Exhibit 10.1
DEVRY INC.
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT (this
“ Agreement ”) is made and entered into
as of September 9, 2009 (the “ Effective Date
”), by and between DeVry Inc. (“ DeVry
”), and William B. Hughson (the “
Executive ”). DeVry and the
Executive are sometimes hereinafter referred to individually as a
“ Party ” and together as “
Parties .”
Unless otherwise defined in the body of this
Agreement, capitalized terms shall be defined as provided in
Appendix I to this Agreement.
In consideration of the mutual covenants
contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Parties hereto agree as follows:
AGREEMENT
1. Employment Period
. DeVry will employ the Executive, and the Executive
hereby accepts employment with DeVry, upon the terms and subject to
the conditions set forth in this Agreement. The
Executive’s employment under this Agreement shall begin on
the Effective Date and shall continue thereafter until the first to
occur of the events described in Section 8(a) (the “
Employment Period ”).
2. Position and Duties
.
(a) Title;
Responsibilities . During the Employment Period,
the Executive will serve as the President, Medical and Healthcare
Group and Sr. Vice President, DeVry Inc. and will have the normal
duties, responsibilities and authority of that position, subject to
the power of the CEO to expand or limit such duties,
responsibilities and authority; provided, however, at all times,
Executive’s duties, responsibilities and authority shall be
commensurate with such duties, responsibilities and authority held
by executives in comparable positions in corporations of similar
size and scope to DeVry in DeVry’s industry. The
Executive shall report to the CEO or the CEO’s
designee. In this trusted, executive position, the
Executive will be given access to DeVry’s Confidential
Information. The Executive shall comply in all material
respects with all applicable laws, rules and regulations relating
to the performance of the Executive’s duties and
responsibilities hereunder, including DeVry’s Code of
Business Conduct and Ethics.
3. Compensation
.
(a) Base Salary
. The Executive shall receive a yearly Base Salary under
this Agreement established as of the Effective Date. The
Executive’s Base Salary will be paid by DeVry in
substantially equal bi-monthly installments. The Base
Salary will be reviewed annually by the CEO in coordination with
the Compensation Committee and upon such review the Base Salary may
be increased by the CEO in coordination with the Compensation
Committee (but subject to any applicable DeVry policy, law, or
exchange listing requirement); provided, however, the Base
Salary under this Agreement, including as subsequently adjusted
upwards, may not be decreased thereafter except in the case of an
across-the-board percentage reduction in base salaries of
executives at the Executive’s level affecting such executives
equally. All amounts payable to the Executive under this
Agreement will be subject to all required withholding by
DeVry.
(b) Equity Awards
. In addition to the Base Salary, the Executive shall be
eligible for annual equity awards, as determined by DeVry, the
Board and/or Compensation Committee as necessary and appropriate to
comply with DeVry policy, applicable law, or exchange listing
requirements, under DeVry’s equity award plan(s) covering
executives at the Executive’s level, as in effect from time
to time.
4. Management Incentive
. In addition to the Base Salary, the Executive will be
eligible to receive an annual MIP Target payment under
DeVry’s annual Management Incentive Plan, as in effect from
time to time, upon the achievement of specific DeVry-wide and
personal performance goals that will be determined each fiscal year
by the Executive’s direct supervisor and/or the Compensation
Committee as necessary and appropriate to comply with DeVry policy;
provided, however, the MIP Award may be based on a higher or lower
percentage of the MIP Target for performance which is in excess of
target goals or below target goals, respectively. Any
MIP Award due and owing hereunder with respect to any fiscal year
shall be paid no later than the fifteenth day of the third month
following the end of DeVry’s fiscal year in which the MIP
Award was earned.
5. Vacation
. The Executive will be entitled to the number of weeks
of vacation each fiscal year equal to that of other executives at
the Executive’s level.
6. Benefits
.
(a) Other Benefit Plans and
Programs . In addition to the Base Salary and
other compensation provided for in Section 3 and Section 4 above,
the Executive shall be eligible to participate in such health and
welfare benefit plans (including Executive’s eligible
dependents) and any qualified and/or non-qualified retirement plans
of DeVry as may be in effect from time to time; provided, however,
that participation shall be subject to all of the terms and
conditions of such plans, including, without limitation, all
waiting periods, eligibility requirements, vesting, contributions,
exclusions and other similar conditions or
limitations. Any and all benefits under any such
plans shall also be payable, if applicable, in accordance with the
underlying terms and conditions of such plan
document. Executive’s participation in the
foregoing plans and any perquisite programs will be on terms no
less favorable than afforded to executives at the Executive’s
level, as in effect from time to time. DeVry, however,
shall have the right in its sole discretion to modify, amend or
terminate such benefit plans and/or perquisite programs at any
time. DeVry will reimburse the Executive for all
reasonable business expenses incurred by Executive in the course of
performing Executive’s duties and responsibilities under this
Agreement which are consistent with DeVry’s policies and
procedures in effect from time to time.
7. Relocation Expenses
. In accordance with the DeVry Inc. Executive Relocation
Policy as in effect July 1, 2009, attached hereto as Exhibit
B.
8. Termination
.
(a) When Does Termination
Occur . The Executive’s employment with
DeVry and the Employment Period will end on the earlier of (i) the
Executive’s death or Permanent Disability, (ii) the
Executive’s resignation at any time with or without Good
Reason, or (iii) termination by DeVry at any time with or
without Cause. Except as otherwise provided herein, any
termination of the Employment Period by DeVry or by the Executive
will be effective as specified in a written notice from the
terminating Party to the other Party; provided, however, if the
Executive’s employment with DeVry is terminated during the
Employment Period by DeVry without Cause or by the Executive
without Good Reason, the terminating Party must give the other
Party at least thirty (30) days prior written
notice. For avoidance of doubt, Executive’s
voluntary retirement from DeVry shall be deemed a resignation by
Executive without Good Reason.
(b) Termination Due to Death or
Permanent Disability . If the Employment Period
is terminated pursuant to Section 8(a)(i) above, then, through the
date of termination of Executive’s employment with DeVry, the
Executive will be entitled to the Accrued Benefits payable no later
than thirty (30) days following Executive’s Termination
Date. Except as set forth in this paragraph (b), the
Executive will not be entitled to any other Base Salary, severance,
compensation or benefits from DeVry thereafter, other than those
previously earned under any of DeVry’s retirement plans or
expressly required under applicable law.
(c) Termination by DeVry With
Cause or By the Executive Without Good Reason
. If the Employment Period is terminated by DeVry with
Cause or if the Executive resigns without Good Reason, then the
Executive will only be entitled to receive the Accrued Benefits
payable no later than thirty (30) days following Executive’s
Termination Date. Except as set forth in this paragraph
(c), the Executive will not be entitled to any other Base Salary,
severance, compensation or benefits from DeVry thereafter, other
than those previously earned under any of DeVry’s retirement
plans or expressly required under applicable law. Within
ten (10) days following notice of termination with Cause, the
Executive may request of the CEO an opportunity to cure the Cause
event, which request shall be determined by the CEO in the
CEO’s sole discretion.
(d) Termination by DeVry
Without Cause or By the Executive With Good Reason
. If:
(i) the Executive’s employment
with DeVry is terminated during the Employment Period (A) by DeVry
without Cause or (B) by the Executive with Good Reason;
and
(ii) the Executive executes a Release
and such Release is not timely revoked by Executive and becomes
legally effective; and
(iii) the Executive complies with the
terms of this Agreement and the Release,
then
the Executive will be entitled to receive:
(A) Accrued Benefits
. the Accrued Benefits payable no later than thirty (30)
days following Executive’s Termination Date;
(B) Base Salary and MIP
Award . payment of an amount equal to one and
one-half (1-1/2) times the sum of Executive’s Base Salary (at
the rate then in effect) plus MIP Target, which shall be payable in
eighteen (18) equal monthly payments commencing with the first
payroll period following the date the Release becomes legally
effective; and
(C) Other Benefits
. the following “ Additional
Benefits ”:
(I) Pro-Rated MIP Award
. Provided that Executive has been employed for not less
than six (6) months during the fiscal year during which
Executive’s Termination Date occurs, payment of a pro-rated
MIP Award pursuant to Section 4 (based on the number of days in the
fiscal year which have passed divided by 365) based upon
accomplishment of the relevant performance targets for the relevant
fiscal year which includes the Executive’s Termination Date,
which MIP Award shall be payable in a lump sum payment at the time
all other MIP Awards for such fiscal year are paid to the other
DeVry senior executives;
(II) Health
Continuation . Eighteen (18) months of continued
health benefit plan coverage following the Termination Date at
active employee levels and active employee cost for Executive and
Executive’s eligible dependents; such health benefits shall
be provided and paid for by DeVry commencing with the first payroll
period following the Executive’s termination of employment
and continuing until the earlier of (1) the eighteen (18) month
anniversary of Executive’s Termination Date, or (2) the date
Executive is eligible for equivalent coverage and benefits under
the plans and programs of a subsequent employer. Medical
expenses (as defined in Code Section 213(d)) paid pursuant to this
paragraph are intended to be exempt from Code Section 409A to the
extent permitted under Treasury Regulation
§§1.409A-1(b)(9)(v)(B) and
-3(i)(1)(iv)(B). However, to the extent any health
benefits provided pursuant to this paragraph do not qualify for
exemption under Code Section 409A, DeVry shall provide Executive
with a lump sum payment in an amount equal to the number of months
of coverage to which Executive is entitled times the then
applicable premium for the relevant health plan in which Executive
participated. Such lump sum amount will be paid during
the second month following the month in which such coverage
expires; and
(III) Outplacement
Services . DeVry shall, at its sole expense,
provide the Executive with a nine (9) month senior executive level
outplacement program the provider of which shall be selected by
DeVry in DeVry’s sole discretion with such expenses being
payable to the outplacement service as soon as administratively
practicable but in no event later that the last day of the calendar
year immediately following the calendar year in which such expense
was incurred by the Executive.
(e) Specified Employee Six
Month Delay Requirement . Notwithstanding the
provisions of paragraph (d) immediately above, because DeVry is a
“public company” within the meaning of Code Section
409A, any amounts payable to the Executive during the first six
months and one day following the Termination Date pursuant to
paragraph (d) immediately above shall be deferred until the date
which is six months and one day following such Termination Date,
with the first payment being in an amount equal to the total amount
to which the Executive would otherwise have been entitled during
the period following the Termination Date of employment if the
six-month deferral had not been required. Except as
otherwise expressly provided in paragraph (d) immediately above,
all of the Executive’s rights to Base Salary, employee
benefits, severance and other compensation hereunder or under any
policy or program of DeVry which accrue or become payable on or
after the termination of the Employment Period will cease upon such
Termination Date other than those expressly required under
applicable law.
(f) No Offset or
Mitigation . Except for such monies due and
owing DeVry, if Executive’s employment with DeVry is
terminated for any reason, DeVry will have no right of offset, nor
will Executive be under any duty or obligation to seek alternative
or substitute employment at any time after the effective date of
such termination or otherwise mitigate any amounts payable by DeVry
to Executive.
9. Change in Control
.
(a) Obligations of DeVry upon
Executive’s Termination with Good Reason or DeVry’s
Termination of Executive Without Cause During Change in Control
Period . If:
(i) during the Change in Control
Period, DeVry terminates the Executive’s employment without
Cause (other than for death or Disability) or the Executive
terminates employment for Good Reason, and
(ii) the Executive executes the
Release and such Release is not timely revoked by Executive and
becomes legally effective; and
(iii) the Executive complies with the
terms of this Agreement and the Release,
then
the Executive will be entitled to receive:
(A) Accrued Benefits
. the Accrued Benefits payable no later than thirty (30)
days following Executive’s Termination Date;
(B) Base Salary and MIP
Award . payment of an amount equal to two (2)
times the sum of Executive’s Base Salary (at the rate then in
effect) plus MIP Target, which shall be payable in twenty-four (24)
equal monthly payments commencing with the first payroll period
following the date the Release becomes legally effective;
and
(C) Other Benefits
. Additional Benefits as delineated in Section
8(d)(iii)(C) above except that in subsection (II) the reference to
“eighteen (18) months” shall be changed to
“twenty-four (24) months” and in subsection (III) the
reference to “nine (9) month” shall be changed to
“twelve (12) months.”
(b) Obligations of DeVry upon
Executive’s Death . If the Executive’s
employment is terminated by reason of the Executive’s death
during the Change in Control Period, DeVry shall provide the
Executive’s estate or beneficiaries with the Accrued
Benefits, and shall have no other severance obligations under this
Agreement. The Accrued Benefits shall be paid to the
Executive’s estate or beneficiary, as applicable, within
thirty (30) days following the Termination Date.
(c) Obligations of DeVry upon
Executive’s Permanent Disability . If the
Executive’s employment is terminated by reason of the
Executive’s Permanent Disability during the Change in Control
Period, DeVry shall provide the Executive with the Accrued
Benefits, and shall have no other severance obligations under this
Agreement. The Accrued Benefits shall be paid to the
Executive within thirty (30) days following the Termination
Date.
(d) Obligations of DeVry upon
Executive’s Termination Without Good Reason or DeVry’s
Termination of Executive With Cause During Change in Control
Period . If the Executive’s employment is
terminated for Cause during the Change in Control Period or the
Executive resigns during the Change in Control Period without Good
Reason, DeVry shall provide the Executive with the Accrued
Benefits, and shall have no other severance obligations under this
Agreement. In such case, all Accrued Benefits shall be
paid to the Executive within thirty (30) days following the
Termination Date.
(e) Anticipatory Change in
Control . If a Change in Control occurs and if
the Executive’s employment with DeVry was terminated by DeVry
without Cause within six (6) months prior to the date such Change
in Control occurred, and if it is reasonably demonstrated by the
Executive that such termination of employment (i) was at the
request of a third party who had taken steps reasonably calculated
to effect a Change in Control or (ii) otherwise arose in connection
with or in anticipation of a Change in Control, then Executive
shall be deemed to have been involuntarily terminated by DeVry
without Cause during the Change in Control Period and shall be
eligible to receive the monies and benefits under Section 9(a)
rather than Section 8(d) of the Agreement.
10. Confidential Information
.
(a) The Executive recognizes and
acknowledges that the continued success of DeVry and its Affiliates
depends upon the use and protection of a large body of confidential
and proprietary information and that the Executive will have access
to the entire universe of DeVry’s Confidential Information
(as defined below in Section 10(b)), as well as certain
confidential information of other Persons with which DeVry and its
Affiliates do business, and that such information constitutes
valuable, special and unique property of DeVry, its Affiliates and
such other Persons.
(b) Confidential Information
. For purposes of this Agreement, DeVry’s “
Confidential Information ” shall include DeVry
and its Affiliates’ trade secrets as defined under Delaware
law, as well as any other information or material which is not
generally known to the public, and which: (a) is
generated, collected by or utilized in the operations of DeVry or
its Affiliates’ business and relates to the actual or
anticipated business, research or development of DeVry, its
Affiliates or DeVry and its Affiliates’ actual or prospective
Customers; or (b) is suggested by or results from any task assigned
to the Executive by DeVry or its Affiliates, or work performed by
the Executive for or on behalf of DeVry or its
Affiliates. Confidential Information shall not be
considered generally known to the public if the Executive or others
improperly reveal such information to the public without DeVry or
its Affiliates’ express written consent and/or in violation
of an obligation of confidentiality owed to DeVry or its
Affiliates. Confidential Information includes, without
limitation, the information, observations and data obtained by the
Executive while employed by DeVry concerning the business or
affairs of DeVry or its Affiliates, including information
concerning acquisition opportunities in or reasonably related to
DeVry or its Affiliates’ business or industry, the identities
of and other information (such as databases) relating to the
current, former or prospective employees, suppliers and Customers
of DeVry or its Affiliates, development, transition and
transformation plans, methodologies and methods of doing business,
strategic, marketing and expansion plans, financial and business
plans, financial data, pricing information, employee lists and
telephone numbers, locations of sales representatives, new and
existing customer or supplier programs and services, customer
terms, customer service and integration processes, requirements and
costs of providing service, support and
equipment.
(c) The Executive agrees to use
DeVry’s Confidential Information only as necessary and only
in connection with the performance of Executive’s duties
hereunder. The Executive shall not, without
DeVry’s prior written permission, directly or indirectly,
utilize for any purpose other than for a legitimate business
purpose solely on behalf of DeVry or its Affiliates, or directly or
indirectly, disclose outside of DeVry or outside of the Affiliates,
any of DeVry’s Confidential Information, as long as such
matters remain Confidential Information. The
restrictions set forth in this paragraph are in addition to and not
in lieu of any obligations the Executive may have by law with
respect to DeVry’s Confidential Information, including any
obligations the Executive may owe under any applicable trade
secrets statutes or similar state or federal
statutes. This Agreement shall not prevent the Executive
from revealing evidence of criminal wrongdoing to law enforcement
or prohibit the Executive from divulging DeVry’s Confidential
Information by order of court or agency of competent
jurisdiction. However, the Executive shall promptly
inform DeVry of any such situations and shall take such reasonable
steps to prevent disclosure of DeVry’s Confidential
Information until DeVry or its relevant Affiliates have been
informed of such requested disclosure and DeVry has had an
opportunity to respond to the court or agency.
(d) The Executive understands that
DeVry and its Affiliates will receive from third parties
confidential or proprietary information (" Third Party
Information ") subject to a duty on DeVry or its Affiliates
to maintain the confidentiality of such information and to use it
only for certain limited purposes. During the Employment
Period and thereafter, and without in any way limiting the
foregoing provisions of this Section 10, the Executive will
hold Third Party Information in the strictest confidence and will
not disclose to anyone (other than personnel and consultants of
DeVry and its Affiliates who need to know such information in
connection with their work for DeVry or its Affiliates) or use
Third Party Information unless expressly authorized by such third
party or by the CEO.
(e) During the Employment Period, the
Executive will not improperly use or disclose any confidential
information or trade secrets, if any, of any former employers or
any other person or entity to whom the Executive has an obligation
of confidentiality, and will not bring onto the premises of DeVry
or its Affiliates any unpublished documents or any property
belonging to any former employer or any other person or entity to
whom the Executive has an obligation of confidentiality unless
consen
