SEVERANCE AGREEMENT

PARTIES:

 

eCOLLEGE.COM ("COMPANY")

 

CHARLIE SCHNEIDER ("EMPLOYEE")

RECITALS:

THIS SEVERANCE AGREEMENT ("AGREEMENT") IS MADE AND ENTERED BY AND BETWEEN THE
COMPANY AND EMPLOYEE EFFECTIVE JULY 3, 2001.

RECITALS

A. THE PARTIES TO THIS AGREEMENT ARE ALSO PARTIES TO AN EMPLOYMENT AGREEMENT
DATED APRIL 12, 1999 (THE "EMPLOYMENT AGREEMENT").

B. EMPLOYEE'S EMPLOYMENT WITH THE COMPANY IS TERMINATING EFFECTIVE JULY 2, 2001
UNDER CIRCUMSTANCES WHERE EMPLOYEE WILL RECEIVE CERTAIN SEVERANCE COMPENSATION
AS SET FORTH IN SECTION 5(B) OF THE EMPLOYMENT AGREEMENT (IT BEING ACKNOWLEDGED
THAT EMPLOYEE WILL BE ON PAID VACATION FROM JULY 3, 2001 THROUGH AUGUST 7, 2001
WHICH WILL USE UP HIS ACCRUED VACATION, AND DURING WHICH EMPLOYEE SHALL CONTINUE
TO RECEIVE STANDARD COMPANY BENEFITS THAT EMPLOYEE RECEIVED DURING EMPLOYMENT).

C. THIS AGREEMENT IS THE "SEVERANCE AGREEMENT" REFERRED TO IN SECTION 5(B) OF
THE EMPLOYMENT AGREEMENT EFFECTIVE AUGUST 7, 2001.

AGREEMENTS

NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND PROMISES HEREIN
CONTAINED AND OTHER GOOD AND VALUABLE CONSIDERATION CONTAINED HEREIN AND IN THE
EMPLOYMENT AGREEMENT, IT IS HEREBY AGREED BY AND BETWEEN THE PARTIES AS FOLLOWS:

NO ADMISSION.

THIS AGREEMENT AND COMPLIANCE WITH THIS AGREEMENT SHALL NOT BE CONSTRUED AS AN
ADMISSION BY EITHER PARTY OF ANY LIABILITY FOR CONTRACTUAL BREACH OR TORT
WHATSOEVER, OR AS AN ADMISSION BY EITHER PARTY OF ANY VIOLATION OF THE RIGHTS OF
THE OTHER.

RELEASE.

EACH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY RELEASES AND FOREVER
DISCHARGES THE OTHER PARTY AND EACH OF ITS OFFICERS, AGENTS, SHAREHOLDERS,
DIRECTORS, SUPERVISORS, EMPLOYEES, REPRESENTATIVES, AND THEIR SUCCESSORS AND
ASSIGNS AND ALL PERSONS ACTING BY, THROUGH, UNDER, OR IN CONCERT WITH ANY OF
THEM FROM ANY AND ALL CHARGES, COMPLAINTS, CLAIMS, AND LIABILITIES OF ANY KIND
OR NATURE WHATSOEVER, KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED (HEREINAFTER
REFERRED TO AS "CLAIM" OR "CLAIMS") WHICH SUCH PARTY MAY HAVE OR CLAIM TO HAVE
REGARDING EVENTS THAT HAVE OCCURRED PRIOR TO AND AS OF THE DATE OF THIS
AGREEMENT ASSOCIATED WITH EMPLOYEE'S EMPLOYMENT WITH THE COMPANY OR ASSOCIATED
WITH THE TERMINATION OF SUCH EMPLOYMENT; PROVIDED, HOWEVER, THAT NOTHING HEREIN
WILL RELEASE OR DISCHARGE (I) ANY EXPRESS RIGHTS OR OBLIGATIONS UNDER THIS
AGREEMENT OR THE EMPLOYMENT AGREEMENT; (II) ANY RIGHTS OF EMPLOYEE TO BE
INDEMNIFIED UNDER ANY PROVISIONS OF THE ARTICLES OF INCORPORATION OR BYLAWS OF
THE COMPANY (THE COMPANY HEREBY COVENANTING IF THE EMPLOYEE IS SO INDEMNIFIED,
TO PROVIDE EMPLOYEE WITH EQUAL TREATMENT IN RESPECT OF CLAIMS FOR INDEMNITY
VIS-À-VIS OFFICERS OF THE COMPANY); (III) ANY RIGHTS OF EMPLOYEE IN OR
ASSOCIATED WITH EQUITY INTERESTS OF EMPLOYEE (INCLUDING STOCK OPTIONS) IN THE
COMPANY; OR (IV) THE CONTINUING OBLIGATIONS OF EMPLOYEE RELATED TO
NONCOMPETITION, CONFIDENTIALITY, IDEAS AND INVENTIONS, NONDISPARAGEMENT, AND
RETURN OF DOCUMENTS AND COMPUTER DATA, AS PROVIDED IN SECTION 2 OF THE
EMPLOYMENT AGREEMENT.

EMPLOYEE UNDERSTANDS AND AGREES THAT HE:

(A) IS ENTITLED TO TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT
BEFORE EXECUTING IT;

(B) HAS A FULL SEVEN (7) DAYS FOLLOWING THE EXECUTION OF THIS AGREEMENT TO
REVOKE THIS AGREEMENT AND HAS BEEN AND HERBY IS ADVISED IN WRITING THAT THIS
AGREEMENT SHALL NOT BECOME EFFECTIVE OR ENFORCEABLE UNTIL THAT REVOCATION PERIOD
HAS EXPIRED; AND

(C) UNDERSTANDS THAT RIGHTS OR CLAIMS UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967 (29 U.S.C. 621, ET. SEQ.) THAT MAY ARISE AFTER THE DATE THIS
AGREEMENT IS EXECUTED ARE NOT WAIVED.

CLAIMS.

THE PARTIES UNDERSTAND THE WORD "CLAIMS" TO INCLUDE ALL ACTIONS, CLAIMS, AND
GRIEVANCES, WHETHER ACTUAL OR POTENTIAL, KNOWN OR UNKNOWN, AND SPECIFICALLY BUT
NOT EXCLUSIVELY ALL CLAIMS BASED ON ANY ALLEGED BREACH OF A DUTY ARISING IN A
STATUTE, CONTRACT, OR TORT; ANY ALLEGED UNLAWFUL ACT, INCLUDING WITHOUT
LIMITATION, AGE, RACE OR NATIONAL ORIGIN DISCRIMINATION; ANY OTHER CLAIM OR
CAUSE OF ACTION; ANY CLAIM UNDER TITILE VII OF THE CIVIL RIGHTS ACT OF 1964; ANY
CLAIM UNDER THE AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967 (29 U.S. 621, ET.
SEQ.); AND REGARDLESS OF THE FORUM IN WHICH IT MIGHT BE BROUGHT.

FULL PAYMENT AND TERMINATION OF BENEFITS

. EMPLOYEE ACKNOWLEDGES THAT, EXCEPT AS PROVIDED BY THIS AGREEMENT AND SECTION
5(B) OF THE EMPLOYMENT AGREEMENT, HE HAS RECEIVED ALL COMPENSATION AND ANY OTHER
BENEFITS DUE TO EMPLOYEE FROM COMPANY. EMPLOYEE FURTHER ACKNOWLEDGES THAT AS OF
THE TERMINATION DATE ALL OF HIS BENEFITS AS AN EMPLOYEE OF THE COMPANY SHALL
TERMINATE, AND EMPLOYEE WILL NOT BE ENTITLED TO ANY FURTHER COMPENSATION OR
BENEFITS OF ANY NATURE FROM COMPANY OTHER THAN AS SET FORTH HEREIN.

REEMPLOYMENT.

EMPLOYEE SHALL NOT APPLY FOR REEMPLOYMENT WITH COMPANY.

CONFIDENTIALITY.

THE PARTIES AGREE THAT THE TERMS OF THIS AGREEMENT SHALL REMAIN CONFIDENTIAL AND
SHALL NOT BE DISCLOSED TO ANY PERSONS OTHER THAN AS REQUIRED BY LAW OR THOSE
NECESSARY TO COMPLETE THIS AGREEMENT. IF, DESPITE THE FOREGOING, AN ARBITRATOR
OR A COURT OF COMPETENT JURISDICTION DETERMINES THAT THIS PARAGRAPH IS INVALID
OR UNENFORCEABLE IN ANY RESPECT, EMPLOYEE AGREES THAT THIS PARAGRAPH SHALL NOT
BE INVALID OR UNENFORCEABLE BUT THE PARTICULAR ASPECT OR ASPECTS FOUND INVALID
OR UNENFORCEABLE shall be amended and modified by such court to be valid and
enforceable to the greatest permissible extent under applicable law.

INTEGRATION.

This agreement, together with the Employment Agreement, constitutes the final
and complete statement of the agreement between the parties and fully supersedes
any and all prior agreements and negotiations, written or oral.

CONSENT.

Employee has fully read this agreement, understands Employee's rights and
obligations, and has knowingly and voluntarily entered into, consented to, and
agreed with the terms hereof.

MISCELLANEOUS PROVISIONS.

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 email 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
Attn: Oakleigh Thorne
10200 A East Girard Ave
Denver, CO 80231
Fax: 1-303-873-7449

If to Employee:

Charles Schneider
171 S. Olive St.
Denver, CO 80230
Fax: 1-303-326-0122

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
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.

Amendments
. This Agreement may be amended only by a written instrument in writing executed
by all the parties.
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.
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.
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.
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.
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.
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.
Exhibits
. The exhibits and schedules referenced in this Agreement are a part of this
Agreement as if fully set forth in this Agreement.
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.
Arbitration
. Any controversy or claim arising out of or relating to this Agreement,
including, without limitation, the making, performance, or interpretation of
this Agreement, any claim for employment discrimination, wrongful termination or
violation of any state or federal law related to employment, shall be settled by
arbitration. 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 Employment
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
Employment 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. 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. The arbitrator shall
award all direct costs of the arbitration, including arbitrator's fees and
arbitration filing fees to the substantially prevailing party. However, each
party shall bear their own costs related to the arbitration, such as attorneys'
fees, deposition costs, copy costs, express delivery costs, travel costs,
witness costs and postage. 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 seventy
five (75) days following the date that the arbitrator is appointed. 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.

eCollege.com

Employee

 

 

 

 

 

 

By: /s/ Oakleigh Thorne

By: /s/ Charles P. Schneider

Title: CEO

Charles P. Schneider

 

 

 

 

ADDENDUM TO SEVERANCE AGREEMENT

This Addendum to Severance Agreement, by and between eCollege.com ("Company")
and Charles Schneider ("Schneider") (each a "Party," collectively the
"Parties"), is effective this ____ of August, 2001 (the "Effective Date").

WHEREAS, the Parties have entered into an Employment Agreement dated April 12,
1999 and, pursuant to Section 5(b) of such Employment Agreement, a Severance
Agreement, dated July 3, 2001;

WHEREAS, the Parties wish to add certain provisions to the Severance Agreement
to provide Schneider with additional stock options in consideration for
extending the duration of the noncompetition provision contained in Section 2(a)
of the Employment Agreement.

NOW THEREFORE, for the mutual covenants contained herein, and other good and
valuable consideration, the Parties agree as follows:

The following Sections shall be added to the Severance Agreement:

VACATION PAY

. Company agrees to pay Employee for accrued vacation, commencing on July 3,
2001 and continuing through August 7, 2001.

RETURN OF COMPANY'S PROPERTY

. Employee hereby warrants and represents that he has returned all property
belonging to Employer in his possession or control, including without limitation
keys, access cards, equipment, tools, documents and files.

SEVERANCE PAYMENTS

. The severance pay set forth in Section 5(b) of the Employment Agreement shall
be paid for a period of six months, commencing on the later of August 8, 2001 or
the expiration of the seven (7) day revocation period set forth in Section 2(B)
of the Severance Agreement, and terminating on February 7, 2002 or six months
following the date of commencement, if not commenced on August 8, 2001. Payments
shall be made by Company in twelve (12) installments in bi-monthly payments on
the 5th and the 20th of each month, provided that Employee complies with the
terms and conditions of the Severance Agreement and Addendum thereto. In
addition to severance pay Company shall continue to provide standard health
insurance benefits as generally provided by Company during the six-month period
Employee is receiving severance pay. During the six-month period, Company shall
continue to pay the monthly cost associated with Employee's health insurance
(currently $175.30, but as it may change in the future), and Company shall
deduct all amounts payable for additional coverage for other members of
Employee's family from Employee's severance pay for health insurance. This
Section, as related to health insurance benefits, shall supercede Section 4 of
the Severance Agreement providing that Employee is not entitled to any further
benefits from the Company, provided however, that health insurance benefits, as
set forth herein, are the only benefits to continue during the six-month period,
and all other benefits terminate as of August 7, 2001. The pro-rata portion of
any earned bonus (subject to the discretion of the Board of Directors as to the
payment of bonuses generally), set forth in Section 5(b) of the Employment
Agreement shall be paid on the Company's normal date for payment of the bonus.

STOCK OPTIONS.

In consideration for a mutual release and extension of the noncompetition term
as set forth below, Company shall grant Schneider a non-statutory stock option
to purchase 75,000 shares of common stock of the Company at an exercise price of
$5.00 per share (the "Option"). The Option shall become 100% exercisable,
commencing on August 8, 2002. The Option will terminate in all events on August
8, 2006.

NONCOMPETITION.

In consideration for the Options set forth above, the term set forth in section
2(a) of the Employment Agreement is hereby extended from six (6) months to
twelve (12) months (through August 7, 2002), such that:

In order to protect Company's trade secrets, to which Schneider had access, and
given Schneider's position as President and Chief Operating Officer, for a
period of twelve (12) months following the Effective Date of the Severance
Agreement, Schneider shall not, within the United States or Canada, 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 business unit of an enterprise, to the
extent that such division or business unit is engaged, directly or indirectly,
or any company or other entity engaged primarily, in the online education or
online training business 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 online education or online training business products and
services provided by the Company to its customers during the term of the
Employment Agreement.

In addition, Schneider 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 during the period referred to in the prior paragraph
solicit or accept if offered to him, with or without solicitation, on his 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 or any company, individual or other entity.

Schneider acknowledges and agrees that the above restrictions are necessary and
reasonable in all respects. The Parties agree that if a court deems any aspect
of this covenant not to compete unreasonable the court should rewrite such
provision to make it reasonable. The Parties also agree that Company may seek
both damages and injunctive relief in the event Schneider breaches this
provision.

Notwithstanding the above, Schneider shall cooperate with and assist Company
with matters pertaining to customers, potential customers and employees to
create a smooth transition leading up to and following Schneider's departure
from the Company, as requested by the Company; provided, however, that such
assistance shall not involve more than one hour per week of availability by
telephone during the term of the Severance Agreement, through August 7, 2002.

eCollege.com

Employee

 

 

By: /s/ Oakleigh Thorne

By: /s/ Charles P. Schneider

Title: CEO

Charles P. Schneider