Exhibit 10.23


 


EMPLOYMENT AGREEMENT


 


	
  DATE:

  	
  August 9,
  2004

  	
   

  
	
   

  	
   

  	
   

  
	
  PARTIES:

  	
  eCollege.com,
  Inc., a Delaware corporation

  	
  (the “Company”)

  
	
   

  	
   

  	
   

  
	
   

  	
  Oakleigh
  Thorne, a resident of Illinois

  	
  (the “Employee”)

  



 


RECITAL:


 


The Company is engaged in the business of providing
value added information services to the post-secondary and related education
markets.  The Company desires to employ
and retain the unique experience, abilities, and services of the Employee as
the Company’s Chief Executive Officer and Chairman of the Board and the
Employee desires to hold such positions under the terms and conditions of this
Employment Agreement (the “Agreement”).


 


AGREEMENT:


 


The parties
agree as follows:


 


1.                                       EMPLOYMENT


 


(a)                                  Duties.  The Company shall employ the Employee as
Chief Executive Officer and Chairman of the Board, and the Employee accepts
employment with the Company on the terms and conditions set forth in this
Agreement.  The Employee 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 the duties and responsibilities
described on Schedule A to this Agreement and such other duties as the Board of
Directors of the Company (the “Board”) may determine so long as such duties are
not materially inconsistent for a similarly situated executive of a public
company.  In performing such duties, the
Employee shall be subject to the direction and control of the Board.  The Employee further agrees that in all aspects
of such employment, the Employee shall comply with the reasonable policies,
standards, and regulations of the Company established from time to time of
which the Employee is or should be aware, and shall perform his duties in good
faith with due care and in the best interests of the Company.  The devotion of reasonable periods of time by
the Employee for personal investment, outside business or charitable activities
shall not be deemed a breach of this Agreement, provided that such activities
are approved by the Board in writing (for the purposes of this paragraph, the
term “personal investment, outside business or charitable activities” shall not
include passive investment by the Employee of his personal assets which
investment shall be deemed not a breach of this Agreement provided such
investment does not violate Section 2 hereof). 
Notwithstanding the foregoing, the Employee shall be entitled to engage
in and continue the activities set forth in Schedule B of this Agreement;
provided that the Board may review such activities on an annual basis and if
the Board determines that such activities are interfering with the


 
















 


performance of his duties hereunder and so notifies
the Employee in writing, the Employee shall terminate such activities within 60
days of such notice.


 


(b)                                 Term.  Employment of the Employee as Chief Executive
Officer began on June 1, 2000 (the “Commencement
Date”) and shall end on the date of termination pursuant to Section
5 of the Agreement.


 


2.                                       RESTRICTIVE COVENANTS; CONFIDENTIALITY


 


(a)                                  Noncompetition;
Nondisclosure; Inventions.  In
consideration for the compensation and benefits to be provided hereunder,
including the severance arrangements set forth in Sections 5 and 6 hereof, and
in consideration of the Employee’s exposure to the Company’s confidential and
proprietary information, the Employee covenants to the following:


 


(1)                                  Noncompetition
and Nonsolicitation.  During the term
of this Agreement and for a period of twelve (12) months after the termination
of the Employee’s employment with the Company, the Employee shall not, within
any locality or region of the United States, Canada or any other country in
which the Company had operations or conducted business at the time of the
termination of this Agreement, directly or indirectly: (1) (A) own directly or
beneficially (as a proprietor, partner, stockholder, or otherwise) an equity or
debt interest of five percent (5%) or more in; or (B) participate (as an
officer, director, or in any other capacity) in the management, operation, or
control of; or (C) perform services as or act in the capacity of an employee,
independent contractor, consultant, lender, principal or agent of any division
or 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 provision of value added information services to the
post-secondary and related education markets that are competitive with the
services provided by the Company or such other business activity that the
Company is engaged in on the date of termination, except with the prior written
consent of the Board; or, (2) contact, solicit or direct or influence 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 provision of value added information services to the
post-secondary and related education markets or other products and services
provided by the Company to its customers during the term of the Employee’s
employment hereunder.


 


The Employee expressly agrees that this noncompete provision is
necessary to protect the Company’s trade secrets and business and is further
justified by virtue of the fact that the Employee is a senior executive officer
of the Company.  The Employee further
acknowledges and agrees that the restrictions set forth in this section of the
Agreement are reasonable and necessary to protect the interest of the
Company.  For


 


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purposes of this Section 2(a), the term Company includes all of its
subsidiaries and affiliates and the activities listed in Schedule B of this Agreement
are deemed not to be competitive with the Company, unless the Board provides
written notice to the Employee that such activities have become competitive
with the Company in which case the Employee shall terminate such activities
within 60 days of such notice.


 


In addition, during the term of the Employee’s employment hereunder and
for a period of twelve (12) months after the termination of this Agreement, the
Employee will not disclose the identity of any such business brokers,
customers, or prospective customers, or any part thereof, whose relationship
with the Company is not then a matter of public record or public knowledge
(other than as a result of unauthorized disclosure by the Employee), to any
person, firm, corporation, association, or other entity for any reason or
purpose whatsoever, other than pursuant to court order or government inquiry;
provided, the Employee must give the Company written notice of the court order
or inquiry at least 15 days prior to the disclosure, or, if later, immediately
upon the Employee’s learning of the court order or government inquiry.  Moreover, the Employee will not solicit,
directly or indirectly, 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 during the six month period
prior to the termination of the Employee’s employment with the Company, nor,
directly or indirectly, solicit any of the Company’s employees to terminate
employment with the Company, nor directly or indirectly agree to hire any
employee of the Company to provide service for himself or any company,
individual or other entity; provided that the foregoing shall not prohibit the
Employee from soliciting or hiring any such employee after the date on which
such person’s employment with the Company was terminated by the Company.


 


(2)                                  Confidentiality.  The Employee acknowledges and agrees that all
product specifications, product planning information, lists of the Company’s
customers and suppliers, business brokers, marketing plans, financial
information, and other Company data related to its business (“Confidential Information”) are valuable
assets of the Company.  Except as
necessary in connection with the Employee’s performance of his duties
hereunder, the Employee shall not, directly or indirectly, during or after his
employment with the Company, disclose any Confidential Information to any
person or use any Confidential Information for the benefit of the Employee or
any other person, except with the prior written consent of the Board; provided,
however, that the foregoing restriction on Confidential Information shall not
apply to information that is (1) information that the Employee knew before the
commencement of his employment with the Company, (2) information that becomes a
matter of public record or public knowledge other than as a result of
unauthorized disclosure by the Employee, or (3) is disclosed by the Employee
pursuant to court order or government inquiry, so long as the Employee gives
the


 


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Company written notice of the court order or inquiry at least 15 days
prior to the disclosure, or, if later, immediately upon the Employee’s learning
of the court order or government inquiry.


 


(3)                                  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
with the Company, 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 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(a)(3) shall not apply to any Inventions
for which no equipment, supplies, facility or Confidential Information of the
Company was used and which were developed entirely on the Employee’s own
personal 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.


 


(b)                                 Nondisparagement.  During the term of the Employee’s employment
with the Company and for a period of two years thereafter, 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; provided, however, that this Section 2(b) shall not preclude either
party from responding to a court order or government inquiry so long as the
responding party has given the other party written notice of such court order
or government inquiry at least 15 days prior to the disclosure, or, if later,
immediately upon the party’s learning of the court order or government inquiry.


 


(c)                                  Return
of Documents and Computer Data.  The
Employee acknowledges and agrees that all originals and copies of all computer
data, records, reports,


 


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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 (without any copies being
maintained by Employee other than copies of his address book, calendar (each
whether paper or electronic) and other personal information) upon the
termination of employment with the Company or earlier upon the written request
of the Company.


 


(d)                                 Injunction.  The Employee and the Company agree that the
services to be rendered by him to the Company and the Confidential Information
to which he has access are of a special and unique character, the loss of which
would result in damages which would be difficult to measure from any breach by
the Employee or the Company of Section 2(a) or 2(b) and that monetary damages
would be an inadequate remedy for any such breach which may cause the Company
irreparable injury. Accordingly, the Employee and Company agrees that if the
Employee or Company shall breach or take steps preliminary to breaching
Section 2(a) or 2(b), the Employee or Company, as appropriate, 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 Employee or Company, or
without posting of any bond or security.


 


(e)                                  No
Release.  The Employee agrees that
the termination of employment with the Company shall not release the Employee
from any obligations set forth herein pursuant to Section 2(a), 2(b), or 2(c)
or the Company from any obligations set forth herein pursuant to Section 2(b),
Section 5 or Section 6.


 


(f)                                    Enforceability.  If any one or more of the provisions
contained in Section 2 of this Agreement shall be held to be excessively broad
as to duration, activity or subject, such provisions shall be construed by
limiting and reducing them so as to be enforceable to the fullest extent
permitted by law.


 


3.                                       COMPENSATION


 


(a)                                  Base
Compensation; Bonus Compensation.  In
consideration of all services to be rendered by the Employee to the Company and
the other terms and conditions of this Agreement, the Company shall pay to the
Employee base and bonus compensation as described on Schedule A of this
Agreement.


 


(b)                                 Other
Benefits.  The Employee has been
provided with a brochure that provides a brief, general description of the
Company’s benefit programs.  The 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.  The Employee shall be
entitled to not less than five weeks vacation each year which shall not accrue
from year to year.  The Employee shall be
allowed to participate in any hospitalization, health and disability insurance
plans, other health programs, pension and profit sharing plans and other
similar benefit programs maintained by the Company for the benefit of its
employees and


 


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any bonus plans, equity incentive plans and other
benefit programs generally available to senior executive officers of the
Company.


 


4.                                       COMPANY POLICIES


 


(a)                                  General
Policy Descriptions.  The Employee
has been provided with the eCollege.com Employee Benefits Summary, which
includes descriptions of Medical Insurance and Prescription Card, Dental
Insurance, Flexible Reimbursement Program, Personal Days, Paid Holidays, Direct
Deposit, Bonus Programs, Employee Referral Program and Smoke Free Work
Environment as of March 31, 1999. 
Additional policies and standards of the Company will be provided to the
Employee from time to time during the Employee’s employment.


 


(b)                                 Changes
to Company Policies.  The 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.


 


5.                                       TERMINATION


 


(a)                                  At-Will
Employment.  The 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)                                 Termination
without Cause; Termination For Good Reason. 
Subject to Section 6(b) below, upon termination of the Employee’s
employment with the Company by the Company without Cause (as defined in Section
5(f) below) or by the Employee for Good Reason (as defined in Section 5(f)
below), other than as a result of death or Disability, the Company shall pay to
or provide the Employee the following: (1) any unpaid base salary the Employee
has earned through the date of termination, (2) any unpaid annual bonus that
the Employee has earned with respect to a year ending prior to such
termination, (3) 12 months of the Employee’s then current base salary paid on
the Company’s normal payroll dates, (4) the pro-rated portion (based on the
number of days in the year completed through the date of termination) of the
Employee’s target bonus for the year of termination (paid on the normal date
for the payment of the bonus), such amount to be paid only if the Employee has
met his pro-rated objective performance targets through the date of
termination, (5) an amount equal to the Employee’s target bonus for the year of
termination, (6) the costs of COBRA continuation coverage for the Employee and
his dependents from the date the Employee’s employment terminates through the
earlier of (A) the first anniversary of such termination and (B) the date on
which the Employee becomes entitled to health coverage of a similar type from
another employer, plus/less (7) any positive/negative accrued vacation
days.  In addition to the foregoing, upon
a termination of the Employee’s employment described in this Section 5(b), any
stock options, stock appreciation rights, performance shares, restricted stock,
share rights and all other similar types of equity incentives held by the
Employee immediately prior to the termination of the Employee’s employment
that, but for


 


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the termination of the Employee’s employment, would
have become vested and, if applicable, exercisable by the first anniversary of
the date of his termination of employment, will become immediately vested and,
if applicable, exercisable.  No amount
shall be payable and no benefits shall be provided pursuant to this Section
5(b) until the Employee has executed a release and waiver agreement
(substantially in the form attached hereto as Schedule C) releasing and waiving
any claims against the Company and in which the Company releases and waives
claims against the Employee and if the Employee is serving as a Director of the
Company a valid and effective resignation from the Board unless the Employee
beneficially owns, directly or indirectly, 5% or more of the Company’s Common
Stock.


 


(c)                                  Termination
for Cause.  Upon termination of the
Employee’s employment with the Company by the Company for Cause, the Company
shall pay to the Employee any unpaid base salary the Employee has earned through
the date of termination and no more.  No
amount shall be payable and no benefits shall be provided pursuant to this
Section 5(c) until the Employee has executed a release and waiver agreement
(substantially in the form attached hereto as Schedule C) releasing and waiving
any claims against the Company and in which the Company releases and waives
claims against the Employee and if the Employee is serving as a Director of the
Company a valid and effective resignation from the Board.


 


(d)                                 Termination
as a Result of Death or Disability. 
Upon termination of the Employee’s employment by the Company as a result
of death or Disability, the Company shall pay to the Employee the
following:  (1) any unpaid base salary
the Employee has earned through the date of termination, (2) any unpaid annual
bonus that the Employee has earned with respect to a year ending prior to such
termination, and (3) 12 months of the Employee’s then current base salary paid
on the Company’s normal payroll dates, less in the case of termination as a
result of Disability any amounts paid to Employee as a result of disability
insurance policies maintained by the Company.


 


(e)                                  Termination
by Employee Without Good Reason. 
Upon termination of the Employee’s employment with the Company by Employee
without Good Reason, the Company shall pay to the Employee the following: (1)
any unpaid base salary the Employee has earned through the date of termination
and (2) any unpaid annual bonus that the Employee has earned with respect to a
year ending prior to such termination. 
No amount shall be payable and no benefits shall be provided pursuant to
this Section 5(e) until the Employee (or his representative) has executed a
release and waiver agreement (substantially in the form attached hereto as
Schedule C) releasing and waiving any claims against the Company and in which
the Company releases and waives claims against the Employee and if the Employee
is serving as a Director of the Company a valid and effective resignation from
the Board unless the Employee beneficially owns, directly or indirectly, 5% or
more of the Company’s Common Stock.


 


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(f)                                    Definitions.


 


(1)                                  Cause.  For purposes of this Agreement, “Cause” shall mean the Employee’s:


 


(A)                              willful
failure or refusal to comply, in a material manner, with the reasonable
policies, standards, and regulations of the Company following written notice of
breach and a reasonable opportunity to cure; or


 


(B)                                engaging
in fraud;


 


(C)                                engaging
in dishonesty that results in a demonstrable material harm to the Company; or


 


(D)                               engaging
in any act of misconduct in the performance of his duties on behalf of the
Company that results in material harm to the Company; or


 


(E)                                 failure
to perform any material provision of this Agreement to be performed by the
Employee or breach by the Employee of this Agreement, provided however, that if
such failure or breach can be cured, the Employee will receive written notice
of such failure or breach and a reasonable opportunity to cure such breach;


 


provided, however, that Cause
shall in no event be deemed to exist except upon a finding reflected in a
resolution of the Board approved by at least 50% of the members of the Board,
whose finding shall not be binding upon or entitled to any deference by any
court, arbitrator or other decision-maker ruling on this Agreement, at a
meeting of which the Employee shall have been given proper notice and at which
the Employee (and his counsel) shall have a reasonable opportunity to be heard.


 


(2)                                  Disability.  For purposes of this Agreement, Disability means the Employee’s incapacity
due to physical or mental illness as determined for purposes of the Company’s
long-term disability insurance plans.


 


(3)                                  Good
Reason.  For purposes of this
Agreement, the Employee will have Good Reason
to terminate his employment with the Company if one or more of the following
occurs without his prior written consent:


 


(A)                              The
material breach of this Agreement by the Company; or


 


(B)                                A
material lessening of the Employee’s role, duties or status with the Company,
including without limitation a requirement that the Employee report to anyone
other than the Board; or


 


(C)                                The
requirement that the Employee’s principal office be other than in the
metropolitan areas of either Chicago, Illinois or New York, New York; or


 


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(D)                               The
assignment to the Employee of duties materially inconsistent with his position.


 


provided, however, that (i) the Employee must deliver
written notice of his intention to terminate his employment for Good Reason,
specifying the event or condition giving rise to Good Reason, to the Company
within 45 days after the Employee first becomes aware of the event or condition
in order for the Employee’s resignation with Good Reason to be effective
hereunder and (ii) no event or condition described above shall constitute Good
Reason if the Company cures the event or condition within a reasonable period
after written notice thereof to the Company; and (iii) the Company shall only
be permitted the opportunity to cure one time during each three-year term of
the Employee’s employment hereunder.


 


6.                                       CHANGE IN CONTROL EVENT; HOSTILE TAKE-OVER.


 


(a)                                  Equity
Compensation.  If a Change in Control
Event (as defined in the Company’s 1997 Stock Option Plan, as amended April 13,
1999) occurs, then, immediately prior to and contingent upon the Change in
Control Event, (1) all presently outstanding stock options, stock appreciation
rights, performance shares, share rights and all other similar types of equity
incentives held by the Employee immediately prior to the date of the Change in
Control Event will become fully vested and, if applicable, exercisable, and (2)
all restrictions on restricted stock presently held by the Employee immediately
prior to the date of the Change in Control Event will lapse.


 


(b)                                 Termination
Following Change in Control.  If,
within the two-year period following a Change in Control Event, the Employee’s
employment with the Company is terminated by the Company without Cause or by
the Employee for Good Reason, then in lieu of the amounts and benefits payable
pursuant to Section 5(a) above, the Company shall pay to the Employee, or with
respect to clause (5) below pay on the Employee’s behalf: (1) any unpaid base
salary the Employee has earned through the date of termination, (2) any unpaid
annual bonus that the Employee has earned with respect to a year ending prior
to such termination, (3) an amount equal to 24 months of the Employee’s then
current base salary paid, (4) the pro-rata portion of the Employee’s target
bonus for the year of such termination of employment (based on the number of
completed days through the date of termination), such amount to be paid only if
the Employee has met his pro-rated objective performance targets through the
date of termination, (5) an amount equal to the Employee’s target bonus for the
year of termination, (6) the costs of COBRA continuation coverage or similar
coverage for the Employee and his dependents from the date the Employee’s
employment terminates through the earlier of (A) the date which is 24 months
after the date of such termination and (B) the date on which the Employee
becomes entitled to health coverage of a similar type from another employer,
plus/less (7) any positive/negative accrued vacation days.  The amounts described in this Section 6(b),
other than those described in clause (7), shall be paid to the Employee in a
lump sum within 5 days of the termination of the Employee’s employment with


 


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the Company.  No
amount shall be payable and no benefits shall be provided pursuant to this
Section 6(b) until the Employee has executed a release and waiver agreement
(substantially in the form attached hereto as Schedule B) releasing and waiving
any claims against the Company and in which the Company releases and waives
claims against the Employee.


 


(c)                                  Hostile
Take-Over.  Notwithstanding any other
provision of this Agreement, any termination by the Employee of his employment
with the Company, for any reason or no reason, during the 30-day period
immediately following the 180th day after the completion of the
Hostile Take-Over (as defined in the Company’s 1999 Stock Incentive Plan, as
amended through July 1, 2002) shall be treated for purposes of this Agreement
as a termination for Good Reason.


 


(d)                                 Parachute
Payments.


 


(1)                                  In
General.  The payments under Section
6 of this Agreement will be made without regard to whether the deductibility of
such payments (considered together with any other entitlements or payments
otherwise paid or due to the Employee) would be limited or precluded by Section
280G of the Code and without regard to whether such payments would subject the
Employee to a Parachute Excise Tax (as defined below).


 


(2)                                  Additional
Payment.  If payment of Total
Payments (as defined below) result in the imposition of a Parachute Excise Tax,
the Employee will be entitled to an additional payment in an amount such that,
after the payment of all federal and state income, employment and excise taxes
on both the Total Payments and the additional payment made pursuant to this
Section 6(d)(2), the Employee will be in the same after-tax position as if no
Parachute Excise Tax had been imposed.


 


(3)                                  Payment
Determination and Adjustments.  The
determination of the amount of the Total Payments and whether and to what
extent payments under Section 6(d)(2) are required to be made will be made at
the Company’s expense by the Company’s independent auditor.  In the event of any underpayment or
overpayment to the Employee (determined after the application of this Section
6(d), the amount of such underpayment or overpayment will be immediately paid
by the Company to the Employee or refunded by the Employee to the Company.


 


(e)                                  Enforcement
Expenses.  The Company shall pay the
Employee on demand the amount necessary to reimburse the Employee 50% of all
expenses (including 50% of all reasonable attorneys’ fees and legal expenses)
incurred by the Employee in enforcing any of the obligations of the Company
under this Section 6 following a Change of Control Event; provided, however,
that the Company will reimburse the Employee for the remaining 50% of such
expenses if the Employee prevails on any material issue in his attempt to
enforce those obligations.


 


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7.                                       REPRESENTATIONS AND WARRANTIES OF EMPLOYEE


 


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


 


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


 


8.                                       MISCELLANEOUS PROVISIONS


 


(a)                                  Indemnification.  During the Employee’s employment hereunder
and thereafter, the Company agrees to indemnify the Employee against all claims
arising out of actions or omissions during the Employee’s service to the
Company, to the same extent and on the same terms and conditions provided for
in Section 6 of the Company’s Amended and Restated Bylaws as in effect on the
Commencement Date.  The Company agrees it
will use its best effort to continue to maintain directors’ and officers’
liability insurance at the same levels of coverage as exist on the Commencement
Date during the term of this Agreement.


 


(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


eCollege Building


Attn:       General Counsel


4900 South Monaco Street


Denver, Colorado 80237


Fax:         1-303-873-3849


 


If to the Employee:


 


Oakleigh Thorne


Thorndale Farm LLC


270 E. Westminster


Lake Forest, Il. 60045


 


Copy to:


 


Nancy O. Ryan


Pepper Hamilton LLP


 


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3000 Two Logan Square


Philadelphia, PA 19103


Fax: 215-981-4750


 


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 addresses
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.  The Employee represents that, in
executing this Agreement, he does not rely and has not relied upon any
representation or statement not set forth herein with regard to the subject
matter or effect of this Agreement or otherwise.


 


(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.


 


12
















 


(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.  The Company will pay (or reimburse the
Employee for) the reasonable legal fees and expenses incurred by him in
connection with the negotiation and documentation of this Agreement up to a
maximum of $5,000.


 


(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 Delaware; without
regard to the principles of conflicts of law thereof.


 


(m)                               Waiver
of Jury Trial.  As a specifically
bargained for inducement for each of the parties hereto to enter into this
Agreement (after having the opportunity to consult with counsel), each party
hereto expressly waives the right to trial by jury in any lawsuit or proceeding
relating to or arising in any way from this Agreement or the matters
contemplated hereby.


 


(n)                                 Withholding.  All payments to the Employee under this
Agreement shall be reduced by all applicable withholding required by federal,
state or local law.


 


IN WITNESS WHEREOF, the parties hereto have executed
this Agreement as of the date and year first written above.


 


	
   

  	
  eCollege.com, Inc.

  
	
   

  
	
   

  
	
   

  	
  By:

  	
  /s/ Douglas
  H. Kelsall

  	
   

  
	
   

  	
  Douglas H. Kelsall, President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Oakleigh
  Thorne

  	
   

  
	
   

  	
  Oakleigh Thorne

  
					



 


13
















 


SCHEDULE A



COMPENSATION AND DUTIES


 


1.                                       BASE SALARY. For the period beginning on
the Commencement Date through December 31, 2004, the base salary payable to the
Employee shall be at the rate of $375,000 per year, payable on the Company’s
normal payroll dates.


 


2.                                       BASE SALARY ADJUSTMENT.  The Employee’s base salary for periods after
December 31, 2004 shall be at the rate as set by the Board of the Company, at
the recommendation of the Compensation Committee, payable on the Company’s
normal payroll dates.  Salary adjustments
will include, at a minimum, any cost of living increase to the extent provided
generally to all members of the Management Committee.  Base salary will not be adjusted downward
unless the Employee consents in advance in writing to such adjustment.


 


3.                                       BONUS/OTHER COMPENSATION.  The Employee’s annual target bonus for each
year of the term of this Agreement, pursuant to the eCollege 2004 Annual
Corporate Incentive Plan, is 90% of his base salary, subject to the Company’s
achieving the criteria set forth in that Plan or as may be approved by the
Compensation Committee for years after 2004. 
The bonus will be paid within 30 days following the annual audit of the
Company’s financial records.  Subject to
the foregoing, in any year in which the Employee is not employed by the Company
for the entire year, the bonus will be prorated according to the number of days
in the year that the Employee was employed by the Company.


 


4.                                       LONG TERM INCENTIVE COMPENSATION.  The Employee understands that the Company is
currently structuring a new long-term equity incentive plan, the 2004
Performance Equity Plan, which is expected to be in place in August, 2004.  The Company agrees that for the year 2004 the
Employee will receive 14% of the pool to be established under the plan, the
form of which will be determined by the Compensation Committee of the Board,
and any future long-term equity incentive compensation will be determined by
the Compensation Committee.


 


5.                                       EXPENSES. 
The Company shall reimburse the Employee for all necessary and
reasonable travel and other business expenses incurred by the Employee in the
performance of his duties hereunder in accordance with the normal expense
reimbursement policies of the Company as may be adopted generally from time to
time for executive officers.


 


6.                                       LIVING EXPENSES.  While the Company’s corporate headquarters remain
in Denver, Colorado, the 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 the Employee’s Lake Forest, Illinois Office to the
Company’s Denver headquarters, net of taxes, if any.  In the event the Company’s corporate
headquarters is relocated to the Chicago, Illinois metropolitan area, the
Employee shall no longer receive the foregoing living and travel expenses;
provided, however that (a) the Company’s reimbursement of


 


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living expenses in clause (i) above shall continue
until the apartment lease to which the Employee is subject at the time of the
headquarters’ relocation has terminated, so long as such reimbursement does not
exceed the costs associated with the lease; and (b) after the headquarters’
relocation, the Employee’s travel to the Company’s Denver office will be
covered by paragraph 5 above as applicable.


 


7.                                       DUTIES AND JOB DESCRIPTION. As Chief
Executive Officer and Chairman of the Board, the Employee’s duties shall
include: (i) oversight of all internal operations of the Company, (ii) planning
and running Board of Directors Meetings, and (ii) development of and oversight
of the execution of strategic plans.


 


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SCHEDULE B


 


PERMITTED
OUTSIDE ACTIVITIES


 


Company Boards of Directors


•                  ShopperTrak
Corporation


•                  Aircell,
Inc.


•                  Quad
Graphics (potentially)


 


Non- Profit Boards of Directors


•                  Lake
Forest Openlands Association


•                  Trout
Unlimited


•                  Art
Institute of Chicago


 


Other Activities


•                  Trustee,
various Thorne, Palmer and Irwin family trusts


•                  Thorndale
Farm LLC, (and various family LLCs) manager


•                  Pine
Cay (club board)


 


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SCHEDULE C


 


THIS MUTUAL
RELEASE AND NON-DISPARAGEMENT AGREEMENT (this “Mutual Release”) is made
as of the     day of
           ,
           by and between
[Executive] (“Executive”) and eCOLLEGE.COM, INC. (the “Company”).


 


WHEREAS,
Executive’s employment as an executive of the Company has terminated; and


 


WHEREAS,
pursuant to Section[s] [5] [and] [6] of the Employment Agreement by and between
the Company and Executive dated June    , 2004 (the “Employment
Agreement”), the Company has agreed to pay Executive certain amounts and to
provide him with certain rights and benefits, subject to the execution of this
Mutual Release.


 


NOW THEREFORE,
in consideration of these premises and the mutual promises contained herein,
and intending to be legally bound hereby, the parties agree as follows:


 


SECTION 1.      Consideration.  Executive acknowledges that: (i) the
payments, rights and benefits set forth in Section[s] [5] [and] [6] of the
Employment Agreement constitute full settlement of all his rights under the
Employment Agreement, (ii) he has no entitlement under any other severance or
similar arrangement maintained by the Company, and (iii) except as otherwise
provided specifically in this Mutual Release, the Company does not and will not
have any other liability or obligation to Executive.  Executive further acknowledges that, in the
absence of his execution of this Mutual Release, the benefits and payments
specified in Section[s] [5] [and] [6] of the Employment Agreement would not
otherwise be due to Executive.


 


SECTION 2.      Mutual Release and Covenant Not to Sue.


 


2.1.      The Company (including for
purposes of this Section 2.1, its parents, affiliates and subsidiaries) hereby
fully and forever releases and discharges Executive (and his heirs, executors
and administrators), and Executive hereby fully and forever releases and
discharges Company (including all predecessors and successors, assigns,
officers, directors, trustees, employees, agents and attorneys, past and
present) from any and all claims, demands, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, controversies, debts,
costs, expenses, damages, judgments, orders and liabilities, of whatever kind
or nature, direct or indirect, in law, equity or otherwise, whether known or
unknown, arising through the date of this Mutual Release, out of Executive’s
employment by the Company or the termination thereof, including, but not
limited to, any claims for relief or causes of action under the Age Discrimination
in Employment Act, 29 U.S.C. § 621 et seq., or any
other federal, state or local statute, ordinance or regulation regarding
discrimination in employment and any claims, demands or actions based upon
alleged wrongful or retaliatory discharge or breach of contract under any state
or federal law.


 


2.2.      Executive expressly
represents that he has not filed a lawsuit or initiated any other
administrative proceeding against the Company (including for purposes of this
Section 2.2, its parents, affiliates and subsidiaries) and that he has not
assigned any claim against the Company or any affiliate to any other person or
entity.  The Company expressly represents
that it


 


C-1
















 


has not filed a lawsuit or initiated any other administrative
proceeding against Executive and that it has not assigned any claim against
Executive to any other person or entity. 
Both Executive and the Company further promise not to initiate a lawsuit
or to bring any other claim against the other arising out of or in any way
related to Executive’s employment by the Company or the termination of that
employment.  This Mutual Release will not
prevent Executive from filing a charge with the Equal Employment Opportunity
Commission (or similar state agency) or participating in any investigation
conducted by the Equal Employment Opportunity Commission (or similar state
agency); provided, however, that any claims by
Executive for personal relief in connection with such a charge or investigation
(such as reinstatement or monetary damages) would be barred.


 


2.3.      The foregoing will not be
deemed to release the Executive or the Company from (a) claims solely to
enforce this Mutual Release, (b) claims solely to enforce Sections 2, 5 or 6 of
the Employment Agreement, or (c) claims solely to enforce the terms of any
equity incentive award agreement or arrangement between the Executive and the
Company, including without limitation any awards to the Executive under the
Company’s 2004 Performance Equity Plan, or (d) claims for indemnification under
the Company’s By-Laws, under any indemnification agreement between the Company
and Executive or under any similar agreement.


 


SECTION 3.      Restrictive Covenants.  Executive and the Company acknowledges that
restrictive covenants contained in Section 2 of the Employment Agreement will
survive the termination of his employment. 
Executive affirms that those restrictive covenants are reasonable and
necessary to protect the legitimate interests of the Company, that he received
adequate consideration in exchange for agreeing to those restrictions and that
he will abide by those restrictions.


 


SECTION 6.      Rescission Right.  Executive expressly acknowledges and recites
that (a) he has read and understands the terms of this Mutual Release in its
entirety, (b) he has entered into this Mutual Release knowingly and
voluntarily, without any duress or coercion; (c) he has been advised orally and
is hereby advised in writing to consult with an attorney with respect to this
Mutual Release before signing it; (d) he was provided twenty-one (21) calendar
days after receipt of the Mutual Release to consider its terms before signing
it; and (e) he is provided seven (7) calendar days from the date of signing to
terminate and revoke this Mutual Release, in which case this Mutual Release
shall be unenforceable, null and void. 
Executive may revoke this Mutual Release during those seven (7) days by
providing written notice of revocation to the Company.


 


SECTION 8.      Miscellaneous.


 


8.1       Successors and Assigns.  This Mutual Release shall inure to the
benefit of and be binding upon the Company and Executive and their respective
successors, executors, administrators and heirs.  Executive not may make any assignment of this
Mutual Release or any interest herein, by operation of law or otherwise.  The Company may assign this Mutual Release to
any successor to all or substantially all of its assets and business by means
of liquidation, dissolution, merger, consolidation, transfer of assets, or
otherwise.


 


C-2
















 


8.2       Severability.  Whenever possible, each provision of this
Mutual Release will be interpreted in such manner as to be effective and valid
under applicable law.  However, if any
provision of this Mutual Release is held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
will not affect any other provision, and this Mutual Release will be reformed,
construed and enforced as though the invalid, illegal or unenforceable
provision had never been herein contained.


 


8.3       Entire Agreement;
Amendments.  Except as otherwise
provided herein, this Mutual Release contains the entire agreement and
understanding of the parties hereto relating to the subject matter hereof, and
merges and supersedes all prior and contemporaneous discussions, agreements and
understandings of every nature relating subject matter hereof.  This Mutual Release may not be changed or
modified, except by an agreement in writing signed by each of the parties
hereto.


 


8.6       Governing Law.  This Mutual Release shall be governed by, and
enforced in accordance with, the laws of the State of Delaware without regard
to the application of the principles of conflicts of laws.


 


8.7       Counterparts and
Facsimiles.  This Mutual Release may
be executed, including execution by facsimile signature, in multiple
counterparts, each of which shall be deemed an original, and all of which
together shall be deemed to be one and the same instrument.


 


IN WITNESS
WHEREOF, the Company has caused this Mutual Release to be executed by its duly
authorized officer, and Executive has executed this Mutual Release, in each
case as of the date first above written.


 


	
   

  	
  eCOLLEGE.COM,
  INC.

  
	
   

  	
   

  
	
   

  	
  By:

  
	
   

  	
  Name &
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  [EXECUTIVE]

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  



 


C-3