exv10w4



 





Exhibit 10.4




AMENDED AND RESTATED EMPLOYMENT AGREEMENT




     THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) is entered into as of this
10th day of October, 2007 and amends and restates that certain Employment Agreement
dated July 14, 2004, effective as of June 21, 2004, by and between American Public University
System, Inc., a West Virginia corporation (the “Company”), American Public Education, Inc., a
Delaware corporation (“the Parent”) and Wallace E. Boston, Jr. (the “Executive”).



     WHEREAS, the Company is a wholly owned subsidiary of the Parent;




     WHEREAS, the Company and the Parent believe that it is in their best interest to continue the
services of the Executive as Chief Executive Officer of each entity, and the Executive desires to
provide his services, on the terms and conditions set forth herein.



     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein and
other good and valuable consideration, the receipt and sufficiency of which hereby are
acknowledged, the parties hereto agree as follows:



     1. Employment. On the terms and conditions set forth in this Agreement, the Company
agrees to employ the Executive, and the Executive agrees to continue to be employed by the Company,
for the term set forth in Section 2 hereof and in the position and with the duties set forth in
Section 3 hereof.



     2. Term. The employment of the Executive by the Company as provided in Section 1
hereof has commenced and, unless sooner terminated as hereinafter set forth, shall end on February
28, 2009; provided, however, that this Agreement will automatically renew for additional one (1)
year periods (each a “Renewal Term”) on each anniversary thereafter, unless the Company and Parent
deliver to the Executive written notice of intent not to renew at least thirty (30) days prior to
the expiration of the Term or any Renewal Term. If this Agreement is renewed for one or more
Renewal Terms, such Renewal Term shall be on the basis stated herein.



     3. Position and Duties. The Executive shall (a) serve as the Chief Executive Officer
of the Company, or in another position of equal or greater title, authority and responsibility, as
assigned by the board of directors of the Company, with duties and responsibilities as the board of
trustees of the Company may from time to time determine and assign to the Executive, and (b) serve
as the Chief Executive Officer and President of the Parent, or in another position of equal or



 









 







greater title, authority and responsibility, as assigned by the board of directors of the Parent
(the “Board”). In addition, for so long as the Executive serves as Chief Executive Officer of the
Parent, the Parent shall cause the Executive to be nominated to serve as a member of the Board.
The Executive shall devote the Executive’s best efforts and full business time to the performance
of the Executive’s duties and the advancement of the business and affairs of the Company and the
Parent.



     4. Place of Performance. In connection with the Executive’s employment by the
Company, the Executive shall be based at the principal executive offices of the Company, which the
Company retains the right to change in its discretion, or such other place as the Company and the
Executive mutually agree.



     5. Compensation.



          5(a). Base Salary. The Company shall pay to the Executive an annual base salary (the
“Base Salary”) at the rate of $300,000 per year. The Base Salary shall be reviewed no less
frequently than annually and may be increased at the discretion of the Compensation Committee of
the Board (the “Compensation Committee”). If the Executive’s Base Salary is increased, the
increased amount shall be the Base Salary for the remainder of the employment term hereunder,
except that the Company may reduce the Executive’s Base Salary at any time as part of a general
salary reduction applied to all employees of the Company with annual salaries in excess of $100,000
(the “Senior Executive Group”) in which case the Executive’s reduced Base Salary shall be the Base
Salary for the remainder of the employment term hereunder. Any such reduction in the Executive’s
Base Salary shall be no more than the lesser of the median percentage salary reduction applied to
the Senior Executive Group or 20%. The Base Salary shall be payable biweekly or in such other
installments as shall be consistent with the Company’s payroll procedures.




          5(b). Annual Bonus. The Executive shall be eligible to receive a bonus of up to 60% of
the Executive’s Base Salary for each year as determined by the Compensation Committee in its sole
discretion, based upon the achievement of certain performance goals established by the Compensation
Committee for each year.




          5(c). Other Benefits. The Executive shall be entitled to receive such other benefits
approved by the Compensation Committee and made available to senior executives of the Company. The
Executive also shall be entitled to participate in such plans and to receive such bonuses,
incentive compensation and fringe benefits as may be granted or established by the Company from
time to time.
Nothing contained in this Agreement shall prevent the Company from changing carriers or from
effecting modifications in insurance coverage for the Executive.





 












 





          5(d). Vacation; Holidays. The Executive shall be entitled to all public holidays
observed by the Company and vacation days in accordance with the applicable vacation policies for
senior executives of the Company, which shall be taken at a reasonable time or times.



          5(e) Intentionally Omitted.



          5(f). Withholding Taxes and Other Deductions. To the extent required by law, the
Company shall withhold from any payments due Executive under this Agreement any applicable federal,
state or local taxes and such other deductions as are prescribed by law or Company policy.



     6. Expenses. The Company shall reimburse the Executive for all reasonable expenses
incurred by the Executive (in accordance with the policies and procedures in effect for senior
executives of the Company) in connection with the Executive’s services under this Agreement. The
Executive shall account to the Company for expenses in accordance with policies and procedures
established by the Company.



     7. Relocation Expenses. The Company will pay or reimburse the Executive for the
customary and reasonable moving expenses incurred by the Executive in connection with any
subsequent relocation of Executive’s place of performance pursuant to Section 4 of this Agreement.
If the Internal Revenue Service or any state or local taxing authority takes the position that the
relocation expenses paid or reimbursed subject to this Section 7 results in the receipt of taxable
income to Executive, such expenses shall include an amount equal to the aggregate Federal, state
and local income and employment taxes imposed on Executive as a direct result of such payment or
reimbursement.



     8. Confidential Information.



          8(a). The Executive covenants and agrees that the Executive will not ever, without the prior
written consent of the Board or a person authorized by the Board or except as may be ordered by a
court of competent jurisdiction, publish or disclose to any unaffiliated third party or use for the
Executive’s personal benefit or advantage any confidential information with respect to the
Company’s past, present, or planned business, including but not limited to all information and
materials related to any Company business, business plan, product, service, procedure, strategy,
method, technique, technology, research, strategy, plan, customer or supplier information, customer
or supplier list, financial data, technical data, computer files, and computer software, including
any of the foregoing that is in any stage of research, development, or planning, and any other information which the Executive
obtained while employed by, or otherwise serving or acting on behalf of, the Company or which the
Executive may possess or have under his control, that is



 









 




not generally known (except for
unauthorized disclosures) to the public or within the industry in which the Company does business.




          8(b). The Executive acknowledges that the restrictions contained in Section 8(a) hereof are
reasonable and necessary, in view of the nature of the Company’s business, in order to protect the
legitimate interests of the Company, and that any violation thereof would result in irreparable
injury to the Company. Therefore, the Executive agrees that in the event of a breach or threatened
breach by the Executive of the provisions of Section 8(a) hereof, the Company shall be entitled to
obtain from any court of competent jurisdiction, preliminary or permanent injunctive relief
restraining the Executive from disclosing or using any confidential information. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies available to it for
breach or threatened breach, including, without limitation, recovery of damages from the Executive.



          8(c). The Executive shall deliver promptly to the Company on termination of employment, or at
any other time the Company may so request, all confidential materials, memoranda, notes, records,
reports and other documents and materials (and all copies thereof), in whatever form or medium,
that contain any of the foregoing, including but not limited to computer data, files, software, and
hardware, relating to the Company’s or its affiliates’ respective businesses which the Executive
obtained while employed by, or otherwise serving or acting on behalf of, the Company or which the
Executive may then possess or have under his control.



     9. Non-Competition.



          9(a). Non-Competition. The Executive covenants and agrees that the Executive will
not, during the Executive’s employment hereunder and for a period of one (1) year thereafter (to
the extent permitted by law), at any time and in the United States or any other jurisdiction in
which the Company is engaged or has reasonably firm plans to engage in business, (i) compete with
the Company on behalf of the Executive or any third party; (ii) participate as a director, agent,
representative, stockholder or partner or have any direct or indirect financial interest in any
enterprise which engages in any business in which the Company is engaged; or (iii) participate as
an employee or officer in any enterprise in which the Executive’s responsibility relates to any
business in which the Company is engaged. The ownership by the Executive of less than five percent
(5%) of the outstanding stock of any corporation listed on a national securities exchange shall not
be deemed a violation of this Section 9(a).



          9(b). Injunctive Relief. In the event the restrictions against engaging in a
competitive activity contained in Section 9(a) hereof shall be determined by any court of competent
jurisdiction to be unenforceable by reason of their extending for too great a period of time or
over too great a geographical area or



 









 




by reason of their being too extensive in any other respect,
Section 9(a) hereof shall be interpreted to extend only over the maximum period of time for which
it may be enforceable and over the maximum geographical area as to which it may be enforceable and
to the maximum extent in all other respects as to which it may be enforceable, all as determined by
the court in the action.




          9(c). Non-Solicitation. The Executive covenants and agrees that the Executive will
not, during the Executive’s employment hereunder and for a period of one (1) year thereafter
solicit, induce, entice, or encourage or attempt to solicit, induce, entice, or encourage any
employee of the Company or any of the Company’s affiliates to render services for any other person,
firm, entity, or corporation or to terminate his or her employment with the Company.



     10. Termination of Employment.



          10(a). Death. The Executive’s employment hereunder shall terminate upon the
Executive’s death.



          10(b). By the Company. The Company or Parent may terminate the Executive’s
employment hereunder under the following circumstances:



               (i) The Company or Parent may terminate the Executive’s employment hereunder for
“Disability.” For purposes of this Agreement, “Disability” shall mean the Executive shall have
been unable to perform all of the Executive’s duties hereunder by reason of illness, physical or
mental disability or other similar incapacity, which inability shall continue for more than three
(3) consecutive months.



               (ii) The Company or Parent may terminate the Executive’s employment hereunder for “Cause.”
For purposes of this Agreement, “Cause” shall mean (A) refusal by the Executive to follow a
written order of the Chairman of the Board or the Board of Directors, (B) the Executive’s
engagement in conduct materially injurious to the Company or its reputation, (C) dishonesty of a
material nature that relates to the performance of the Executive’s duties under this Agreement, (D)
the Executive’s conviction for any crime involving moral turpitude or any felony, and (E) the
Executive’s continued failure to perform his duties under this Agreement (except due to the
Executive’s incapacity as a result of physical or mental illness) to the satisfaction of the Board
of Directors of the Company for a period of at least thirty (30) consecutive days after written
notice is delivered to the Executive specifically identifying the manner in which the Executive has failed to perform his
duties.



               (iii) The Company, in the sole discretion of its board of trustees, or the Parent, in the sole
discretion of the Board, may terminate the



 









 




Executive’s employment hereunder at any time other than
for Disability or Cause, for any reason or for no reason at all.




          10(c). By the Executive. The Executive may terminate the Executive’s employment
hereunder for “Good Reason.” For purposes of this Agreement, “Good Reason” shall mean:



               (i) the assignment to the Executive of any duties inconsistent in any material respect with
the Executive’s position as contemplated by Section 3 of this Agreement, excluding for this purpose
an isolated, insubstantial and inadvertent action which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;



               (ii) any failure by the Company or Parent to comply with any of the provisions of this
Agreement, other than an isolated, insubstantial and inadvertent failure which is remedied by the
Company or Parent promptly after receipt of notice thereof given by the Executive;



               (iii) after a Change of Control (as defined in Section 12) the Executive does not continue as
the Chief Executive Officer, or any other office he holds at the time of the Change of Control, of
the most senior resulting entity succeeding to the business of the Company;



               (iv) any failure by the Company or Parent to comply with and satisfy Section 16(c) of this
Agreement.


In order to constitute Good Reason, Executive must provide notice to the Company of the existence
of the condition within ninety (90) days of the initial existence.




          10(d). Notice of Termination. Any termination of the Executive’s employment by the
Company, the Parent or the Executive (other than pursuant to Section 10(a) hereof) shall be
communicated by written “Notice of Termination” to the other party hereto in accordance with
Section 13 hereof. For purposes of this Agreement, a “Notice of Termination” shall mean a notice
which shall indicate the specific termination provision in this Agreement relied upon, if any, and
shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive’s employment under the provision so indicated.



          10(e). Date of Termination. For purposes of this Agreement, the “Date of
Termination” shall mean (i) if the Executive’s employment is terminated by the Executive’s death,
the date of the Executive’s death; (ii) if the Executive’s employment is terminated pursuant to
Section 10(b)(i) hereof, thirty (30) days after Notice of Termination, provided that the Executive
shall not have returned to the performance of the Executive’s duties on a full-time basis during
this 30-day period; (iii) if the Executive’s employment is terminated pursuant to Section
10(b)(ii),



 









 




10(b)(iii) or 10(c) hereof, the date specified in the Notice of Termination; and (iv) if
the Executive’s employment is terminated for any other reason, the date on which Notice of
Termination is given.




          10(f). Termination Solely by Parent. For purposes of this Agreement, any termination solely
by Parent and not by the Company shall not affect the Executive’s rights to continue to receive the
benefit of any provisions, rights or privileges hereunder that relate to employment of the
Executive by the Company.



     11. Compensation Upon Termination.



          11(a). If the Executive’s employment is terminated by the Executive’s death, the Company
shall pay to the Executive’s estate, or as may be directed by the legal representatives of the
estate, the Executive’s full Base Salary through the Date of Termination and all other unpaid
amounts, if any, to which the Executive is entitled as of the Date of Termination in connection
with any fringe benefits or under any incentive compensation plan or program of the Company
pursuant to Sections 5(b) and (c) hereof, at the time these payments are due and the Company shall
have no further obligations to the Executive under this Agreement.



          11(b). If the Company terminates the Executive’s employment for Disability as provided in
Section 10(b)(i) hereof, the Company shall pay the Executive his full Base Salary through the Date
of Termination and all other unpaid amounts, if any, to which the Executive is entitled as of the
Date of Termination in connection with any fringe benefits or under any incentive compensation plan
or program of the Company pursuant to Sections 5(b) and (c) hereof, at the time these payments are
due, and the Company shall have no further obligations to the Executive under this Agreement;
provided, that payments made to the Executive during the Disability Period shall be reduced
by the sum of the amounts, if any, payable to the Executive at or prior to the time of any payment
under disability benefit plans of the Company and which amounts were not previously applied to
reduce any payment.



          11(c). If the Company terminates the Executive’s employment for Cause as provided in Section
10(b)(ii) hereof, the Company shall pay the Executive the Executive’s full Base Salary through the
Date of Termination and all other unpaid amounts, if any, to which Executive is entitled as of the Date of Termination in
connection with any fringe benefits or under any incentive compensation plan or program of the
Company pursuant to Section 5(c) hereof, and the Company shall have no further obligations to the
Executive under this Agreement.



          11(d). If the Executive terminates the Executive’s employment other than for Good Reason, the
Company shall pay the Executive the Executive’s



 









 





full Base Salary through the Date of Termination
and all other unpaid amounts, if any, to which Executive is entitled as of the Date of Termination
in connection with any fringe benefits or under any incentive compensation plan or program of the
Company pursuant to Sections 5(b) and (c) hereof, and the Company shall have no further obligations
to the Executive under this agreement.



          11(e). Except where payments are required to be made under Section 11(f), if the Company
terminates the Executive’s employment other than for Cause or Disability or the Executive
terminates the Executive’s employment for Good Reason as provided in Section 10(c) hereof, the
Company shall pay the Executive the following amounts and shall have no further obligations to the
Executive, provided that the Executive first executes a release of claims in a form to be prepared
by the Company:



               (i) the sum of (1) the Executive’s Base Salary through the Date of Termination to the extent
not theretofore paid, (2) the product of (x) the Annual Bonus (to the extent Company and Executive
performance were satisfying the performance targets, adjusted for the short period through the Date
of Termination, for an Annual Bonus) and (y) a fraction, the numerator of which is the number of
days in the current fiscal year through the effective date of termination of the Executive’s
employment (the “Date of Termination”), and the denominator of which is 365, and (3) any
compensation previously deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case, to the extent not theretofore paid, (the sum
of the amounts described in clauses (1), (2), and (3) shall be hereinafter referred to as the
“Accrued Obligations”) in a lump sum in cash within 30 days of the Date of Termination;



               (ii) an amount equal to the sum of (x) the Executive’s Base Salary and (y) the Annual Bonus
(to the extent Company and Executive performance were satisfying the performance targets, adjusted
for the short period, after the Date of Termination to the end of the calendar year for an Annual
Bonus and as to the remainder of the twelve month period following the Date of Termination, only if
net income has increased from the same period in the prior year and the performance targets
established for the successor chief executive officer were being satisfied for that period), in
substantially equal proportionate installments in accordance with the Company’s normal payroll
practices, commencing with the first payroll period in the month following the month in which the Date of
Termination occurs, for a period of twelve (12) months; and



               (iii) for twelve (12) months after the Date of Termination, or any longer period as may be
provided by the terms of the appropriate plan, program, practice or policy, the Company shall
continue benefits to the Executive and/or the Executive’s family at least equal to those which
would have been provided to them in accordance with the welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies



 









 




(including, without limitation,
medical, prescription, dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to other peer employees
of the Company and its affiliated companies, as if the Executive’s employment had not been
terminated; provided, however, that the Company may elect, with respect to sum or
all of such benefits, that in lieu of the continuation of such benefits, the Company may pay to the
Executive a lump sum payment, less applicable withholdings for federal, state, and local taxes,
equal to twelve (12) months premiums (at the rate and level of coverage applicable at the time of
the Executive’s termination) under the Company’s welfare benefit plans, practices, policies and
programs (at the rate and level of coverage applicable at the time of the Executive’s termination)
for the benefits for which this election is made; provided, further, that if the
Executive becomes reemployed with another employer and is eligible to receive medical or other
welfare benefits under another employer provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under the other plan during the applicable
period of eligibility.




               (iv) subject to Section 12 hereof, to the extent that less than thirty three and one-third
percent (33 1/3%) of all stock options granted to the Executive under the American Public
Education, Inc. 2002 Stock Incentive Plan or any other employee stock option plan maintained for
Company employees which are outstanding at the time of such event shall be vested on the Date of
Termination, such additional number of options, if any, shall immediately accelerate and vest and
become exercisable in accordance with their terms. This Agreement is intended to amend all stock
option grants previously awarded to the Executive to modify vesting as described above to the
extent more than sixty six and two-thirds percent (66 2/3%) of the options held by the Executive
shall not be vested under the terms of such stock option grants on the Date of Termination.



               (v) to the extent not theretofore paid or provided, for twelve (12) months after the Date of
Termination, the Company shall timely pay or provide to the Executive any other amounts or benefits
required to be paid or provided or which the Executive is eligible to receive under any plan,
program, policy or practice or contract or agreement of the Company and its affiliated companies (these other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”).



          11(f). If within 180 days after a Change of Control (as defined in Section 12), the Company
terminates the Executive’s employment other than for Cause or Disability or the Executive
terminates the Executive’s employment for Good Reason as provided in Section 10(c) hereof, the
Company shall pay the Executive the following amounts and shall have no further obligations to the
Executive, provided that the Executive first executes a release of claims in a form to be prepared
by the Company:



 









 





               (i) the sum of (1) the Executive’s Base Salary through the Date of Termination to the extent
not theretofore paid, (2) the Annual Bonus (to the extent Company and Executive performance were
satisfying the performance targets, adjusted for the short period through the Date of Termination,
for an Annual Bonus) and (y) a fraction, the numerator of which is the number of days in the
current fiscal year through the effective date of termination of the Executive’s employment (the
“Change of Control Date of Termination”), and the denominator of which is 365, and (3) any
compensation previously deferred by the Executive (together with any accrued interest or earnings
thereon) and any accrued vacation pay, in each case, to the extent not theretofore paid, in a lump
sum in cash within 30 days of the Change of Control Date of Termination;



               (ii) an amount equal to the sum of (x) two times the Executive’s Base Salary and (y) two times
the Annual Bonus (to the extent the Company and Executive performance were satisfying the
performance targets, adjusted for the short period), in a lump sum in cash within 30 days of the
Change of Control Date of Termination;



               (iii) for twenty-four (24) months after the Date of Termination, or any longer period as may
be provided by the terms of the appropriate plan, program, practice or policy, the Company shall
continue benefits to the Executive and/or the Executive’s family at least equal to those which
would have been provided to them in accordance with the welfare benefit plans, practices, policies
and programs provided by the Company and its affiliated companies (including, without limitation,
medical, prescription, dental, disability, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable generally to other peer employees
of the Company and its affiliated companies, as if the Executive’s employment had not been
terminated; provided, however, that the Company may elect, with respect to sum or
all of such benefits, that in lieu of the continuation of such benefits, the Company may pay to the
Executive a lump sum payment, less applicable withholdings for federal, state, and local taxes,
equal to twenty-four (24) months premiums (at the rate and level of coverage applicable at the time
of the Executive’s termination) under the Company’s welfare benefit plans, practices, policies and programs (at the rate and level of
coverage applicable at the time of the Executive’s termination) for the benefits for which this
election is made; provided, further, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other welfare benefits under another
employer provided plan, the medical and other welfare benefits described herein shall be secondary
to those provided under the other plan during the applicable period of eligibility;



               (iv) to the extent not theretofore paid or provided, for twenty-four (24) months after the
Date of Termination, the Company shall timely pay or provide to the Executive any other amounts or
benefits required to be paid or



 









 





provided or which the Executive is eligible to receive under any
plan, program, policy or practice or contract or agreement of the Company and its affiliated
companies (these other amounts and benefits shall be hereinafter referred to as the “Other
Benefits”); and



               (v) in the event that it is determined that any payment, benefit, or distribution described in
this Section 11(f) or in Section 12 made by the Company, by any of its affiliates, by any person
who acquires ownership or effective control or ownership of a substantial portion of the Company’s
assets (within the meaning of Section 280G of the Internal Revenue Code of 1986, as amended, and
the regulations thereunder (the “Code”)) or by any affiliate of such person, whether paid or
payable or distributed or distributable pursuant to the terms of this Section 11(f), Section 12 or
otherwise (the “Total Payments”), would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties with respect to such excise tax (such excise tax, together with
any such interest or penalties, are collectively referred to as the “Excise Tax”), then the
Executive shall be entitled to receive an additional payment (an “Excise Tax Restoration Payment”)
in an amount that shall fund the payment by the Executive of any Excise Tax on the Total Payments
as well as all income taxes imposed on the Excise Tax Restoration Payment, any Excise Tax imposed
on the Excise Tax Restoration Payment and any interest or penalties imposed with respect to taxes
on the Excise Tax Restoration Payment or any Excise Tax.



          11(g). No Duty to Mitigate. The Executive shall not be required to mitigate
amounts payable pursuant to Section 11 hereof by seeking other employment.



          11(h). No Additional Payments. Notwithstanding anything to the contrary in this
Agreement, the Executive acknowledges and agrees that in the event of the termination of his
employment, even if in breach of this Agreement, he will be entitled only to those payments
specified herein for the circumstances of his termination, and not to any other payments by way of
damages or claims of any nature, whether under this Agreement or under any other agreements between
the Executive and the Company.



          12. Acceleration of Options Upon Change of Control. Immediately prior to a Change of
Control (as hereinafter defined), all stock options granted to the Executive under any employee
stock option plan maintained for Company employees that are outstanding immediately prior to such
event shall be vested and fully exercisable. This Agreement is intended to amend all stock option
grants previously awarded to the Executive to modify vesting as described above to the extent
vesting would not otherwise accelerate in full under the terms of such stock option grants. For
purposes of this Agreement, “Change of Control” means (i) the dissolution or liquidation of the
Parent or a merger, consolidation, or reorganization of the Parent with one or more other entities
in which the Parent is not the surviving entity, (ii) a



 









 




sale of substantially all of the assets of
the Parent to another person or entity, or (iii) any transaction (including without limitation a
merger or reorganization in which the Parent is the surviving entity) which results in any person
or entity owning 50% or more of the combined voting power of all classes of stock of the Parent.




     13. Notices. All notices, demands, requests or other communications required or
permitted to be given or made hereunder shall be in writing and shall be delivered, telecopied or
mailed by first class registered or certified mail, postage prepaid, addressed as follows:




	 	(a)	 	If to the Company:
	 
	 	 	 	American Public University System, Inc.

111 West Congress Street

Charles Town, West Virginia 25414

Telecopy: (304) 724-3780

Attention: Secretary
	 
	 	(b)	 	If to the Parent:
	 
	 	 	 	American Public Education, Inc.

111 West Congress Street

Charles Town, West Virginia 25414

Telecopy: (304) 724-3780

Attention: Secretary
	 
	 	(c)	 	If to the Executive , to the address set forth on the signature page hereto,




or to such other address as may be designated by either party in a notice to the other. Each
notice, demand, request or other communication that shall be given or made in the manner described
above shall be deemed sufficiently given or made for all purposes three (3) days after it is
deposited in the U.S. mail, postage prepaid, or at such time as it is delivered to the addressee (with the return receipt, the delivery receipt,
the answer back or the affidavit of messenger being deemed conclusive evidence of delivery) or at
such time as delivery is refused by the addressee upon presentation.




     14. Severability. The invalidity or unenforceability of any one or more provisions of
this Agreement shall not affect the validity or enforceability of the other provisions of this
Agreement, which shall remain in full force and effect.



     15. Survival. It is the express intention and agreement of the parties hereto that
the provisions of Sections 8 and 9 hereof shall survive the termination of employment of the
Executive. In addition, all obligations of the Company to make



 









 





payments hereunder shall survive
any termination of this Agreement on the terms and conditions set forth herein.



     16. Successors and Assigns. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company and the Parent shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This Agreement shall
inure to the benefit of and be enforceable by the Executive’s legal representatives.



          (b) This Agreement shall inure to the benefit of and be binding upon the Company and the
Parent and their successors and assigns.



          (c) The Company and the Parent will require any successor or any party that acquires control
of the Company and the Parent (whether direct or indirect, by purchase, merger, consolidation or
otherwise) or all or substantially all of the business and/or assets of the Company or the Parent
to assume expressly and agree to perform this Agreement in the same manner and to the same extent
that the Company and the Parent would be required to perform it if no succession had taken place.
As used in this Agreement, “Company” and “Parent” shall mean the Company or Parent, respectively,
as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes
and agrees to perform this Agreement by operation of law, or otherwise.



     17. Binding Effect. Subject to any provisions hereof restricting assignment, this
Agreement shall be binding upon the parties hereto and shall inure to the benefit of the parties
and their respective heirs, devisees, executors, administrators, legal representatives, successors
and assigns.



     18. Amendment; Waiver. This Agreement shall not be amended, altered or modified
except by an instrument in writing duly executed by the parties hereto. Neither the waiver by
either of the parties hereto of a breach of or a default under any of the provisions of this
Agreement, nor the failure of either of the parties, on one or more occasions, to enforce any of the provisions of this Agreement or to
exercise any right or privilege hereunder, shall thereafter be construed as a waiver of any
subsequent breach or default of a similar nature, or as a waiver of any provisions, rights or
privileges hereunder.



     19. Headings. Section and subsection headings contained in this Agreement are
inserted for convenience of reference only, shall not be deemed to be a part of this Agreement for
any purpose, and shall not in any way define or affect the meaning, construction or scope of any of
the provisions hereof.



     20. Governing Law. This Agreement, the rights and obligations of the parties hereto,
and any claims or disputes relating thereto, shall be governed by



 









 





and construed in accordance with
the laws of the State of West Virginia (but not including the choice of law rules thereof).



     21. Entire Agreement. This Agreement constitutes the entire agreement between the
parties hereto with respect to the subject matter hereof, and it supersedes all prior oral or
written agreements, commitments or understandings with respect to the matters provided for herein.



     22. Counterparts. This Agreement may be executed in two or more counterparts, each of
which shall be an original and all of which shall be deemed to constitute one and the same
instrument.



     23. Limitations Under Code Section 409A. Anything in this Agreement to the contrary
notwithstanding, if (A) on the date of termination of Executive’s employment with the Company or a
Subsidiary, any of the Company’s stock is publicly traded on an established securities market or
otherwise (within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as amended
(the “Code”)), (B) if Executive is determined to be a “specified employee” within the meaning of
Section 409A(a)(2)(B) of the Code, (C) the payments exceed the amounts permitted to be paid
pursuant to Treasury Regulations section 1.409A-1(b)(9)(iii) and (D) such delay is required to
avoid the imposition of the tax set forth in Section 409A(a)(1) of the Code as a result of such
termination, the Executive would receive any payment that, absent the application of this Section
23, would be subject to interest and additional tax imposed pursuant to Section 409A(a) of the Code
as a result of the application of Section 409A(2)(B)(i) of the Code, then no such payment shall be
payable prior to the date that is the earliest of (1) 6 months after the Executive’s termination
date, (2) the Executive’s death or (3) such other date as will cause such payment not to be subject
to such interest and additional tax (with a catch-up payment equal to the sum of all amounts that
have been delayed to be made as of the date of the initial payment).



     It is the intention of the parties that payments or benefits payable under this Agreement not
be subject to the additional tax imposed pursuant to Section 409A of the Code. To the extent such
potential payments or benefits could become subject to such Section, the parties shall cooperate to
amend this Agreement with the goal of giving the Executive the economic benefits described herein
in a manner that does not result in such tax being imposed.



 









 





     IN WITNESS WHEREOF, the undersigned have duly executed this Agreement, or have caused this
Agreement to be duly executed on their behalf, as of the day and year first hereinabove written.



	 	 	 	 	 
	 	AMERICAN PUBLIC UNIVERSITY SYSTEM, INC.

 	 
	 	 	 
	 	 	 
	 
	 	 	 
	 	By:  	                                              /s/ James Herhusky
 	 
	 	 	Name:  	James Herhusky 	 
	 	 	Title:  	Executive Vice President


 	 
	 	 	 
	 	AMERICAN PUBLIC EDUCATION, INC.	 
	 	 	 
	 	 	 
	 	 	 
	 	By:  	                                              /s/ Phillip A. Clough
 	 
	 	 	Name:  	Phillip A. Clough 	 
	 	 	Title:  	Chairman of the Board





 	 
	 	 	 
	 	THE EXECUTIVE:	 
	 	 	 
	 	 	 
	 	 	 
	 	                                              /s/ Wallace E. Boston, Jr.
 	 
	 	Wallace E. Boston, Jr.