Document:

Exhibit 10.1

 

FORM OF NEO

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (this “Agreement”) is dated as of [                   ] [INSERT DATE], by and between Corinthian Colleges, Inc., a Delaware corporation (the “Company”), and [                       ] [INSERT NAME OF EMPLOYEE] (“Employee”).

 

WITNESSETH:

 

WHEREAS, the Company and Employee desire to enter into this Agreement to assure the Company of the continuing and exclusive service of Employee and to set forth the terms and conditions of Employee’s employment with the Company.

 

AGREEMENT:

 

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, the parties agree as follows:

 

1.                                      TERM.  The Company agrees to employ Employee and Employee hereby accepts such employment, in accordance with the terms of this Agreement, commencing on the date of this Agreement (the “Effective Date”) and continuing for a period of five (5) years hereafter (the “Term”), subject to earlier termination under Section 5.

 

2.                                      SERVICES AND EXCLUSIVITY OF SERVICES.  During the Term of this Agreement, Employee shall devote Employee’s full business time, energy and ability exclusively to the business, affairs and interests of the Company and matters related thereto, shall use Employee’s best efforts and abilities to promote the Company’s interests and shall perform the services contemplated by this Agreement in accordance with policies established by and under the direction of the Board of Directors of the Company (the “Board”) [and the Chief Executive Officer of the Company or such other executive officer of the Company as the Chief Executive Officer shall determine from time to time (the “Senior Officer”)] [BRACKETED LANGUAGE NOT APPLICABLE IN CEO CONTRACT].

 

Employee shall not, directly or indirectly, during the term of this Agreement render services to any other person or firm for compensation or engage in any activity competitive with or adverse to the Company’s business.  Employee may serve as a director or in any other capacity of any business enterprise or any nonprofit or governmental entity or trade association, provided in each case that such service is approved by the Board or the Senior Officer.  Notwithstanding the foregoing, Employee may make and manage personal business investments of Employee’s choice and serve in any capacity with any civic, educational or charitable organization (other than as a director of such organization, approval for which may be sought under the immediately preceding sentence of this Section 2) without seeking the approval of the [Senior Officer] [the Board], provided that such activities and services do not interfere or conflict with the performance of the duties hereunder or create any conflict of interest with such duties.

 

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3.                                      DUTIES AND RESPONSIBILITIES.  Employee shall serve as [INSERT TITLE] of the Company for the Term of this Agreement.  In the performance of Employee’s duties, Employee shall report directly to the [Senior Officer] [Board] and shall be subject to the direction of the [Senior Officer] [Board] and to such limits on Employee’s authority as the [Senior Officer] [Board] may from time to time impose.  During the term of this Agreement, Employee shall be based at the Company’s principal executive offices in Orange County, California. Employee agrees to observe and comply with the rules and regulations of the Company and agrees to carry out and perform orders, directions and policies of the Company and its Board as they may be, from time to time, stated either orally or in writing.  The Company agrees that the duties which may be assigned to Employee shall be usual and customary duties of the office(s) or position(s) to which Employee may from time to time be appointed or elected and shall not be inconsistent with the provisions of the charter documents of the Company or applicable law. Employee shall have such corporate power and authority as shall reasonably be required to enable Employee to perform the duties required in any office that may be held. [BOARD MEMBERSHIP TO BE INCLUDED FOR CEO]

 

4.                                      COMPENSATION.

 

(a)                                 Base Compensation.  During the Term, the Company agrees to pay Employee a base salary at the annual rate of not less than [$                    ] [INSERT BASE SALARY], payable in accordance with the Company’s practices in effect from time to time (the “Base Salary”).

 

(b)                                 Additional Benefits.  Employee shall also be entitled to all rights and benefits for which Employee is otherwise eligible under any bonus plan, Target Bonus (defined below) arrangement, incentive agreement (including stock options and/or other awards granted pursuant to the Company’s equity award plans (hereinafter the “Equity Award Plans”)), participation or extra compensation plan, pension plan, profit-sharing plan, life, medical, dental, disability, or insurance plan (including, except as otherwise prohibited therein, the Company’s Employee Stock Purchase Plan) or policy or other plan or benefit that the Company may provide for Employee or (provided Employee is eligible to participate therein) for Peer Employees or for employees of the Company generally, as from time to time in effect, during the Term (collectively, all of the above shall be referred to as the “Additional Benefits”).  The term “Peer Executives” shall mean those other employees within the Company who have the same executive-level title as Employee (e.g., Executive Vice President, Senior Vice President, etc.).  In addition to the Base Salary, Employee shall be eligible to earn, for each fiscal year of Company, a target annual incentive bonus equal to [115% FOR CEO] [90% FOR CHIEF ADMIN OFFICER] [75% FOR ALL OTHER EVPs] [INSERT TARGET BONUS] of Employee’s Base Salary (“Target Bonus”), which bonus shall be based on achieving targeted performance goals as determined in advance by Compensation Committee.

 

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(c)                                  Periodic Review.  The Compensation Committee of the Board shall review Employee’s Base Salary, Target Bonus and equity awards then being paid to Employee not less frequently than every twelve months.  Following such review, the Company may in its discretion increase (but shall not be required to increase) the Base Salary and Target Bonus, but may not decrease the Base Salary and Target Bonus during the Term; provided, however, that if the Company undertakes any generalized salary reductions of Peer Employees, the Company may reduce Employee’s Base Salary and Target Bonus by a percentage equal to the percentage base salary and target bonus reductions effected for all other Peer Employees of the Company, but in no event by a percentage of more than 10% of either Employee’s Base Salary or Target Bonus.

 

(d)                                 Vacation.  Employee shall be entitled to not less than three weeks paid vacation each twelve-month period (or such larger amount of paid vacation as is generally granted to employees of the Company based on time of service with the Company), which shall accrue on a pro rata basis from the Effective Date of this Agreement.  Vacation time will continue to accrue so long as Employee’s total accrued vacation does not exceed one times (1x) the then-current rate of annual vacation accrual of the Employee (the “Vacation Accrual Cap”).  Should Employee’s accrued vacation time reach the Vacation Accrual Cap, Employee will cease to accrue additional vacation until Employee’s accrued vacation time falls below the Vacation Accrual Cap.  Except with respect to the rate of vacation accrual set forth above, all vacation time shall be subject to the plans, policies, programs and practices as in effect generally with respect to other Peer Employees of the Company.

 

5.                                      TERMINATION.  This Agreement and all obligations hereunder (except the obligations contained in Sections 8, 9, 10, 11, 12, 13 and 22 (Trade Secrets/Confidential Information, Agreement Not to Disclose, Property of Company, Unfair Competition, Solicitation of Employees, Indemnity and Arbitration) which shall survive any termination hereunder) shall terminate upon the earliest to occur of any of the following:

 

(a)                                 Voluntary Termination by Employee / End of Term / Retirement.  Employee may terminate employment and this Agreement by giving no less than eight (8) weeks’ notice to the Company.  This Agreement shall also terminate upon expiration of the Term or the voluntary termination by Employee or Retirement from the Company.

 

(b)                                 Death or Disability of Employee.  Employee’s employment shall be terminated upon the death or Disability (as defined below) of Employee.  In such instance, except as set forth below, all obligations hereunder to Employee (or Employee’s heirs or legal representatives) shall cease, other than for payment of the sum of (A) Employee’s Base Salary through the date of termination to the extent not theretofore paid, (B) pro rata portion of the Target Bonus calculated as of the date of termination and any other amount earned through the date of termination pursuant to another cash compensation agreement; and (C) any accrued vacation pay, in each case to the extent not theretofore paid (the sum of the amounts

 

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described in clauses (A), (B), and (C) shall be hereinafter referred to as the “Accrued Obligations”), which shall, subject to Section 5(i), be paid to Employee or Employee’s estate or beneficiary, as applicable, in a lump sum in cash within 30 days after the date of termination or any earlier time required by applicable law.  For the purposes of this Agreement, Disability shall mean that Employee is either (1) unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, or (2) by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than six (6) months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company,(3) if determined to be totally disabled by the Social Security Administration, or (4) if determined to be disabled in accordance with the applicable disability insurance program of the Company, provided that the definition of “disability” applied under such disability insurance program complies with the requirements of this Section.  The termination of this Agreement due to the death or Disability of Employee shall have no effect on the rights and obligations of Employee (or Employee’s personal representative or beneficiary, as the case may be) with respect to stock options or other rights granted under the Company’s Equity Award Plans, as amended, or the Company’s Employee Stock Purchase Plan, or any subsequent employee benefit or equity compensation plan adopted by the Company, all of which rights and obligations shall be governed solely and exclusively by the applicable terms and conditions of such plans and the agreements issued thereunder.

 

(c)                                  Cause. The Company may terminate Employee’s employment and all of Employee’s rights to receive Base Salary and any Additional Benefits hereunder for Cause.  For purposes of this Agreement, the term “Cause” shall be defined as any of the following; provided, however, that the Company must determine the presence of such Cause in good faith:

 

(i)            Willful misconduct by Employee which materially and demonstrably injures the Company, including (1) Employee’s material breach of any material duties and responsibilities under this Agreement (other than as a result of incapacity due to Employee’s Disability), (2) Employee’s commission of a material act of fraud upon the Company or (3) Employee’s immoderate use of alcoholic beverages or narcotics or other substance abuse.

 

(ii)           Employee willfully engaging in conduct specifically prohibited by the Company’s written policies, including, without limitation, unlawful harassment of any other Company employee and which does or could reasonably be expected to materially and demonstrably injure the Company.

 

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(iii)          Employee’s conviction by, or entry of a plea of guilty or nolo contendere in, a court of competent and final jurisdiction for a felony or any crime which materially adversely affects the Company and/or its reputation in the community and which involves moral turpitude or is punishable by imprisonment in the jurisdiction involved.

 

For purposes of this Section 5, no act or failure to act on the part of Employee shall be considered “willful” unless done, or omitted to be done, by Employee in bad faith and without reasonable belief by Employee that such action or omission was in the best interest of the Company.  Notwithstanding the foregoing, Employee shall not be terminated for Cause pursuant to clauses (i), (ii) and (iii) of this Section 5(c) unless and until Employee has received notice of a proposed termination for Cause and Employee has had an opportunity to be heard before at least a majority of members of the Board.

 

(d)                                 Without Cause.  Notwithstanding any other provision of this Section 5, the Company shall have the right to terminate Employee’s employment with the Company without Cause at any time, but in the event of such termination without Cause and subject to the satisfaction of the condition in Section 5(f), Employee shall be entitled to receive the following payments and benefits: (i) a lump sum payment equal to [2.15] [FOR CEO] [1.9] [FOR CHIEF ADMIN OFFICER] [1.75] [FOR ALL OTHER EVPs] times the value of Employee’s Base Salary in effect as of the date of such termination (hereinafter such amount shall be referred to as the “Lump Sum Payment”) which shall be paid to Employee within 60 days of the date of such termination; provided that if such 60 day period commences and ends in two calendar years such payment shall be made in the calendar year following the year in which Employee’s employment terminates; (ii) a pro-rata annual bonus for the year in which Employee’s employment terminates, payable based on actual Company performance for such year and paid at the same time as annual bonuses for such year are paid generally to the Company’s employees; (iii) provided that Employee timely elects continued group health plan insurance coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall pay directly or reimburse Employee for the premium costs of such continued coverage for a eighteen (18) months, and (iv) Company funded outplacement services for a period of not less than six (6) months.

 

(e)                                  Good Reason.  Employee may terminate employment with the Company for Good Reason within two years following the initial existence of Good Reason.  In the event that Employee fails to terminate employment within such period but Employee’s employment under this Agreement in fact terminates at the initiation of Employee, such termination shall be deemed a termination by Employee without Good Reason.  Regardless of whether a resignation occurs prior to, coincident with or after a “Change in Control,” “Good Reason” shall mean any one or more of the following:

 

(i)                                     An involuntary material diminution in Employee’s Base Salary.

 

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(ii)                                  An involuntary material diminution in Employee’s authority, duties, or responsibilities.

 

(iii)          An involuntary material diminution in the authority, duties, or responsibilities of the supervisor to whom Employee is required to report; provided, however, that if Employee reports to the Chief Executive Officer and Chairman of the Board, and subsequently reports only to a person with the title of either Chief Executive Officer or Chairman of the Board (but not both titles), then such change shall not constitute “Good Reason” for Employee.

 

(iv)                              An involuntary material diminution in the budget over which Employee retains authority.

 

(v)                                 A 100 mile or greater change in the geographic location at which Employee must perform services.

 

(vi)                              Any other action or inaction by the Company that constitutes a material breach of the Agreement.

 

Employee must give the Company written notice which shall identify with reasonable specificity the grounds for Good Reason within 90 days of the initial existence of Good Reason, upon the notice of which the Company shall have 30 days to cure the alleged grounds for Good Reason contained in the notice.  In the event Employee fails to notify the Company of the existence of Good Reason within such 90 day period but Employee’s employment under this Agreement in fact terminates at the initiation of Employee, such termination shall be deemed a termination by Employee without Good Reason.  If Employee terminates employment with the Company for Good Reason, then subject to the satisfaction of the condition in Section 5(g), Employee shall be entitled to receive the payments and benefits described in Section 5(d) above, at the same time and in the same form as described in Section 5(d) above.

 

(f)                                   Retirement.  Employee may voluntarily resign employment with the Company at any time on or after attainment of Retirement Age (such resignation, a “Retirement”).  Upon Retirement, Employee shall, upon satisfaction of the condition in Section 5(g) be entitled to the following benefits: (i) accelerated vesting and/or payment in full of (A) any of Employee’s then outstanding awards under the Equity Award Plans, and/or (B) cash-based retention incentive plans granted in lieu of equity awards, in each case that have been outstanding for at least one (1) year as of the date of Employee’s Retirement (provided, however, that acceleration of the payment of any cash-based retention award shall apply solely to cash awards in lieu of equity awards, and shall not apply to any individualized cash-retention award applicable solely to Employee and not to other Peer Employees), and (ii) Employee shall further have a period of three (3) years following Employee’s Retirement (or the original term of such stock options, if earlier) within which Employee may exercise any Company stock options.  For purposes of this Agreement “Retirement Age” means Employee’s attainment of (i) age 55 with ten or more years of employment with the Company or (ii) age 65.

 

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(g)                                  The Employee shall be entitled to receive the benefits described in Section 5 provided that the Employee must execute and deliver to the Company the severance and release agreement attached hereto as Exhibit A within 50 days of the Termination without Cause, Retirement, or Resignation for Good Reason, and not revoke it pursuant to any revocation rights afforded by law.  If the Employee does not timely execute and deliver to the Company such severance and release agreement, or if the Employee has executed the severance and release agreement but revokes it, no severance or Retirement benefits shall be paid.

 

(h)                                 Employee agrees that the payments and benefits contemplated by this Section 5 shall constitute the exclusive and sole remedy for any termination of employment and Employee covenants and agrees not to assert or pursue any other remedies, at law or in equity, with respect to any termination of employment.  The Lump-Sum Payment under Section 5(d) and 5(e) shall be deemed a separate payment for purposes of Code Section 409A, intended to qualify as a “short-term deferral” under Treasury Regulation § 1.409A-1(b)(4) to the maximum extent possible and, for any other portion thereof, under the “two-year/two-times” exclusion from being a deferral of compensation under Treasury Regulation § 1.409A-1(b)(9)(iii) to the maximum extent possible.  Each payment of compensation under this Agreement shall be treated as a separate payment of compensation for purposes of Code Section 409A.

 

(i)                                     Notwithstanding anything to the contrary in the other provisions of this Agreement, any payment under this Agreement that the Company reasonably determines is subject to Section 409A(a)(2)(B)(i) of the Code shall not be paid or payment commenced until the earlier of six (6) months and one day after the date of Employee’s termination of employment or Employee’s death .  On the earliest date on which such payments can be made or commenced without violating the requirements of Section 409A(a)(2)(B)(i) of the Code, Employee shall be paid, in a single cash lump sum, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, together with interest accrued on such delayed payments through their date of payment at a rate not less than the Federal applicable federal interest as of the date of Employee’s termination of employment.

 

(j)                                    If a payment under this Section 5 would be payable upon or during a specified period following a termination of Employee’s employment and such payment would constitute a deferral of compensation under Section 409A of the Code, the term “termination of employment” shall mean a “separation from service” as defined in Treasury Regulation Section 1.409A-1(h).  Employee shall have no control or influence as to the time of payment of any payment under this Section 5 payable during a specified period following termination.

 

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6.                                      BUSINESS EXPENSES.  During the Term of this Agreement, to the extent that such expenditures satisfy the criteria under the Internal Revenue Code for deductibility by the Company (whether or not fully deductible by the Company) for federal income tax purposes as ordinary and necessary business expenses, the Company shall reimburse Employee promptly for reasonable business expenditures, including travel, entertainment, parking, business meetings, and professional dues, made and substantiated in accordance with the reasonable policies, practices and procedures established from time to time by the Company generally with respect to other Peer Employees and incurred in the pursuit and furtherance of the Company’s business and good will.  Any reimbursements and in-kind benefits provided under this Agreement shall be made or provided in accordance with the requirements of Code Section 409A to the extent that such reimbursements or in-kind benefits are subject to Code Section 409A, including, where applicable, the requirements that (a) any reimbursement is for expenses incurred during Employee’s lifetime, (b) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (c) the reimbursement of an eligible expense will be made on or before the last day of the calendar year following the year in which the expense is incurred and (d) the right to reimbursement is not subject to set off or liquidation or exchange for any other benefit.

 

7.                                      CHANGE IN CONTROL.

 

(a)                                 If, (A) “In Anticipation Of,” as defined below, or within 24 months after a “Change in Control” of the Company (or any successor), as defined below, the Company involuntarily terminates Employee’s employment without Cause, or (B) within 24 months after a Change in Control, Employee terminates employment for Good Reason, then subject to the satisfaction of the condition in Section 5(f), Employee shall receive (i) a lump sum payment equal to two times (2x) the amount that would be required to be paid to Employee as a Lump Sum Payment under Section 5(d) upon Employee’s termination other than for Cause (hereinafter the “Change in Control Payment”) within 60 days following the termination of employment; provided that if such 60 day period commences and ends in two calendar years such payment shall be made in the calendar year following the year in which Employee’s employment terminates and (ii) the COBRA payments or reimbursements described in Section 5(d).

 

(b)                                 In the event that any economic benefit, payment or distribution by the Company to or for the benefit of Employee, whether paid, payable, distributed or distributable, pursuant to this Section 7 or otherwise In Anticipation Of or following a Change in Control, including, if applicable, the vesting of Employee’s stock options or other equity awards (hereinafter, the “Total Payments”), would result in all or a portion of such Total Payments being subject to excise tax under Section 4999 of the Code, or any interest or penalties with respect to such excise tax (such excise tax and any applicable interest and penalties, collectively referred to in this Agreement as the “Excise Tax”), then the amount of the Total Payments shall be reduced (but not below zero) so that the maximum amount of the Total

 

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Payments (after such reduction) equals one dollar ($1.00) less than the amount that would cause the Total Payments to be subject to the Excise Tax; provided that such reduction to the Total Payments shall be made only if the total after-tax benefit to Employee is greater after giving effect to such reduction than if no such reduction had been made.

 

(c)                                  All determinations required to be made under this Section 7 shall be made by a nationally-recognized accounting or executive compensation consulting firm, which firm must be reasonably acceptable to Employee (the “Accounting Firm”). The Company shall cause the Accounting Firm to provide detailed supporting calculations of its determinations to the Company and Employee. Notice must be given to the Accounting Firm within twenty (20) business days after an event entitling Employee to a Change in Control Payment under this Agreement. Any determination by the Accounting Firm shall be binding upon the Company and Employee. All fees and expenses of the Accounting Firm shall be borne solely by the Company.

 

(d)                                 Unless Employee shall have given prior written notice to the Company to effectuate a reduction in the Total Payments in a manner other than as set forth below (to the extent such a notice from Employee does not result in any tax, penalty or interest under Section 409A of the Code), if a reduction in Total Payments is required pursuant to this Section 7, the Company shall reduce or eliminate the Total Payments by first reducing or eliminating the Change in Control Payment, then by reducing or eliminating any accelerated vesting of stock options or other equity awards, then by reducing or eliminating any other remaining Total Payments (in each case, by first reducing or eliminating the payment, benefit or vesting that would otherwise occur the latest in the future).  As a result of the uncertainty in the application of Section 4999 of the Code at the time of the determination of whether a reduction to the Total Payments is required and the amount of any such reduction, it is possible that actual Total Payments made to Employee should have been reduced (or further reduced, as the case may be) pursuant to this Section 7 (an “overpayment”).  In such event, Employee shall promptly reimburse the Company for the amount of any excess Total Payment together with interest on such amount (at the same rate as is applied to determine the present value of payments under Section 280G or any successor thereto), from the date the reimbursable payment was received by Employee to the date the same is repaid to the Company

 

(e)                                  Definitions.  The following terms shall have the following meanings for purposes of this Section 7.

 

(i)            “In Anticipation Of”:  For purposes of this Section 7, the involuntary termination by the Company of Employee’s employment shall be deemed to have been “In Anticipation Of” a Change in Control if such termination (A) was at the request of an unrelated third party who has taken steps reasonably calculated to effect a Change in Control, or (B) otherwise arose in connection with a Change in Control.

 

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(ii)           “Change in Control”:  For purposes of this Section 7, a “Change in Control” means, and shall be deemed to have taken place, if (1) any person or entity or group of affiliated persons or entities, including a group which is deemed a “person” by Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), after the date hereof is or becomes the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company representing 40% or more of the combined voting power of the Company’s then outstanding securities; (2) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board cease for any reason to constitute at least a majority thereof, unless the election, or the nomination for election by the Company’s stockholders, of each new Board member was approved by a vote of at least three-fourths (3/4) of the Board members then still in office who were Board members at the beginning of such period; (3) any reorganization, consolidation, merger or similar transaction  involving the Company in which the Company is not the continuing or surviving corporation or pursuant to which the Company’s securities would be converted into cash, securities or other property (other than a merger of the Company in which the holders of the Company’s voting securities immediately prior to the merger have more than 50% of the combined voting power of the securities of the corporation or other entity resulting from or surviving such merger, calculated on a fully-diluted basis in accordance with generally accepted accounting principles after giving effect to such merger, immediately after such merger); or (4) any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company.

 

(iii)          “Parachute Value” of a payment shall mean the present value as of the date of the change of control for purposes of Section 280G of the Code of the portion of such payment that constitutes a “parachute payment” under Section 280G(b)(2), as determined by the Accounting Firm for purposes of determining whether and to what extent the Excise Tax will apply to such payment.

 

(iv)          The “Safe Harbor Amount” means 2.99 times Employee’s “base amount,” within the meaning of Section 280G(b)(3) of the Code.

 

8.                                      TRADE SECRETS/CONFIDENTIAL INFORMATION.  Employee recognizes that Employee shall be employed in a sensitive position that involves a relationship of trust and confidence.  During the course of Employee’s employment or hiring, Employee may receive, develop, otherwise acquire, have access to or become acquainted with trade secrets or other confidential and sensitive information relating to the business of the Company.  In this regard, Employee understands and hereby agrees that the term “trade secrets” shall include, but not be limited to, customer lists, potential customer lists, all information stored in the company database such as notes, proposals, historical sales, pricing strategies, price quotes to customers or potential customers, customer contracts,

 

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all devices, methods, techniques, compilations, processes, job specifications, product specifications, work and product samples, future plans, costs, financial information and data, training materials and information, customer files, pricing structure, pricing lists, job lists, job order information, software data, computer disks, vendor suppliers’ lists and contact persons, market analysis, marketing plans, cost and pricing information, labor rates and piece-work prices, the names, contact information, buying habits or practices of any of the Company’s customers and potential customers, know-how, vendors, suppliers, or employees, written business records, business files, computer data, business operating forms, documents, specifications, plans, and compilations of information concerning the business, customers, or employees of the Company.  If it is at any time determined that any of the information or materials identified above are, in whole or in part, not entitled to protection as trade secrets, Employee agrees that they shall nevertheless be considered and treated as confidential information that is protected under this Agreement, in the same manner as trade secrets, to the maximum extent permitted by law.

 

9.                                      AGREEMENT NOT TO DISCLOSE.  Employee shall not, at any time during the term of this Agreement or after its termination, disclose to others, either directly or indirectly, or take or use for the Employee’s own purposes or the purposes of others, either directly or indirectly, any trade secret or any confidential information, knowledge, data or know-how of the Company.  The Employee understands and acknowledges that these restrictions shall also apply to trade secrets, confidential information, knowledge, data or know-how conceived, originated, discovered or developed by the Employee within the scope of the Employee’s employment or hiring.

 

10.                               PROPERTY OF COMPANY.  All trade secrets and confidential information, whether prepared by the Employee or otherwise coming into the Employee’s possession or control, shall remain the exclusive property of the Company.  Upon the termination of the Employee’s employment or whenever required by the Company, the Employee shall immediately deliver to the Company all property and materials in the Employee’s possession or under the Employee’s control belonging to the Company, including, but not limited to, all trade secrets and confidential information of the Company and any documents or materials that describe or refer to such trade secrets and/or confidential information.

 

11.                               UNFAIR COMPETITION.  Employee acknowledges that the information listed in Section 8 above, as well as other information regarding the Company’s customers and business, is confidential and constitutes trade secret, commercially sensitive, and proprietary information.  While employed by the Company, and following separation of employment from the Company, Employee will not, directly or indirectly, use this or any other trade secret information to solicit any of the Company’s customers or use the Company’s trade secret information to negotiate with any of the Company’s customers, or to disrupt, damage, impair, or interfere with the Company’s business.  Subject to the limitations noted herein, the Employee is not, however, restricted from being employed by or engaged in any type of business following the termination of the Employee’s employment relationship with the Company.

 

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12.                               SOLICITATION OF EMPLOYEES.  Employee agrees that while employed by the Company, and as a result of the Employee’s position with the Company, the Employee will acquire specialized knowledge regarding the Company’s employees.  Therefore, Employee agrees that for a period of one (1) year after Employee’s separation of employment from the Company, Employee will not, directly or indirectly, solicit any person who is engaged as a regular, temporary, introductory, full time or part time employee, agent, or independent contractor by the Company to terminate his or her employment or engagement with the Company for any reason.

 

13.                               INDEMNITY.  In addition to any other separate agreement with the Company concerning indemnification, to the fullest extent permitted by applicable law and the bylaws of the Company, as from time to time in effect, the Company shall indemnify Employee and hold Employee harmless for any acts or decisions made in good faith while performing services for the Company, and the Company shall use its best efforts to obtain coverage for Employee (provided the same may be obtained at reasonable cost) under any liability insurance policy or policies now in force or hereafter obtained during the term of this Agreement that cover other officers of the Company having comparable or lesser status and responsibility; provided, however, that this paragraph shall not apply to any claims initiated solely by Employee against the Company.  To the same extent, the Company will pay and, subject to any legal limitations, advance all expenses, including reasonable attorneys’ fees and costs of court approved settlements, actually and necessarily incurred by Employee in connection with the defense of any action, suit or proceeding and in connection with any appeal thereon, which has been brought against Employee by reason of Employee’s service as an officer or agent of the Company.

 

14.                               REMEDIES.  The parties hereto agree that the services to be rendered by Employee pursuant to this Agreement, and the rights and privileges granted to the Company pursuant to this Agreement, are of a special, unique, extraordinary and intellectual character, which gives them a peculiar value, the loss of which cannot be reasonably or adequately compensated in damages in any action at law, and that a breach by Employee of any of the terms of this Agreement will cause the Company great and irreparable injury and damage. Employee hereby expressly agrees that the Company shall be entitled to the remedies of injunction, specific performance and other equitable relief to prevent a breach of this Agreement by Employee. This Section shall not be construed as a waiver of any other rights or remedies which the Company may have for damages or otherwise.

 

15.                               SEVERABILITY.  If any provision of this Agreement is held to be unenforceable for any reason, it shall be adjusted rather than voided, if possible, to achieve the intent of the parties to the extent possible. In any event, all other provisions of this Agreement shall be deemed valid and enforceable to the extent possible.

 

16.                               SUCCESSORS AND ASSIGNS.  This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns and any such successor or assignee shall be deemed substituted for the Company under the terms of this Agreement for all purposes. As used herein, “successor” and “assignee” shall include any person, firm, corporation or other business entity which at any time, whether by purchase, merger or otherwise, directly or indirectly acquires the stock of the Company or to which the Company assigns this Agreement by operation of law or otherwise.  The obligations and duties of Employee hereunder are personal and otherwise not assignable.  Employee’s obligations and representations under this Agreement will survive the termination of Employee’s employment, regardless of the manner of such termination.

 

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17.                               NOTICES.  Any notice or other communication provided for in this Agreement shall be in writing and sent if to the Company to its principal executive office at:

 

Corinthian Colleges, Inc. 
 6 Hutton Centre Drive, Suite 400
 Santa Ana, California 92627
 Phone: (714) 427-3000; Facsimile: (714) 427-3013
 Attention:  General Counsel

 

or at such other address as the Company may from time to time in writing designate, and if to Employee at such address as Employee may from time to time in writing designate (or, if not so designated, at the last address for such Employee on the employment records of the Company).  Each such notice or other communication shall be effective (i) if given by telecommunication, when transmitted to the applicable number so specified in (or pursuant to) this Section and a verification of receipt is received, (ii) if given by mail, three days after such communication is deposited in the mails with first class postage prepaid, addressed as aforesaid or (iii) if given by any other means, when actually delivered at such address.

 

18.                               ENTIRE AGREEMENT.  This Agreement contains the entire agreement of the parties relating to the subject matter hereof and supersedes any prior agreements, whether written or oral, undertakings, commitments and practices relating to Employee’s employment by the Company.

 

19.                               AMENDMENTS.  No amendment or modification of the terms of this Agreement shall be valid unless made in writing and duly executed by both parties.

 

20.                               WAIVER.  No failure on the part of any party to exercise or delay in exercising any right hereunder shall be deemed a waiver thereof or of any other right, nor shall any single or partial exercise preclude any further or other exercise of such right or any other right.

 

21.                               GOVERNING LAW.  This Agreement, and the legal relations between the parties, shall be governed by and construed in accordance with the laws of the State of California without regard to conflicts of law doctrines and any court action arising out of this Agreement shall be brought in any court of competent jurisdiction within the State of California, County of Orange.

 

22.                               ARBITRATION.  As a material inducement to enter into this Agreement, Employee and the Company each hereby agrees that any “Claims” or “Controversies” (as defined below) arising out of or in respect to this Agreement (or its validity, interpretation or enforcement), or Employee’s employment or termination, that Employee may have against the Company or it officers, directors, employees, or agents, in their capacity as such, or that the Company may have against Employee, shall be resolved solely through

 

13

 

final and binding arbitration. EMPLOYEE AND THE COMPANY EACH HEREBY ACKNOWLEDGES THAT THIS AGREEMENT TO ARBITRATE MEANS THAT EMPLOYEE AND THE COMPANY ARE RELINQUISHING it’s the RIGHTS EACH MAY OTHERWISE HAVE TO EITHER A JURY TRIAL OR COURT TRIAL FOR THE RESOLUTION OF ANY CLAIMS OR CONTROVERSIES THAT EMPLOYEE AND THE COMPANY MAY HAVE AGAINST THE OTHER.

 

The Terms “Claims” or “Controversies” arising out of this Agreement or Employee’s employment or termination means and includes all claims for breach of this Agreement, harassment and/or discrimination (including sexual harassment and harassment or discrimination based on race, color, religion, age, sex, sexual orientation, ancestry, national origin, marital status, military service, pregnancy, physical or mental disability, medical condition or any other protected class or condition), breach of any contract or covenant (express or implied), tort claims, wrongful termination, whistle-blowing and all other claims relating to this Agreement (including the arbitrability of any Claim or Controversy) or Employee’s employment or termination, except that claims covered by the Workers’ Compensation Act and claims for unemployment benefits are not covered by this agreement to arbitrate.  All Claims or Controversies shall be submitted to a single neutral arbitrator who shall issue a written decision describing the essential findings and conclusions on which the arbitrator’s award is based.. The arbitration shall take place in Orange County, California, unless otherwise mutually agreed. The arbitrator shall be mutually agreed-upon by Employee and the Company. If Employee and the Company cannot agree upon an arbitrator, the selection process shall be governed by the employment arbitration rules and procedures of the American Arbitration Association (“AAA”). Regardless of the arbitrator chosen, the arbitration proceedings shall be governed by the then current AAA procedural rules which can be found at [INCLUDE WEB LINK TO AAA RULES], except that if a contrary rule exists: (1) all monetary or provisional remedies available under applicable state or federal statutory law or common law will remain available to both parties, (2) except as mutually agreed upon by the parties, there will be no limitation on discovery beyond that which exists in cases litigated in Orange County Superior Court and (3) the California Rules of Evidence shall apply to the arbitration hearing.

 

The Company will pay the arbitrator’s fees and arbitration expenses and any other costs associated with the arbitration hearing (except that each side bears its own deposition, witness, expert and attorneys’ fees and other expenses as and to the same extent as if the matter were being heard in court).  If, however, any party prevails on a statutory claim, which (if brought in court) affords the prevailing party attorneys’ fees and/or costs, then the arbitrator may award reasonable fees and costs to the prevailing party.  The arbitrator will resolve any dispute as to who is the prevailing party and as to the reasonableness of any fee or cost. This agreement to arbitrate and arbitration procedure is intended to be the exclusive method of resolving all Claims or Controversies as described above between Employee and the Company and judgment upon the award rendered by the arbitrator may be entered in any court having jurisdiction thereof.

 

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23.                               WITHHOLDING.  All compensation payable hereunder, including salary and other benefits, shall be subject to applicable taxes, withholding and other required, normal or elected employee deductions.

 

24.                               ATTORNEYS FEES.  The Company shall pay directly or reimburse Employee for any attorneys’ fees and costs incurred by Employee in connection with the negotiation, drafting and implementation of this Agreement.

 

25.                               COUNTERPARTS. This Agreement and any amendment hereto may be executed in one or more counterparts. All of such counterparts shall constitute one and the same agreement and shall become effective when a copy signed by each party has been delivered to the other party.

 

26.                               HEADINGS.  Section and other headings contained in this Agreement are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement.

 

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

 

	
 
    	
CORINTHIAN   COLLEGES, INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
Name:
    
	
 
    	
Its:
    
	
 
    	
 
    
	
 
    	
EMPLOYEE
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
[Employee’s   Name]
    

 

15Exhibit 10.1

 

LIMITED CONSENT AND AMENDMENT

 

THIS LIMITED CONSENT AND AMENDMENT (the “Consent”), effective as of the 15th day of March, 2013, is entered into by and among SANCHEZ ENERGY CORPORATION (“Sanchez”), SEP HOLDINGS III, LLC and SN MARQUIS LLC (each, including Sanchez, a “Borrower” and collectively, the “Borrowers”), the Lenders party hereto (the “Lenders”) and CAPITAL ONE, NATIONAL ASSOCIATION, as Administrative Agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).

 

RECITALS

 

WHEREAS, the Borrowers, the Lenders and the Administrative Agent entered into that certain Credit Agreement dated as of November 15, 2012 (as amended, restated, supplemented or modified from time to time, the “Credit Agreement”); and

 

WHEREAS, the Borrowers have advised the Administrative Agent and the Lenders that Sanchez is negotiating to acquire certain oil and gas properties from an international energy company and intends to enter into a purchase and sale agreement with respect thereto (such purchase and sale agreement is hereinafter referred to as the “PSA”) and has shared with the lenders a recent draft of such PSA; and

 

WHEREAS, in order to consummate the acquisition contemplated by the PSA (the “Acquisition”), (a) Sanchez intends to issue shares of a new series of Preferred Stock, par value $0.01, to be issued pursuant to a certificate of designations with respect to Convertible Perpetual Preferred Stock, Series B of Sanchez to be filed on or before March 31, 2013, resulting in aggregate gross proceeds to Sanchez no greater than $250,000,000 and with a dividend rate no greater than 7.0% per annum (the “Series B Preferred Stock Transaction”), (b) Sanchez may create a directly or indirectly wholly-owned Subsidiary (the “Acquisition Subsidiary”) and transfer to it Sanchez’s rights and obligations under the PSA, (c) either Sanchez or the Acquisition Subsidiary, as applicable, will post a performance deposit in an amount up to $13,250,000 (the “Performance Deposit”) in accordance with the PSA and (d) if Sanchez transfers to the Acquisition Subsidiary Sanchez’s rights and obligations under the PSA, then Sanchez may be required to enter into a guarantee of all of the obligations of the Acquisition Subsidiary as buyer under the PSA (the “Acquisition Subsidiary Buyer Obligations Guaranty”); and

 

WHEREAS, the Borrowers have requested that the Administrative Agent and the Lenders acknowledge Sanchez’s execution of the PSA and certain matters in connection therewith and consent to the Series B Preferred Stock Transaction and certain matters pertaining to the Acquisition and amend the Credit Agreement in connection therewith and the Administrative Agent and Lenders signatory hereto are willing to consent thereto and amend the Credit Agreement in connection therewith on the  terms and conditions contained in this Consent.

 

NOW, THEREFORE, in consideration of the foregoing and the mutual covenants set forth in this Consent, the Borrowers, the Lenders and the Administrative Agent agree as follows:

 

1

 

1.                                       Defined Terms.  Unless otherwise defined herein, capitalized terms used herein have the meanings assigned to them in the Credit Agreement.

 

2.                                       Acknowledgements Regarding the PSA.  Subject to the terms and conditions set forth herein, the Administrative Agent and the Lenders signatory hereto hereby acknowledge that (a) Sanchez may enter into the PSA, (b) Sanchez or any Subsidiary may, subject to compliance by the Borrowers and any such Subsidiary with Section 8.16 and Section 9.05 of the Agreement, create, capitalize and make Investments in the Acquisition Subsidiary, who shall be a Restricted Subsidiary, and may transfer the PSA to the Acquisition Subsidiary, and (c) the posting by Sanchez or the Acquisition Subsidiary of the Performance Deposit pursuant to the PSA is permitted under Section 9.05(g) of the Credit Agreement.

 

3.                                       Limited Consent and Amendment.  (a) Subject to the terms and conditions set forth herein, the Administrative Agent and the Lenders signatory hereto hereby consent to the Series B Preferred Stock Transaction, the posting of the Performance Deposit by Sanchez or the Acquisition Subsidiary, as applicable, and the granting by Sanchez of the Acquisition Subsidiary Buyer Obligations Guaranty.

 

(b)                                 The Credit Agreement is hereby amended as follows:

 

(i)                                     The defined term “Permitted Preferred Stock Distributions” in Section 1.02 of the Credit Agreement is hereby deleted and the following is substituted therefor:

 

“Permitted Preferred Stock Distributions” means dividends to holders of the Preferred Stock to the extent described and provided for by (a) that certain Certificate of Designations of 4.875% Convertible Perpetual Preferred Stock, Series A of Sanchez dated September 17, 2012 and (b) a certificate of designations with respect to Convertible Perpetual Preferred Stock, Series B of Sanchez to be filed on or before March 31, 2013.

 

(ii)                                  The defined term “Preferred Stock” in Section 1.02 of the Credit Agreement is hereby deleted and the following is substituted therefor:

 

“Preferred Stock” means collectively, (a) the shares of the series of Sanchez’ preferred stock, par value $0.01, issued pursuant to that certain Certificate of Designations of 4.875% Convertible Perpetual Preferred Stock, Series A of Sanchez dated September 17, 2012 and (b) the shares of the series of Sanchez’ preferred stock, par value $0.01, issued pursuant to a certificate of designations with respect to Convertible Perpetual Preferred Stock, Series B of Sanchez to be filed on or before March 31, 2013.

 

4.                                       Ratification.  The Borrowers hereby ratify all of their respective Obligations under the Credit Agreement and each of the Loan Documents to which it is a party, and agree and acknowledge that the Credit Agreement and each of the Loan Documents to which it is a party are and shall continue to be in full force and effect. Nothing in this Consent extinguishes, novates or releases any right, claim, lien, security interest or entitlement of any of the Lenders or the Administrative Agent created by or contained in any of such documents nor are the

 

2

 

Borrowers released from any covenant, warranty or obligation created by or contained herein or therein.

 

5.                                       Conditions to Effectiveness.  This Consent shall be effective upon its execution and delivery by the Administrative Agent and the Lenders.

 

6.                                       Counterparts.  This Consent may be signed in any number of counterparts, which may be delivered in original or facsimile form each of which shall be construed as an original, but all of which together shall constitute one and the same instrument.

 

7.                                       Governing Law.  This Consent shall be governed by, and construed in accordance with the laws of the State of Texas without regard to any choice-of-law provisions that would require the application of the law of another jurisdiction.

 

8.                                       Continuing Effect of the Credit Agreement. This Consent shall not constitute a waiver of any provision not expressly referred to herein and shall not be construed as a consent to any action on the part of the Borrowers that would require a waiver or consent of the Lenders or an amendment or modification to any term of the Loan Documents except as expressly stated herein. Except as expressly modified hereby, the provisions of the Credit Agreement and the Loan Documents are and shall remain in full force and effect.

 

[Signature Pages Follow]

 

3

 

IN WITNESS WHEREOF, the parties hereto have caused this Consent to be executed by their respective officers thereunto duly authorized as of the date first above written.

 

 

	
 
    	
BORROWERS:
    
	
 
    	
 
    
	
 
    	
SANCHEZ   ENERGY CORPORATION,
    
	
 
    	
a   Delaware corporation
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Michael G. Long
    
	
 
    	
Name:
    	
Michael   G. Long
    
	
 
    	
Title:
    	
Senior   Vice President – Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SEP   HOLDINGS III, LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Michael G. Long
    
	
 
    	
Name:
    	
Michael   G. Long
    
	
 
    	
Title:
    	
Senior   Vice President – Chief Financial Officer
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
SN   MARQUIS LLC,
    
	
 
    	
a   Delaware limited liability company
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:   
    	
/s/   Michael G. Long
    
	
 
    	
Name:
    	
Michael   G. Long
    
	
 
    	
Title:
    	
Senior   Vice President – Chief Financial Officer
    

 

Signature Page to Limited Consent

 

 

	
 
    	
ADMINISTRATIVE AGENT AND LENDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
CAPITAL   ONE, NATIONAL ASSOCIATION
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Michael Higgins
    
	
 
    	
Name:   
    	
Michael   Higgins
    
	
 
    	
Title:
    	
Vice   President
    

 

Signature Page to Limited Consent

 

 

	
 
    	
LENDER:
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
MACQUARIE   BANK LIMITED
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
/s/   Christian Coulter
    
	
 
    	
Name:   
    	
Christian   Coulter
    
	
 
    	
Title:
    	
Division   Director
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
/s/   Andrew Mitchell
    
	
 
    	
Name:   
    	
Andrew   Mitchell
    
	
 
    	
Title:
    	
Associate   Director
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
POA   Ref: # 938 dated 22 November 2012 expiry 30 November 2014, signed   in London
    

 

Signature Page to Limited Consent

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