34
EXHIBIT 10(a)
-------------
2002 EMPLOYMENT AGREEMENT
-------------------------
This Agreement, dated as of July 1, 2002, by and between ____________
(the "Executive"), DeVry Inc., a Delaware corporation (the "Company"), and
DeVry University, Inc., an Illinois corporation (the "School").
W I T N E S S E T H:
-------------------
WHEREAS, the employment of the Executive by the Company and the School
is currently subject to an Employment Agreement dated June 1, 1991 (the
"Prior Employment Agreement"); and
WHEREAS, the Company and the School wish to obtain the future services
of the Executive for the Company and the School; and
WHEREAS, the Company, the School and the Executive are also entering
into a Senior Advisor Agreement dated as of July 1, 2002 (the "Senior Advisor
Agreement"), pursuant to which the Company and the School wish to obtain the
future services of the Executive for the Company and the School after the
Executive ceases to be employed by the Company and the School in accordance
with this Agreement; and
WHEREAS, the Executive is willing, upon the terms and conditions herein
set forth, to provide services hereunder;
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and intending to be legally bound hereby, the parties
hereto agree as follows:
1. Nature of Employment
--------------------
The Company hereby employs Executive, and Executive agrees to accept
such employment, during the Term of Employment (as defined in Section 3(a)),
as [President and] Co-Chief Executive Officer of the Company (or such other
position as the Executive and the Company may agree upon from time to time)
and to undertake such duties and responsibilities, consistent with the
authority, duties and obligations in respect of such executive positions as
set forth in the Bylaws of the Company. Executive will be accorded such
authority, duties and obligations, and the prerogatives, generally associated
with such executive positions, during the Term of Employment. During the
Term of Employment, the Company's principal executive office will be located
within 20 miles of Oakbrook Terrace, Illinois.
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2. Extent of Employment
--------------------
(a) During the Term of Employment, the Executive shall perform
his obligations hereunder faithfully and to the best of his ability, under
the direction of the Board of Directors of the Company (the "Board"), and
shall abide by the rules, customs and usages from time to time established by
the Company.
(b) During the Term of Employment, the Executive shall devote
substantially all of his business time, energy and skill as may be reasonably
necessary for the performance of his duties, responsibilities and obligations
hereunder (except for vacation periods and reasonable periods of illness and
during any period in which he has a physical or mental disability which
renders him incapable, after reasonable accommodation, of performing his
duties under this Agreement), consistent with past practices.
(c) Nothing contained in this Agreement shall require Executive
to follow any directive or to perform any act which would violate any laws,
ordinances, regulations or rules of any governmental, regulatory or
administrative body, agent or authority, any court or judicial authority, or
any public, private or industry regulatory authority.
(d) During the Term of Employment, while the Executive is
employed by the Company and the School, and notwithstanding the foregoing
provisions of this Section 2, the Executive may devote reasonable time to
activities other than those required under this Agreement, including the
supervision of his personal investments, and activities involving
professional, charitable, community, educational, religious and similar types
of organizations, speaking engagements, membership on the boards of directors
of other organizations, any other business or similar types of activities,
consistent with past practices to the extent that such other activities do
not inhibit or prohibit the performance of the Executive's duties under this
Agreement, or conflict in any material way with the business of the Company,
the School, or any Subsidiary; provided, however, that, the Executive shall
not serve on the board of any business or hold any other position with any
business without notifying the Board.
(e) For purposes of this Agreement, the term "Subsidiary" shall
mean any corporation, partnership, joint venture or other entity during any
period in which at least a fifty percent interest in such entity is owned,
directly or indirectly, by the Company or the School(or a successor to the
Company or the School).
3. Term of Employment; Termination
-------------------------------
(a) The "Term of Employment" shall commence on the date hereof
and shall continue through June 30, 2005; provided, that such term will be
continued after June 30, 2005, until such time as either the Executive or the
Company provides at least one hundred fifty (150) days notice to the other of
its decision not to continue such term, in which case the Term of Employment
will be terminated one hundred fifty (150) days (or such longer period as may
be agreed by the parties) after the date of delivery of such notice.
However, should the Executive's employment by the Company and the School be
earlier terminated pursuant to Sections 3(b) or 3(d), the Term of Employment
shall end on the date of such earlier termination. If the Executive becomes
employed by an entity into which the Company is merged, or the purchaser of
36
substantially all of the assets of the Company, or a successor to such entity
or purchaser, the Executive shall not be treated as having terminated
employment for purposes of this Agreement until such time as the Executive
terminates employment with the successor (including, without limitation, the
merged entity or purchaser), provided that the new employer agrees to assume
this Agreement and be substituted for the Company under this Agreement.
(b) The Executive's employment under this Agreement may be
terminated at any time by the Company: (i) in the event that because of
physical or mental disability the Executive is unable to perform, and does
not perform, his duties hereunder after reasonable accommodation for a
continuous period of one hundred eighty (180) days ("Disability"), or
(ii) for Cause (as defined in Section 3(c)). The Executive's employment
under this Agreement will terminate upon his death. Except as expressly
provided in Section 3(a) and this Section 3(b), or upon the death of
Executive, the Company may not terminate the Executive's employment hereunder
during the Term of Employment.
(c) For the purposes of this Section 3, "Cause" shall mean any
of the following: (i) Executive's conviction of any crime involving any
felony, or (ii) Executive's conviction of fraud or embezzlement.
(d) The Executive's employment may be terminated at any time by
the Executive in the event: (i) Executive is not accorded the authority,
duties, obligations and prerogatives set forth in Section 1, or if Executive
is able and willing to serve as a director of the Company but is not
nominated or slated for reelection as a director at the 2003 annual meeting
of the Company or thereafter, (ii) the authority, duties, obligations and
prerogatives of Executive are materially or substantially reduced, (iii) the
Executive is not paid or reimbursed the amounts owed to Executive under this
Agreement after ten (10) days' notice thereof to the Company, (iv) the
Company otherwise does not observe its obligations under this Agreement, or
(v) a "Change of Control," as defined in Exhibit A to this Agreement, occurs
while the Executive is employed by the Company, and the Executive resigns for
any reason at any time during the 12-month period following the occurrence of
a Change in Control, after providing at least 30 days' advance written notice
of such resignation to the Company (collectively, a "Constructive
Dismissal").
(e) In the event that, during the Term of Employment (as it may
be extended pursuant to Section 3(a)), the Executive's employment under this
Agreement is terminated due to Disability, by the Company for any reason
other than Cause, or by the Executive in the event of Constructive Dismissal,
then the Company, effective immediately upon such termination, will pay
Executive an amount equal to the product of 1.5 times the sum of (x) an
amount equal to the rate of annual base compensation being paid to Executive
during the fiscal year of the Company in which such termination occurs, plus
(y) the annual bonus paid to Executive during the fiscal year of the Company
immediately preceding the fiscal year in which such termination occurs.
(f) In the event that, during the Term of Employment (as it may
be extended pursuant to Section 3(a)), the Executive's employment under this
Agreement is terminated due to death, Disability, by the Company for any
reason other than Cause, or by the Executive in the event of Constructive
Dismissal, or if the Executive's employment is terminated under this
Agreement due to the end of the Term of Employment (as it may be extended
37
pursuant to Section 3(a)) or pursuant to a Qualified Resignation or
Retirement (as defined in Section 4(b)), the Executive shall receive payment
of the bonus for the performance period in which his termination occurs,
based on actual performance for the entire period, and payable at the same
time as it is payable for executives of the Company; provided, however, that
it shall be subject to a pro-rata reduction for the portion of the
performance period following termination.
(g) The Executive and any of his dependents shall be eligible
for COBRA continuation coverage (as described in Section 4980B of the
Internal Revenue Code of 1986, as amended) to the extent required by
applicable law.
(h) In the event that Executive's employment under this
Agreement is terminated during the Term of Employment (as it may be extended
pursuant to Section 3(a)) for any reason, the Company shall also pay
Executive (and shall pay Executive's Designated Beneficiary (as defined in
Section 16) in the event of his death) his accrued and unpaid base salary at
the rate in effect at the time of such termination, any previous year's
earned but unpaid bonus and other earned and unpaid incentive cash
compensation, accrued and unused vacation, unpaid expense reimbursements and
other unpaid cash entitlements earned by Executive as of the date of such
termination pursuant to the terms of the applicable Company Plan or program
(collectively, "Accrued Obligations").
4. Senior Advisor Agreement
------------------------
(a) Following the Executive's termination of employment under
this Agreement during or at the end of the Term of Employment (as it may be
extended pursuant to Section 3(a)) for any circumstance or reason other than
as set forth below, the Executive shall be employed pursuant to the Senior
Advisor Agreement beginning on the first day following the Executive's
termination of employment under this Agreement; provided, that the Executive
shall not be employed pursuant to the Senior Advisor Agreement if the
Executive's termination of employment under this Agreement occurs during the
Term of Employment (as it may be extended pursuant to Section 3(a)) for
Cause, death, Disability, a Constructive Dismissal or a resignation or
retirement that is not a Qualified Resignation or Retirement, although in the
event of termination of employment under this Agreement by reason of death,
Disability or a Constructive Dismissal, benefits shall be payable in
accordance with the Senior Advisor Agreement as if the Executive had become
employed under the Senior Advisor Agreement as of the first day following the
termination of employment under this Agreement and immediately thereafter
terminated employment under the Senior Advisor Agreement due to death,
Disability, or a resignation with adequate prior notice as may be required
thereunder, as applicable. If, after termination of the Executive's
employment under this Agreement, the Executive becomes employed under the
Senior Advisor Agreement, except as otherwise specifically provided in this
Agreement, the rights and obligations of the Executive, the Company, and the
School for periods of Executive's employment after termination of employment
under this Agreement (including, without limitation, the rights to
compensation and benefits after termination of employment under Section 5,
the duties on termination of employment and the obligations of
confidentiality, disparagement, competition, and assistance with claims after
termination of employment under Section 6) shall be governed by the terms of
the Senior Advisor Agreement rather than this Agreement.
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(b) In addition to termination of employment due to death,
Disability or resignation incident to Constructive Dismissal, and without
impairing his other rights and interests hereunder, the Executive shall have
the right to resign or retire from employment under this Agreement for any
reason and at any time and be employed pursuant to the Senior Advisor
Agreement, but only upon one-year advance written notice to the Company, with
such resignation or retirement referred to herein as a "Qualified Resignation
or Retirement."
5. Compensation
------------
During the Term of Employment, while the Executive is employed by the
Company under this Agreement, the Company shall pay to Executive:
(a) As base compensation for his services hereunder, in monthly
installments, a base salary at a rate of $609,000 per annum. The Executive's
base compensation rate shall be reviewed by the Board on or about July 1 of
each year during the Term of Employment to determine whether an increase in
the amount of base compensation is appropriate; provided that, in all events,
the Executive shall be entitled to an annual increase in base compensation no
less than the budgeted annual average percentage increase for all employees
of the Company. In no event shall the base compensation of the Executive be
reduced to an amount that is less than the amount specified in this
Section 5(a), or to an amount that is less than the amount that he was
previously receiving.
(b) An annual bonus as determined and approved by the Board in
its sole discretion.
(c) The Executive shall receive director's fees for the period
he is serving as a member of the Board.
(d) At the request of the Executive, the Company shall obtain
and maintain term life insurance coverage on the Executive's life providing
$1,000,000 in death benefits payable to the beneficiary named by the
Executive, and the Company shall pay the premiums with respect to such policy
or, at Executive's option the Executive may obtain such coverage in lieu of
the Company, and the Company shall reimburse Executive for the premium cost
to maintain such coverage; provided, however, that if the cost for term life
insurance coverage providing for $1,000,000 in death benefits exceeds $30,000
per year, the Company shall pay (or reimburse Executive for) premiums of
$30,000 per year for life insurance coverage providing for a lesser death
benefit; and further provided that the Company shall have no obligation to
provide life insurance coverage under this Section 5(d) if the Executive
shall fail to reasonably cooperate with obtaining such insurance, including
submitting to medical examination and providing information necessary for
such insurance or if the Company, after reasonable investigation, is unable
to obtain such coverage from a life insurance company. The Executive agrees
that, in addition to the foregoing obligation to provide life insurance
coverage with the benefits payable to the beneficiary named by the Executive,
the Board, in its sole discretion, may direct the Company to obtain life
insurance on the life of the Executive in any amount the Board determines to
be appropriate, with the benefits payable to the Company or such other
beneficiary determined by the Board, and the Executive and his beneficiaries
shall have no rights with respect to the coverage or benefits described in
this sentence.
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(e) Consistent with past practices, the Company will reimburse
the Executive for periodic dues associated with the Executive's membership in
one professional, country, social or other club as may be selected by the
Executive.
(f) Consistent with past practices, the Company shall reimburse
the Executive for the costs of his financial and tax planning expenses,
provided that such reimbursement shall not exceed $15,000 per year.
(g) Except as otherwise specifically provided to the contrary
in this Agreement, and consistent with past practices, the Executive shall
participate in (i) the Company's annual incentive compensation and long term
incentive compensation programs; (ii) deferred compensation plans (including,
without limitation, pension, profit sharing, savings and other retirement
plans or programs); and (iii) welfare benefits and other fringe benefits, in
all cases to the extent and on terms no less favorable than those benefits
are provided by the Company from time to time to the Company's other senior
management employees; provided, however, that if any such benefits are
adjusted to reflect an executive's position, the Executive's benefits shall
be adjusted in a manner commensurate with his position, consistent with past
practices. However, the Company shall not be required to provide a benefit
under this Section 5(g) if such benefit would duplicate (or otherwise be of
the same type as) a benefit specifically required to be provided under
another provision of this Agreement. Nothing in this Section 5(g) shall be
construed to prevent the Company from revising the benefits or perquisites
generally provided to executives from time to time.
(h) Without limiting the generality of the provisions of
Section 5(g), the Executive shall be entitled to use of an automobile on
terms consistent with past practices and no less favorable than those in
existence on the date of this Agreement (and, at the termination of the
Executive's employment under this Agreement, the Executive shall be permitted
to purchase from the Company the automobile then provided to him by the
Company, at a cost of 75% of the then book value of the automobile as shown
on the books of the Company) and to health, disability and pension benefits
consistent with past practice, or as increased from time to time, and the
Executive shall be entitled to the perquisites customarily provided by the
Company to the individual holding Executive's position.
6. Covenants
---------
(a) The Executive agrees that, during the Term of Employment
and all times thereafter:
(i) Except as may be required by the lawful order of a court or
agency of competent jurisdiction, except as necessary to carry
out his duties to the Company, the School and the Subsidiaries,
or except to the extent that the Executive has express
authorization from the Company, the Executive agrees to take all
reasonable steps and actions to keep secret and confidential
indefinitely, all Confidential Information, and not to disclose
the same, either directly or indirectly, to any other person,
firm, or business entity. The Executive shall, during the
continuance of the Executive's employment, use the Executive's
40
best endeavors to prevent the unauthorized publication or misuse
of any Confidential Information.
(ii) To the extent that any court or agency seeks to have the
Executive disclose Confidential Information, he shall promptly
inform the Company, and he shall take reasonable steps to prevent
disclosure of Confidential Information until the Company has been
informed of such requested disclosure, and the Company has an
opportunity to respond to such court or agency. To the extent
that the Executive obtains information on behalf of the Company,
the School, or any of the Subsidiaries that may be subject to
attorney-client privilege as to the Company's attorneys, the
Executive shall take reasonable steps to maintain the
confidentiality of such information and to preserve such
privilege.
(iii) Nothing in the foregoing provisions of this Section 6(a)
shall be construed so as to prevent the Executive from using, in
connection with his employment for himself or an employer other
than the Company, the School, or any of the Subsidiaries,
knowledge which was acquired by him during the course of his
employment with the Company, the School and the Subsidiaries, and
which is generally known to persons of his experience in other
companies in the same industry.
(v) This Section 6(a) shall not be construed to unreasonably
restrict the Executive's ability to disclose Confidential
Information in an arbitration proceeding or a court proceeding in
connection with the assertion of, or defense against any claim of
breach of this Agreement. If there is a dispute between the
Company and the Executive as to whether information may be
disclosed in accordance with this Section 6(a), the matter shall
be submitted to the arbitrators or the court (whichever is
applicable) for decision.
(b) The Executive agrees that, while he is employed by the
Company, and thereafter, he shall not make any false, defamatory or
disparaging statements about the Company, the School, any of the
Subsidiaries, or the officers or directors of the Company, the School, or the
Subsidiaries that are reasonably likely to cause material damage to the
Company, the School or any of the Subsidiaries, or the officers or directors
of the Company, the School or any of the Subsidiaries. While the Executive
is employed by the Company, and after the termination of the Term of
Employment, the Company agrees, on behalf of itself, the School and the
41
Subsidiaries, that neither the respective officers nor the respective
directors of the Company, the School or any of the Subsidiaries shall make
any false, defamatory or disparaging statements about the Executive that are
reasonably likely to cause material damage to the Executive.
(c) While he is employed by the Company, and for a period of 24
months after the termination of the Executive's employment under this
Agreement for any reason (and which period shall be extended for an
additional period equal in duration to the period during which the breach or
breaches of the following covenants occurred, including the period of any
litigation or arbitration regarding such breach (but only if a final
nonappealable ruling holds that such a breach occurred)):
(i) The Executive shall not, without the prior written consent
of the Board (or duly authorized committee thereof) which consent
shall not be unreasonably withheld, be employed by, serve as a
consultant to, or otherwise assist or directly or indirectly
provide services to a Competitor (defined below) if: (i) the
services are to be provided with respect to any location in which
the Company, the School or a Subsidiary had material operations
during the 24-month period prior to the termination of the
Executive's employment under this Agreement, or with respect to
any location in which the Company, the School or a Subsidiary had
devoted material resources to establishing operations during the
24-month period prior to the termination of the Executive's
termination of employment under this Agreement; or (ii) the trade
secrets, confidential information, or proprietary information
(including, without limitation, confidential or proprietary
methods) of the Company, the School and any of the Subsidiaries
to which the Executive had access could reasonably be expected to
benefit the Competitor if the Competitor were to obtain access to
such secrets or information. For purposes of this Section 6(c),
services provided by others shall be deemed to have been provided
by the Executive if the Executive had material supervisory
responsibilities with respect to the provision of such services.
The foregoing provisions of this Section 6(c)(i) to the contrary
notwithstanding, the Executive may from time to time serve,
without compensation, as a member of the board of directors (and
any committee thereof) of one or more not-for-profit institutions
that are Competitors, to the extent that such service does not
inhibit or prohibit the performance of the Executive's duties
under this Agreement.
(ii) The Executive shall not solicit or attempt to solicit any
party who is then or, during the 24-month period prior to such
solicitation or attempt by the Executive was (or was solicited to
become), a customer or supplier of the Company, the School or a
Subsidiary, provided that the restriction in this Section 6(c)
shall not apply to any activity on behalf of a business that is
not a Competitor; and further provided that this Section 6(c)
shall not apply to the solicitation of a supplier of the Company,
the School or a Subsidiary if such solicitation would not
reasonably be expected to result in furthering material
competition with the Company, the School or a Subsidiary.
(iii) The Executive shall not solicit, entice, persuade or induce
any individual who is employed by the Company, the School or any
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of the Subsidiaries (or was so employed within 90 days prior to
the Executive's action) to terminate or refrain from renewing or
extending such employment or to become employed by or enter into
contractual relations with any other individual or entity other
than the Company, the School or any of the Subsidiaries, and the
Executive shall not approach any such employee for any such
purpose or authorize or knowingly cooperate with the taking of
any such actions by any other individual or entity.
(iv) The Executive shall not directly or indirectly own an
equity interest in any Competitor (other than ownership of 1% or
less of the outstanding stock of any corporation listed on a
national stock exchange or included in the NASDAQ System).
The term "Competitor" means any enterprise (including a person, firm or
business, whether or not incorporated, and whether for profit or not for
profit) during any period in which a material portion of its business is (and
during any period in which it intends to enter into business activities that
would be) materially competitive in any way with any business in which the
Company, the School or any of the Subsidiaries was engaged during the 24-
month period prior to the termination of the Executive's employment under
this Agreement (including, without limitation, any business if the Company,
the School or any Subsidiary devoted material resources to entering into such
business during such 24-month period). Nothing in this Section 6(c) shall be
construed as limiting the Executive's duty of loyalty to the Company, the
School and the Subsidiaries or any other duty he may otherwise have to the
Company, the School and the Subsidiaries while he is employed by the Company.
(d) The Executive agrees that, during the Term of Employment,
and continuing for a reasonable period after the termination of the
Executive's employment under this Agreement, the Executive will assist the
Company, the School and the Subsidiaries in the defense of any claims that
may be made against any of the Company, the School and the Subsidiaries, and
will assist the Company, the School and the Subsidiaries in the prosecution
of any claims that may be made by the Company, the School or any of the
Subsidiaries, to the extent that such claims may relate to services performed
by the Executive for the Company, the School and the Subsidiaries. The
Executive agrees to promptly inform the Company if he becomes aware of any
lawsuits involving such claims that may be filed against the Company, the
School or any Subsidiary. The Company agrees to provide legal counsel to the
Executive in connection with such assistance (to the extent legally
permitted), and to reimburse the Executive for all of the Executive's
reasonable out-of-pocket expenses associated with such assistance, including
travel expenses. For periods after the Executive's employment with the
Company, the School and all Subsidiaries terminates, the Company agrees to
provide reasonable compensation to the Executive for such assistance. The
Executive also agrees to promptly inform the Company if he is asked to assist
in any investigation of the Company, the School or any of the Subsidiaries
(or their actions) that may relate to services performed by the Executive for
the Company, the School or any of the Subsidiaries, regardless of whether a
lawsuit has then been filed against the Company, the School or any of the
Subsidiaries with respect to such investigation.
(e) The Executive acknowledges that the Company, the School and
the Subsidiaries would, for purposes of establishing the basis of equitable
remedies hereunder, be irreparably injured by a violation of Section 6, and
he agrees that the Company, the School and the Subsidiaries, in addition to
43
any other remedies available to them for such breach or threatened breach,
shall be entitled to a preliminary injunction, temporary restraining order,
or other equivalent relief, restraining the Executive from any actual or
threatened breach of Section 6. The Company acknowledges that the Executive
would, for purposes of establishing the basis of equitable remedies
hereunder, be irreparably injured by a violation of this Section 6, and
agrees that the Executive, in addition to any other remedies available to him
for such breach or threatened breach, shall be entitled to a preliminary
injunction, temporary restraining order, or other equivalent relief,
restraining the Company, the School and Subsidiaries from any actual or
threatened breach of this Section 6. If a bond is required to be posted in
order for the Company or Executive to secure an injunction or other equitable
remedy, the parties agree that said bond need not be more than a nominal sum.
(f) The foregoing provisions of this Section 6 shall be
applicable for periods after the Executive's termination of employment under
this Agreement only if the Executive's employment under this Agreement is
terminated by the Company for Cause or by the Executive due to a resignation
or retirement that is neither a Qualified Resignation or Retirement nor a
Constructive Dismissal. In all other cases, the rights and obligations of
the Executive, the Company, and the School for periods after termination of
employment under this Agreement shall be governed by the terms of the Senior
Advisor Agreement rather than this Agreement.
7. Reimbursement of Expenses
-------------------------
During the Term of Employment and consistent with past practices, the
Company shall reimburse Executive for documented travel, entertainment, fees,
dues and other expenses reasonably incurred by Executive in connection with
the performance of his duties here under and in accordance with the rules,
customs and usages of the Company from time to time in effect.
8. Benefits
--------
During the Term of Employment, the Executive shall be entitled to all
perquisites and benefits the Company is now providing (including automobile,
health, disability, pension, life insurance and other benefits consistent
with past practice, or as increased from time to time) established from time
to time, by the Board for senior managers of the Company.
9. Notice
------
Any notice, request, demand or other communication required or
permitted to be given under this Agreement shall be given in writing and
delivered personally, or sent by certified or registered mail, return receipt
requested, as follows (or to such other addressee or address as shall be set
forth in a notice given in the same manner):
If to Executive:
------------------
------------------
------------------
With a copy to:
------------------
------------------
------------------
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If to Company: DeVry Inc.
Attn: Legal Department
▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Any such notices shall be deemed to be given on the date personally delivered
or such return receipt is issued.
10. Company Representations.
-----------------------
The Company hereby represents and warrants to Executive that it has the
authorization, power and right to deliver, execute and fully perform its
obligations under this Agreement in accordance with its terms.
11. Validity
--------
If, for any reason, any provision hereof shall be determined to be
invalid or unenforceable, the validity and effect of the other provisions
hereof shall not be affected thereby.
12. Severability
------------
Whenever possible, each provision of this Agreement will be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Agreement is held to be invalid, illegal or unenforceable
in any respect under applicable law or rule in any jurisdiction, such
invalidity, illegality or unenforceability will not affect any other
provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein. If any court
determines that any provision hereof is unenforceable because of the power to
reduce the scope or duration of such provision, as the case may be and, in
its reduced form, such provision shall then be enforceable.
13. Waiver of Breach
----------------
The waiver by the Company or Executive of a breach of any provision of
this Agreement by the other party shall not operate or be construed as a
waiver of any other breach of such other party. Each of the parties (and
third party beneficiaries) to this Agreement will be entitled to enforce its
rights under this breach of any provision of this Agreement and to exercise
all other rights existing in its favor.
14. Indemnity
---------
(a) Unless Executive's employment under this Agreement is
terminated by the Company for Cause, the Company shall promptly reimburse
Executive for any reasonable legal fees and expenses incurred or sustained by
Executive in connection with (i) enforcing his rights and interests
45
hereunder, or (ii) any dispute with regard to his rights and interests
hereunder; provided, however, that to the extent that the court or arbitrator
shall determine that under the circumstances recovery by the Executive of all
or a part of any such fees and costs and expenses would be unjust or
inappropriate, the Executive shall not be entitled to such recovery and to
the extent that such amounts have been recovered by the Executive previously,
the Executive shall repay such amounts to the Company.
(b) Unless Executive's employment under this Agreement is
terminated for Cause, and irrespective of when Executive's employment under
this Agreement terminates, any payments or benefits to be provided to the
Executive by the Company or the School or a Subsidiary pursuant to any
employee benefit plans or arrangements established or adopted by the Company
or the School or a Subsidiary (including, without limitation except as
provided in Section 13(c), any rights to indemnification from the Company or
from a third-party insurer for directors and officers liability coverage with
respect to any costs, losses, claims, suits, proceedings, damages or
liabilities to which the Executive may become subject which arise out of, are
based upon or relate to the Executive's employment by the Company or the
School or a Subsidiary, the Executive's service as an officer or member of
the Board, the Board of Directors of the School, or the Board of Directors of
any Subsidiary), shall be paid to Executive to the extent such amounts are
due from the Company or the School or Subsidiary in accordance with the terms
of such plans or arrangements.
(c) The Company shall indemnify Executive, during and after his
employment under this Agreement, to the fullest amount provided by the
Certificates of Incorporation and Bylaws of the Company and any Director
Indemnity Agreements of the Company, and nothing herein will be construed as
modifying those separate Agreements.
15. Mitigation and Set-Off
----------------------
Unless the Executive's employment under this Agreement is terminated
for Cause, (a) the Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking employment or
otherwise, and (b) neither the Company, nor the School, nor any Subsidiary
shall be entitled to any set-off against the amounts payable by Company, the
School or any Subsidiary to Executive any amounts owed to the Company, School
or any Subsidiary by the Executive.
16. Assignment
----------
This Agreement shall be binding upon, and inure to the benefit of, the
Company and its successors and assigns and upon any person acquiring, whether
by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the Company's assets and business, and the successor
shall be substituted for the Company under this Agreement. Except as
hereafter provided in this Section 16, neither the Executive nor the Company
(or the School) may assign, transfer, pledge, encumber or otherwise dispose
of this Agreement or any of his or its respective rights or obligations
hereunder, without the prior written consent of the other. The Executive may
dispose of his rights under this Agreement by will or limit the power or
rights of any executor or any administrator. If any benefits deliverable to
the Executive under this Agreement have not been delivered at the time of the
Executive's death (including, without limitation, his Accrued Obligations),
such benefits shall be delivered to the Designated Beneficiary, in accordance
46
with the provisions of this Agreement. The "Designated Beneficiary" shall be
the beneficiary or beneficiaries designated by the Executive in a writing
filed with the Company in accordance with Section 9 in such form and at such
time as the Company shall require. If the Executive fails to designate a
beneficiary, or if the Designated Beneficiary does not survive the Executive,
any benefits distributable to the Executive shall be distributed to the legal
representative of the estate of the Executive. If the Executive designates a
beneficiary and the Designated Beneficiary survives the Executive but dies
before the complete distribution of benefits to the Designated Beneficiary
under this Agreement, then any benefits distributable to the Designated
Beneficiary shall be distributed to the legal representative of the estate of
the Designated Beneficiary.
17. Amendment; Entire Agreement
---------------------------
This Agreement may not be changed orally but only by an agreement in
writing agreed to by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought. This Agreement
embodies the entire agreement and understanding of the parties hereto in
respect of the subject matter of this Agreement, and supersedes and replaces
all prior Agreements (including, without limitation, the Prior Employment
Agreement), understandings and commitments with respect to such subject
matter.
18. Litigation
----------
This Agreement shall be governed by, construed, applied and enforced in
accordance with the laws of the State of Illinois, except that no doctrine of
choice of law shall be used to apply any law other than that of Illinois, and
no defense, counterclaim or right of set-off given or allowed by the laws of
any other state or jurisdiction, or arising out of the enactment,
modification or repeal of any law, regulation, ordinance or decree of any
foreign jurisdiction, be interposed in any action hereon. Executive and the
Company agree that any action or proceeding to enforce or arising out of this
Agreement may be commenced in the state courts, or in the United States
District courts in Chicago, Illinois. Executive and the Company consent to
such jurisdiction, agree that venue will be proper in such courts and waive
any objections based upon forum non conveniens. The choice of forum set
forth in this Section 17 shall not be deemed to preclude the enforcement of
any judgment obtained in such forum or the taking of any action under this
Agreement to enforce same in any other jurisdiction.
IN WITNESS WHEREOF, the parties hereto have set their hands as of the
day and year first above written.
EXECUTIVE: COMPANY:
-------------------------
By:
-----------------------------
Its:
----------------------------
SCHOOL:
By:
-----------------------------
Its:
----------------------------
47
Exhibit A
---------
Change in Control Definition
----------------------------
A-1. Purpose. This Exhibit A is attached to and forms a part of an
employment transition agreement (the "Agreement") among __________ (the
"Executive"), DeVry Inc., a Delaware corporation (the "Company"), and DeVry
University, Inc., an Illinois corporation dated July 1, 2002. The purpose of
this Exhibit A is to set forth the definition of the term "Change in Control"
as used in Section 3(d) of the Agreement.
A-2. Change in Control. "Change in Control" means the occurrence of
the events described in any of Sections (a), (b), (c) or (d) below:
(a) Acquisition of Securities. The acquisition (disregarding any Excluded
Acquisitions) by any Person of ownership of any Voting Securities if,
immediately after such acquisition, such Person has ownership of more
than twenty-five percent (25%) of either the Outstanding Company Common
Stock, or the combined voting power of the Outstanding Company Voting
Securities.
(b) Change in Board. Individuals who constitute the Incumbent Board cease
for any reason to represent greater than 50% of the voting power of
members of the Board.
(c) Corporate Transaction. Consummation of (A) a Corporate Transaction or
(B) the sale or other disposition of more than fifty percent (50%) of
the operating assets of the Company (determined on a consolidated
basis), but not including an Internal Reorganization.
(d) Liquidation. Approval by the shareholders of the Company of a plan of
complete liquidation or dissolution of the Company.
A-3. Definitions. The terms used in the definition of "Change in
Control" shall have the following meanings:
(a) The term "Company Plan" means an employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company.
(b) The term "Corporate Transaction" means any reorganization, merger,
consolidation, or other business combination involving the Company.
(c) The following shall constitute "Excluded Acquisitions" of Stock or
Voting Securities (whichever is applicable):
(I) Any acquisition of Stock or Voting Securities (whichever is
applicable) by a Company Plan.
(II) Any acquisition of Stock or Voting Securities (whichever is
applicable) by an underwriter temporarily holding securities
pursuant to an offering of such securities.
48
(III) Any acquisition of Stock or Voting Securities (whichever is
applicable) by any Person pursuant to an Internal Reorganization.
(IV) Any acquisition of Stock or Voting Securities (whichever is
applicable) directly from the Company (excluding any acquisition
resulting from the exercise of an exercise, conversion or
exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company).
(V) Any acquisition of Stock or Voting Securities (whichever is
applicable) by the Company.
(d) The members of the "Incumbent Board" shall mean the members of the
Board of Directors as of the Effective Date of the Agreement and shall
also mean any individual becoming a director after that date whose
election, or nomination for election by the Company shareholders, was
approved by a vote of a least a majority of the directors then
comprising the Incumbent Board; provided, however, that there shall be
excluded for this purpose any such individual whose initial assumption
of office occurs as a result of an actual or publicly threatened
election contest (as such terms are used in Rule 14a-11 promulgated
under the Securities Exchange Act of 1934 (the "Exchange Act")) or
other actual or publicly threatened solicitation of proxies or consents
by or on behalf of a Person other than the Board.
(e) The term "Internal Reorganization" means a sale-leaseback or other
arrangement resulting in the continued utilization of the assets being
sold or otherwise transferred (or the operating products of such
assets) by the Company. The term "Internal Reorganization" also means
a Corporate Transaction to which all of Sections (I), (II), and (III)
below are applicable:
(I) All or substantially all of the individuals and entities who have
ownership, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to
such Corporate Transaction have ownership of more than fifty
percent (50%) of, respectively, the then outstanding shares of
common equity securities and the combined voting power of the
then outstanding Voting Securities entitled to vote generally in
the election of directors, as the case may be, of the ultimate
parent entity resulting from such Corporate Transaction
(including, without limitation, an entity which, as a result of
such transaction, has ownership of the Company or all or
substantially all of the assets of the Company either directly or
through one or more subsidiaries) in substantially the same
relative proportions as their ownership, immediately prior to
such Corporate Transaction, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities, as the case may
be.
(II) No Person (other than the Company, any Company Plan or related
trust, the corporation resulting from such Corporate Transaction,
and any Person having ownership, immediately prior to such
Corporate Transaction, directly or indirectly, of more than
twenty-five percent (25%) of the Outstanding Company Common Stock
or the Outstanding Company Voting Securities, as the case may be)
49
will have ownership of more than twenty-five percent (25%) of,
respectively, the then outstanding common stock of the ultimate
parent entity resulting from such Corporate Transaction or the
combined voting power of the then outstanding Voting Securities
of such entity.
(III) Individuals who were members of the Incumbent Board immediately
prior to the Corporate Transaction will constitute at least a
majority of the members of the board of directors of the ultimate
parent entity resulting from such Corporate Transaction.
(f) The term "Outstanding Company Common Stock" as of any date means the
then outstanding shares of common stock, of whatever class, of the
Company.
(g) The term "Outstanding Company Voting Securities" as of any date means
the then outstanding Voting Securities (which shall be counted based on
the number of votes that may be cast per share).
(h) The term "ownership" means beneficial ownership within the meaning of
Rule 13d-3 promulgated under the Exchange Act.
(i) The term "Person" means an individual, entity or group as that term is
used in Section 13(d)(3) or 14(d)(2) of the Exchange Act.
(j) The term "Voting Securities" as of any date means any of the
outstanding securities of the Company entitled to vote generally in the
election of the Company's Board of Directors.