Document:

exv10w4

Exhibit 10.4

	 	 	 

	 

	 	The St. Joe Company
	 

	 	133 South WaterSound Parkway,
	 

	 	WaterSound, Florida 32413

May 3, 2011

Hugh M. Durden

Chairman

Alfred I. duPont Testamentary Trust

510 Alfred duPont Place

Jacksonville, FL 32202

Dear Hugh:

Reference is made to the letter agreement between you and The St. Joe Company (the “Company”),
dated March 4, 2011 (the “Interim CEO Agreement”). This letter agreement amends the Interim CEO
Agreement by extending the term during which you are empowered to act as the interim Chief
Executive Officer of the Company (“Interim CEO”). Such term shall be for a period ending on the
earlier of (i) 30 days from the date hereof, (ii) the effective date that the Company hires a
full-time Chief Executive Officer or (iii) such date as the Board may determine in its sole
discretion. You will be paid $50,000 for your service as the Interim CEO for such term.

All other terms and conditions of the Interim CEO Agreement, including, without limitation, your
authority and duties as Interim CEO and compensation therefor, remain in full force and effect.

Please acknowledge acceptance of the foregoing by executing the letter below and returning it to my
attention. Please retain a copy for your records.

	 	 	 	 	 

	 	 	Sincerely,
	 
	 	 	 	 
	 	 	The St. Joe Company
	 
	 

	 	By:
	 	  /s/ Bruce R. Berkowitz
	 

	 	 	 	 

	 	 	Name: Bruce R. Berkowitz
	 	 	Title: Chairman

	 	 	 

	AGREED AND ACCEPTED:
	 	 
	 
	 	 
	  /s/ Hugh M. Durden
 

Hugh M. Durden

	 	 

	 	 	 	 	 

	Date:

	 	  5/4/2011exv10w1

Exhibit 10.1

EDUCATION MANAGEMENT CORPORATION

AMENDMENT TO

NONQUALIFIED STOCK OPTION AGREEMENT

(Performance-Vesting)

     This Amendment to Nonqualified Stock Option Agreement (Performance-Vesting) (this “Amendment”)
is entered into by and between Education Management Corporation, a Pennsylvania corporation (the
“Company”), and _______________ (the “Participant”).

RECITALS:

     WHEREAS, the Company adopted the Education Management Corporation 2006 Stock Option Plan, as
amended (the “Plan”), for the benefit of its eligible employees and directors (capitalized terms
not otherwise defined herein shall have the meanings given thereto in the Plan);

     WHEREAS, on ______________, the Company and the Participant entered into a Nonqualified Stock
Option Agreement (Performance-Vesting) under the Plan (the “Agreement”), pursuant to which the
Company granted the Participant an Option to purchase shares of the Company’s common stock on the
terms and conditions set forth therein;

     WHEREAS, the Company and the Participant wish to amend the vesting criteria for the Option set
forth in the Agreement; and

     WHEREAS, pursuant to Section 16 of the Agreement, the Agreement may be amended by mutual
agreement of the Company and the Participant.

     NOW, THEREFORE, the parties hereto, intending to be legally bound hereby, agree as follows:

          1. Section 3 of the Agreement is amended and restated in its entirety to read as follows:

          “3. Vesting.

          (a) Subject solely to the provisions of Sections 4(a), 4(b) and 4(c) below and Section 8(b) of
the Plan, the Option shall vest and become exercisable with respect to the Shares then subject to
it at the times, and to the degree, set forth in this Section 3, upon one or more Realization
Events. If a Realization Event would result in vesting under each of Section 3(b) and 3(c), then
the number of Shares that shall vest upon any such Realization Event shall equal the greater of the
number of Shares that would vest upon such Realization Event pursuant to Section 3(b) or Section
3(c). The portion of the Option which has become vested and exercisable as described in
this Section 3 is hereinafter referred to as the “Vested Portion.”

 

 

          (b) Upon the occurrence of a Realization Event in which any Principal Stockholder receives
cash or marketable securities in respect of its interest in Shares by means of a sale, exchange or
other disposition of its interest in Shares (other than transfers by members of the Principal
Stockholders to or among their respective Affiliates), the Option shall vest and become exercisable
with respect to (i) that number of Shares subject to the Option that bears the same proportion to
(ii) the total number of Shares subject to the Option (treating Shares in respect of which the
Option has already been exercised as, for this purpose, then still subject to the Option) as (x)
the number of Shares sold by the Principal Stockholders in the Realization Event bears to (y) the
total number of Shares held by the Principal Stockholders (including, for this purpose, Shares
previously sold, exchanged or otherwise disposed of).

          (c) Upon the occurrence of a Realization Event, the Option shall vest and become exercisable
with respect to the Shares then subject to it at the times, and to the degree, set forth in the
following schedule:

	 	 	 	 	 
	Cash on Cash Return Realized by Principal	 	 
	Stockholders on Invested Capital	 	Applicable Percentage
	 	200	%	 	20% of the Shares then subject
to the Option

	 	250	%	 	40% of the Shares then subject
to the Option (treating Shares
in respect of which the Option
has already been exercised as,
for this purpose, then still
subject to the Option)

	 	300	%	 	60% of the Shares then subject
to the Option (treating Shares
in respect of which the Option
has already been exercised as,
for this purpose, then still
subject to the Option)

	 	350	%	 	80% of the Shares then subject
to the Option (treating Shares
in respect of which the Option
has already been exercised as,
for this purpose, then still
subject to the Option)

	 	400	%	 	100% of the Shares then subject
to the Option

For purposes of this Agreement, “Cash on Cash Return” shall mean the aggregate gross cash return
(e.g., without deduction for taxes or for amounts invested by the Principal Stockholders in Shares)
realized by the Principal Stockholders on all of the capital invested by them in Shares. Such
return shall include cash (and marketable securities) realized as a result of any disposition or
exchange of Shares owned by the Principal Stockholders, as well as cash (and marketable securities)
received as dividends or other distributions in respect of Shares owned by the Principal
Stockholders. The Cash on Cash Return targets shall be separately calculated for, and must be
separately satisfied with respect to, capital invested in Shares by the Principal Stockholders
after the Effective Date, so that the applicable Cash on Cash Return target stated as a percentage
equals 100 + ((x/36) times (y-100)), where x = the number of months that have

 

 

elapsed from the date of investment through the date the return is being measured, (provided that x
shall not exceed 36), and y = the applicable Cash on Cash Return percentage from the schedule
above; provided, however, that for purposes of such calculation, returns shall
first be attributed to the earliest capital invested.1 If one or more of the Principal
Stockholders ceases to own any Shares, Cash on Cash Return shall thereafter be determined based
solely on the returns realized by the remaining Principal Stockholder(s). Immediately following a
Realization Event described in clause (ii) of the definition thereof in Section 2(w) of the Plan (a
“Clause (ii) Realization Event”), the sum of (x) the Fair Market Value of the remaining Shares
owned by the Principal Stockholders, plus (y) the Fair Market Value of property previously received
by the Principal Stockholders in respect of Shares in forms other than cash (or marketable
securities), shall be considered as cash proceeds received by the Principal Stockholders, and there
shall be no further vesting thereafter; provided, however, that in the event that
some or all of the proceeds received (or to be received) by the Principal Stockholders in respect
of any disposition of Shares owned by them is in the form of contingent payments or proceeds (e.g.,
installment sale proceeds, earn-out proceeds, escrow amounts, etc.), then, at the time that such
contingent payments or proceeds (if any) are received by the Principal Stockholders, the Cash on
Cash Return shall be recalculated and the Applicable Percentage above increased if necessary to
reflect the receipt of such payments or proceeds. Notwithstanding the foregoing, to the extent that
a Clause (ii) Realization Event has not occurred as of the nine-year and six-month anniversary of
the Date of Grant and there are any contingent payments or proceeds that have not been received by
the Principal Stockholders (or property previously received by the Principal Stockholders that has
not already been reduced to cash or marketable securities) as of that date, then the Fair Market
Value of such contingent payments or proceeds (or property) shall be determined and the Cash on
Cash Return shall be recalculated and the Applicable Percentage above increased, if necessary.”

          2. Except to the extent expressly amended hereby, the Agreement shall remain in full force and
effect in all respects.

[Signature page follows]

 

			
	1	 	For purposes of illustration, to achieve
a 60% Applicable Percentage, (i) a 300% Cash on Cash Return would have to be
realized on the Principal Stockholders’ initial capital investment and (ii) on
subsequently invested capital measured on a realized return to the Principal
Stockholders two years following the date of investment, the Cash on Cash
Return needed on that subsequently invested capital would be equal to 233% (100
+ ((24/36) * (300-100)) = 233).

 

 

          IN WITNESS WHEREOF, the Company and the Participant have caused this Amendment to be executed
as of the ____ day of
_________, 2011.

	 	 	 	 	 	 	 

	 	 	EDUCATION MANAGEMENT CORPORATION	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	Title:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	PARTICIPANT	 	 
	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 

	 	 	 	 	 	 	 

	 

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