EMPLOYMENT AGREEMENT by and among CONCORDE CAREER COLLEGES, INC. and PAUL R. GARDNER dated as of June 21, 2006
by
and among
CONCORDE
CAREER COLLEGES, INC.
and
▇▇▇▇
▇.
▇▇▇▇▇▇▇
dated
as
of June 21, 2006
057223.00125/21499388v.3
TABLE
OF CONTENTS
Page
|
1.
Employment and Duties
|
………………………………………………..1
|
|
2.
Term
|
………………………………………………..1
|
|
3.
Compensation and Benefits.
|
………………………………………………..2
|
|
3.1
Salary
|
………………………………………………..2
|
|
3.2
Annual Bonus
|
………………………………………………..2
|
|
3.3
Benefits
|
………………………………………………..2
|
|
3.4
Vacation
|
………………………………………………..3
|
|
3.5
Expenses
|
………………………………………………..3
|
|
4.
Termination.
|
………………………………………………..3
|
|
4.1
Notice of Termination
|
………………………………………………..3
|
|
4.2
Grounds for Termination.
|
………………………………………………..3
|
|
4.3
Amounts Payable Upon Termination Without Cause
|
………………………………………………..5
|
|
4.4
Procedure Upon Termination
|
………………………………………………..6
|
|
4.5
Severance Pay Statutes; Set-Off
|
………………………………………………..6
|
|
4.6
Certain Rights
|
………………………………………………..6
|
|
5.
Covenants.
|
………………………………………………..6
|
|
5.1
Proprietary Information
|
………………………………………………..6
|
|
5.2
Nondisclosure
|
………………………………………………..7
|
|
5.3
Nonsolicitation; Noncompetition and Nondisparagement
|
………………………………………………..7
|
|
5.4
Third Party Information
|
………………………………………………..9
|
|
5.5
No Improper Use of Information of Prior Employers and
Others
|
………………………………………………..9
|
|
5.6
Equitable Relief
|
………………………………………………..9
|
|
5.7
Consideration
|
………………………………………………10
|
|
5.8
Scope
|
………………………………………………10
|
|
6.
Work Product.
|
………………………………………………10
|
|
6.1
Ownership
|
………………………………………………10
|
|
6.2
Works for Hire
|
………………………………………………10
|
|
6.3
Obligation to Keep Company Informed
|
………………………………………………11
|
|
6.4
Enforcement of Proprietary Rights
|
………………………………………………11
|
|
7.
Prior Agreements
|
………………………………………………11
|
|
8.
Disclosure to Future Employer
|
………………………………………………11
|
|
9.
Miscellaneous.
|
………………………………………………11
|
|
9.1
Successors and Assigns
|
………………………………………………12
|
|
9.2
Notices
|
………………………………………………12
|
|
9.3
Entire Understanding; Modification
|
………………………………………………12
|
|
9.4
Severability
|
………………………………………………12
|
|
9.5
Counterparts
|
………………………………………………12
|
|
9.6
Enforcement
|
………………………………………………12
|
|
9.7
Section Headings; References
|
………………………………………………12
|
|
9.8
Waivers
|
………………………………………………12
|
|
9.9
Controlling Law; Jurisdiction
|
………………………………………………13
|
|
9.10
Delivery by Facsimile
|
………………………………………………13
|
|
9.11
Interpretation of Agreement
|
………………………………………………13
|
|
9.12
Survival
|
………………………………………………13
|
|
9.13
Effectiveness
|
………………………………………………13
|
057223.00125/21499388v.3
INDEX
OF DEFINED TERMS
Term
Page
|
Agreement
|
………………………………………………..1
|
|
Annual
Bonus
|
………………………………………………..2
|
|
Benefits
|
………………………………………………..2
|
|
Board
|
………………………………………………..1
|
|
Cause
|
………………………………………………..5
|
|
COBRA
|
………………………………………………..3
|
|
Company
|
………………………………………………..1
|
|
Company’s
Business
|
………………………………………………..9
|
|
Concorde
|
………………………………………………..1
|
|
Covenant
Period
|
………………………………………………..9
|
|
Covenants
|
………………………………………………..9
|
|
Date
of Termination
|
………………………………………………..3
|
|
Executive
|
………………………………………………..1
|
|
Initial
Term
|
………………………………………………..2
|
|
Inventions
|
………………………………………………..6
|
|
Notice
of Termination
|
………………………………………………..3
|
|
Permanently
Disabled
|
………………………………………………..4
|
|
Person
|
………………………………………………..7
|
|
Proprietary
Information
|
………………………………………………..7
|
|
Proprietary
Rights
|
……………………………………………….10
|
|
Renewal
Term
|
………………………………………………..2
|
|
Salary
|
………………………………………………..2
|
|
Severance
Pay Statutes
|
………………………………………………..6
|
|
Term
|
………………………………………………..2
|
|
Third
Party Information
|
………………………………………………..9
|
|
Work
Product
|
……………………………………………….10
|
057223.00125/21499388v.3
Parties: CONCORDE
CAREER COLLEGES, INC.
(the
“Company”
or
“Concorde”
),
a
Delaware corporation
▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇
(“Executive”)
▇▇▇▇
▇.
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Date: June
21,
2006
Background
Concorde
intends to employ the Executive pursuant to the terms and conditions set forth
in this Employment Agreement (“Agreement”).
Intending to be legally bound, in consideration of the mutual agreements
contained herein, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows:
1. Employment
and Duties.
The
Company shall employ Executive, and Executive hereby accepts such employment,
as
Vice President and Chief Financial Officer of the Company during the term of
employment set forth in Section 2.
Executive shall have customary responsibilities for such position commensurate
with the position of Vice President and Chief Financial Officer of an entity
comparable to the Company, including the powers and duties set forth set forth
in the Bylaws of the Company for such office, subject to the direction of the
President of the Company and the Board. Executive shall report to the President
of Concorde or such other officer as designated by the Chief Executive Officer
and Chairman of the Board and shall assume such other responsibilities and
duties, consistent with his position and expertise, as may from time to time
be
reasonably prescribed by the Board of Directors of the Company (collectively,
the “Board”).
Executive shall devote his full business time, energy, skill and efforts to
the
business and affairs of the Company. Executive acknowledges and agrees that
he
shall observe and comply with all of the Company’s policies as prescribed by the
Board in writing. Nothing in this Section 1,
however, shall prohibit Executive from (i) serving as a director or trustee
of a
governmental, charitable or educational organization; provided
that
such activities are not inconsistent with Executive’s duties under this
Agreement and do not violate the terms of Section 5
hereof;
and provided
further
that
Executive has received written approval of the Board which shall not be
unreasonably withheld or delayed; or (ii) engaging in additional activities
in
connection with personal investments and community affairs that are not
inconsistent with Executive’s duties under this Agreement and do not violate the
terms of Section 5
hereof.
2. Term.
The
term of employment under this Agreement shall be a period commencing on the
date
of the Closing (as defined in the Agreement and Plan of Merger dated as of
June
21, 2006 (the “Merger
Agreement”)
by and
among Liberty
Partners Holdings 28 LLC (“Buyer”),
Teach
Acquisition Corporation, and the Company) (the “Effective
Date”)
and
ending on the third anniversary of such date, unless terminated earlier in
accordance with the other provisions hereof (the “Initial
Term”).
The
Agreement shall automatically renew for successive one (1) year periods (each
a
“Renewal
Term”),
unless either party gives written notice to the other of its election not to
renew at least ninety (90) days prior to the end of the then-current term or
this Agreement is otherwise terminated earlier in accordance with the provisions
hereof. The Initial Term and Renewal Term(s) are collectively referred to herein
as the “Term.”
1
3. Compensation
and Benefits.
3.1 Salary.
As long
as Executive remains an employee of the Company, the Company shall pay to
Executive as compensation for services rendered hereunder a base salary of
not
less than One Hundred Fifty Five Thousand Dollars ($155,000) per year (the
“Salary”),
payable in accordance with the Company’s normal payroll practices for the
Company’s senior executive officers. During the Term, the Board shall review the
Salary at such time as the salaries of senior executive officers of the Company
are reviewed generally, and in any event at least annually on Executive’s
current annual review date. The Company shall deduct or cause to be deducted
from the Salary all taxes and amounts required by law to be withheld, as well
as
any amounts due from Executive with respect to executive benefit plans in which
Executive participates.
3.2 Annual
Bonus.
Each
year during the Term, as additional compensation for services rendered
hereunder, Executive shall be eligible to receive a bonus equivalent to
thirty percent (30%) of his Salary, as determined by the Board in its sole
and
reasonable discretion consistent with the terms of the Company’s management
compensation plan then in effect (the “Annual
Bonus”).
The
Annual Bonus shall be paid to Executive within fifteen (15) days of the receipt
of an opinion from the Company’s public accountants with respect to the
Company’s fiscal year end financial statements. The Board may award the
Executive such additional bonuses as it may approve from time
to
time in its sole discretion.
3.3 Benefits.
Each
year during the Term, subject to the other provisions of this Agreement,
Executive shall be entitled to participate and shall be included in any savings,
deferred compensation, pension, profit sharing, stock option or other equity
compensation plan, life insurance, disability insurance (short and long term),
accidental death and dismemberment insurance, hospitalization, major medical,
dental and other employee benefit plans of the Company generally available
to
executive officers to the extent Executive is eligible under the general
provisions thereof (collectively, the “Benefits”),
which
may change from time to time in the sole discretion of the Company. Executive
shall be entitled to participate in any stock option or equity compensation
plan
of Buyer. Promptly after the Effective Date, Buyer shall grant options to
Executive for shares of common stock representing no less than one percent
(1%)
of the common stock of Buyer on a fully-diluted basis as of the date of the
grant of such options (the “Options”).
Half
of such Options shall vest in equal installments over four (4) years beginning
on the first anniversary of the date of grant; the remaining half shall vest
based upon the achievement of budgeted EBITDA targets as determined by the
Board
in its sole discretion. Except as set forth in Sections 4.2.1, 4.2.2 and 4.3
or
as may otherwise be set forth in the stock option grant, all such Options, to
the extent not vested and exercised prior to such date, shall terminate on
the
Date of Termination. Nothing in this Section 3.3,
in and
of itself, shall be construed to limit the ability of the Company or Buyer
to
amend or terminate any particular plan, program or arrangement.
2
3.4 Vacation.
Each
year during the Term, Executive shall be entitled to vacation benefits in
accordance with the vacation policies of the Company in effect for its executive
officers from time to time, which vacation shall be taken by Executive at such
time or times as approved by the Board; provided,
however, that
Executive agrees to be reasonably accessible to the Company and the Board by
phone and/or electronic mail for the duration of any such vacation.
3.5 Expenses.
Each
year during the Term, the Company shall pay or reimburse Executive for all
ordinary, necessary, documented and reasonable business-related expenses
actually incurred by Executive in the course of the performance of his duties
under this Agreement, including travel and out-of-pocket expenses, in accordance
with the Company’s policies with respect to reimbursement as in effect from time
to time. Executive shall keep an itemized account of such expenses, which shall
be submitted to the Company monthly together with original receipts or other
satisfactory documentation substantiating such expenses.
4. Termination.
4.1 Notice
of Termination.
Any
termination by the Company or by Executive, other than due to Executive’s death,
shall be communicated by written Notice of Termination to the other party.
As
used in this Agreement, (a) “Notice
of Termination”
means
a
written notice specifying the termination provision in this Agreement relied
upon and (b) “Date
of Termination”
means
(a) the date of death or (b) the earlier of (i) the date specified in the Notice
of Termination or (ii) the last day Executive is employed by the Company, as
the
case may be.
4.2 Grounds
for Termination.
4.2.1 Termination
upon Death.
Executive’s employment with the Company and all of his rights to Salary, Annual
Bonus and Benefits hereunder shall automatically terminate upon his death,
except that (a) his heirs, personal representatives or estate (as the case
may
be) shall be entitled to (i) reimbursement of documented, unreimbursed expenses
incurred prior to the Date of Termination and (ii) any earned but unpaid portion
of his Salary and Benefits through the earlier of (A) nine (9) months after
the
Date of Termination and (B) the end of the Term and (b) all Options which are
vested on the Date of Termination shall be exercisable by his heirs, personal
representatives or estate (as the case may be) until the earlier to occur of
(i)
the expiration of such Options and (ii) the ninetieth (90th)
day
after the Date of Termination. Executive’s heirs’, personal representatives’ or
estate’s (as the case may be) election to receive payment under this Section
4.2.1
shall be
in lieu of all other amounts and conditioned upon such heirs’, personal
representatives’ or estate’s execution (without revocation) of a valid release
agreement in a form reasonably acceptable to the Company pursuant to which
such
heirs, personal representatives or estate release(s) the Company and its
Affiliates from all claims that Executive or his heirs, personal representatives
or estate may have against them.
Executive’s dependents shall have any conversion rights available under the
Company’s medical insurance plan and as otherwise provided by law including the
Comprehensive Omnibus Budget Reconciliation Act (“COBRA”).
The
period during which Executive’s dependents shall be entitled to continuation
coverage under COBRA shall begin on the day after the Date of Termination.
If
Executive’s dependents elect to continue coverage under the medical insurance
plans after the Date of Termination, Executive’s dependents shall be responsible
for all premiums, as permitted by law. For purposes of this Agreement, an
“Affiliate”
of
any
Person (as defined herein) shall mean any other person or entity that, directly
or indirectly, is controlled by or is under common control with such person
or
entity.
3
4.2.2 Termination
upon Disability.
If
Executive becomes Permanently Disabled (as defined herein), then the Company
shall have the right to terminate Executive’s employment immediately upon Notice
of Termination and all of Executive’s rights to Salary, Annual Bonus and
Benefits shall simultaneously terminate, except that (a) all Options which
are
vested on the Date of Termination shall be exercisable until the earlier to
occur of (i) the expiration of such Options and (ii) the ninetieth
(90th)
day
after the Date of Termination and (b) Executive shall be entitled to (i)
reimbursement of documented, unreimbursed expenses incurred prior to the Date
of
Termination, (ii) any earned but unpaid portion of his Salary and Benefits
through the earlier of (A) nine (9) months after the Date of Termination and
(B)
the end of the Term, and (iii) benefits under any disability insurance policy
or
plan provided to or for the benefit of Executive; provided
that
any
payment under this Section 4.2.2
shall be
reduced, dollar-for-dollar, by any amounts received by Executive under any
disability insurance policy or plan provided to Executive by the Company.
Executive and his dependents shall have any conversion rights available under
the Company’s medical insurance plan and as otherwise provided by law including
COBRA. The period during which Executive and his dependents shall be entitled
to
continuation coverage under COBRA shall begin on the day after the Date of
Termination. If Executive or his dependents elect to continue coverage under
the
medical insurance plans after the Date of Termination, Executive shall be
responsible for all premiums, as permitted by law. For purposes of this
Agreement, “Permanently
Disabled”
shall
mean any permanent disability that qualifies Executive for full benefits under
any disability insurance policy or plan provided to Executive by the Company,
if
any, or, if the Company does not maintain any such policy, the inability of
the
Executive to attend to the essential and regular functions of Vice President
and
Chief Financial Officer on a full time basis, with or without reasonable
accommodations, by reason of physical or mental incapacity, sickness or
infirmity for a period of (i) ninety (90) consecutive days or (ii) one hundred
twenty (120) days in any twelve (12)-month period. Executive’s election to
receive payment under this Section 4.2.2
shall be
in lieu of all other amounts and conditioned upon Executive’s execution (without
revocation) of a valid release agreement in a form reasonably acceptable to
the
Company pursuant to which Executive releases the Company and its Affiliates
from
all claims that Executive may have against them. In the event of a dispute
as to
whether Executive is Permanently Disabled, the Company may refer Executive
to a
mutually acceptable licensed practicing physician, at Company’s expense, whose
written report shall be final and binding upon the parties, and Executive agrees
to submit to such reasonable tests and examination as such physician shall
deem
appropriate. If Executive fails or refuses for any reason to promptly submit
to
any reasonable examination requested by such physician, then Executive shall
not
be considered to be
Permanently Disabled.
4.2.3 Termination
for Cause.
At any
time during the Term, the Company may terminate Executive’s employment hereunder
for Cause (as defined herein), effective immediately upon Notice of Termination.
Executive shall have the right to appeal the cause for termination directly
with
the Board. Upon termination of this Agreement pursuant to this Section
4.2.3,
all of
Executive’s rights to Salary, Annual Bonus and Benefits hereunder shall
automatically terminate as of the Date of Termination, except that Executive
shall be entitled to (a) reimbursement of documented, unreimbursed expenses
incurred through the Date of Termination and (b) any earned but unpaid portion
of his Salary and Benefits to the Date of Termination.
4
For
purposes of this Agreement, “Cause”
shall
mean: (a) Executive’s willful misconduct, fraud, usurpation of corporation
opportunity or gross negligence with respect to the Company or his duties
hereunder or a material breach of any fiduciary duty owed to the Company or
any
of its Affiliates; (b) Executive’s failure to adhere to the Company’s policies
or to perform duties, as validly assigned pursuant to Section 1 (other than
any
such failure resulting from incapacity due to physical or mental illness);
provided
that
Executive shall first be given five (5) business days following notice from
the
Company to comply with such policies or to perform such duties; (c) a material
breach by Executive of the agreements and covenants contained in this Agreement;
(d) Executive’s conviction of or plea of nolo
contendere
with
respect to a felony, any crime involving fraud, larceny or embezzlement or
any
other crime involving moral turpitude which subjects, or if generally known,
would subject, the Company or any of its Affiliates to public ridicule or
embarrassment; or (e) habitual intoxication or the use of illegal drugs by
Executive.
4.2.4 Termination
Without Cause.
At any
time during the Term, the Company may terminate Executive’s employment without
Cause, effective immediately upon Notice of Termination. Except for payments
to
Executive as set forth in Section 4.3,
the
Company shall have no further obligation or liability to Executive under this
Agreement upon a termination pursuant to this Section 4.2.4.
4.2.5 Elective
Termination.
Executive may voluntarily terminate his employment with the Company at any
time
during the Term upon ninety (90) days prior written notice. Executive’s
employment with the Company and all of his rights to Salary, Annual Bonus and
Benefits hereunder shall automatically terminate on the ninetieth
(90th)
day
after Notice of Termination is given by Executive to the Company pursuant to
this Section 4.2.5.
Except
for reimbursement of documented, unreimbursed expenses incurred prior to the
Date of Termination and the payment of any earned but unpaid portion of
Executive’s Salary and Benefits up to the Date of Termination, the Company shall
have no further obligation or liability to Executive under this Agreement upon
a
termination of employment by Executive pursuant to this Section 4.2.5.
Notwithstanding the provisions of this Section 4.2.5,
the
Company may elect in its sole discretion to permit the termination of
Executive’s employment in advance of such ninetieth (90th)
day
after Notice of Termination is given;
provided
that
Executive’s right to Salary, Annual Bonus and Benefits hereunder shall
automatically terminate on such earlier date of termination.
4.3 Amounts
Payable Upon Termination Without Cause.
If
Executive’s employment is terminated pursuant to Section 4.2.4,
(a)
Executive shall be entitled to receive, in lieu of all other amounts, upon
Executive’s execution (without revocation) of a valid release agreement in a
form acceptable to the Company pursuant to which Executive releases the Company
and its Affiliates from all claims that Executive may have against them, (i)
nine (9) months Salary at the rate in effect on the Date of Termination, payable
in accordance with the Company’s normal payroll practices for the Company’s
officers, (ii) reimbursement of documented, unreimbursed expenses incurred
by
Executive prior to the Date of Termination and (iii) Benefits under any employee
benefit plans in which Executive was a participant on the Date of Termination,
to the extent such plans allow such continued participation; provided
that
such
compensation and benefits shall terminate immediately upon any material breach
by Executive of his obligations under this Agreement;
and (b)
all Options which are vested on the Date of Termination shall be exercisable
until the earlier to occur of (i) the expiration of such Options and (ii) the
ninetieth (90th)
day
after the Date of Termination.
5
4.4 Procedure
Upon Termination.
On
termination of employment regardless of the reason, Executive (or his heirs,
representatives or estate as the case may be) shall promptly return to the
Company all property, equipment, credit cards, keys, etc., documents (including
copies) and other property containing or disclosing Proprietary Information
(as
defined in Section 5.1)
or
Third Party Information (as defined in Section 5.4),
including customer lists, manuals, letters, materials, reports and records
in
Executive’s possession or control no matter from whom or in what manner
acquired.
4.5 Severance
Pay Statutes; Set-Off.
Executive expressly acknowledges and agrees that the consideration received
by
Executive under this Agreement fully satisfies all potential obligations of
the
Company for any severance pay or other amounts to which Executive may become
entitled under any state or local law, rule or regulation regarding severance
pay, termination of employment or related matters (collectively, “Severance
Pay Statutes”).
To
the fullest extent permitted by law, Executive voluntarily and irrevocably
waives all rights, including any rights to severance pay or other amounts,
to
which Executive may become entitled under any applicable Severance Pay Statutes,
and Executive releases and forever discharges the Company from and against
any
obligations which he may have under any applicable Severance Pay Statutes;
provided
that
the
Company is in material compliance with this Agreement. The Company shall be
entitled to set-off against amounts payable to Executive the amounts of any
and
all claims that the Company may have against Executive for which Executive
has
been finally adjudicated to have been liable.
4.6 Certain
Rights.
Nothing
in this Section 4
is
intended to preclude Executive from receiving any vested or accrued
Benefits which are to be continued or paid after the Date of Termination in
accordance with the terms of the corresponding plans for such
Benefits.
5. Covenants.
5.1 Proprietary
Information.
Executive recognizes and acknowledges that by reason of his employment by and
service with the Company he will have access to confidential and/or proprietary
information of the Company and its Affiliates, including (a) trade secrets,
inventions, ideas, processes, apparatus, equipment, data, programs, listings,
patents, copyrights, trademarks, service marks, works of authorship, know-how,
improvements, discoveries, developments, designs, sketches, drawings, models
and
techniques relating to the current, future and proposed products and services
of
the Company (collectively, “Inventions”);
(b)
information regarding plans for research, development, new products, product
design, details and specifications, engineering, marketing and sales, business
records and plans, budgets, plans for future developments, business forecasts,
financial statements and other financial information, licenses, prices and
costs, procurement requirements, policies or operational methods, suppliers,
customers, potential customers and key personnel; and (c) the terms of this
Agreement ((a), (b) and (c) collectively, “Proprietary
Information”).
Executive hereby assigns to the Company all rights he may have or acquire in
such Proprietary Information and recognizes that all Proprietary Information
shall be the sole property of the Company and its assigns.
6
5.2 Nondisclosure.
Executive covenants and agrees that he shall not, for as long as he is employed
by the Company and at all times thereafter, except with the express prior
written consent of the Company, directly or indirectly, whether as an employee,
associate, owner, partner, member, agent, director, officer, shareholder,
consultant, representative or in any other capacity, for his own account or
for
the benefit of any Person, communicate, disclose, divulge, provide commentary
regarding or make available to any Person any of the Company’s Proprietary
Information;
provided
that the
provisions of this Section 5.2
shall
not apply to information that (a) is or becomes generally available to the
public other than as a result of disclosure by Executive, (b) was readily
available to Executive on a non-confidential basis prior to its disclosure
to
Executive by the Company, (c) was in Executive’s lawful possession as evidenced
by records kept in the ordinary course of business or by proof of actual prior
possession; (d) becomes available to Executive on a non-confidential basis
from
a source other than the Company, provided
that
such source is not known by Executive to be bound by confidentiality agreements
with the Company or its Affiliates (or any representatives thereof) or by legal
or fiduciary constraints on disclosure of such information, or (e) is required
to be disclosed pursuant to an order or other law, provided
that
Executive shall give the Company prompt notice thereof prior to such disclosure
and, at the request of the Company, shall cooperate in all reasonable respects
in maintaining the confidentiality of Proprietary Information so required to
be
disclosed, including obtaining a protective order or other similar order.
Nothing in this Section 5.2
shall
limit in any respect Executive’s ability to disclose information as required in
connection with Executive’s performance of this Agreement or the enforcement by
Executive of his rights under this Agreement, subject to the proviso of clause
(e) in the immediately preceding sentence. For purposes of this Agreement,
“Person”
means
a
natural person, corporation, partnership, limited liability company, trust,
estate, joint venture, sole proprietorship, government (and any branch or
subdivision thereof), governmental agency, association, cooperative or other
entity.
5.3 Nonsolicitation;
Noncompetition and Nondisparagement.
Executive acknowledges that: (a) the Company’s Business (as defined in Section
5.3.6)
is
highly competitive and faces competition from numerous and a variety of Persons;
(b) the Company’s Business requires substantial and continuous expenditures of
time and money to develop, market and maintain; and (c) he has performed
services requiring specialized skills. Accordingly, during the period of
Executive’s employment with the Company and for the Covenant Period (as defined
in Section 5.3.7),
Executive shall not, except with the Company’s express prior written consent,
directly or indirectly, whether as an employee, associate, owner, partner,
member, agent, director, officer, shareholder, consultant, representative or
in
any other capacity, for Executive’s own account or for the benefit of any
Person, with or without compensation:
7
5.3.1 Solicit,
service, contact, divert, take away or interfere with, or aid in the
solicitation, servicing, contacting, diverting, taking away or interfering
with,
any customers, distributors, vendors, suppliers, licensees, licensors, strategic
partners, other business relations or prospects of the Company (or any of the
Company’s Affiliates) for the purpose of (a) selling goods or performing
services in competition with the Company’s Business, (b) inducing any such
customer, distributor, vendor, supplier, licensee, licensor, strategic partner,
other business relation or prospect to cancel, transfer or cease doing business
in whole or in part with the Company (or any of the Company’s Affiliates) or (c)
inducing any such customer, distributor, vendor, supplier, licensee, licensor,
strategic partner, other business relation or prospect to do business with
any
Person in competition with the Company’s Business or in any way interfere with
its relationship with the Company (or any of the Company’s
Affiliates);
5.3.2 Solicit,
contact, divert, encourage or induce, or aid in the solicitation, contacting,
diverting, encouragement or inducement of, any Person who is (or was within
the
previous twelve (12) months) an employee, associate, consultant, agent or
representative of the Company (or any of the Company’s Affiliates) to leave the
employ of the Company (or any of the Company’s Affiliates) or to work for
Executive or any Person with whom or which Executive is connected or affiliated
or in any way interfere with the Company’s (or any of the Company’s Affiliates’)
relationship with such Person;
5.3.3 Hire
or
retain any Person who is (or was within the previous twelve (12) months) an
employee, associate, consultant, agent or representative of the Company (or
any
of the Company’s Affiliates);
5.3.4 Establish,
own, manage, operate, finance or control, participate in the establishment,
ownership, management, operation, financing or control of, render consulting
or
other services to, guarantee the liabilities or any other obligations of, permit
his name to be used in connection with, or be otherwise connected in any manner
with any Person, business or proposed business engaged, or planning to be
engaged, in the Company’s Business within one hundred (100) miles of any
existing or proposed location of the Company (or any of the Company’s
Affiliates) if (a) such Person, business or proposed business competes directly
or indirectly with the Company’s Business or (b) such Person, business or
proposed business competes with the Company’s Business with regard to any
customers of the Company or its Affiliates that Executive called on, serviced,
solicited, attempted to solicit, had contact with or became aware of during
the
Term; provided
that
nothing in this Section 5.3.4
shall
prevent Executive from owning not more than one percent (1%) of the outstanding
securities of any Person that is engaged in a business in competition with,
or
similar to, the Company’s Business having a class of securities listed on any
national securities exchange or quoted on the NASDAQ National Market or Small
Cap Market; provided
that
Executive has no other connection or relationship with such Person;
and
provided
further
that
this Section 5.3.4 shall not be applicable to Executive to the extent that
Executive is terminated pursuant to Section 4.2.4 prior to the first anniversary
of the Effective Date;
or
5.3.5 Take
any
action that is intended, or would reasonably be expected, to harm or disparage
the Company (or any of its Affiliates) or any of their shareholders, directors,
officers, employees or agents, to impair the Company’s (or any of its
Affiliates’) reputation, or to lead to unwanted or unfavorable publicity to the
Company (or its Affiliates).
8
5.3.6 The
“Company’s
Business”
shall
mean the business of proprietary post-secondary education in allied health
and
such other businesses, products and services as the Company or any of its
subsidiaries provide during the Term.
5.3.7 The
“Covenant
Period”
means
a
period equal to twenty-four (24) months after the Date of Termination (for
any
reason whatsoever) or expiration of Executive’s employment with the Company;
provided
that
in
the event of any breach by Executive of this Section 5.3,
the
Covenant Period shall be extended by the period of the duration of such
breach.
5.4 Third
Party Information.
Executive understands that the Company has received and in the future will
receive from third parties confidential or proprietary information
(“Third
Party Information”)
subject to a duty on the Company’s part to maintain the confidentiality of such
information and to use it only for certain limited purposes. During the Term
and
at all times thereafter, Executive shall hold Third Party Information in
confidence to the same extent required of the Company and shall not communicate,
disclose, divulge, provide commentary regarding or make available to any Person
(other than Company personnel who need to know such information in connection
with their work for the Company) or use, except in connection with his work
for
the Company, Third Party Information without the Board’s express prior written
consent.
5.5 No
Improper Use of Information of Prior Employers and Others.
During
his employment with the Company, Executive shall not improperly use or
communicate, disclose, divulge, provide commentary regarding or make available
any confidential information or trade secrets, if any, of any former employer
or
any other Person to whom Executive has an obligation of confidentiality, and
Executive shall not bring onto the premises of the Company any unpublished
documents or any property belonging to any former employer or any other Person
to whom Executive has an obligation of confidentiality unless consented to
in
writing by that former employer or Person.
5.6 Equitable
Relief.
Executive acknowledges that any breach by his of any of the covenants and
agreements set forth in this Section 5
(collectively, the “Covenants”)
will
result in irreparable injury to the Company for which monetary damages could
not
adequately compensate the Company. Therefore, in the event that Executive
breaches or threatens to commit a breach of any of the Covenants, the Company
shall have the following rights and remedies, each of which rights and remedies
shall be independent of the other and severally enforceable, and all of which
rights and remedies shall be in addition to, and not in lieu of, any other
rights and remedies available to the Company under law or in
equity:
5.6.1 The
right
and remedy to have the Covenants specifically enforced by any court having
equity jurisdiction, including the right to any entry against Executive for
restraining orders and injunctions (preliminary, mandatory, temporary and
permanent) against violations, threatened or actual, and whether or not then
continuing, of such covenants, it being acknowledged and agreed that any such
breach or threatened breach will cause irreparable injury to the Company and
that money damages alone will not provide adequate remedy to the Company;
and
9
5.6.2 The
right
and remedy to require Executive to account for and pay over to Company all
compensation, profits, monies, accruals, increments or other benefits derived
or
received by Executive as a result of any transactions constituting a breach
of
any of the Covenants.
5.7 Consideration.
Executive expressly acknowledges and agrees that (a) the Covenants (i) may
limit
his ability to earn a livelihood in a business similar to the Company’s
Business, (ii) are the result of arm’s-length negotiations between the parties,
and without Executive’s agreement to be bound by the Covenants, the Company
would not have entered into this Agreement, (iii) are reasonable and valid
in
geographical scope and duration and in all other respects, (iv) do not impose
a
greater restraint than necessary to protect the goodwill or other business
interests of the Company, (v) are not harmful to the general public, and (vi)
are not unduly burdensome to Executive; and (b) the level of compensation and
benefits provided to Executive hereunder includes good and adequate
consideration for the Covenants. In consideration of the foregoing and in light
of Executive’s education, skills and abilities, Executive agrees that he shall
not assert, and it should not be considered, that any provisions of this Section
5
otherwise are void, voidable or unenforceable or should be voided or held
unenforceable.
5.8 Scope.
If any
portion of any Covenant or its application is construed to be invalid, illegal
or unenforceable, then the other portions and their application shall not be
affected thereby and shall be enforceable without regard thereto. If any of
the
Covenants is determined to be unenforceable because of its scope, duration,
geographical area or similar factor, then the court making such determination
shall have the power to reduce or limit such scope, duration, area or other
factor, and such Covenant shall then be enforceable in its reduced or limited
form.
6. Work
Product.
6.1 Ownership.
Executive acknowledges that all Inventions (and all Proprietary Rights (as
defined herein) with respect thereto) which relate to (a) the Company’s
Proprietary Information or (b) the Company’s or any of its Affiliates’ actual or
anticipated business, research and development or existing or future products
or
services and which are conceived, developed or made by Executive while employed
by the Company and its Affiliates (collectively, “Work
Product”)
belong
to the Company or such Affiliate and hereby irrevocably and perpetually assigns,
transfers and conveys and agrees to so assign, transfer and convey in the future
to the Company all his right, title and interest in and to such Work Product.
Executive acknowledges that such assignment does not violate the terms and
conditions of any agreement to which he is a party by which he is bound. For
purposes of this Agreement, “Proprietary
Rights”
means
all trade secret, patent, copyright, mask work and other intellectual property
rights throughout the world.
6.2 Works
for Hire.
Executive acknowledges that all Work Product or other original works of
authorship which are made by Executive (solely or jointly with others) within
the scope of Executive’s employment and which are protectable by copyright are
“works made for hire,” pursuant to United States Copyright Act (17 U.S.C.,
Section 101) and, to the extent that such Work Product or other original works
of authorship may not be deemed “works made for hire,” in accordance with
Section 6.1
above,
hereby irrevocably or perpetually assigns, transfers and conveys and agrees
to
so assign, transfer and convey in the future to the Company all his right,
title
and interest in and to such Work Product or other original work of
authorship.
10
6.3 Obligation
to Keep Company Informed.
During
the Covenant Period, Executive shall promptly disclose to the Company fully
and
in writing all Work Product authored, conceived or reduced to practice by
Executive, either alone or jointly with others. In addition, Executive shall
promptly disclose to the Company all patent or copyright applications filed
by
Executive or on Executive’s behalf during the Covenant Period.
6.4 Enforcement
of Proprietary Rights.
Executive shall assist the Company in every reasonable way to obtain, and from
time to time enforce, United States and foreign rights relating to Work Product
in any and all countries. To that end Executive shall execute, verify and
deliver such documents and perform such other acts (including appearances as
a
witness) as the Company may reasonably request for use in applying for,
obtaining, perfecting, evidencing, sustaining and enforcing such rights and
the
assignment thereof. In addition, Executive shall execute, verify and deliver
assignments of such rights to the Company or its designee. Executive’s
obligation to assist the Company with respect to rights relating to such Work
Product in any and all countries shall continue beyond the termination of his
employment, but the Company shall compensate Executive at a reasonable rate
after his termination for the time actually spent by Executive at the Company’s
request on such assistance. Executive hereby waives and quitclaims to the
Company any and all claims, of any nature whatsoever, which Executive now or
may
hereafter have for infringement of any Work Product assigned hereunder to the
Company.
7. Prior
Agreements.
Executive represents to the Company (a) that there are no restrictions,
agreements or understandings whatsoever to which Executive is a party which
would prevent or make unlawful Executive’s execution of this Agreement or
Executive’s employment hereunder, (b) that Executive’s execution of this
Agreement and Executive’s employment hereunder shall not constitute a breach of
any contract, agreement or understanding, oral or written to which Executive
is
a party or by which Executive is bound, (c) that Executive is free and able
to
execute this Agreement and to enter into employment with the Company and (d)
that this Agreement is a valid and binding obligation of Executive, enforceable
in accordance with its terms.
8. Disclosure
to Future Employer.
Executive agrees that he shall provide, and that the Company may similarly
provide in its discretion, a copy of the covenants contained in Sections
5
and
6
of this
Agreement to any business enterprise which could reasonably be determined to
compete, directly or indirectly, with the Company’s Business which Executive
may, directly or indirectly, own, manage, operate, finance, join, control or
in
which Executive participates in the ownership, management, operation, financing
or control, or with which Executive may be connected as director, officer,
shareholder, member, executive, partner, principal, employee, agent,
representation, consultant or otherwise.
9. Miscellaneous.
11
9.1 Successors
and Assigns.
The
rights and protections of the Company hereunder shall extend to any successors
or assigns of the Company and to the Company’s Affiliates. This Agreement may be
assigned by the Company without Executive’s consent. This Agreement is not
assignable by Executive.
9.2 Notices.
All
notices, requests, demands, consents or other communications required or
permitted to be given under this Agreement shall be in writing and shall be
deemed to have been duly given (a) upon delivery if delivered personally, (b)
three (3) business days after mailing by first class certified mail, return
receipt requested, postage prepaid; or (c) one (1) day after delivery to a
nationally recognized overnight courier service, postage or delivery charges
prepaid, to the parties at their respective addresses set forth on the first
page of this Agreement.
9.3 Entire
Understanding; Modification.
This
Agreement sets forth the entire understanding between the parties with respect
to the subject matter hereof and supersedes all prior and contemporaneous
written, oral, expressed or implied, communications, agreements and
understandings with respect to the subject matter hereof,
provided
that
Executive acknowledges and agrees that he is subject to other employment
policies which may be established, modified or deleted by the Company not in
conflict with the express terms of this Agreement. This Agreement shall not
be
amended, modified, supplemented or terminated except in writing signed by both
parties. No action taken by the Company hereunder, including any waiver, consent
or approval, shall be effective unless authorized by the Board.
9.4 Severability.
If any
provision of this Agreement is construed to be invalid, illegal or
unenforceable, then the remaining provisions hereof shall not be affected
thereby and shall be enforceable without regard thereto.
9.5 Counterparts.
This
Agreement may be fully executed in any number of counterparts, each of which
when so executed and delivered shall be an original hereof, and it shall not
be
necessary in making proof of this Agreement to produce or account for more
than
one (1) counterpart hereof.
9.6 Enforcement.
In the
event that any action is brought to enforce any of the provisions of this
Agreement, or to obtain money damages for the breach thereof, and such action
results in the award of a judgment for money damages or the granting of any
injunction in favor of one of the parties to this Agreement, all expenses
thereof, including reasonable attorneys’ fees, shall be paid by the
non-prevailing party.
9.7 Section
Headings; References.
Section
and subsection headings in this Agreement are inserted for convenience of
reference only, and shall neither constitute a part of this Agreement nor affect
its construction, interpretation, meaning or effect. All words used in this
Agreement shall be construed to be of such number and gender as the context
requires or permits. When used in this agreement, the words “including” and
“include” shall be deemed to be followed by the words “without
limitation.”
9.8 Waivers.
Neither
the failure nor delay on the part of either party to exercise any right, remedy,
power or privilege under this Agreement shall operate as a waiver thereof,
nor
shall the single or partial exercise of any right, remedy, power or privilege
preclude any other or further exercise of the same or any other right, remedy,
power or privilege, nor shall any waiver of any right, remedy, power or
privilege with respect to any occurrence be construed as a waiver of such right,
remedy, power or privilege with respect to any other occurrence. No waiver
shall
be effective unless it is in writing and is signed by the party asserted to
have
granted such waiver.
12
9.9 Controlling
Law; Jurisdiction.
This
Agreement shall be governed by the laws of the State of Delaware, without giving
effect to principles of conflicts of laws. The parties hereto consent to the
exclusive jurisdiction of the state and federal courts located in the State
of
Delaware with respect to all claims and disputes between or among the parties
hereto with respect to the subject matter hereof. THE
PARTIES HEREBY EXPRESSLY WAIVE THE RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING BROUGHT BY OR AGAINST EITHER OF THEM RELATING TO THIS
AGREEMENT.
9.10 Delivery
by Facsimile.
This
Agreement and any amendments hereto, to the extent signed and delivered by
means
of a facsimile machine, shall be treated in all manner and respects as an
original agreement or instrument and shall be considered to have the same
binding legal effect as if it were the original signed version thereof delivered
in person. At the reasonable request of any party hereto or to any such
agreement or instrument, each other party hereto or thereto shall reexecute
original forms thereof and deliver them to all other parties. No party hereto
or
to any such agreement or instrument shall raise the use of a facsimile machine
to deliver a signature or the fact that any signature or agreement or instrument
was transmitted or communicated through the use of a facsimile machine as a
defense to the formation or enforceability of a contract and each such party
forever waives any such defense.
9.11 Interpretation
of Agreement.
The
parties hereto acknowledge and agree that this Agreement has been negotiated
at
arm’s length and among parties equally sophisticated and knowledgeable in the
matters dealt with in this Agreement. Accordingly, any rule of law or legal
decision that would require interpretation of any ambiguities in this Agreement
against the party that has drafted it is not applicable and is waived. The
provisions of this Agreement shall be interpreted in a reasonable manner to
effect the intent of the parties as set forth in this Agreement.
9.12 Survival.
Except
as otherwise expressly provided herein, the rights and obligations of the
parties to this Agreement shall survive the termination of Executive’s
employment with the Company.
9.13 Effectiveness.
Notwithstanding anything herein to the contrary, the parties hereto hereby
acknowledge and agree that (a) this Agreement is being executed in connection
with the transactions contemplated by the Merger Agreement and shall not be
effective until the Effective Date and (b) neither party shall have any
rights,
interests, remedies, or obligations hereunder until the Effective
Date.
*
* *
*
13
IN
WITNESS WHEREOF, the parties hereto have executed this Employment Agreement
as
of the date above written.
CONCORDE
CAREER COLLEGES, INC.
By:
Name:
Title:
EXECUTIVE
▇▇▇▇ ▇. ▇▇▇▇▇▇▇