EMPLOYMENT AGREEMENT

DATE:

July 31, 2001

 

PARTIES:

eCollege.com, a Delaware corporation

(the "Company")

Steven P. Lindauer, a resident of Colorado

("Employee")

RECITAL:

The Company is engaged in the business of online web production, online
education and online training. The Company desires to employ and retain the
unique experience, abilities, and services of Employee as Senior Vice President,
Strategy & Business Development, in the Company's office in Denver, Colorado.

AGREEMENT:

The parties agree as follows:

EMPLOYMENT

a)   Term. The term of this Employment Agreement (the "Agreement") shall
commence on July 31, 2001. The term of this Agreement shall continue until
termination in accordance with Section 5 of this Agreement, or until either the
Company provides the Employee, or the Employee provides the Company, with
written notice to the contrary.

b)   Duties. Company shall employ Employee as a Senior Vice President, Strategy
& Business Development. Employee accepts employment with the Company on the
terms and conditions set forth in this Agreement, and agrees to devote his full
time and attention (reasonable periods of illness excepted) to the performance
of his duties under this Agreement. In general, such duties shall consist of
administration of the day to day operations of the Company's online web
production, online education and online training business, and the specific
duties set forth in Schedule A attached hereto. Employee shall perform such
specific duties and shall exercise such specific authority as may be assigned to
Employee from time to time by the Employee's supervisor, Oakleigh Thorne, CEO of
the Company or by the Executive Vice President of the Company. In performing
such duties, Employee shall be subject to the direction and control of the CEO.
Employee further agrees that in all aspects of such employment, Employee shall
comply with the policies, standards, and regulations of the Company established
from time to time, and shall perform his/her duties faithfully, intelligently,
to the best of his/her ability, and in the best interest of the Company. The
devotion of reasonable periods of time by Employee for personal purposes or
charitable activities shall not be deemed a breach of this Agreement, provided
that such purposes or activities do not materially interfere with the services
required to be rendered to or on behalf of the Company; however, any outside
business activities that are not first submitted in writing to the CEO of the
Company, and approved in writing by the CEO shall be deemed a breach of this
Agreement.

COVENANT NOT TO COMPETE; CONFIDENTIALITY

a)   Noncompetition. During the term of this Agreement and for a period of six
(6) months after the termination of this Agreement, Employee shall not, within
the United States, directly or indirectly, (1) own (as a proprietor, partner,
stockholder, or otherwise) an interest of five percent (5%) or more in, or (2)
participate (as an officer, director, or in any other capacity) in the
management, operation, or control of, or (3) perform services as or act in the
capacity of an employee, independent contractor, consultant, or agent of any
enterprise engaged, directly or indirectly, in the online education and online
training business or in competition with any other business conducted by the
Company except with the prior written consent of the CEO of the Company; or, (4)
directly or indirectly, contact, solicit or direct any person, firm, or
corporation to contact or solicit, any of the Company's customers, prospective
customers, or business brokers for the purpose of selling or attempting to sell,
any products and/or services that are the same as or similar to the products and
services provided by the Company to its customers during the term hereof. In
addition, the Employee will not disclose the identity of any such business
brokers, customers, or prospective customers, or any part thereof, to any
person, firm, corporation, association, or other entity for any reason or
purpose whatsoever; and solicit or accept if offered to him/her, with or without
solicitation, on his/her own behalf or on behalf of any other person, the
services of any person who is an employee of the Company, nor solicit any of the
Company's employees to terminate employment with the Company, nor agree to hire
any employee of the Company into employment with himself/herself or any company,
individual or other entity.

b)   Confidentiality. Employee acknowledges and agrees that all product
specifications, product planning information, lists of the Company's customers
and suppliers, financial information, and other Company data related to its
business ("Confidential Information") are valuable assets of the Company. Except
for information that is a matter of public record, Employee shall not, during
the term of this Agreement or after the termination of employment with the
Company, disclose any Confidential Information to any person or use any
Confidential Information for the benefit of Employee or any other person, except
with the prior written consent of the Company.

c)   Ideas, Inventions. The Employee recognizes and agrees that all ideas,
inventions, enhancements, plans, writings, and other developments or
improvements (the "Inventions") conceived by the Employee, alone or with others,
during the term of his employment, whether or not during working hours, that are
within the scope of the Company's business operations or that relate to any of
the Company's work or projects, are the sole and exclusive property of the
Company. The Employee further agrees that (1) he will promptly disclose all
Inventions to the Company and hereby assigns to the Company all present and
future rights he has or may have in those Inventions, including without
limitation those relating to patent, copyright, trademark or trade secrets; and
(2) all of the Inventions eligible under the copyright laws are "work made for
hire." At the request of and without charge to the Company, the Employee will do
all things deemed by the Company to be reasonably necessary to perfect title to
the Inventions in the Company and to assist in obtaining for the Company such
patents, copyrights or other protection as may be provided under law and desired
by the Company, including but not limited to executing and signing any and all
relevant applications, assignments or other instruments. Notwithstanding the
foregoing, the Company hereby notifies the Employee that the provisions of this
Section 2)c) shall not apply to any Inventions for which no equipment, supplies,
facility or trade secret information of the Company was used and which were
developed entirely on the Employee's own time, unless (1) the Invention relates
(i) to the business of the Company, or (ii) to actual or demonstrably
anticipated research or development of the Company, or (2) the Invention results
from any work performed by the Employee for the Company.

d)   Nondisparagement. During the term of this Agreement and for a period of two
years following the voluntary or involuntary termination of this Agreement, the
parties shall not make any statements concerning the other party that would tend
to diminish the esteem, respect, good will, or confidence in which that party is
held by members of the community in which that party, or its officers, directors
and employees, conduct their business affairs or that would provoke adverse or
derogatory feelings or opinions in such members of those communities as to that
party.

e)   Return of Documents. Employee acknowledges and agrees that all originals
and copies of records, reports, documents, lists, plans, drawings, memoranda,
notes, and other documentation related to the business of the Company or
containing any Confidential Information shall be the sole and exclusive property
of the Company, and shall be returned to the Company upon the termination of
employment with the Company or upon the written request of the Company.

f)   Injunction.

Employee agrees that it would be difficult to measure damage to the Company from
any breach by Employee of Section 2)a), 2)b), 2)c) or 2)d) and that monetary
damages would be an inadequate remedy for any such breach. Accordingly, Employee
agrees that if Employee shall breach or take steps preliminary to breaching
Section 2)a), 2)b), 2)c) or 2)d), the Company shall be entitled, in addition to
all other remedies it may have at law or in equity, to an injunction or other
appropriate orders to restrain any such breach, without showing or proving any
actual damage sustained by the Company.

Company agrees that it would be difficult to measure damage to the Employee from
any breach by Company of Section 2)d) and that monetary damages would be an
inadequate remedy for any such breach. Accordingly, Company agrees that if
Employee shall breach or take steps preliminary to breaching Section 2)d), the
Company shall be entitled, in addition to all other remedies it may have at law
or in equity, to an injunction or other appropriate orders to restrain any such
breach, without showing or proving any actual damage sustained by the Company.

g)   No Release. Employee agrees that the termination of employment with the
Company or the expiration of the term of this Agreement shall not release
Employee from any obligations under Section 2)a), 2)b), 2)c), 2)d), 2)e) or
2)f).

COMPENSATION

a)   Base Compensation; Bonus Compensation. In consideration of all services to
be rendered by Employee to the Company, the Company shall pay to Employee
compensation as described in Schedule A of this Agreement.

b)   Other Benefits. Employee has been provided with a brochure of the Company's
general benefits. Employee agrees and acknowledges that the benefits provided by
the Company may be changed or amended from time to time, and at any time, at the
sole discretion of the Company.

COMPANY POLICIES

a)   General Policy Descriptions. Employee has been provided with a description
of several policies, standards and regulations of the Company including a
description of the Personal Days Policy, Travel Policy, and Expense
Reimbursement Policy.

b)   Abide by All Policies Established by the Company. Employee agrees to abide
by all policies, standards and regulations of the Company.

c)   Changes to Company Policies. Employee agrees and acknowledges that the
Company's policies may be created, eliminated, changed or amended from time to
time, and at any time, at the sole discretion of the Company.

TERMINATION

a)   At-Will Employment. Employee agrees and acknowledges that, just as he has
the right to terminate his employment with the Company at any time for any
reason, the Company has the same right, and may terminate his employment with
the Company at any time for any reason.

b)   Severance. In the event of the involuntary termination of Employee by the
Company, which termination is not termination for cause as set forth in
Paragraph 5)c) below, the Company shall provide Employee with severance pay
equal to six months of Employee's base salary paid on the Company's normal
payroll dates, plus/less any positive/negative accrued vacation days, provided
that the Employee executes a severance agreement waiving any claims against the
Company and in which the Company waives claims against the Employee.

c)   Immediate Termination. The employment of Employee by the Company may be
terminated immediately in the sole discretion of the either the President, a
Vice President or the Board of Directors of the Company upon the occurrence of
any one of the following events:

 i.   After Employee receives written notice of conduct which is in violation of
      policies, standards, and regulations of the Company as established from
      time to time and after a reasonable period of time to correct the conduct,
      the Employee willfully and continuously fails or refuses to comply, in a
      material manner, with the policies, standards, and regulations of the
      Company;
 ii.  Employee engages in fraud, dishonesty, or any other act of material
      misconduct in the performance of Employee's duties on behalf of the
      Company;
 iii. Employee fails to perform any material provision of this Agreement to be
      performed by Employee, provided however, that if such breach can be cured,
      the Employee will receive reasonable, written notice of breach and
      opportunity to cure such breach; or
 iv.  Employee violates one or more of the rules identified on Schedule B.

FACILITIES AND PERSONNEL

a)   Workspace and Supplies. Employee shall be provided a workspace at the
Company's executive headquarters. The Company shall provide all such facilities,
supplies, and services as the Company determines are reasonably required for the
performance of Employee's duties under this Agreement.

REPRESENTATIONS AND WARRANTIES OF EMPLOYEE

a)   No Other Employment Agreements. Employee represents and warrants to the
Company that there is no employment contract or any other contractual obligation
to which Employee is subject, which prevents Employee from entering into this
Agreement or from performing fully Employee's duties under this Agreement.

b)   Special Needs. There are no special accommodations required to be made by
Company for Employee to perform his duties and responsibilities.

MISCELLANEOUS PROVISIONS

a)   Binding Effect. This Agreement shall be binding on and inure to the benefit
of the parties and their heirs, personal representatives, successors, and
assigns.

b)   Notices. Any notice, election, waiver, consent, acceptance or other
communication required or permitted to be given under this Agreement shall be in
writing and shall be hand delivered, transmitted via fax, by e-mail or sent via
nationally recognized third party delivery (such as Federal Express or UPS) for
next day delivery, addressed to the parties as follows:

If to Company:

eCollege.com
Attn: CEO
10200 "A" East Girard Ave.
Denver, Colorado 80231
Fax: 1-303-873-7449

If to Employee:

Steven P. Lindauer
10200 "A" East Girard Ave.
Denver, CO 80231

Any notice or other communication shall be deemed to be given at the date the
notice is hand delivered to the individual, the date the notice is sent via fax,
or the date following the date of deposit with any nationally recognized third
party delivery (such as Federal Express or UPS) for next day delivery to the
addressee. The addresses to which notices or other communications shall be sent
may be changed from time to time by giving written notice to the other party as
provided in this Paragraph.

c)   Amendments. This Agreement may be amended only by an instrument in writing
executed by all the parties.

d)   Entire Agreement. This Agreement (including the schedules) sets forth the
entire understanding of the parties with respect to the subject matter of this
Agreement and supersedes any and all prior understandings and agreements,
whether written or oral, between the parties with respect to such subject
matter.

e)   Counterparts. This Agreement may be executed by the parties in separate
counterparts, each of which when executed and delivered shall be an original,
but all of which together shall constitute one and the same instrument. Fax
signatures shall have the same effect as an original signature.

f)   Severability. If any provision of this Agreement shall be invalid or
unenforceable in any respect for any reason, the validity and enforceability of
any such provision in any other respect and of the remaining provisions of this
Agreement shall not be in any way impaired; provided, however, that the parties
will attempt to agree upon a valid and enforceable provision which shall be a
reasonable substitute for each invalid provision or unenforceable provision in
light of the tenor of this Agreement and, upon so agreeing, shall incorporate
such substitute provision into this Agreement.

g)   Waiver. A provision of this Agreement may be waived only by a written
instrument executed by the party waiving compliance. No waiver of any provision
of this Agreement shall constitute a waiver of any other provision, whether or
not similar, nor shall any waiver constitute a continuing waiver. Failure to
enforce any provision of this Agreement shall not operate as a waiver of such
provision or any other provision.

h)   Further Assurances. From time to time, each of the parties shall execute,
acknowledge, and deliver any instruments or documents necessary to carry out the
purposes of this Agreement.

i)   No Third-Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer on any person, other than the parties to this
Agreement, any right or remedy of any nature whatsoever.

j)   Expenses. Except as otherwise provided herein, each party shall bear its
own expenses in connection with this Agreement and the transactions contemplated
by this Agreement.

k)   Exhibits.The exhibits and schedules referenced in this Agreement are a part
of this Agreement as if fully set forth in this Agreement.

l)   Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the United States of America and the State of
Colorado.

m)   Arbitration.

 i.   Any controversy or claim arising out of or relating to this Agreement,
      including, without limitation, the making, performance, or interpretation
      of this Agreement, shall be settled by arbitration.
 ii.  The parties may choose an arbitrator and rules of arbitration by mutual
      agreement. Unless the parties agree otherwise, the arbitration shall be
      conducted in Denver, Colorado in accordance with the then current
      Commercial Arbitration Rules of the American Arbitration Association in
      Denver, Colorado. The arbitration shall be held before a single arbitrator
      (unless otherwise agreed by the parties). The arbitrator shall be chosen
      from a panel of attorneys knowledgeable in the field of business law in
      accordance with the then current Commercial Arbitration Rules of the
      American Arbitration Association and judgment upon the award of the
      arbitrator may be entered in any court having jurisdiction thereof and any
      party to the arbitration may, if it so elects, institute proceedings in
      any court having jurisdiction for the specific performance of any such
      award. The powers of the arbitrator shall include the granting of
      injunctive relief. If the arbitration is commenced, the parties agree to
      permit reasonable discovery proceedings as determined by the arbitrator,
      including production of material documents, accounting of sources and uses
      of funds, interrogatories and the deposition of each party and any witness
      proposed by either party.
 iii. The parties agree that the arbitrator shall have no jurisdiction to
      consider evidence with respect to or render an award or judgment for
      punitive damages (or any other amount awarded for the purpose of imposing
      a penalty), incidental or consequential damages.
 iv.  The arbitrator shall award all direct costs of the arbitration, including
      arbitrator's fees and arbitration filing fees according to the parties'
      ability to pay.
 v.   The arbitrator shall determine a schedule for the arbitration proceedings
      such that a final determination of the matter submitted to the arbitrator
      can be rendered and delivered to the parties within 150 days following the
      date that a demand for arbitration is filed.
 vi.  The parties agree that all facts and other information relating to any
      arbitration arising under this Agreement shall be kept confidential to the
      fullest extent permitted by law.

n)   Survival Beyond Termination. All provisions that by their terms survive
termination or expiration and all rights and obligations under those provisions
shall survive any voluntary or involuntary termination or expiration of this
Agreement in accordance with the respective terms of such provisions.

eCollege.com

By: /s/ Oakleigh Thorne
Oakleigh Thorne, CEO

/s/ Steven P. Lindauer
Steven P. Lindauer, Individually

 

 

SCHEDULE A

COMPENSATION AND DUTIES

1)   SALARY. Commencing on August 6, 2001, compensation to the Employee shall be
at the rate of $170,000 per year, payable on the Company's normal payroll dates.
Employee's target bonus for the period of August 6, 2001 through December 31,
2001, pursuant to the eCollege Incentive Compensation Plan and subject to the
discretion of the Board of Directors, is $14,875 and is based on Employee
achieving the individual objectives agreed to by Employee and the CEO, and
approved of by the Company's Compensation Committee ("Approved Objectives").

2)   SALARY ADJUSTMENT. Subject to approval by the Compensation Committee and
achievement of the Approved Objectives, Employee's base compensation shall
increase to $180,000 per year at the time of the next annual merit increases for
executive management, as determined by the Compensation Committee, but no later
than April 1, 2002.

3)   BONUS/OTHER COMPENSATION. Employee bonus compensation, whether in cash,
Company stock, or other consideration, may be provided to Employee as determined
from time to time by the Board of Directors or the CEO of the Company; the
Company has no requirement to provide Employee with bonus compensation of any
type.

4)   JOB DESCRIPTION. As Senior Vice President, Strategy & Business Development,
Employee is responsible for business development strategic planning for the
Company. Employee's general duties include:

 a. Development, along with the CEO, and implementation of a business strategy
    for the Company;
 b. Ongoing review and updates to business strategy developed for the Company;
 c. Development of long-term product vision consistent with the Company
    strategy;
 d. Keeping abreast of current market conditions in elearning; and
 e. Identification of business development opportunities consistent with
    Company's strategy;
 f. Management, under the direction of the CEO, of business development
    arrangements entered into by Company.

5)   OTHER DUTIES. Employee's duties may vary from time to time as determined by
the CEO or the Executive Vice President of the of the Company.

Employee acknowledges that he has read and fully understands all terms set forth
in this Schedule A

.

/s/ Steven P. Lindauer
Steven P. Lindauer

 

 

 

SCHEDULE B

All employees must abide by the following rules of the Company:

1)   HONESTY. Employees shall conduct their affairs with honesty and integrity
and shall not engage in fraud, dishonesty or any act of material misconduct.

2)   SIGNING AGREEMENTS. Employees shall not sign any document or agreement that
creates a legally binding obligation on the Company. The only persons authorized
to sign agreements are the CEO, Oakleigh Thorne and the Executive Vice
President, Doug Kelsall.

3)   WRITTEN AGREEMENT. All employees of the Company and all independent
contractors of the Company must have a signed, written agreement with the
Company prior to performing work for the Company.

Any violation of the above rules may result in disciplinary action, including
termination of any employee found to have violated one or more of the above
rules.