Document:

ceco-ex101_173.htm

Exhibit 10.1

SEPARATION AGREEMENT AND GENERAL RELEASE

 

This Separation Agreement and General Release (“Agreement”) is made and entered into by and between Jeffrey R. Cooper (the “Executive”) and Career Education Corporation, a Delaware corporation (the “Company”).

 

1.Separation and Effective Dates:  The Executive’s employment with the Company and, to the extent applicable, with its direct and indirect subsidiaries, affiliates, companies, divisions, units, schools, and affiliated schools (the “Company Affiliates”), terminates effective September 30, 2016  (the “Separation Date”).  The Executive understands and agrees that from and after the Separation Date, he is no longer authorized to incur any expenses, obligations or liabilities on behalf of the Company or the Company Affiliates.  This Agreement shall not become effective or enforceable until all parties have signed an original of this Agreement and the revocation period referenced in Paragraph 19 has expired.  

2.No Claims:  The Executive represents and agrees that he has not filed any notices, claims, complaints, charges, or lawsuits of any kind whatsoever against the Releasees (as defined in Paragraph 11) with any court, any governmental agency, any regulatory body or any other third party with respect to any matter related to the Company, a Company Affiliate or a Releasee, or arising out of his employment with and/or separation from the Company.

3.Payment of Moneys Owed:  The Executive and the Company acknowledge that the Company has paid, or will pay no later than October 15, 2016, all remuneration owed to the Executive as a result of his employment with and separation from the Company, related to (a) his salary through the Separation Date, (b) all accrued (but unused) vacation pay for 2016 through the Separation Date, and (c) all business expenses, if any, incurred by him through the Separation Date as a result of his employment with the Company, provided that such expenses are authorized under and consistent with the expense reimbursement policies of the Company.  Except as specifically provided for in this Paragraph 3 and in Paragraphs 6 and 9, the Executive shall not be entitled to receive any compensation or benefits of employment from the Company or any Company Affiliate following the Separation Date.  

4.Non-Admission of Liability and Acknowledgement of Compliance:  This Agreement and the fact that it was offered are not and shall not in any way be construed as admissions by the Company that it violated any federal, state or local law, statute or regulation, or that it acted wrongfully with respect to the Executive or to any other person or entity in any manner.  The Company specifically disclaims any liability to or wrongful acts against the Executive or any other person or entity.   Further, the Executive acknowledges and agrees that it is the policy of the Company to comply with all applicable federal, state and local laws and regulations.  The Executive affirms that he has reported all compliance issues and violations of federal, state and local laws or regulations or Company policy of which he had knowledge during the term of his employment, if any.  The Executive represents and acknowledges that he has no further or additional knowledge or information regarding compliance issues or possible violations of federal, state or local laws or regulations or Company policy other than what the Executive has previously raised, if any.  

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Exhibit 10.1

5.Non-Admissibility:  Neither this Agreement nor anything in this Agreement shall be construed to be or shall be admissible in any proceeding as evidence of or an admission by the Company or the Executive of any violation of any state, federal or local laws or regulations or any rules, regulations, criteria or standards of any regulatory body.  This Agreement may be introduced, however, in any proceeding to enforce the Agreement.

6.Consideration:  In exchange for the promises and agreements made by the Executive contained in this Agreement and in addition to the benefits provided there under, the Company will: 

(a) Within twenty (20) business days following the date this Agreement may no longer be revoked by the Executive as described in Paragraph 19 of this Agreement (and provided that this Agreement has not been revoked), pay to the Executive a lump-sum severance payment in the amount of $427,000, less all applicable taxes and other withholdings, which amount is the sum of (i) the Executive’s annual base salary ($305,000), plus (ii) the Executive’s target value of his annual incentive under the Company’s 2016 Annual Incentive Program (40%, or $122,000), to be paid in accordance with the terms of the Company’s Executive Severance Plan; 

(b) If the Executive is currently a participant in the Company health and/or dental insurance plan(s) and the Executive timely elects to continue insurance coverage under federal COBRA law, the Company will partially subsidize such COBRA coverage such that the Executive will only pay the same cost that similarly situated active employees of the Company pay for such insurance coverage for the following months:  October 1, 2016 through September 30, 2017; 

(c) For a period not to exceed one (1) year after the Separation Date, provide the Executive with outplacement services by an organization selected by the Company, in its sole discretion; and

(d)Waive any non-compete covenant contained in any long term incentive award or other agreement with the Executive.

The Executive acknowledges that the monies and benefits set forth in this Paragraph 6 constitute additional consideration above and beyond anything to which the Executive is already entitled, in exchange for Executive’s execution of this Agreement.   

7.No Disparagement or Encouragement of Claims: The Executive agrees that Executive  will not, nor will he cause anyone else to, make any statement or issue any communication, written or otherwise, that disparages, criticizes or otherwise reflects adversely on or encourages any adverse action against the Company, any Company Affiliate or any Releasee (as defined in Paragraph 11), to either the press, the media or any other third party, except if testifying truthfully under oath pursuant to any lawful court order or subpoena or otherwise responding to or providing disclosures required by law.  The Company similarly agrees that its executive officers and directors will not, nor will they cause anyone else to, make any statement or issue any communication, written or otherwise, that disparages, criticizes or otherwise reflects adversely on or encourages any adverse action against the Executive to either the press, the 

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Exhibit 10.1

media or any third party, except if testifying truthfully under oath pursuant to lawful court order or subpoena or otherwise responding to or providing disclosures required by law. 

8.Confidential Information and Non-Solicitation.

8.1Confidential Information and Protection of Confidential Information.  The Executive acknowledges that, throughout and as an incident to his employment with the Company, the Executive has become acquainted with and received Confidential Information relating to the Company, including trade secrets, processes, methods of operation, business models and plans, advertising and marketing plans and strategies, Company records, research techniques and results, academic programs, academic course development, methods of instruction, training programs, computer programs, databases, software codes, systems and models, marketing, promotional and sales programs, and financial information concerning the business of the Company, which information is not readily available to the public and gives the Company an opportunity to gain an advantage over competitors who do not know or use this information in the same manner as the Company, and which the Company regards as confidential and proprietary (collectively “Confidential Information”).  Such Confidential Information includes, but is not limited to: (i) information relating to the Company’s past and existing students and vendors and the development of prospective students and vendors, including, but not limited to, specific student service and product requirements, pricing, arrangements, payment terms, student lists and other similar information; (ii) inventions, designs, methods, discoveries, works of authorship, creations, improvements or ideas developed or otherwise produced, acquired or used by the Company; (iii) advertising and marketing plans and strategies; (iv) the Company’s proprietary programs, processes or software; (v) the subject matter of any patents, design patents, copyrights, trade secrets, trademarks, service marks, trade names, trade dress, manuals, operating instructions, training materials, and other industrial property; and (vi) other confidential and proprietary information or documents relating to the Company or its students or vendors which the Company reasonably regards as being confidential.  Confidential Information does not include: (a) information known in general to the Executive’s profession, or that becomes known thereafter, other than by an unauthorized act of the Executive; (b) information that was lawfully in the Executive’s possession before his employment with the Company; or (c) information obtained lawfully and in good faith from another party after such disclosure emanating from an original source other than the Company.

The Executive acknowledges that the Confidential Information is of incalculable value to the Company and is the exclusive property of the Company, and that the Company would suffer irreparable damage if any of the Confidential Information is improperly disclosed or used.  Accordingly, the Executive will not, at any time during Executive’s employment with, or after the Executive’s separation from employment with, the Company, reveal, divulge, or make known to any person, firm or corporation any Confidential Information made known to the Executive or of which the Executive has become aware, regardless of whether developed, prepared, devised, or otherwise created in whole or in part by the efforts of the Executive.  The Executive further agrees that he will retain all Confidential Information in trust for the sole benefit of the Company, and will not divulge or deliver any Confidential Information to any unauthorized person including, without limitation, any other employer of the Executive except as required by the order of any court or similar tribunal or any other governmental body or agency of appropriate jurisdiction; provided, that the Executive will, to the extent practicable, give the 

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Exhibit 10.1

Company prior written notice of any such disclosure and will cooperate with the Company in obtaining a protective order or such similar protection as the Company may deem appropriate to preserve the confidential nature of such information. The foregoing obligations to maintain the Confidential Information shall not apply to any Confidential Information that is, or without any action by the Executive becomes, generally available to the public.

8.2Non-Solicitation/Non-Hire. Commencing on the Separation Date and for eighteen (18) months thereafter, the Executive will not, directly or indirectly, individually or on behalf of any Person (as defined below) (a) hire, solicit, aid or induce any then-current employee of the Company or Company Affiliates to leave the Company or Company Affiliates to accept employment with or render services for the Executive or such Person, or (b) solicit, aid or induce any then-current student, customer, client, vendor, lender, supplier or sales representative of the Company or Company Affiliates or similar persons engaged in business with the Company or Company Affiliates to discontinue the relationship or reduce the amount of business done with the Company or Company Affiliates. “Person” means any individual, a partnership, a corporation, an association, a limited liability company, a joint stock company, a trust, a joint venture, an unincorporated organization, a governmental entity, or any department, agency or political subdivision thereof, or an accrediting body. 

8.3Acknowledgements. The Executive fully understands the nature and burdens of this Paragraph 8.  The Executive acknowledges that the provisions of this Paragraph 8 are fair, reasonable, and not excessively broad, that they are necessary to protect important and legitimate business interests of the Company, Company Affiliates and each school, and that in light of the Executive’s education, experience, and capabilities, the Executive can honor all parts of this Paragraph 8 without being prevented from earning a fully adequate livelihood for the Executive and the Executive’s dependents from now throughout any period during which the Executive’s activities are restricted hereunder. The Executive agrees that the covenants in this Paragraph 8 are in addition to any common law, statutory or contractual obligations of the Executive.

8.4 Remedies and Enforcement.  The Executive acknowledges that a breach on his part of the terms of the Restrictive Covenants set forth in this Paragraph 8 will cause irreparable damage to the Company and that monetary damages will not provide an adequate remedy to the Company.  Accordingly, the Executive agrees that the Company will be entitled to enforce the terms herein in court and seek any and all remedies available to it in equity and law, including, but not limited to, injunctive relief, without the posting of any bond or other security.  The parties agree that the prevailing party in any action related to enforcement of such Restrictive Covenants shall be entitled to reimbursement from the non-prevailing party for attorneys fees and costs incurred related to such action.  The Executive further acknowledges and agrees that in the event any of the Restrictive Covenants contained in this Paragraph 8, or any part thereof, hereafter is construed to be illegal, invalid or unenforceable, the same shall not affect the remainder of such covenant or any other covenants.  The Executive and the Company expressly empower a court of competent jurisdiction to modify any Restrictive Covenant in this Paragraph 8 to the extent necessary to make it legal, valid, and enforceable.

9.Indemnity and Cooperation:  In the event of a lawsuit or claim by a third party in which the Executive is sued either jointly or separately for acts arising out of the scope of the Executive’s  employment with the Company, the Company agrees to defend the Executive and 

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Exhibit 10.1

hold the  Executive harmless in accordance with the Executive’s rights to indemnification under the Company’s certificate of incorporation or bylaws of the Company or any existing Indemnification Agreement between the Executive and the Company.   In turn, in the event of any pending or threatened legal action against the Company or the Company Affiliates or Releasees relating to events which occurred during the Executive’s employment, the Executive acknowledges and agrees that he will cooperate to the fullest extent possible in the investigation, preparation, prosecution, or defense of the Company’s or the Company Affiliate’s case, including, but not limited to, the execution of affidavits or documents or providing of information requested by the Company or the Company’s counsel.  Reasonable out-of-pocket expenses related to such assistance will be reimbursed by the Company, if the Company’s written approval is obtained in advance.  In addition, the Executive will be compensated by the Company for his time, at the rate of $100/hour, when requested by the Company to prepare to provide testimony or spend time assisting the Company in any of the foregoing activities or with such matters.  The Executive will not, however, be compensated for the time he spends providing testimony.  Nothing in this Paragraph should be construed as suggesting or implying that the Executive should testify in any way other than truthfully or provide anything other than accurate, truthful information.  The Executive further agrees to provide truthful and timely answers to any reasonable questions the Company may have from time to time about the work the Executive performed during his employment.  A failure on the part of the Executive to reasonably cooperate with the Company shall constitute and be treated as a material breach of this Agreement.  Any amount paid to the Executive pursuant to this Paragraph 9 for his time shall be paid promptly and in any event no later than March 15 of the year following the year in which such services occurred.  For purposes of complying with Section 409A, with respect to any reimbursement required to be made pursuant to this Paragraph 9, (i) the provision of such reimbursements during one calendar year shall not affect the reimbursements made available in a different calendar year, (ii) such reimbursements shall not be subject to liquidation or exchange for other benefits, and (iii) any reimbursements shall be paid as soon as administratively feasible (or in accordance with the timing prescribed under the applicable Company policy) after the applicable expense is incurred but no later than the last day of the calendar year following the calendar year in which the applicable expense was incurred.      

10.Company Property:  The Executive represents, warrants and covenants that the Executive has returned to the Company (or will return to the Company on or before the Separation Date) all Company property in the Executive’s possession or control, including, without limitation, all telephones, keys, access cards, security badges, credit cards, phone cards, equipment, computer hardware and encryption devices (including, but not limited to, all computers, telephone, Blackberry devices, and personal data assistants), all contents of all such hardware, all passwords and codes needed to obtain access to or operate all or part of any such hardware, all electronic storage devices (including but not limited to all hard drives, disk drives, diskettes, CDs, CD-ROMs, DVDs, and DVD-ROMs), all contents of all such electronic storage devices, all passwords and codes needed to obtain access to or use all or part of any such electronic storage device, all computer software and programs, financial information, accounting records, computer printouts, manuals, data, materials, papers, books, files, documents, records, policies, student information and lists, customer information and lists, marketing information, specifications and plans, data base information and lists, mailing lists, and notes, including but not limited to any property describing or containing any Confidential Information, and the 

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Exhibit 10.1

Executive agrees that the Executive will not retain any copies, duplicates, reproductions or excerpts thereof in any form whatsoever.

11.General Release, Discharge of All Claims and Agreement Not to Sue: In consideration of the payments and benefits referred to in Paragraph 6 from the Company to the Executive as set forth herein and other consideration the receipt and sufficiency of which is hereby acknowledged, the Executive, on behalf of himself, his dependents, heirs, executors, administrators, assigns and successors, and each of them hereby:

(a)voluntarily, fully and unconditionally releases and forever discharges the Company, the Company Affiliates, and associated organizations, past and present, and each of them, as well as its and their trustees, directors, officers, agents, attorneys, employees, contractors, insurers, representatives, assigns, and successors, past and present, and each of them, (hereinafter “Releasees”), with respect to and from any and all legally waivable claims, wages, demands, rights, liens, agreements, contracts, covenants, actions, suits, causes of action, obligations, debts, costs, expenses, attorneys’ fees, damages, judgments, orders, liabilities, complaints, and promises whatsoever, in law or equity, known or unknown, suspected or unsuspected, and whether or not concealed or hidden (collectively, “Claims”), which he now owns or holds or he has at any time heretofore owned or held or may in the future hold as against any or all said Releasees, arising on or before the date this Agreement is executed, including, but not limited to, any Claims arising out of or in any way connected with his employment with and/or separation from the Company, any Claims arising under the Sarbanes-Oxley Act of 2002, Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in Employment Act of 1967, as amended (the “ADEA”), the Americans with Disabilities Act, the Family and Medical Leave Act of 1993, the Fair Labor Standards Act, the False Claims Act, as amended, the Employee Retirement Income Security Act, as amended, Illinois civil rights laws and regulations, Illinois wage/hour laws and regulations, or any other federal, state or local law, regulation, ordinance or public policy, and any Claims for severance pay, bonus pay, sick leave, holiday pay, vacation pay, life insurance, health, medical or disability insurance or any other fringe benefit or the common law of any state relating to employment contracts, wrongful discharge, defamation or any other matter; and

(b)agrees not to sue any or all of the Releasees with respect to any matter released or discharged herein, except that the Executive may seek a determination of the validity of the waiver of his rights under the ADEA.  Nothing in this Agreement is intended to reflect any party’s belief that the waiver of the Executive’s claims under the ADEA is invalid or unenforceable, it being the intent of the parties that such claims are waived.

12.Exclusions from General Release and Discharge:   Nothing in this Agreement releases or waives any claims which by law cannot be waived, including but not limited to (a) any right to continue the Executive’s group health insurance coverage pursuant to applicable law; (b) benefits or the right to seek benefits under applicable workers’ compensation and/or unemployment compensation statutes; or (c) the right to enforce or challenge the validity of this Agreement.

13.Protected Rights: Nothing in this Agreement restricts or prohibits the Executive from initiating communications directly with, responding to any inquiries from, providing testimony before, providing documents or other information to, reporting possible violations of law or 

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Exhibit 10.1

regulation to, or from filing a claim or charge or assisting with an investigation directly with a self-regulatory authority or a government agency or entity, including the U.S. Equal Employment Opportunity Commission, the Department of Labor, the National Labor Relations Board, the Department of Justice, the Securities and Exchange Commission, the Congress, or any agency Inspector General (collectively, the “Regulators”), or from making other disclosures that are protected under the whistleblower provisions of state or federal law or regulation.  The Executive does not need the prior authorization of the Company to make any such reports, disclosures or communications.  The Executive is not required to notify the Company that he has made such reports, disclosures or communications.  Nothing in this Agreement limits the Executive’s right to receive and retain an award from any Regulator that gives awards as a result of such reports, disclosures or communications.  The Executive does, however, waive his right to receive any individual monetary relief from the Company resulting from such a charge or complaint, regardless of whether the Executive or another party has filed the charge or complaint, and in the event the Executive obtains such monetary relief from the Company.   

14.No Representation:  The Executive agrees and acknowledges that in executing this Agreement he does not rely and has not relied on any representation or statement by any of the Releasees or by any of the Releasees’ agents, representatives or attorneys with regard to the subject matter, basis or effect of this Agreement.

15.No Assignment:  The Executive represents that he has not heretofore assigned or transferred, or purported to assign or transfer, to any person or entity, any claim or any portion thereof or interest therein, and the Executive agrees to indemnify, defend and hold harmless each and all of the Releasees against any and all disputes based on, arising out of, or in connection with any such transfer or assignment, or purported transfer or assignment, of any claims or any portion thereof or interest therein.

16.Severability:  If any provision of this Agreement or the application thereof is held invalid, the invalidity shall not affect other provisions or applications of the Agreement which can be given their intended effect without the invalid provisions or applications and to this end the provisions of this Agreement are declared to be severable.  If, however, a court of competent jurisdiction finds that any release by the Executive in Paragraph 11 above is illegal, void, or unenforceable, the Executive will promptly sign a release, waiver, and/or agreement that is legal and enforceable to the greatest extent permitted by law.

17.No Continuing Relationship:  The Executive and the Company acknowledge that any employment, contractual or other relationship between the Executive and the Company terminated as of the Separation Date and that they have no further employment, contractual or other relationship except as may arise out of this Agreement.  

18.Voluntary Execution of Agreement and Consultation with Counsel:  The Executive is hereby advised to consult with an attorney prior to executing this Agreement.  The Executive represents warrants and agrees that he has carefully read the Agreement and understands its meaning and has had the opportunity to seek independent legal advice from an attorney of his choice with respect to the advisability of this Agreement and is signing this Agreement, knowingly, voluntarily and without any coercion or duress.  The Executive further acknowledges that he has been given a period of twenty-one (21) days within which to consider whether to sign 

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Exhibit 10.1

this Agreement.  The Executive may execute this Agreement at any time within the twenty-one day period and by doing so the Executive waives any right to the remaining days.

19.Revocability of Agreement:  The Executive has the right to revoke this Agreement, solely with respect to his release of claims under the Age Discrimination in Employment Act and the Older Workers Benefit Protection Act, for up to seven (7) days after the Executive signs it.  In order to revoke this Agreement, the Executive must sign and send a written notice of the decision to do so, following the notice provisions set forth in Paragraph 20, below, which must be received no later than the eighth day after the Executive executes the Agreement.  If the Executive revokes this Agreement, the Executive will not be entitled to the consideration from the Company described herein.

20.Notice and Return of Agreement:  All notices, requests, demands and other communications hereunder to either party shall be in writing and shall be delivered, either by hand, by facsimile, by overnight courier or by certified mail, return receipt requested, duly addressed as indicated below or to such changed address as the party may subsequently designate:

To the Company:

 

            Beth Boeke 

Chief Human Resources Officer

Career Education Corporation 

231 N. Martingale Road

Schaumburg, IL 60173

(FAX) 847.586.7232

(TEL) 224.293.5937 

 

 

To the Executive:

 

Jeffrey R. Cooper

1124 Lake Street 
# 704 
Oak Park, IL 60301 

 

 

The Agreement must be signed and returned to the Company via U.S. mail or facsimile within thirty (30) calendar days following the Separation Date to the Company address or facsimile number provided above.

 

21.Governing Law:  This Agreement is made and entered into in the State of Illinois and shall be interpreted, enforced and governed under Illinois law, without regard to its conflict of laws principles.

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Exhibit 10.1

22.Binding Effect:  This Agreement shall be binding upon the Executive and upon the Executive’s dependents, heirs, representatives, executors, administrators, successors and assigns, and shall inure to the benefit of the Company and others released in this Agreement, and to their respective dependents, heirs, representatives, executors, administrators, successors and assigns.

23.No Presumption:  This Agreement shall be construed and interpreted as if all of its language were prepared jointly by the Executive and the Company.  No language in this Agreement shall be construed against a party on the ground that such party drafted or proposed that language.

24.Violation of Agreement.  If the Executive or the Company prevails in a legal or equitable action claiming that the other party has breached this Agreement, the prevailing party shall be entitled to recover from the other party the reasonable attorneys’ fees and costs incurred by the prevailing party in connection with such action.

25.Execution of Counterparts:  This Agreement may be executed in counterparts, but shall be construed as if signed in one document.

26.Entire Agreement:  This Agreement constitutes and contains the entire agreement and understanding concerning the Executive’s employment with and separation from the Company and the other subject matters addressed herein between the parties, and supersedes and replaces all prior negotiations and all agreements proposed or otherwise, whether written or oral, concerning the subject matters hereof, except for the parties’ agreements relating to indemnification, trade secrets, confidential and proprietary information, copyrights, and the like, if any, which shall remain in force and effect in accordance with the terms thereof.  The Executive represents and agrees that no promises, statements or inducements have been made to him which caused him to sign this Agreement other than those which are expressly stated in this Agreement.  This is an integrated document and may not be altered except by written agreement signed by an officer designated by the Company, and the Executive.

I have carefully read the entire Agreement and accept and agree to the provisions it contains and hereby execute it voluntarily and with full understanding of its consequences.

 

Executed this _7th_ day of _October__, 2016.

 

 

__/s/ Jeffrey R. Cooper_______________________

Jeffrey R. Cooper

 

CAREER EDUCATION CORPORATION 

 

 

DATED: _October 10, 2016_By: _/s/ Beth Boeke_________________________

Name: __Beth Boeke________________________

                                                                        Title:__SVP & CHRO______________________

9Exhibit

SEVERANCE AGREEMENT
THIS AGREEMENT, executed on                , 2016, is made by and between Covisint Corporation, a Michigan corporation (the “Company”), and                      (the “Employee”).  This Severance Agreement supersedes and replaces any prior Severance Agreement between the Company and Employee.
WHEREAS, the Company considers it essential to the best interests of its business to foster the continued employment of key personnel; and
WHEREAS, the Board of Directors of the Company (“Company Board”) recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among employees, may result in the departure or distraction of key personnel to the detriment of the Company; and
WHEREAS, the Company Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of the Company’s key personnel, including the Employee, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control of the Company;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained, the Company and the Employee hereby agree as follows:
1.Defined Terms.  The definitions of capitalized terms used in this Agreement are provided in the last Section hereof.

2.    Term of Agreement.  The Term of this Agreement shall commence on the date hereof and shall continue in effect through December 31, 2019.

3.    Severance Payments.
    
3.1    Subject to Section 3.2 hereof, if the Employee’s employment is terminated within one (1) year following a Change in Control either by the Company (or its successor as contemplated under Section 6.1 below) or by the Employee, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Employee without Good Reason, then the Company shall pay the Employee the amounts, and provide the Employee the benefits, described in this Section 3.1 (“Severance Payments”), in addition to any payments and benefits to which the Employee is entitled with respect to his employment with the Company:

(A)    In lieu of any further salary payments to the Employee for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Employee, the Company shall pay to the Employee a lump 

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sum severance payment, in cash, equal to 1 times (1x) the sum of (i) the Employee’s annual base salary as in effect immediately prior to the Date of Termination, and (ii) the Employee’s target annual bonus under any annual bonus or incentive plan maintained by the Company in respect of the fiscal year in which occurs the Date of Termination.
 
(B)    For a 12-month period that begins following the Date of Termination (the “COBRA Reimbursement Period”), the Company will reimburse Employee for Employee’s payments of premiums for COBRA continuation coverage as elected by Employee (the “COBRA coverage”), provided that Employee timely elects such COBRA coverage through the Company’s COBRA administrator and such COBRA coverage remains in effect during the COBRA Reimbursement Period.  Invoices for the COBRA coverage premiums will be mailed to Employee on a monthly basis.  Within 30 days of receiving verification that Employee has paid the COBRA premiums, the Company will reimburse Employee in the amount of such premiums paid by the Employee during the COBRA Reimbursement Period.    

(C)    Notwithstanding any provision of any annual incentive plan to the contrary, the Company shall pay to the Employee an amount, in cash, equal to the sum of any unpaid incentive compensation which has been allocated or awarded to the Employee for a completed fiscal year preceding the Date of Termination under any such plan and which, as of the Date of Termination, is contingent only upon the continued employment of the Employee to a subsequent date.

(D)    Unless otherwise vested under the 2009 Long Term Incentive Plan or the applicable stock option agreement, upon the Date of Termination, Employee’s unvested options will vest immediately and the Employee may exercise the options as if he were still employed.

3.2    (A)    Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Employee in connection with, or on account of, a Change in Control (including any payment or benefit received in connection with the termination of the Employee’s employment on account of a Change in Control, whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement) (all such payments and benefits, including the Severance Payments, being hereinafter referred to as the “Total Payments”) would be subject (in whole or part), to the Excise Tax, then, after taking into account any reduction in the Total Payments permitted under Section 280G of the Code to that portion of the Total Payments payable under such other plan, arrangement or agreement, to the extent the Total Payments still result in an excess payment under Section 280G of the Code, Total Payments shall be adjusted further as follows:
(i) the portion of the Total Payments that does not constitute deferred compensation within the meaning of Section 409A of the Code shall first be reduced, then 

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(ii) to the extent necessary so that no portion of the Total Payments is subject to the Excise Tax, the portion of the Total Payments that constitutes deferred compensation within the meaning of Section 409A of the Code shall thereafter be reduced, but only if (A) the net amount of such Total Payments, as so reduced (and after subtracting the net amount of federal, state and local income taxes on such reduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such reduced Total Payments) is greater than or equal to (B) the net amount of such Total Payments without such reduction (but after subtracting the net amount of federal, state and local income taxes on such Total Payments and the amount of Excise Tax to which the Employee would be subject in respect of such unreduced Total Payments and after taking into account the phase out of itemized deductions and personal exemptions attributable to such unreduced Total Payments).
(B)    For purposes of determining whether and the extent to which the Total Payments will be subject to the Excise Tax, (i) no portion of the Total Payments the receipt or enjoyment of which the Employee shall have waived at such time and in such manner as not to constitute a “payment” within the meaning of Section 280G(b) of the Code, if such waiver is otherwise permitted by law, shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of tax counsel reasonably acceptable to the Employee (“Tax Counsel”), does not constitute a “parachute payment” within the meaning of Section 280G(b)(2) of the Code (including by reason of Section 280G(b)(4)(A) of the Code) and, in calculating the Excise Tax, no portion of such Total Payments shall be taken into account which, in the opinion of Tax Counsel, constitutes reasonable compensation for services actually rendered, within the meaning of Section 280G(b)(4)(B) of the Code, in excess of the Base Amount allocable to such reasonable compensation, and (iii) the value of any non‐cash benefit or any deferred payment or benefit included in the Total Payments shall be determined in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
(C)    At the time that payments are made under this Agreement, the Company shall provide the Employee with a written statement setting forth the manner in which such payments were calculated and the basis for such calculations including, without limitation, any opinions or other advice the Company has received from Tax Counsel or other advisors or consultants (and any such opinions or advice which are in writing shall be attached to the statement).  If the Employee objects to the Company’s calculations, the Company shall pay to the Employee such portion of the Severance Payments (up to 100% thereof) as the Employee determines is necessary to result in the proper application of subsection A of this Section 3.2.
3.3    Subject to the provisions of Section 12 hereof, the payment provided in subsections (A) and (C) of Section 3.1 hereof shall be made not later than the fifth business day following the Date of Termination.

4.    Termination Procedures and Compensation During Dispute.

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4.1    Notice of Termination.  After a Change in Control and during the Term, any purported termination of the Employee’s employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 7 hereof.  For purposes of this Agreement, a “Notice of Termination” shall mean a notice which shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Employee’s employment.
4.2    Date of Termination.  “Date of Termination,” with respect to any purported termination of the Employee’s employment after a Change in Control and during the Term, shall mean (i) if the Employee’s employment is terminated by the Company, thirty (30) days after Notice of Termination is given, or such earlier date as is specified in the Notice of Termination and (ii) if the Employee’s employment is terminated by the Employee, fifteen (15) days after Notice of Termination is given.

5.    No Mitigation.  The Company agrees that, if the Employee’s employment with the Company terminates during the Term, the Employee is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Employee by the Company pursuant to Section 3 hereof.  Further, except as specifically provided in Section 3.1(B) hereof, no payment or benefit provided for in this Agreement shall be reduced by any compensation earned by the Employee as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Employee to the Company, or otherwise.

6.    Successors; Binding Agreement.

6.1    In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  

6.2    This Agreement shall inure to the benefit of and be enforceable by the Employee’s personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.  If the Employee shall die while any amount would still be payable to the Employee hereunder (other than amounts which, by their terms, terminate upon the death of the Employee) if the Employee had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Employee’s estate.

7.    Notices.  For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, or by overnight courier service such as FedEx, addressed, 

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if to the Employee, to the most recent address shown in the personnel records of the Company and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt:

To the Company:
Covisint Corporation
26533 Evergreen Road, Suite 500
Southfield, MI  48076
Attention:  Chief Executive Officer

8.    Miscellaneous.  No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Employee and such officer as may be specifically designated by the Company Board.  No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time.  This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party.  The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Michigan.  All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections.  Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Employee has agreed.  The obligations of the Company and the Employee under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 3 hereof) shall survive such expiration.

9.    Validity.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

10.    Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

11.    Settlement of Disputes; Arbitration.  

11.1    All claims by the Employee for benefits under this Agreement shall be in writing.  Any denial of a claim for benefits under this Agreement shall be delivered to the Employee in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon.  The Company shall afford a reasonable opportunity to the Employee for a review of the decision denying a claim.  

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11.2    Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in the city and state of the Employee’s principal residence as of the date of the Change in Control, in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the evidentiary standards set forth in this Agreement shall apply.  Judgment may be entered on the arbitrator’s award in any court having jurisdiction.

12.    Section 409A.  The intent of the parties is that payments and benefits under this Agreement comply with Section 409A of the Code to the extent subject thereto or be exempt therefrom, and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted and administered to be in compliance therewith.  Notwithstanding anything contained herein to the contrary, to the extent required to avoid the application of an accelerated or additional tax under Section 409A of the Code, the Employee shall not be considered to have terminated employment with the Company for purposes of this Agreement until such time as the Employee is considered to have incurred a “separation from service” from the Company within the meaning of Section 409A of the Code.  Each amount to be paid or benefit to be provided under this Agreement shall be construed as a separately identified payment for purposes of Section 409A of the Code, and any payments that are due within the “short term deferral period” as defined in Section 409A of the Code shall not be treated as deferred compensation unless applicable law requires otherwise.  To the extent required to avoid the application of an accelerated or additional tax under Section 409A of the Code, amounts that would otherwise be payable and benefits that would otherwise be provided pursuant to this Agreement during the three-month period immediately following the Employee’s termination of employment shall instead be paid on the first business day after the date that is six months following the Employee’s termination of employment (or upon the Employee’s death, if earlier).  To the extent required to avoid an accelerated or additional tax under Section 409A of the Code, amounts reimbursable to Employee under this Agreement shall be paid to Employee on or before the last day of the year following the year in which the expense was incurred and the amount of expenses eligible for reimbursement (and in-kind benefits provided to Employee) during any one year may not affect amounts reimbursable or provided in any subsequent year.

13.    Definitions.  For purposes of this Agreement, the following terms shall have the meanings indicated below:

(A)    “Affiliate” shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.

(B)    “Base Amount” shall have the meaning set forth in Section 280G(b)(3) of the Code.

(C)    “Beneficial Owner” shall have the meaning set forth in Rule 13d‐3 under the Exchange Act.

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(D)    “Cause” for termination by the Company of the Employee’s employment shall mean (i) the failure by the Employee to substantially perform the Employee’s duties with the Company (other than any such failure resulting from the Employee’s incapacity due to physical or mental illness or any such actual or anticipated failure after the issuance of a Notice of Termination for Good Reason by the Employee pursuant to Section 4.1 hereof), or (ii) the engaging by the Employee in conduct which is demonstrably and materially injurious to the Company or its subsidiaries, monetarily or otherwise.  

(E)    A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

(I)    any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of Company representing 50% or more of the combined voting power of Company’s then outstanding securities; or

(II)    the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Company Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of Company) whose appointment or election by the Company Board or nomination for election by Company’s stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or

(III)    there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation immediately following which the voting securities of the Company outstanding immediately prior to such merger or consolidation continue to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, more than 50% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates) 

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representing 50% or more of the combined voting power of the Company’s then outstanding securities; or

(IV)    the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets immediately following which the individuals who comprise the Company Board immediately prior thereto constitute at least a majority of the board of directors of the entity to which such assets are sold or disposed or any parent thereof.

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have occurred under clauses (I), (II), (III) or (IV) above by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions.

(E)    “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.
 
(F)    “Date of Termination” shall have the meaning set forth in Section 4.2 hereof.

(G)    “Disability” shall be deemed the reason for the termination by the Company of the Employee’s employment, if, as a result of the Employee’s incapacity due to physical or mental illness, the Employee shall have been absent from the full‐time performance of the Employee’s duties with the Company for a period of six (6) consecutive months, the Company shall have given the Employee a Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Employee shall not have returned to the full‐time performance of the Employee’s duties.

(H)    “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

(I)    “Excise Tax” shall mean any excise tax imposed under Section 4999 of the Code.

(J)    “Employee” shall mean the individual named in the first paragraph of this Agreement.

(K)    “Good Reason” for termination by the Employee of the Employee’s employment shall mean the occurrence (without the Employee’s express written consent 

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which specifically references this Agreement) after any Change in Control, of any one of the following acts by the Company, or failures by the Company to act: 
(I)    the assignment to the Employee of any duties materially inconsistent with the Employee’s status, duties, and responsibilities as a _______________________ of a publicly traded company, including the Company, or a substantial adverse alteration in the nature or status of the Employee’s responsibilities from those in effect on the effective date of this Agreement;

(II)    a reduction by the Company in the Employee’s annual base salary or target bonus percentage as in effect on the date hereof or as the same may be increased from time to time;

(III)    the relocation of the Employee’s principal place of employment to a location more than 25 miles from the Employee’s principal residence immediately prior to the date hereof or the Company’s requiring the Employee to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company’s business to an extent substantially consistent with the Employee’s present business travel obligations;

(IV)    the failure by the Company to pay to the Employee any portion of the Employee’s current compensation or to pay to the Employee any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due;

(V)    the failure by the Company to continue in effect any compensation plan in which the Employee participates immediately prior to the date hereof which is material to the Employee’s total compensation, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Employee’s participation therein (or in such substitute or alternative plan acceptable to the Employee) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Employee’s participation relative to other participants, as existed immediately prior to the date hereof;

(VI)    the failure by the Company to continue to provide the Employee with such benefits that are substantially similar to those enjoyed by the Employee as of the date of this Agreement under any of the Company’s pension, savings, life insurance, medical, health and accident, disability or other plans in which the Employee is participating as of the date of this Agreement (except to the extent that across-the-board-changes are made that affect all similarly situated executives of the Company and all executives of 

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any Person in control of the Company) or the taking of any other action by the Company which would directly or indirectly reduce any of such benefits or deprive the Employee of any fringe benefit enjoyed by the Employee as of the effective date hereof; or

(VII) the failure by the Company to fulfill its obligations under Section 6.1 of this Agreement requiring any successor to the Company to assume this Agreement and the obligations hereunder.

The Employee’s continued employment shall not constitute consent to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder; provided that the Employee provides the Company with a written Notice of Termination within ninety (90) days following the occurrence of the event constituting Good Reason.  In no event will the Employee have Good Reason to terminate employment if such act or failure to act as set forth in paragraphs (I) through (VII) is cured by the Company within 30 days after a Notice of Termination is delivered by the Employee to the Company.

(L)    “Notice of Termination” shall have the meaning set forth in Section 4.1 hereof.

(M)    “Person” shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof. 

(N)    “Severance Payments” shall have the meaning set forth in Section 3.2 hereof.

(O)    “Tax Counsel” shall have the meaning set forth in Section 3.2 hereof.

(P)    “Term” shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein).

(Q)    “Total Payments” shall mean those payments so described in Section 3.2 hereof.

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written. 
COVISINT CORPORATION
    
By:        
Its: Chief Executive Officer

    

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