This Employment
Agreement (this “Agreement”) is entered into as of this
15 th
day of September, 2008, by and
between Study Island LLC, a Delaware limited liability company (the
“Company”), and Ray Lowrey (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:
The
Executive’s employment with the Company shall commence as of
September 29, 2008 (the “Start Date”). Such
employment shall be “at-will” employment. Subject to
the terms of this Agreement, the Company may terminate the
Executive’s employment and this Agreement for any reason at
any time, with or without prior notice and with or without Cause
(as defined herein), but subject to certain terms set forth in
Section 7 below. Similarly, subject to the terms of this
Agreement, the Executive may terminate his employment at any
time.
2 EMPLOYMENT
AND RESPONSIBILITIES
The Company
will employ the Executive in the position of Senior Vice President,
Chief Technology Officer. This position will be located in Dallas,
Texas. 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 (the “Board”) of Study Island
Holdings, LLC (“Holdings”) or the Chief Executive
Officer, in each case consistent with his position as Senior Vice
President, Chief Technology 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. The 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 7 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. 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 the Executive’s
employment by the Company.
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:
5.1 Base
Salary: The Company will
pay the Executive an annual base salary of Three hundred and twenty
thousand dollars ($320,000), 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. The Executive’s annual base
salary, as in effect from time to time, is hereinafter referred to
as the “Base Salary.”
5.2 Signing
Bonus: In consideration
for the Executive entering into this Agreement, the Company shall
pay the Executive a signing bonus (the “Signing Bonus”)
of One hundred and fifty thousand dollars ($150,000), of which
Seventy five thousand dollars ($75,000) shall be payable with the
first payroll period following the Executive’s Start Date,
and the remaining Seventy five thousand dollars ($75,000) shall be
payable in the first payroll period in January 2009, provided
that the Executive is employed by the Company at such time. If the
Executive’s employment is terminated for any reason prior to
September 29, 2009, the Executive shall within five
(5) days of such termination pay back to the Company the full
Signing Bonus (or Seventy five thousand dollars ($75,000) if
terminated on or prior to December 31, 2008). If the
Executive’s employment is terminated for any reason on or
after September 29, 2009, but on or before September 29,
2010, the Executive shall within five (5) days of such
termination pay back to the Company Seventy five thousand dollars
($75,000). If the Executive’s employment is terminated for
any reason after September 29, 2010, the Executive is not
obligated to pay back to the Company any portion of the Signing
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, the 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 in an amount equal to up to 40% of his earned Base
Salary (pro rated for partial years) based on, among other things,
performance targets established by the Board by reference to the
operating plan approved from time to time by the Board; provided
that if the Company’s
performance in
any fiscal year exceeds 110% of the performance targets, the
Executive shall be eligible to receive an annual bonus in an amount
equal to up to 50% of his Base Salary. Notwithstanding the above,
for 2008, the Executive will be eligible to receive up to Fifty
five thousand dollars ($55,000) upon achieving certain objectives
between the Start Date and December 31, 2008, as established by the
Board. 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.
5.4
Incentive Equity: On the
Start Date, the Executive will be granted incentive equity pursuant
to the long term incentive equity program of Holdings, on the terms
and conditions set forth in Exhibits A and B.
5.5 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.
6.1
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 the 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
(4) weeks of paid vacation per year, subject to the
Company’s standard vacation policy. 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.
6.2
Relocation Expenses: The
Executive shall relocate from Cincinnati, Ohio to Dallas, Texas no
later than June 2009. The Company will reimburse the Executive
for the following relocation expenses: (i) the
Executive’s temporary housing costs in Dallas for up to ten
(10) months (not to exceed Two thousand and two hundred
dollars ($2,200) per month), (ii) the cost of two
(2) trips for the Executive and his family to search for a
permanent residence in Dallas, which includes airfare, a car rental
and meal expenses, (iii) the realtor fee for the sale of the
Executive’s residence in Cincinnati, up to 6%,
(iv) other closing costs associated with the sale of the
Executive’s residence in Cincinnati, including attorney fees,
title fees, escrow fees, and other similar expenses, (v) costs
associated with transporting the Executive’s household and
personal property from Cincinnati to Dallas upon the Executive
submitting three (3) bids from moving companies, and
(vi) costs associated with the trip for the Executive and his
family when moving to Dallas. The Executive shall submit all
relocation expenses to the Company Controller on the
Company’s expense report forms,
along with
documentation and receipts for approval. The Company will reimburse
the Executive all approved relocation expenses on a “tax
gross-up” basis. All reimbursements shall be made as soon as
reasonably practicable and in all events on or before the last day
of the second full calendar month following the date on which the
Executive presents such relocation expenses for reimbursement;
provided, however, that in no event shall a reimbursement be made
later than on the last day of the calendar year following the
calendar year in which the Executive incurred the relocation
expenses.
The
Executive’s employment under this Agreement may be terminated
as follows, but in the event of any such termination, the
provisions of Sections 8 and 9 will survive the termination of
the Executive’s employment.
7.1 By the
Company: The Company may
terminate the employment of the Executive, with or without Cause
(as defined in Section 8.5 hereof), at any time during the
term hereof by delivery of a Notice of Termination (as defined
below) to the Executive.
7.2 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.
7.3 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
ninety (90) business days in any twelve (12) month
period, as a result of physical or mental illness or loss of legal
capacity.
7.4
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,
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 4 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 8:
8.1
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 8.7 below) payable
at the same time such payment would be made during the
Executive’s regular employment with the Company,
(iii) provide the 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
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).
8.2
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 the 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).
8.3
Expiration of Term, Death or Disability:
(a) If the
Executive’s employment is terminated pursuant to
Section 4 hereof as a result of the expiration of the term of
this Agreement, 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 the 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
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