GENERAL RELEASE AGREEMENT
This Severance and General Release Agreement (“Agreement”) is entered into and effective as of the 29 th day of November 2010 (the “Separation Date”), by and between Peter Waller (“Employee”), an individual, and Corinthian Colleges, Inc., a Delaware corporation (the “Company”).
In consideration of the mutual covenants and releases contained in this Agreement, Employee and the Company hereby agree as follows:
1. Resignation . Employee hereby resigns from employment by, and from any and all of his positions with (including without limitation, as a member of the Board of Directors of the Company and as President and Chief Executive Officer of the Company), the Company and each of its affiliates effective immediately. Accordingly, the Company and Employee acknowledge that any contractual (except as expressly provided herein) or employment relationship between them terminates immediately, and that they have no further contractual relationship (except as may arise out of or be expressly provided for in this Agreement) or employment relationship hereafter.
2. Employment Prior to Separation Date . Prior to the Separation Date, Employee will continue to diligently provide services to the Company as an employee, subject to the Company’s personnel and other policies, including without limitation, the Employment Agreement between Employee and the Company dated as of March 17, 2008 (the “Employment Agreement ”), as well as comply with all applicable laws, including without limitation, state and federal securities laws. Capitalized terms used but not defined herein have the meaning set forth for such terms in the Employment Agreement.
3. Payments by the Company . The Company and Employee acknowledge and agree that Employee’s employment is terminating pursuant to Section 5(d) of the Employment Agreement and accordingly, the sole payment due Employee under the Employment Agreement is the Lump Sum Payment. The Company shall pay Employee within 60 days from the Separation Date, assuming Employee does not revoke this Agreement, the Lump Sum Payment consistent with the terms of Section 5(d) of the Employment Agreement. In addition, provided Employee does not revoke this Agreement, the Company agrees to the following:
(a) The Company will reimburse Employee for his premiums charged to continue medical coverage pursuant to the Consolidated Omnibus Budget Reconciliation Act (“COBRA”), at the same or reasonably equivalent medical coverage for Employee (and, if applicable, Employee’s eligible dependents) as in effect immediately prior to the Separation Date, to the extent that Employee elects such continued coverage; provided that the Company’s obligation to make any reimbursement pursuant to this Section 3(a) shall commence with continuation coverage for the month following the month in which the Separation Date occurs and shall cease with continuation coverage for the eighteenth (18 th ) month following the month in which the Separation Date occurs (or, if earlier, shall cease upon the first to occur of Employee’s death, the date Employee becomes eligible for coverage under the health plan of a future employer, or the date the Company ceases to offer group medical coverage to its active executive employees). To the extent Employee elects COBRA coverage, he shall notify the Company in writing of such election prior to such coverage taking effect, complete any other continuation coverage enrollment procedures the Company may then have in place, and promptly notify the Company of his premiums to continue such coverage to facilitate prompt reimbursement by the Company of any amounts due to Employee pursuant to this Section 3(a). To the extent that any reimbursement payment pursuant to this Section 3(a) is taxable to Employee, any such payment due to Employee shall be paid to Employee on or before the last day of Employee’s taxable year following the taxable year in which the related expense was incurred. All payments and reimbursements contemplated by this Agreement will be subject to any applicable tax withholding.
(b) The Company shall pay for reasonable outplacement services incurred by Employee over the one year period following the Separation Date, up to a maximum cost to the Company of TWENTY FIVE THOUSAND DOLLARS ($25,000).
(c) To the extent the Company pays its executive officers bonuses with respect to its fiscal year ending June 30, 2011, the Company will in good faith consider Employee for a pro-rata bonus (based on the bonus Employee would have received from the Company had Employee remained employed by the Company for the entire fiscal year, multiplied by a fraction, the numerator of which is the number of days Employee was employed by the Company in the fiscal year and the denominator of which is 365). Any such pro-rata bonus shall be determined by the Compensation Committee of the Company’s Board of Directors and shall be paid to Employee at the same time the Company pays its bonuses to its executive officers generally with respect to such fiscal year (but in no event later than December 31, 2011).
4. Cooperation Following Separation . The Company and Employee agree to reasonably cooperate with each other following the Separation Date. Specifically, and without limiting the foregoing sentence, following the Separation Date, Employee will be available as reasonably requested by the Company in order to assist in the orderly transition of business matters under Employee’s management and other matters in which Employee was involved during his or her employment with the Company. As necessary, Employee also agrees to cooperate with the Company in connection with any litigation or arbitration matters or any regulatory inquiries in which the Company is or becomes involved and which concern matters in which Employee was involved during his or her employment with the Company, for which Employee’s assistance is reasonably requested by the Company. In connection with any such assistance provided by Employee at the request of the Company pursuant to this Section 4 (other than providing testimony at a trial, deposition, or other proceeding), the Company will (a) pay any related, reasonable out-of-pocket expenses incurred by Employee, and (b) to the extent Employee provides such services on more than ten (10) days after the Separation Date, compensate Employee at an hourly rate of THREE HUNDRED AND FIFTY DOLLARS ($350) per hour for each hour spent by Employee in performing such services after such first ten (10) days of services. Promptly (and in all cases within ten (10) days) following each month in which Employee performs any such services, Employee shall provide the Company with a statement showing the services so performed by Employee during such month and a reasonable breakdown of the time spent by Employee in performing such services. To the extent any payment is due to Employee pursuant to this Section 4, the Company shall make such payment to Employee not later than the end of the month following the month in which the related services were performed by Employee.
5. Trade Secrets/Confidential Information, Agreement not to Disclose, Property of Company, Unfair Competition, Solicitation of Employees .
(a) Employee acknowledges and agrees that Employee continues to be bound by the terms of Sections 8, 9, 10, 11 and 12 (Trade Secrets/Confidential Information, Agreement Not to Disclose, Property of Company, Unfair Competition and Solicitation of Employees) of the Employment Agreement, which survive the termination of Employee’s employment.
(b) Employee represents and agrees that the terms, conditions, payments, benefits and the existence of this Agreement and settlement are strictly confidential and that Employee will not disclose any information concerning this Agreement and settlement to anyone except as required by applicable law, or to legal counsel, immediate family, or financial advisors, all of whom will have first been informed of and agreed to be bound by this confidentiality provision. The parties acknowledge that this Agreement will be publicly filed by the Company with the Securities and Exchange Commission within four business days of the Separation Date.
(c) Employee warrants and represents that he has returned any and all property belonging to the Company and its affiliates to the Company. The Company and Employee agr