EMPLOYMENT AGREEMENT

PARTIES:

 

eCollege.com, a Delaware corporation (the "Company")

   

Oakleigh Thorne

, a resident of Illinois ("Employee")    

Date June 20, 2003

WHEREAS,

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 Chief Executive Officer,
in the Company's office in Denver, Colorado and from his own office in Lake
Forest, Illinois.

NOW THEREFORE, in consideration of the promises, mutual covenants and agreements
contained herein, and other good and valuable consideration, the sufficiency of
which is hereby acknowledged by the parties, the parties agree as follows:

EMPLOYMENT

Term. This employment agreement (the "Agreement") shall govern the relationship
between Employee and the Company from January 1, 2003 through December 31, 2003,
unless terminated earlier in accordance with Section 5 of this Agreement. This
Agreement shall terminate on December 31, 2003. Duties. Company shall employ
Employee as Chief Executive Officer. 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 to the performance of his duties under this
Agreement. The duties of Employee are as 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 Board
of Directors of the Company (the "Board"). In performing such duties, Employee
shall be subject to the direction and control of the Board. 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 Board, and approved in
writing by the Board shall be deemed a breach of this Agreement. Notwithstanding
the foregoing sentence, Employee shall be entitled to engage in and continue the
activities set forth in Schedule C of this Agreement. COVENANT NOT TO COMPETE;
NON-SOLICITATION; CONFIDENTIALITY Noncompetition. During the term of this
Agreement and for a period of twelve (12) 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
Board. Employee expressly agrees that this noncompete provision is necessary to
protect the Company's trade secrets, and is further justified by virtue of the
fact that Employee is a member of the Company's management or executive staff.
Employee further acknowledges and agrees that the restrictions set forth in this
Agreement are reasonable. For purposes of this Paragraph, the activities listed
in Schedule C of this Agreement shall not be deemed to be competitive with the
Company. Non-Solicitation. During the term of this Agreement and for a period of
twelve (12) months after the termination of this Agreement, Employee shall not,
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. 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 Board. 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 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)d) 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. Nondisparagement. During the term of this Agreement
and for a period of two years following the voluntary or involuntary termination
of this Agreement, the Employee shall not make any statements concerning the
Company that would tend to diminish the esteem, respect, good will, or
confidence in which the Company is held by members of the community in which the
Company, 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 the Company. 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. 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), 2)d), 2)e) or 2)f) 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), 2)d), 2)e) or 2)f), 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. 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) 2)f) or 2)g). Enforceability; Severability of Covenants.
For purposes of Sections 2)a) and 2)b) above, the covenants in such sections
shall be construed as separate and distinct covenants. In the event a court of
competent jurisdiction finds any of such covenants to be so overbroad as to be
unenforceable, it is the intent of the parties that such covenant be reduced in
scope by the court, but only to the extent deemed necessary by the court to
render the covenant reasonable and enforceable, keeping in mind that it is the
intent of the parties to give the Company the broadest lawful protection. If the
court declines to reduce the scope of a covenant it finds unenforceable, such
unenforceable covenant shall be deemed eliminated and shall not affect the
enforceability of any other covenant contained in this Section. COMPENSATION
Base Compensation; Bonus Compensation. In consideration of all services to be
rendered by Employee to the Company during the fiscal year 2003, the Company
shall pay to Employee compensation as described in Schedule A of this Agreement.
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 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. Abide by All Policies
Established by the Company. Employee agrees to abide by all policies, standards
and regulations of the Company. 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
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.
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 twelve (12)
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.
Immediate Termination
. The employment of Employee by the Company may be terminated immediately in the
sole discretion of the Board 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 the prescribed period of time to correct the
      conduct has expired, the Employee willfully and continuously fails or
      refuses to comply 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. 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. Employee, at Employee's
expense, will maintain his own office in Lake Forest, Illinois. REPRESENTATIONS,
WARRANTIES AND COVENANTS OF EMPLOYEE
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.
No Violation of Prior Agreements
. Employee represents, warrants and covenants that Employee shall not, in the
course of employment with the Company, use or provide any information,
intellectual property, or other materials in violation of any prior contractual
obligation.

MISCELLANEOUS PROVISIONS
Binding Effect
. This Agreement shall be binding on and inure to the benefit of the parties and
their heirs, personal representatives, successors, and assigns.
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
eCollege Building
Attn: Executive Vice President and CFO
4900 South Monaco Street
Denver, Colorado 80237
Fax: 1-303-873-3849

If to Employee:

eCollege
eCollege Building
Attn: Oakleigh Thorne
4900 South Monaco Street
Denver, Colorado 80237
Fax: 1-303-873-3849

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.

Amendments
. This Agreement may be amended only by an instrument in writing executed by all
the parties.
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. Employee
understands that no individual is authorized to add, modify or vary the terms of
this Agreement except in writing by the Board.
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
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
.
 i.   Except for any claim to unemployment compensation or workers'
      compensation, any dispute, claim or controversy concerning the terms and
      conditions of this Agreement, any claimed breach thereof, or any aspect of
      Employee's employment with the Company, shall be resolved by arbitration
      in accordance with the National Rules for the Resolution of Employment
      Disputes of the American Arbitration Association, as modified in this
      Agreement, and judgment upon the award rendered by the arbitrator(s) may
      be entered in any court having competent jurisdiction.
 ii.  The arbitrator shall be selected by the mutual agreement of the parties.
      If the amount in dispute exceeds $250,000, the parties shall select, by
      mutual agreement, a panel of three arbitrators, rather than one
      arbitrator, to resolve the dispute.
 iii. The arbitration shall be conducted in Denver, Colorado. Reasonable
      discovery shall be permitted as determined by the arbitrator or
      arbitrators. The Company shall pay the costs of the arbitrator or
      arbitrators for any arbitration under this Agreement. Each party shall
      otherwise pay his, her or its own costs and attorneys fees, except as
      otherwise provided by law.
 iv.  Except as otherwise provided herein, this arbitration procedure is the
      exclusive remedy for any contractual, non-contractual or statutory claim
      of any kind, including claims arising under federal, state and local
      statutory law, including, but not limited to, the Age Discrimination in
      Employment Act of 1967, 29 U.S.C. Section 621 et seq.; Title VII of the
      Civil Rights Act of 1964, 42 U.S.C. Section 2000e et seq.; the Americans
      with Disabilities Act, 42 U.S.C. Section 12101 et seq.; the Employee
      Retirement Income Security Act, 29 U.S.C. Section 1001 et seq.; the
      Colorado Anti-Discrimination Act of 1957, C.R.S. Section 24-34-401 et
      seq.; and common law or equitable claims alleging breach of contract,
      defamation, fraud, outrageous conduct, promissory estoppel, violation of
      public policy, wrongful discharge, or any other tort, contract or
      equitable theory. However, this arbitration procedure is not intended to
      preclude the filing of a charge with the EEOC, NLRB or other
      administrative agency by Employee at any time, and, to the extent that
      Employee is required to exhaust administrative remedies before obtaining
      legal relief, Employee can and must exhaust administrative remedies prior
      to pursuing arbitration under this Agreement.
 v.   By signing this Agreement, Employee voluntarily, knowingly and
      intelligently waives any right Employee may otherwise have to seek
      remedies in court, including the right to a jury trial.
 vi.  To the extent any provision of this paragraph shall be invalid or
      unenforceable, it shall be considered deleted from this Agreement and the
      remainder of this paragraph shall remain in full force and effect.

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/ Douglas Kelsall                        
    Douglas Kelsall, Executive VP and CFO

 

  /s/ Oakleigh Thorne                           

Oakleigh Thorne, Individually

SCHEDULE A

COMPENSATION AND DUTIES

SALARY AND BONUS.
Employee's base salary shall be $350,000 payable on the Company's normal payroll
dates. Employee's target bonus, pursuant to the eCollege Incentive Compensation
Plan and subject to the discretion of the Board of Directors, is 75% of his base
salary ($262,500)

and is based on the Company achieving the criteria set forth in the Company's
2003 Corporate Incentive Plan. No other salary or bonus shall be paid to
Employee other than pursuant to paragraph 2 below, or otherwise at the sole
discretion of the Compensation Committee. LONG-TERM INCENTIVE COMPENSATION.
Employee shall receive long-term incentive compensation valued at $180,000, the
form of which to be determined by the Compensation Committee. LIVING EXPENSES.
Employee shall be entitled to receive up to (i) $1,000 per month for personal
living expenses, net of taxes, and (ii) up to $30,000 annually for travel from
Employee's Lake Forest, Illinois Office to the Company's Denver headquarters,
net of taxes, if any. SALARY ADJUSTMENT. Employee's compensation may be amended,
from time to time, as determined by the Compensation Committee in its sole
discretion. JOB DESCRIPTION. As Chief Executive Officer, Employee is responsible
for developing the corporate mission and strategic objectives of the Company.
Employee's general duties include:
 a. Developing strategy, policies and operating plans of the Company and its key
    operating units;
 b. Analyzing operating results of the Company and its units versus approved
    plans and objectives, and taking or directing corrective action as
    necessary;
 c. Establishing plans for acquisition, retention and continuing development of
    key human resources throughout the company;
 d. Representing, or overseeing representation of, the Company to key external
    constituencies, including customers, potential investors, shareholders,
    suppliers, potential and existing business partners, competitors and
    government entities;
 e. Evaluating and executing potential business combinations for the Company.

OTHER DUTIES. Employee's duties may vary from time to time as determined by the
Board of Directors of the Company.

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

.

 

 /s/ Oakleigh Thorne          

Oakleigh Thorne

SCHEDULE B

 

 

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

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

 

 

 

SCHEDULE C

 

Permitted Outside Activities

Company Boards of Directors

 * SCP Communications, Inc.
 * ShopperTrak RCT Corporation
 * Aircell

 

Non- Profit Boards of Directors

 * Lake Forest Openlands Association, Chairman of Development Committee
   (resigned as Chairman, will remain on board)
 * Trout Unlimited, Chairman of the Board (term as Chairman will end in
   September, 2003, letter of resignation 3/17/03, will remain on Board)
 * Art Institute of Chicago

 

Other Activities

 * Trustee, various Thorne, Palmer and Irwin family trusts
 * Thorndale Farm LLC, manager
 * Pine Cay (club board)