Archipelago Learning,
LLC
This Employment
Agreement (this “Agreement”) is entered into as of this
31st day of August, 2009 by and between Archipelago Learning, LLC,
a Delaware limited liability company (the “Company”),
and James B. Walburg (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; and
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 Executive Vice President,
Chief Financial Officer, beginning on August 31, 2009 (the
“Start Date”). The Executive shall report to the Chief
Executive Officer. 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”) or the Chief Executive Officer, in each case
consistent with his position as Executive Vice President, Chief
Financial Officer.
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.
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, subject to
earlier
termination in accordance with Section 6 below. 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.
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 two hundred and seventy-five thousand dollars ($275,000),
before all customary payroll deductions. This annual base salary
will be paid in accordance with the usual payroll practices of the
Company. The Board may make such increases in the base salary as
the Board may, in its sole discretion, deem appropriate.
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, 2009)
an annual bonus (the “Bonus”) in an amount equal to up
to 50% of his earned base salary (pro rated for partial years)
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; provided
, that if the performance targets in any fiscal year are
exceeded, the maximum bonus the Executive shall be eligible to
receive shall equal up to 60% of his base salary. The bonus
payments, if any, shall be paid by the Company no later than the
15th day of the third calendar month of the fiscal year following
the fiscal year to which such annual bonus relates.
4.3 Incentive
Equity: The Executive will have the right to participate in the
Company’s incentive equity plan, as determined by the Board
of Directors.
4.4
Withholding: The Company may withhold from any compensation and
benefits payable to the Executive all applicable federal, state and
local withholding taxes.
4.5 Board
Participation . The Executive will not be a member of the Board
of Managers of Holdings but will be permitted to attend and
participate in meetings of the Board of Managers of Holdings.
, with the exception of any closed executive
sessions.
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
4 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.
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 Death;
Disability: 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 thirty (30) 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 , 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 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), and such
termination constitutes a “separation from service”
under Section 409A of the Internal Revenue Code of 1986, as
amended (“Section 409A”), 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 him a Bonus or a pro-rated Bonus
for the calendar year in which the Termination Date fell, based on
the number of days of such calendar year that the Executive was
employed by the Company (the “Pro-Rated Bonus”), as
applicable, (iii) pay him an amount equal to his base salary
during the Severance Period (as defined in Section 7.7 below)
payable in equal installments, in accordance with the
Company’s normal payroll practices, beginning with the first
payroll date following the 45th day after the Termination Date
, (iv) provide the Executive with all benefits that are
accrued but unpaid as of the Termination Date, and (v) 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). Notwithstanding anything herein to the
contrary, for the avoidance of doubt, when calculating the Pro
Rated Bonus under this Section 7.1 or any other Section of
this Agreement such calculation shall be determined based on the
actual performance achieved by the Company during the applicable
fiscal period, and shall be paid by the Company when other bonus
payments are made to similarly situated employees.
(b) If the
Company terminates the Executive’s employment for Cause, and
such termination constitutes a “separation from
service” under Section 409A, 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), and such termination constitutes a
“separation from service” under Section 409A, 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 him a Pro-Rated Bonus,
(iii) pay him an amount equal to his base salary during the
Severance Period
payable in
equal installments, in accordance with the Company’s normal
payroll practices, beginning with the first payroll date following
the 45th day after the Termination Date, (iv) provide the Executive
with all benefits that are accrued but unpaid as of the Termination
Date, and (v) 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, and such termination constitutes a “separation from
service” under Section 409A, 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:
(a) If the
Executive’s employment is terminated pursuant to
Section 3 hereof as a result of the expiration of the term of
this Agreement, and such termination constitutes a
“separation from service” under Section 409A, 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).
(b) If the
Executive’s employment is terminated pursuant to
Section 6.3 hereof as a result of his death or total
disability, and such termination constitutes a “separation
from service” under Section 409A, 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 the Executive with all benefits that are accrued
but unpaid as of the Termination Date , and
(iii) provide the Executive with all be
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