This Employment
Agreement (this “ Agreement ”) is entered into
as of this 10th day of January, 2007, by and between Study Island,
LLC, a Delaware limited liability company (the “
Company ”), and David Muzzo (the “
Executive ”).
WHEREAS, the
Company desires to engage the services of the Executive and the
Executive desires to be employed by the Company;
WHEREAS, the
Company desires to be assured that the unique and expert services
of the Executive will be available to the Company, and that the
Executive is willing and able to render such services on the terms
and conditions hereinafter set forth;
WHEREAS, the
Company desires to be assured that the confidential information and
good will of the Company will be preserved for the exclusive
benefit of the Company.
NOW, THEREFORE, in
consideration of such employment and the mutual covenants and
promises herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the Company and the Executive agree as
follows:
1 EMPLOYMENT
AND RESPONSIBILITIES
The Company will
employ the Executive in the position of Founder and Manager,
beginning on the date hereof (the “ Start Date
”). The Executive will have such authority, and will perform
all of the duties, normally associated with this position as well
as other duties as may be reasonably assigned to him from time to
time by the Board of Managers of the Company (the “
Board ”) consistent with his position as Founder and
Manager.
The Executive will
devote all of his business time, ability, attention and best
efforts to the performance of his duties hereunder in a manner
which will faithfully and diligently further the Company’s
business to the exclusion of all other business activities.
However, the Executive may devote reasonable periods of time to
engaging in charitable or community service activities, so long as
none of these activities interfere with his duties under this
Agreement. Executive agrees to perform his duties and
responsibilities within Company policies, standard work hours and
attendance and general work practices.
This Agreement
shall be effective on the Start Date and will remain in effect
until it is terminated in accordance with Section 6
below.
During the term of
employment under this Agreement, the Company agrees to pay to the
Executive, and he agrees to accept in full consideration for all
services performed by him, the following compensation:
4.1 Base
Salary: The Company will pay the Executive an annual base
salary of One Hundred and Twenty-five thousand dollars ($125,000),
before all customary payroll deductions. This annual base salary
will be paid in accordance with the usual payroll practices of the
Company.
4.2 Bonus:
During the Executive’s employment term, the Executive will
participate in the Company-wide bonus plan in which all employees
of the Company participate based on the bonus plan’s policies
and procedures then in effect. In addition, Executive will be
eligible to receive in respect of each fiscal year of the Company
(commencing with the fiscal year ending on December 31, 2007)
an annual bonus in an amount equal to up to two-thirds
(2/3’s) of his base salary based on, among other things,
performance targets established by the Board of Managers by
reference to the operating plan approved from time to time by the
Board of Managers.
4.3 Incentive
Equity: On the Start Date, Executive will be granted incentive
equity pursuant to the long term incentive equity program of the
Company’s parent company, Study Island Holdings LLC (“
Holdings ”), on the terms and conditions set forth in
Exhibit A .
4.4
Withholding: The Company may withhold from any compensation and
benefits payable to the Executive all applicable federal, state and
local withholding taxes.
5.1
Description of Benefits: During the term of employment under
this Agreement, the Executive will be entitled to participate in
all employee incentive, pension and welfare benefit plans and
programs made available generally to other senior executives of the
Company, as such plans or programs may be in effect from time to
time (including, without limitation, incentive equity, profit
sharing, savings and other pension and retirement plans or
programs, medical, dental, hospitalization, short-term and
long-term disability and life insurance plans, accidental death and
dismemberment protection, and any other pension or retirement plans
or programs and any other employee incentive compensation plans,
employee welfare benefit plans or programs that may be sponsored by
the Company from time to time and provided that Executive meets the
eligibility requirements and other terms, conditions and
restrictions of the respective plans and programs, including any
plans that supplement the above-listed types of plans or programs,
whether funded or unfunded). Payment for such coverages will be the
sole responsibility of the Executive, unless the Company makes such
coverages available to similarly situated executives on a shared
cost basis. In addition, the Executive will be entitled to four
weeks of paid vacation per year. The Company will pay for all
reasonable expenses actually incurred by the Executive directly in
connection with the business affairs of the Company and the
performance of his duties hereunder, upon presentation of proper
receipts or other proof of expenditure and subject to such
reasonable guidelines or limitations provided by the Company from
time to time.
The
Executive’s employment under this Agreement may be terminated
as follows, but in the event of any such termination, the
provisions of Sections 7 and 8 will survive the
termination of the Executive’s employment.
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6.1 By the
Company: The Company may terminate the employment of the
Executive, with or without Cause (as defined in
Section 7.5 hereof), at any time during the term hereof
by delivery of a Notice of Termination (as defined below) to the
Executive.
6.2 By the
Executive: The Executive may terminate his employment at any
time, for any reason, by delivery of a Notice of Termination to the
Company.
6.3 Term:
The Executive’s employment hereunder initially shall be for a
term commencing on the Start Date and ending on the day preceding
the second anniversary of the Start Date. The Agreement shall be
automatically extended from year to year thereafter unless either
party gives not less than sixty (60) days prior written notice
to the other that such party elects to have the Agreement
terminated effective at the end of the initial or then current
renewal term. The provision of the foregoing notice shall result in
the expiration of this Agreement at the end of the then current
term and shall not be deemed a termination of Executive’s
employment by the Company. The Executive’s employment will
terminate automatically upon the Executive’s death or total
disability. The term “ total disability ” will
mean the Executive’s inability to perform the duties set
forth in Section 1 hereof for a period of twelve
(12) consecutive weeks, or a cumulative period of 90 business
days in any 12-month period, as a result of physical or mental
illness or loss of legal capacity.
6.4
Notice: The term “ Notice of Termination ”
means at least one hundred twenty (120) days’ prior written
notice of termination of the Executive’s employment (the
“ Advance Notice Period ”), during which period
the Executive’s employment and performance of services will
continue; provided, however, that (i) the Executive may, upon
termination of his employment for Good Reason, make such notice
effective immediately, (ii) the Company may, upon termination
of his employment with or without Cause, make such notice
immediately and (iii) the Company may, upon notice to the
Executive and without reducing compensation during any Advance
Notice Period, excuse him from any or all of his duties during any
Advance Notice Period. The effective date of termination of
employment (the “ Termination Date ”) will be
the date on which such Advance Notice Period expires (or the date
of notice, if the Company exercises its rights under clause (ii)
hereof or if the Executive exercises his rights under clause
(i) hereof) or as otherwise provided in
Section 6.3 above.
In the event of
termination of the employment of the Executive, all compensation
and benefits set forth in this Agreement will terminate as of the
Termination Date except as specifically provided in this
Section 7 :
7.1
Termination by the Company:
(a) If the
Company terminates the Executive’s employment without Cause
(other than as result of death or total disability), he will not be
entitled to receive any of the payments or benefits provided for
herein except the Company shall (i) pay his base salary
through the Termination Date, (ii) pay his base salary during
the Severance Period (as defined in Section 7.7 below)
payable at the same time such payment would be made during
Executive’s regular employment with the Company,
(iii) provide Executive with all benefits that are accrued
but
3
unpaid as of
the Termination Date, and (iv) provide the Executive with all
benefits expressly available upon termination of employment in
accordance with the plans and programs of the Company applicable to
the Executive on the Termination Date (but without duplication of
any benefits or payments otherwise provided for
hereunder).
(b) If the
Company terminates the Executive’s employment for Cause, he
will not be entitled to receive any of the payments or benefits
provided for herein except the Company shall (i) pay his base
salary through the Termination Date, (ii) provide the
Executive with all benefits that are accrued but unpaid as of the
Termination Date, and (iii) provide the Executive with all
benefits expressly available upon termination of employment in
accordance with the plans and programs of the Company applicable to
the Executive on the Termination Date (but without duplication of
any benefits or payments otherwise provided for
hereunder).
7.2
Termination by the Executive:
(a) If the
Executive terminates his employment with the Company with Good
Reason (as hereinafter defined), he will not be entitled to receive
any of the payments or benefits provided for herein except the
Company shall (i) pay his base salary through the Termination
Date, (ii) pay his base salary during the Severance Period
payable at the same time such payment would have been made during
the Executive’s regular employment with the Company,
(iii) provide Executive with all benefits that are accrued but
unpaid as of the Termination Date and (iv) provide the
Executive with all benefits expressly available upon termination of
employment in accordance with the plans and programs of the Company
applicable to the Executive on the Termination Date (but without
duplication of any benefits or payments otherwise provided for
hereunder).
(b) If the
Executive terminates his employment with the Company without Good
Reason, he will not be entitled to any payments or benefits
provided for herein except the Company shall (i) pay his base
salary through the Termination Date, (ii) provide the
Executive with all benefits that are accrued but unpaid as of the
Termination Date, and (iii) provide the Executive with all
benefits expressly available upon termination of employment in
accordance with the plans and programs of the Company applicable to
the Executive on the Termination Date (but without duplication of
any benefits or payments otherwise provided for
hereunder).
7.3 Expiration
of Term, Death or Disability: If the Executive’s
employment is terminated pursuant to Section 6.3 hereof
as a result of the expiration of the term of such employment, or
his death or total disability, he will not be entitled to any
payments or benefits, except the Company shall (i) pay his
base salary through the Termination Date, (ii) provide
Executive with all benefits that are accrued but unpaid as of the
Termination Date, and (iii) provide the Executive with all benefits
expressly available upon termination of employment in accordance
with the plans and programs of the Company applicable to the
Executive on the Termination Date (but without duplication of any
benefits or payments otherwise provided for hereunder).
7.4 Payment
Schedule: All payments of base salary under this
Section 7 (including wages for services performed prior
to the Termination Date) shall be paid in accordance with the
Company’s normal payroll practices.
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7.5 Cause:
Wherever reference is made in this Agreement to termination being
with or without Cause, “ Cause ” shall mean
(i) Executive refuses or fails to perform any of his duties
and responsibilities as determined from time to time by the Board,
including, without limitation (a) Executive’s persistent
neglect of duty or chronic unapproved absenteeism (other than for a
temporary or permanent disability) which remains uncured to the
reasonable satisfaction of the Board following thirty
(30) days’ written notice from the Company of such
alleged fault and (b) Executive’s refusal to comply with any
lawful directive or policy of the Board which refusal is not cured
by Executive within thirty (30) days of such written notice
from the Company; provided, however, that the Company shall not be
required to give Executive a cure period with respect to this
clause (i) on more than one occasion; (as used in this
Section 7.5 , “ Company ” shall mean
Holdings, the Company and each of the Company’s
subsidiaries), (ii) Executive acts (including a failure to
act) in a manner which constitutes willful misconduct, gross
negligence, or insubordination, (iii) the Company determines
that, in the reasonable judgment of the Board, (x) Executive has
committed an act of fraud, personal dishonesty or
misappropriat
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