EXHIBIT 10.1
AMENDMENT TO EMPLOYMENT AGREEMENT
This AMENDMENT TO EMPLOYMENT AGREEMENT, dated as of October 2, 2012 (the
“Amendment”), is entered into by and between Education Management Corporation, a
Pennsylvania corporation (together with its successors and assigns, the
“Company”), and Edward H. West (the “Executive”).
WHEREAS, the Company and the Executive previously entered into an Employment
Agreement dated as of June 1, 2006 (the “Agreement”);
WHEREAS, the Agreement may be amended from time to time in accordance with the
provisions of Section 8.2 thereof; and
WHEREAS, the Company and the Executive wish to amend the Agreement, effective as
of the date hereof.
NOW, THEREFORE, in consideration of the mutual covenants contained herein and
other valid consideration the sufficiency of which is acknowledged, the
Executive and the Company hereby amend the Agreement, effective as of the date
hereof, as follows:
1.
Section 1.2 of the Agreement is deleted in its entirety and restated in full as
follows:

1.2    Duties. During the Term, the Executive shall serve as the Company's Chief
Executive Officer, and such other positions as officer or director of the
Company and its affiliates as the Executive and the Board of directors of the
Company (the “Board”) shall mutually agree from time to time. In such positions,
the Executive shall perform such duties, functions and responsibilities during
the Term commensurate with the Executive's positions. Subject to Section 1.3
below, the Executive shall have all authorities, duties and responsibilities
customarily exercised by an individual serving in the foregoing positions at an
entity of the size and nature of the Company; shall be assigned no duties or
responsibilities that are materially inconsistent with, or that materially
impair his ability to discharge, the foregoing duties and responsibilities;
shall have such additional duties and responsibilities, consistent with the
foregoing, as may be from time to time assigned to him; and in his capacity as
Chief Executive Officer shall report solely and directly to the Board. During
the Term, the Executive shall also serve as a member of the Board.
2.
Section 2.1 is deleted in its entirety and restated in full as follows:

2.1    Salary. As compensation for the performance of the Executive's services
hereunder, during the Term, the Company shall pay to the Executive a salary at
an annual rate of five hundred sixty-eight thousand and seven dollars
($568,007), payable in accordance with the Company's standard payroll policies
(the “Base Salary”); provided, effective July 1, 2013, the Executive's Base
Salary shall be increased to eight hundred fifty thousand dollars ($850,000).
The Base Salary will be reviewed annually and may be adjusted upward by the
Board (or a committee thereof) in its discretion, based on competitive data and
the Executive's performance.

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3.
Section 2.2(a) is deleted in its entirety and restated in full as follows:

2.2    Annual Bonus.
(a)    During the Term, the Executive will be eligible for an annual incentive
bonus (the “Annual Bonus”) for each complete fiscal year occurring during the
Term. The Executive's target bonus will be one hundred twenty-five percent
(125%) of the Base Salary; provided, for purposes of this Section 2.2, for the
fiscal year ending June 30, 2013 the Executive's “Base Salary” shall be deemed
to be eight hundred fifty thousand dollars ($850,000) effective July 1, 2012.
The actual Annual Bonus paid for any year will depend on meeting Company and
individual performance standards established by the Board. The Annual Bonus will
be paid in cash within seventy-five (75) days of the end of the fiscal year.
4.
Section 2.3 is amended by adding after the last sentence thereof the following:

On or within thirty (30) days after the date hereof, the Company shall award to
the Executive a stock option, pursuant to one or more award agreements, for an
aggregate of 1,000,000 shares of the Company's Common Stock under one or more
duly-adopted long-term incentive plans, having an exercise price equal to the
fair market value of Company Common Stock as provided under the applicable plan
when granted and have such vesting and other terms and conditions as are set
forth in a form (or forms) of stock option agreement(s) provided to, and as
agreed by, the Executive.
5.
Section 3.2(a) of the Agreement is deleted in its entirety and restated in full
as follows:

(a) Termination by the Company Other than for Cause; Termination by the
Executive for Good Reason. If the Executive's employment hereunder is terminated
by the Company during the Term other than for Cause, or by the Executive with
Good Reason, in addition to the Accrued Amounts the Executive shall be entitled
to a lump sum severance payment of (i) one and one-half (1.5) times (or three
(3) times if (x) the Executive reasonably demonstrates that the termination is
In Anticipation Of, or (y) occurring on or within two (2) years following, a
“Change in Control” (as defined in the Company's 2006 Stock Option Plan (or
successor long-term incentive plan))) the sum of the Executive's Base Salary
plus the target Annual Bonus and (ii) a pro-rata Annual Bonus (determined by
multiplying the actual Annual Bonus earned by the Executive for the fiscal year
of termination (without regard for any exercise of negative discretion under the
applicable annual bonus plan) by a fraction, the numerator of which is the
number of days he was employed by the Company during such fiscal year and the
denominator of which is the number of days in such fiscal year) (the “Pro-Rata
Annual Bonus Payment”) ((i) and (ii), collectively the “Severance Payment”),
subject to the provisions of the last sentence of Section 4.8 hereof. The
Company's obligations to make the Severance Payment shall be conditioned upon
the Executive's execution, delivery and non-revocation of a valid and
enforceable general release of claims substantially in the form attached hereto
as Exhibit C (the “Release”) within thirty (30) days of the date of termination.
Subject to Section 3.2(e) and Section 8.13, the Severance Payment will be paid
to the Executive as soon as practicable following the effectiveness of the
Release. The Company shall also reimburse the Executive, on a monthly basis, for
an amount of his COBRA premiums (for the duration of COBRA continuation
coverage, not to exceed eighteen (18) months following termination of
employment) equal to difference between (x) the amount of COBRA premium charged
to the Executive minus (y) the amount of premium charged to actively employed
senior executives for like coverage as that elected by the Executive.

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6.
Section 3.2(c) of the Agreement is deleted in its entirety and restated in full
as follows:

(i)    Termination Due to Disability. Upon a determination that the Executive is
Disabled, the Company may give notice to the Executive that it intends to
replace him. If the Executive does not return to the performance of his duties
on essentially a full-time basis within thirty (30) days after receiving such
notice, the Company may replace the Executive without breaching this Agreement;
provided, however, that this Agreement and the Executive's employment thereunder
shall not terminate until the anniversary date of this Agreement next following
the date that the Executive is determined to be Disabled. For the period from
the date the Executive is determined to be Disabled through the earlier of such
anniversary date or the date of the Executive's death (the “Disability Period”),
the Company shall continue to provide the Executive all compensation and
benefits provided for in Section 2; provided, however, that (x) the Company's
obligation to pay the Executive's Base Salary shall be reduced by the amounts
paid to the Executive under any long-term disability insurance plan sponsored or
otherwise maintained by the Company (if any) and that in no event shall the
total annual obligation of the Company under this Agreement to make Base Salary
payments to the Executive during the Disability Period be greater than an amount
equal to two-thirds (2/3) of the Executive's Base Salary, computed on a pro rata
basis beginning with the date that the Executive is replaced in accordance with
this Section 3.2(c)(i) and continuing until the expiration of the Disability
Period and (y) the Executive's Annual Bonus due for fiscal year (or years) in
which all or a portion of the Disability Period occurs shall not be reduced on
account of the Executive's absence from active service due to his Disability
from what otherwise may be earned and payable to him.
(ii)    Termination Due to Death. If the Executive's employment hereunder is
terminated by reason of his death, the Company shall continue to pay the
Executive's Base Salary at the rate in effect at the time of his death to such
person or persons as the Executive shall have designated for that purpose in a
notice filed with the Company, or, if no such person shall have been so
designated, to his estate, for a period of six (6) months after the Executive's
date of death. The Company also shall pay to such person(s) or estate (i) the
amount of the Accrued Amounts and a Pro-Rata Annual Bonus Payment (except, for
which purpose the Annual Bonus shall be deemed earned and payable at target) for
the year of termination and (ii) an amount equal to one-twelfth (1/12) of the
Executive's average Annual Bonus paid or payable to the Executive with respect
to the most recent three (3) full fiscal years or, if greater, the most recent
twelve (12)-month period (in each case, determined by annualizing the bonus paid
or payable with respect to any partial fiscal year) that amount being payable in
each of the six (6) months following the date of termination. Any amounts
payable under this Section 3.2(c)(ii) shall be exclusive of and in addition to
any payments which the Executive's widow, beneficiaries or estate may be
entitled to receive pursuant to any pension plan, profit sharing plan, employee
benefit plan, or life insurance policy maintained by the Company.
7.
Section 3.2(d)(1) of the Agreement is deleted in its entirety and restated in
full as follows:

(1) “Good Reason” shall mean the occurrence of any of the following events
without either the Executive's prior written consent or full cure within thirty
(30) days after he gives written notice to the Company describing the event and
requesting cure: (i) any material diminution in the Executive's authorities,
titles or offices, or the assignment to the Executive of duties that materially
impair his ability to perform the duties normally assigned to an executive in
the Executive's role at a corporation of the size and nature of the Company;
(ii) any change in the reporting structure so that the Executive reports to
someone other than to the Board; (iii) any failure to re-elect the Executive as
a member of the Board; (iv) any relocation of the Company's principal office, or
of the Executive's own principal place of employment, to a location more than
fifty (50) miles from Pittsburgh,

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Pennsylvania; (v) any material breach by the Company or any of its affiliates of
any material obligation to the Executive; or (vi) any failure of the Company to
obtain the assumption in writing of its obligation to perform this Employment
Agreement by any successor to all or substantially all of the assets of the
Company within fifteen (15) days after any merger, consolidation, sale or
similar transaction, except where such assumption occurs by operation of law. If
the Company fails to cure a Good Reason event during the thirty (30) day cure
period, the Executive must terminate his employment within sixty (60) days after
the expiration of such thirty (30) day period if such termination is to be
treated as for Good Reason based on such uncured Good Reason event.
8.
A new Section 8.13 is hereby added to the Agreement, to read as follows:

8.13 409A Compliance. Notwithstanding the other provisions hereof, this
Agreement is intended to comply with the requirements of section 409A of the
Internal Revenue Code of 1986, as amended. Accordingly, all provisions herein,
or incorporated by reference, shall be construed and interpreted to comply with
section 409A and if necessary, any such provision shall be deemed amended comply
with Section 409A and the regulations thereunder. Further, for purposes of the
limitations on nonqualified deferred compensation under section 409A, each
payment of compensation under this Agreement shall be treated as a separate
payment of compensation for purposes of applying the Section 409A deferral
election rules and the exclusion from section 409A for certain short-term
deferral amounts. Any amounts payable solely on account of an involuntary
separation from service of the Executive within the meaning of section 409A
shall be excludible from the requirements of section 409A, either as involuntary
separation pay or as short-term deferral amounts (e.g., amounts payable under
the schedule prior to March 15 of the calendar year following the calendar year
of involuntary separation) to the maximum possible extent. Any reimbursements or
in-kind benefits provided under this Agreement shall be made or provided in
accordance with the requirements of section 409A, including, where applicable,
the requirement that (i) any reimbursement is for expenses incurred during the
period of time specified in this Agreement, (ii) the amount of expenses eligible
for reimbursement, or in kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in kind benefits to be
provided, in any other calendar year, (iii) the reimbursement of an eligible
expense will be made no later than the last day of the calendar year following
the year in which the expense is incurred, and (iv) the right to reimbursement
or in kind benefits is not subject to liquidation or exchange for another
benefit. Any severance payment to the Executive that is conditioned upon the
execution and non-revocation of a release of claims shall be paid in the taxable
year in which ends the maximum period of time that the Executive had to consider
and revoke such release, regardless of when such release is actually executed.
9.
The Company agrees to promptly pay all fees and charges of the Executive's
attorneys reasonably incurred by the Executive in connection with the
negotiation, preparation and execution of this Amendment and grants of stock
options provided herein, up to a maximum of ten thousand dollars ($10,000).

10.Except as specifically modified herein, the Agreement shall remain in full
force and effect in accordance with all of the terms and conditions thereof.
11.This Amendment may be executed in counterparts, all of which together shall
comprise one and the same instrument.
[Signature page follows]

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IN WITNESS WHEREOF, the Parties have executed this Amendment to the Agreement as
of the date first written above.
 
EDUCATION MANAGEMENT CORPORATION

/s/ Edward H. West
By:

 /s/ Randall J. Killeen
Edward H. West
Name:
Randall J. Killeen
 
Title:
Vice President and Acting Chief Financial Officer

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