3.2. Incentive Opportunity.(a) Employee Incentive Opportunity. Subject to Employee’s satisfaction of the terms of thisAgreement, and his continued employment by the Company, Employee shall receive an annual incentivebonus in the amounts set forth in the table below for each year of this Agreement (“IncentiveOpportunity”). The Incentive Opportunity for each year will be paid on or before March 15 of thefollowing year.   Year Incentive2007 $43,7502008 $266,254 + $175,000 = $441,2542009 $279,5662010 $293,5452011 $308,220(b) TeamIncentive Opportunity. In addition to the amounts to be paid to Employee inSection 3.2(a), the Online Team shall have an opportunity, based upon the level of theirperformance as determined by the Company, to earn an annual incentive equal to ten percent (10%) ofthe net income before taxes of the Online Business, to be divided among the Online Team, atEmployee’s discretion. At Employee’s election, this incentive may be paid to the Online Team ineither cash or in shares of Class A Common Stock of Nelnet, Inc. (“Stock”), or in a combination ofcash and Stock, and will be paid, if at all, on or before March 15 of the following year. Allamounts elected to be paid in Stock will be increased by 25% (the “Kicker”). For clarity, if theincentive opportunity is $100,000 and Employee elects to have $60,000 paid in Stock and $40,000 incash, the amount of Stock paid will be $75,000 (125% of $60,000) and the amount of cash will be$40,000. The portion of the original incentive amount paid in Stock will be paid in shares of Stockvesting immediately, but restricted from sale for one year following the payment date, and theKicker will be paid in shares of Stock vesting over three years, one-third on each anniversary dateof the original award.The Company will also consider additional incentive opportunities for the Online Team in connectionwith such group’s potential future involvement in the Company’s lead generation businessesincluding CUnet and Peterson’s.3.3. Benefits. Employee shall be eligible to participate in such benefit programs as theCompany makes available for its employees.3.4. Restricted Stock Grant. Employee shall receive a grant of 3,750 restricted shares ofClass A Common Stock of Nelnet, Inc., vesting over a ten year period and subject to the terms of aseparate Restricted Stock Agreement to be executed by Employee and Nelnet, Inc.**4. TERMINATION.**4.1. For Cause. The Company may terminate this Agreement at any time for Cause. Forpurposes of this Agreement, “Cause” is defined as: (a) the willful engaging by the Employee in conduct that is materiallyinjurious to or contrary to the best interests of the Company, monetarily orotherwise;
 
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 (b) the willful failure by the Employee to perform such duties as may be delegatedor assigned by, or to follow the directive or instructions of the Company, or of themanagement of the Company in accordance with the terms of this Agreement andconsistent with Employee’s role;  (c) material violation of any Company policy; or  (d) the Employee’s conviction of, or plea of no contest to, a felony or any crimeinvolving moral turpitude.4.2. Good Reason. The Employee may terminate this Agreement at any time with Good Reason.For purposes of this Agreement, “Good Reason” shall mean the occurrence, without Employee’swritten consent, of any one of the following: (a) Breach by the Company of its obligations under Section 3 of this Agreement;  (b) A material reduction in Salary, Incentive Opportunity or benefits enjoyed bythe Employee;  (c) A material reduction in the Employee’s authority, duty or responsibilities,other than for Cause.4.3 Without Cause. The Company may terminate this Agreement without Cause upon thirty (30)days written notice to Employee.4.4. Voluntary Resignation. Employee may terminate this Agreement without Good Reason uponthirty (30) days written notice to the Company.4.5 Severance. (a) If the Employee’s employment with Company is terminated under Sections 4.2 or 4.3 aboveprior to November 1, 2010, the Company shall pay the Employee severance in an amount whichis the greater of (i) two times Employee’s Salary; or (ii) $650,000, retention of whichshall be subject to the Employee’s agreement to and compliance with the provisions ofSection 5 below for a period of one year following the date of Employee’s termination.  (b) If the Employee’s employment with Company is terminated under Sections 4.2 or 4.3 aboveon or after November 1, 2010 and before the end of the Initial Term or any Renewal Term ofthis Agreement, the Company shall pay the Employee severance in anamount which is thegreater of (i) Employee’s Salary; or (ii) $350,000, retention of which shall be subject tothe Employee’s agreement to and compliance with the provisions of Section 5 below for aperiod of one year following the date of Employee’s termination.  (c) Any severance amount to be paid hereunder shall be paid in accordance with otherprovisions of the Company’s severance policy, provided, however, all severance amounts shallbe paid on or before the date which is two and one-half months after the end of the tax yearin which the termination of employment occurs.  (d) Other than wages due under applicable state law, no other amounts shall be payable toEmployee upon termination of his employment.
 
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**5. RESTRICTIVE COVENANTS AND TRADE SECRETS.**5.1 Restrictive Covenant. In consideration of this Agreement, Employee agrees that in orderto protect the Company’s trade secrets and other intellectual property, during and for a period oftwelve (12) months following the termination for any reason of his employment or any consultingrelationship with the Company (as applicable, the “Restricted Period”), he will not engage, eitherdirectly or indirectly, (i) in selling products and services substantially similar to those sold bythose portions of the business of the Company and the Company’s related or affiliated entities inwhich or with which Employee was directly involved during his employment to, or soliciting withrespect to the sale of any such products and services, any Person with whom he had contact whileselling or attempting to sell services on behalf of the Company or its affiliates, or (ii) inowning, managing, operating, joining, controlling, being employed or retained as a consultant orindependent contractor on behalf of, or participating in any manner in the ownership, management,operation or control of or to be connected in any manner with any Person, firm, corporation,company (other than the Company or its affiliates), partnership, joint venture or the like which inany way, directly or indirectly, is engaged in any activity which is directly or indirectlycompetitive with the products and services substantially similar to those offered by thoseportions of the business of the Company or its affiliates in which or with which Employee wasdirectly involved during his employment in any geographic area in which the Company competes. TheRestricted Period shall be extended to add (a) any period of time in which Employee is or wasengaged in activities constituting a breach of this Section 5.1 and (b) any period of time requiredto litigate activities of Employee constituting a breach of this Section 5.1. The partiesunderstand and agree that a breach hereof will cause irreparable injury to the Company or itsaffiliates, that monetary damage would not provide an adequate remedy for such breach and thereforethe Company may elect to have this Section 5.1 specifically enforced by any court having equityjurisdiction. In the event Employee fails, in any manner, to observe the requirements of thisSection 5.1, the Company shall be entitled to enforce such provisions against Employee, through anyremedies provided by Law, including but not limited to injunctive relief and pursue such otherremedies for relief which may be available pursuant to Law or this Agreement. During theRestricted Period, Employee may not without the prior written consent of the Company or applicableaffiliate directly or indirectly solicit for hire or hire any employee of Company or itsaffiliates, unless such employee has not been employed by the Company or any of its affiliates formore than two (2) years from the date of such hire. Employee acknowledges and agrees that theforegoing restrictions are reasonable and enforceable against him.5.2 Trade Secrets. Employee understands and agrees that all names or identities ofcustomers, sales materials, pricing information, software programs, customer agreements, marketingplans and other information furnished or made available to Employee or to which Employee hasaccess are confidential trade secrets (to the extent that such information would constitute tradesecrets under applicable Law) of the Company or its affiliates. Employee shall not, during or afterthe term of this Agreement, disclose or use such information in any manner or for any reason orpurpose whatsoever, other than the purpose of promoting the Company’s or its affiliates’ business.After the term of this Agreement, information which is generally known by the public as a resultother than disclosure by Employee, or which Employee possessed prior to employment, shall not besubject to this paragraph 5.2.**6. MISCELLANEOUS.**6.1 Governing Law. This Agreement shall be governed, interpreted and construed under thelaws of the State of Nebraska without regard to its conflict of law principles.6.2 Assignment. The rights and obligations of the parties hereto under this Agreement maynot be assigned in whole or in part without the prior written consent of the other party heretoprovided, however, that the Company may assign this Agreement in whole or in part to any of itsaffiliates. This Agreement shall be binding upon and inure to the benefit of the parties hereto,and their successors and permitted assigns.
 
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6.3Modifications. This Agreement may be modified or otherwise amended only if such modification oramendment is in writing and signed by both parties.6.4 Notices. All notices and other communications under this Agreement shall be deemed tohave been duly given if delivered or mailed by regular United States mail, sufficient postagepre-paid, addressed as follows:If to the Company:c/o Nelnet, Inc.