EXECUTIVE EMPLOYMENT
AGREEMENT
(President)
This Executive
Employment Agreement (the “Agreement”) is entered into
on September 1, 2008, by and between Grand Canyon Education,
Inc., a Delaware corporation (the “Company”), and
Dr. Kathy Player (“Executive”).
The parties
agree as follows:
1.
Employment . The Company hereby employs Executive, and
Executive hereby accepts such employment, upon the terms and
conditions set forth herein.
2.1 Position . Executive is employed as
President of the University and shall have the duties and
responsibilities assigned by the Company’s Executive Chairman
or Chief Executive Officer as may be reasonably assigned from time
to time. Executive shall perform faithfully and diligently all
duties assigned to Executive. The Company reserves the right to
modify Executive’s position and duties at any time in its
sole and absolute discretion, except that any material diminution
in Executive’s duties shall be subject to
Section 7.3(ii) below.
2.2 Best Efforts/Full-time . Executive
will expend Executive’s best efforts on behalf of the
Company, and will abide by all policies and decisions made by the
Company, as well as all applicable federal, state and local laws,
regulations or ordinances. Executive will act in the best interest
of the Company at all times. Executive shall devote
Executive’s full business time and efforts to the performance
of Executive’s assigned duties for the Company, unless
Executive notifies the Company in advance of Executive’s
intent to engage in other paid work and receives the
Company’s express written consent to do so. Notwithstanding
the foregoing, Executive will be permitted to serve as an outside
director on the board of directors for corporate, civic, nonprofit
or charitable entities, so long as Executive obtains the consent of
the Company and provided such entities are not competitive with the
Company and subject to the provisions of section 9
below.
2.3 Work Location . Executive’s
principal place of work shall be located in Phoenix, Arizona, or
such other location as the Company may direct from time to
time.
3.1 Initial Term . The employment
relationship pursuant to this Agreement shall be for an initial
term commencing on September 1, 2008 (the “Effective
Date”) and continuing for a period of four (4) years
following such date (“lnitial Term”), unless sooner
terminated in accordance with section 7 below.
3.2 Renewal . On expiration of the
Initial Term specified in subsection 3.1 above, this Agreement will
automatically renew for subsequent one (1) year terms (each a
“ Renewal Term ”) unless either party provides
thirty (30) days’ advance written notice to the other
that the Company or Executive does not wish to renew the Agreement
for subsequent Renewal Term. In the event either party gives notice
of nonrenewal pursuant to this subsection 3.2, this Agreement will
expire at the end of the then current term. The lnitial Term and
each subsequent Renewal Term are referred to collectively as the
“ Term ”.
4.1 Base Salary . As compensation for
Executive’s performance of Executive’s duties
hereunder, the Company shall pay to Executive an initial Base
Salary at the rate of Two-Hundred Seventy-Five Thousand Dollars
($275,000) per year payable in accordance with the normal payroll
practices of the Company, less required deductions for state and
federal withholding tax, social security and all other employment
taxes and payroll deductions. In the event Executive’s
employment under this Agreement is terminated by either party, for
any reason, Executive will earn the Base Salary prorated to the
date of termination, except as otherwise set forth herein.
Executive’s Base Salary shall be reviewed annually by the
Compensation Committee of the Company’s Board of Directors
(the “ Compensation Committee ”).
4.2 Incentive Compensation . For the
fiscal year of the Company ending December 31, 2008, and
provided Executive remains employed with the Company as of such
date, Executive will be eligible to receive a bonus equal to
Sixty-Eight Thousand Seven- Hundred Fifty Dollars ($68,750.00)
unless the company does not complete an IPO in which case Executive
will receive a bonus similar to the bonus paid to other members of
the Company’s Cabinet. Thereafter, Executive will be eligible
to earn incentive compensation in the form of an annual bonus for
each fiscal year of the Company with a target amount of fifty
percent (50%) of Executive’s Base Salary. The Compensation
Committee will determine the actual amount of the bonus earned for
any year, which will be based upon both the Company’s
achievement of overall performance metrics for the year and
Executive’s achievement of individual performance metrics as
agreed upon by the Compensation Committee and the Executive. The
Compensation Committee may, in its sole discretion, increase the
Executive’s annual bonus above fifty percent (50%) of Base
Salary if it determines that the performance of both the Executive
and the Company significantly exceed the predetermined metrics.
Bonus amounts, if any, are to be awarded annually and payment shall
be made within two and one-half months following the end of the
applicable Company fiscal year.
5.
Customary Fringe Benefits . Executive will be eligible for
all customary and usual fringe benefits generally available to
senior management of the Company, subject to the terms and
conditions of the Company’s benefit plan documents. The
Company reserves the right to change or eliminate fringe benefits
on a prospective basis, at any time, effective upon notice to
Executive.
6.
Business Expenses . Executive will be reimbursed for all
reasonable, out-of-pocket business expenses incurred in the
performance of Executive’s duties on behalf of the Company.
To obtain reimbursement, expenses must be submitted promptly with
appropriate supporting documentation and will be reimbursed in
accordance with the Company’s policies. Any reimbursement
Executive is entitled to receive shall (a) be paid no later
than the last day of Executive’s tax year following the tax
year in which the expense was incurred, (b) not be affected by
any other expenses that are eligible for reimbursement in any tax
year, and (c) not be subject to liquidation or exchange for
another benefit.
7.
Termination of Executive’s Employment .
7.1 Termination for Cause by Company .
Although the Company anticipates a mutually rewarding employment
relationship with Executive, the Company may terminate
Executive’s employment immediately at any time for Cause. For
purposes of this Agreement, “ Cause ” is defined
as: (a) acts or omissions constituting gross negligence,
recklessness or willful misconduct on the part of Executive with
respect to Executive’s obligations or otherwise relating to
the business of the Company; (b) Executive’s material
breach of this Agreement, including, without limitation, any breach
of Section 8, Section 9, or Section 11;
(c) Executive’s breach of the Company’s Employee
Nondisclosure and Assignment Agreement; (d) Executive’s
conviction or entry of a plea of nolo contendere for fraud,
misappropriation or embezzlement, or any felony or crime of moral
turpitude; (e) Executive’s inability to perform the
essential functions of Executive’s position, with or without
reasonable accommodation, due to a mental or physical disability;
(f) Executive’s willful neglect of duties as determined
in the sole and exclusive discretion of the Board of Directors,
provided that Executive has received written notice of the action
or omission giving rise to such determination and has failed to
remedy such situation to the satisfaction of the Board of Directors
within thirty (30) days following receipt of such written
notice, unless Executive’s action or omission is not subject
to cure, in which case no such notice shall be required, or
(g) Executive’s death. In the event Executive’s
employment is terminated in accordance with this subsection 7.1,
Executive shall be entitled to receive only Executive’s Base
Salary then in effect, prorated to the date of termination, and all
fringe benefits through the date of termination. All other Company
obligations to Executive pursuant to this Agreement will be
automatically terminated and completely extinguished. Executive
will not be entitled to receive the Severance Package described in
subsection 7.2 below. Any termination pursuant to this subsection
7.1 shall be evidenced by a resolution or written consent of the
Board of Directors of the Company, and the Company shall provide
Executive with a copy of such resolution or written consent,
certified by the Secretary of the Company, upon Executive’s
written request.
7.2 Termination Without Cause by
Company/Severance . The Company may terminate Executive’s
employment under this Agreement without Cause at any time upon
written notice to Executive. In the event of such termination,
Executive will receive Executive’s Base Salary then in
effect, prorated to the date of termination of employment. In
addition, Executive will receive a “ Severance Package
” that shall include (a) a severance payment equivalent
to twelve (12) months of Executive’s Base Salary then in
effect on the date of termination, payable in accordance with the
Company’s regular payroll cycle commencing with the first
payroll date occurring on or after the 60th day following the date
of Executive’s termination of employment, and
(b) payment by the Company of the premiums required to
continue Executive’s group health care coverage for a period
of twelve (1 2) months following Executive’s termination,
under the applicable provisions of the Consolidated Omnibus Budget
Reconciliation Act (“ COBRA ”), provided that
Executive timely elects to continue and remains eligible for these
benefits under COBRA, and does not become eligible for health
coverage through another employer during this period. Executive
will only receive the Severance Package if Executive:
(i) complies with all surviving provisions of this Agreement
as specified in subsection 14.8 below; and (ii) executes a
full general release, releasing all claims, known or unknown, that
Executive may have against the Company arising out of or any way
related to Executive’s employment or termination of
employment with the Company, and such release has become effective
in accordance with its terms prior to the 60th day following the
termination date. All other Company obligations to Executive will
be automatically terminated and completely extinguished.
2
7.3 Voluntary Resignation by Executive for
Good Reason/Severance . Executive may voluntarily resign
Executive’s position with the Company for Good Reason at any
time on thirty (30) days’ advance written notice to the
Company. In the event of Executive’s resignation for Good
Reason, Executive will be entitled to receive Executive’s
Base Salary then in effect, prorated to the date of termination of
employment, and the Severance Package described in subsection 7.2
above, provided Executive complies with all of the conditions
described in subsection 7.2 above. All other Company obligations to
Executive pursuant to this Agreement will be automatically
terminated and completely extinguished. Executive will be deemed to
have resigned for Good Reason if Executive voluntarily terminates
his employment with the Company within ninety (90) days
following the first occurrence of a condition constituting Good
Reason. “ Good Reason ” means the occurrence of
any of the following conditions without Executive’s written
consent, which condition(s) remain(s) in effect thirty
(30) days after Executive provides written notice to the
Company of such condition(s): (i) a material reduction in
Executive’s Base Salary as then in effect prior to such
reduction, other than as part of a salary reduction program among
similar management employees, (ii) a material diminution in
Executive’s authority, duties or responsibilities as an
employee of the Company as they existed prior to such change, or
(iii) a relocation of Executive’s principal place of
work which increases Executive’s one-way commute distance by
more than fifty (50) miles. Executive will be deemed to have
given consent to any condition(s) described in this subsection if
Executive does not provide written notice to the Company of his
int
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