially all of the
Company’s
assets either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately
prior
to such Business Combination, of the Common Stock;
or
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(e)
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a
complete liquidation or dissolution of the Company or the sale
or other
disposition of all or substantially all of the assets of the
Company;
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A-2
provided,
however,
that in
no event shall a Change in Control be deemed to have occurred so long as
Stonington Partners, Inc., together with Five Mile River Capital, LLC and
any of
their respective affiliates, remain the person or group with the largest
single
beneficial ownership stake in the outstanding Common Stock and combined voting
power of the then outstanding voting securities of the Company entitled to
vote
generally in the election of the Company’s directors.
“Disability”
shall
mean the inability of the Executive to perform substantially his duties and
responsibilities to the Company or any of its subsidiaries by reason of a
physical or mental disability or infirmity (a) for a continuous period of
six
months or (b) at such earlier time as the Executive submits medical evidence
of
such disability to the reasonable satisfaction of the Committee that the
Executive has a physical or mental disability or infirmity that shall likely
prevent him from substantially performing his duties and responsibilities
for
six months or longer. The date of such Disability shall be on the last day
of
such six-month period or the day on which the Committee determines that the
Executive has a physical or mental disability or infirmity as provided in
clause
(b) herein.
“Good
Reason”
shall
mean, with respect to the Executive, the occurrence of any of the following
(without his written consent): (a) a reduction in the Executive’s Base Salary or
minimum guaranteed Annual Bonus; (b) an adverse change in the Executive’s title,
authority, duties, responsibilities or reporting lines as specified in Section
2.1; (c) the relocation of the Executive’s principal place of employment to a
location more than 10 miles from West Orange, New Jersey; (d) a failure by
the
Company to pay material compensation when due in connection with the Executive’s
employment; or (e) a material breach of this Agreement by the Company;
provided,
however,
that,
if any such Good Reason is reasonably susceptible to cure, then the Executive
shall not terminate his employment hereunder unless the Executive first provides
the Company with written notice of his intention to terminate and of the
grounds
for such termination, and the Company has not, within 10 business days following
receipt of such written notice, cured such Good Reason.
“Option
Documents”
shall
mean, with respect to the Executive, each of the following documents to the
extent applicable: (a) the Management Stockholders Agreement, dated January
1,
2002, among the Company, Back to School Acquisition LLC and certain Management
Investors; (b) the Lincoln Technical Institute Management Stock Option Plan,
effective January 1, 2002, and any stock option agreement thereunder; (c)
the
Management Stock Subscription Agreement, dated January 1, 2002, among the
Company and certain Management Investors; (d) any option agreements or other
equity awards under the Company’s 2005 Long-Term Incentive Plan; and (e) any
stock pledge agreement or promissory note relating to the Executive’s stock
options or shares of Company common stock underlying such options.
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