This Agreement
sets forth the terms and conditions regarding your continued
employment with Voyager Expanded Learning, Inc. (the
“Company”). Capitalized terms used in this letter and
not otherwise defined herein are defined in
Exhibit A.
During your employment with the Company, you
will be paid a base salary (“Base Salary”) of $9,615
bi-weekly ($250,000 if annualized), payable in accordance with the
regular payroll practices of the Company.
You will be eligible to participate in the
Company’s then current annual bonus plan, in accordance with
the terms of such plan.
During your employment with the Company, you
will be entitled to participate in the employee retirement and
welfare benefit plans and programs set forth in Exhibit C, in
accordance with the terms and conditions of such programs as in
effect from time to time.
You shall be entitled to cash LTIP awards equal
to (i) $100,000 which shall be due November 14, 2009, and (ii)
$45,000 which shall be due on November 14, 2010. If you leave
the Company voluntarily without Good Reason, payments scheduled
after your termination date will not be due. In the event of an
involuntary termination without Cause, any unpaid amounts would
become immediately payable. Payments will also accelerate and be
due upon a Change of Control of the Company or your termination for
Good Reason.
Subject to Section 6 below, you will be
entitled to the following severance benefits under this
Section 5 if the Company terminates your employment without
Cause or you resign for Good Reason at any time:
(a) Salary
continuation in an amount equal to the sum of (i) 100% of your
then current Base Salary for twelve months and (ii) an amount
equal to any accrued but unused vacation days, with such payments
commencing on the earliest payroll date that does not result in
adverse tax consequences to you under Section 409A of the
Code.
(b) Subject to your continued co-payment of
premiums, continued participation for twelve months in all medical,
dental and vision plans which cover you (and eligible dependents)
upon the same terms and conditions (except for the requirements of
your continued employment) in effect for active employees of the
Company. If you obtain other employment that offers substantially
similar or improved benefits, as to any particular medical, dental
or vision plan, such continuation of coverage by the Company for
such similar or improved benefit under such plan under this Section
5(b) will immediately cease. The continuation of health benefits
under this subparagraph shall reduce and count against your rights
under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended.
6.
Conditions to Receiving Severance Benefits
Any severance benefits payable under this
Agreement shall be in lieu of any other severance benefits that you
may have otherwise been eligible to receive from the Company or its
affiliates under the Company Separation Benefits Plan or otherwise.
If you terminate employment in a manner entitling you to severance
benefits under either Section 5 above and your death occurs
before full payment of such severance benefits, any amount
remaining to be paid shall be paid to your surviving spouse, or, if
none, to your estate. You must sign a release agreement in
substantially the same form as attached as Exhibit B to this
Agreement to receive the severance benefits. The severance benefits
under this Agreement will commence as soon as reasonably
practicable after the termination of the revocation period provided
in the release agreement. You shall not be required to seek other
employment to mitigate damages, and any income earned by you from
other employment or self-employment shall not be offset against any
obligations of the Company to you under this Agreement.
7. Change in
Control of the Company Bonus
In the event a Change in Control of the Company
occurs on or before December 31, 2009, you shall be entitled
to receive a change in control bonus equal to $200,000 (the
“CIC Bonus”). Payment of the CIC bonus is expressly
contingent on you being employed by the Company or one of its
successors, or their affiliates, on March 1, 2010. In the
event you voluntarily terminate your employment or are terminated
for Cause prior to March 1, 2010, you shall not be entitled to
receive the CIC Bonus. In the event you are terminated without
Cause or you terminate for Good Reason prior to March 1, 2010,
the CIC Bonus shall be paid to you on March 1,
2010.
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8.
Successors and Assigns
This Agreement shall be binding upon any
successor or assign of the Company, including any entity that
(whether directly or indirectly, by purchase, merger,
reorganization, consolidation, acquisition of property or stock,
liquidation or otherwise) is the survivor of the Company or that
acquires the Company and/or substantially all the assets of the
Company in accordance with the operation of law, and such successor
entity shall be deemed to be “the Company” for purposes
of this Agreement (except for purposes of determining whether there
has been a Change of Control of the Company). This Section will
continue to apply in the event of any subsequent merger or
consolidation or transfer of assets.
9. Company
Right to Recover Payments Under This Agreement
You hereby agree that, if it is ever determined
by the Company that any action or inaction by you constituted
grounds for termination for Cause, then the Company may recover all
of any award or payment made to you pursuant to this Agreement, and
you agree to repay and return any such award or payment to the
Company. The Company may, in its sole discretion, affect any such
recovery by (i) obtaining repayment directly from you;
(ii) setting off the amount owed to it against any amount or
award that would otherwise be payable by the Company to you, or
(iii) any combination of (i) and
(ii) above.
This Agreement does not change the at-will
nature of your employment relationship with the Company.
The Company may withhold from any amounts
payable under this Agreement such federal, state, local or foreign
taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
The Company shall indemnify you to the same
extent that its officers, directors and employees are entitled to
indemnification as of the date hereof pursuant to the
Company’s Articles of Incorporation and Bylaws for any acts
or omissions by reason of being a director, officer or employee of
the Company.
You agree to reasonably cooperate with the
Company and its affiliates during your employment and thereafter in
any internal investigation, any administrative, regulatory or
judicial investigation or proceeding or any dispute with a third
party as reasonably requested by the Company (including, without
limitation, your being available to the Company upon reasonable
notice and at reasonable times for interviews and factual
investigations, appearing at the Company’s request upon
reasonable notice and at reasonable times to give testimony without
requiring service of a subpoena or other legal process, delivering
to the Company requested infolination and relevant documents which
are or may come into your possession, all at times and on schedules
that are reasonably consistent with your other permitted activities
and commitments). The obligations under this Section shall survive
expiration of your employment with the Company. If your cooperation
under this Section is requested after your termination of
employment, the Company shall (i) provide you reasonable
advance notice after giving due consideration to your then current
employment obligations, and (ii) reimburse you for all
reasonable travel expenses and other reasonable out-of-pocket
expenses upon submission of receipts.
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14. Entire
Agreement: Modification
This Agreement contains the entire agreement
between you and the Company concerning the matters set forth herein
and supersedes any other discussions, agreements, representations
or warranties of any kind with regard to these matters. You
acknowledge that this Agreement supercedes any and all agreements
or arrangement between you and the Company including without
limitation, your offer letter agreement with the Company dated
November 9, 2006, your employment terms letter date
July 24, 2007, and your LTIP letter dated November 14,
2007. Any modification of this Agreement will only be effective if
done in writing and signed by you and the Chief Executive Officer
of the Company. If for any reason any provision of this Agreement
shall be held invalid, that invalidity will not affect the
remainder of this Agreement.
15.
Non-Compete Agreement
By signing this Agreement, you acknowledge that
(a) the Employee Confidentiality and Restrictive Covenant
Agreement dated November 13, 2006, between you and the Company
(the “Non-Compete Agreement”) remains a valid and
binding agreement and (b) the Non-Compete Agreement shall
inure to the benefit of any successor or assign of the
Company.
The provisions of Sections 5, 7, 8, 9, 12,
13, 15 and the other provisions of this Agreement which by their
terms contemplate survival of the termination of this Agreement,
shall survive expiration of this Agreement and/or your employment
with the Company and be deemed to be independent
covenants.
You acknowledge that you have had an opportunity
to fully discuss and review the terms of this Agreement with an
attorney of your own choosing. You further acknowledge that you
have carefully read this Agreement, understand its contents and
freely and voluntarily assent to all of its terms and conditions,
and sign your name of your own free act.
This Agreement is governed by the laws of Texas
(excluding conflicts of laws).
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We hope that
these adjustments to your compensation reinforce the degree to
which you are valued by the Company. Please review this Agreement
carefully and, if it correctly states our agreement, sign and
return to me the enclosed copy.
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President
Voyager Expanded Learning, Inc.
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Read, accepted
and agreed to this 5th day March, 2009
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“Asset
Sale” means a sale, lease or transfer of all or substantially
all of Voyager Learning Company’s assets to an entity less
than 50% of the outstanding voting securities of which are owned in
aggregate by Voyager Learning Company, its subsidiaries or any
employee benefit plan of Voyager Learning Company or its
subsidiaries.
“Cause” means termination of your
employment with the Company or its affiliates by reason of
(1) an act of fraud, embezzlement or theft in connection with
your duties or in the course of your employment;
(2) unreasonable neglect or refusal by you to perform your
material duties (other than as a result of illness, accident or
other physical or mental incapacity), provided that (A) a
demand for performance of services has been delivered to you by the
Company’s President at least sixty days prior to such
termination identifying the manner in which the President believes
that your have failed to perform and (B) you have thereafter
failed to remedy such failure to perform; (3) you engage in
willful, reckless, or grossly negligent misconduct which is or may
be materially injurious to the Company
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