Document:

Exhibit 10.1

	 	 	 	 	 

Exhibit 10.1

EXECUTIVE EMPLOYMENT AGREEMENT

 This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of June
1, 2010 (the “Effective Date”), by and between Dlorah, Inc., a South Dakota corporation and a
wholly-owned subsidiary of National American University Holdings, Inc. (the “Company”), and Dr.
Ronald Shape (“Executive”).

RECITALS

A. Executive is currently employed by the Company as its Chief Executive Officer.

B. The Company desires to continue to employ Executive, and Executive desires to continue to
be employed by the Company.

C. The Company and Executive have agreed that this Agreement shall replace and supersede all
of Executive’s prior employment agreements between the Company and Executive, including, but not
limited to, Executive’s Employment Agreement with the Company dated November 18, 2009.

D. Executive recognizes that the Company operates in a highly competitive environment and that
it is important for the Company to ensure Executive’s loyalty and protect the Company’s business
relations, employees, confidential information and goodwill.

E. The Company and Executive desire to enter into this Agreement.

AGREEMENT

In consideration of the above recitals and the promises set forth in this Agreement, the
parties agree as follows:

	1.	 	Duties.

	 	1.1.	 	Position and Responsibilities. The Company hereby agrees to employ
Executive pursuant to the terms of this Agreement. As of the Effective Date,
Executive’s title shall be Chief Executive Officer (“CEO”), and Executive shall have the
duties and responsibilities assigned from time to time by the Company’s Board of
Directors in consultation with the National American University’s Board of Governors.
Executive agrees to perform, on a full-time basis, all duties assigned to Executive.
The Company’s Board of Directors in consultation with the National American University’s
Board of Governors reserves the right to modify Executive’s position and duties at any
time in its sole and absolute discretion, except that any material diminution in
Executive’s duties, such that he is no longer the CEO of the Company, shall be subject
to Sections 5.5 and 5.6 below.

	 	1.2.	 	Undertakings of Executive. During Executive’s employment with the
Company, Executive agrees to spend Executive’s full working time and effort in
performance of Executive’s duties with the Company and will abide by all policies and
decisions made by the Company, as well as all applicable federal, state and local laws,
regulations or ordinances. Executive will act in the best interest of the Company at
all times. Executive will not, during employment by the Company, without prior written
approval of the Company’s Board of Directors or National American University’s Board of
Governors, engage in, become an employee, director, officer, agent, partner of or
consultant to, or a stockholder of (except a stockholder of a public company in which
Executive owns less than two percent (2%) of the issued and outstanding capital stock of
such company) or render services to any company or other business entity that is a
competitor or significant supplier or customer of the Company, or engage in any other
activities that would interfere with the performance of Executive’s duties as an
employee of the Company or would create an actual or perceived conflict of interest with
respect to Executive’s obligations as an employee of the Company. Notwithstanding the
foregoing, Executive may serve on civil or charitable boards or committees, provided
that such service does not require a material time commitment by the Executive and that
such entities are not competitive with the Company.

	 	1.3.	 	Work Location. Executive’s principal place of work shall be located in
Rapid City, South Dakota, or such other location as the Company may direct from time to
time.

 

 

 

	2.	 	Term of Employment.

	 	2.1.	 	Term. The term of this Agreement shall commence as of the Effective Date and
continue for a period of two (2) years following such date (the “Term”), unless earlier
terminated by either party as provided for in Section 5 below. Unless Executive’s
employment is terminated earlier pursuant to the terms of Section 5 below, this
Agreement shall automatically renew following the Term for successive terms of one year
(each, a “Renewal Term”) unless the Company or Executive provides the other party with
at least sixty (60) days advance written notice prior to the expiration of the current
Term or Renewal Term, as the case may be, that this Agreement will not be renewed. If
this Agreement automatically renews pursuant to this Section 2.1, the parties
acknowledge that the term set forth in South Dakota Codified Laws § 60-2-6 shall
likewise start anew. If either party provides notice of non-renewal, the Company may
elect either (a) to have Executive continue performing work for the Company through the
remainder of the current Term or Renewal Term, as the case may be; or (b) to release
Executive effective immediately, in which case the Company shall pay Executive’s Base
Salary and provide Executive’s benefits under Section 4.1 below for the remainder of the
current Term or Renewal Term, as the case may be.

	 	2.2.	 	Payment on Non-Renewal. If Executive’s employment terminates at the end of the
Term or a Renewal Term as a result of the Company’s non-renewal of this Agreement in
accordance with Section 2.1 above, Executive shall be entitled to the severance benefits
provided in Section 5.6 below. If Executive’s employment terminates at the end of the
Term or a Renewal Term as a result of Executive’s non-renewal of this Agreement in
accordance with Section 2.1 above, Executive will be entitled to receive the remaining
installments due under Section 3.2 below, if any, for any bonus earned for a Company
fiscal year prior to the fiscal year that in which the notice of non-renewal is given
and for any bonus earned for the Company fiscal year in which the notice of non-renewal
is given, but will not otherwise be entitled to receive the additional severance
described in Section 5.6 below. In the event of non-renewal of this Agreement, and
except as expressly provided in this Section 2.2, the Company shall be relieved of all
other obligations and liabilities to Executive under this Agreement.

	3.	 	Compensation.

	 	3.1.	 	Base Salary. Executive’s annual base salary shall be Three Hundred
Eighty Thousand and No/100 Dollars ($380,000) (“Base Salary”), which salary shall be
earned by Executive on a pro rata basis as Executive performs services for the Company
and which salary shall be paid in accordance with the Company’s regular payroll
practices. Executive’s compensation is subject to review and change from time to time
by the Company’s Board of Directors in its sole discretion after consultation with
National American University’s Board of Governors.

	 	3.2.	 	Bonus and Incentive Compensation. While employed by the Company as an
executive, Executive will be eligible to participate in any bonus and incentive
compensation plans or programs that the Company may adopt for executives, as such plans
or programs may be modified or terminated from time to time by, and at the discretion
of, the Company’s Board of Directors after consultation with National American
University’s Board of Governors. Executive acknowledges and agrees that the Company is
under no obligation to Executive to establish and maintain any bonus and incentive
compensation plans or programs and that any such plans or programs are within the
exclusive province of the Company’s Board of Directors, subject to applicable law.
Except as expressly modified in this Agreement, the terms of any such bonus or incentive
compensation plans or programs will govern any bonus or incentive compensation, and any
bonus or incentive compensation plan or program for Executive will be set forth in a
separate written agreement signed by both Executive and the Company.

	 	3.3.	 	Stock Based Compensation. While employed by the Company as an executive,
Executive will be eligible to participate in any stock ownership or stock option plans
or programs that the Company may adopt for executives, as such plans or programs may be
modified or terminated from time to time, by and at the discretion of, the Company’s
Board of Directors, after consultation with National American University’s Board of
Governors. Executive acknowledges and agrees, however, that the Company is under no
obligation to Executive to establish and maintain any stock option program and that any
such program is within the exclusive province of the Company’s Board of Directors,
subject to applicable law. Notwithstanding any provision of this Agreement to the
contrary, the terms of any such stock ownership or stock option plans or programs will
govern any such stock based compensation.

	4.	 	Benefits and Reimbursement.

	 	4.1.	 	Employee Benefits Generally. During Executive’s employment with the
Company, Executive shall be entitled to participate in all retirement plans, health
plans, and other employee benefits and policies made available by the Company to its
employees generally as they may be changed from time to time. Executive acknowledges
and agrees that the Company is under no obligation to Executive to establish and
maintain any employee benefit plan in which Executive may participate and that the terms
and provisions of any employee benefit plan of the Company are matters within the
exclusive province of the Company’s Board of Directors, subject to applicable law. Upon
the
termination of Executive’s employment, Executive shall be entitled to continue those
benefits to the extent required by state or federal law.

 

 

 

	 	4.2.	 	Executive Benefits. Executive will also be eligible for all customary
and usual fringe benefits generally available to executives of the Company, subject to
the terms and conditions of the Company’s benefit plan documents. The Company reserves
the right to change or eliminate fringe benefits on a prospective basis, at any time,
upon notice to the Executive.

	 	4.3.	 	Vacation. The Company agrees that Executive shall be entitled to
vacation time of up to five (5) weeks per year without reduction of the minimum Base
Salary payable to Executive pursuant to Section 3.1 above. Earned vacation time must be
used as set forth in the Company’s policies, unless extended to a later period with the
written approval of the Company’s Board of Directors, after consultation with National
American University’s Board of Governors.

	 	4.4.	 	Reimbursement of Expenses. The Company shall reimburse Executive for all
reasonable and necessary business and traveling expenses incurred by Executive for or on
behalf of the Company in connection with the performance of Executive’s duties
hereunder, in accordance with the policies and practices of the Company in effect from
time to time; provided that such expenses shall only be reimbursed upon presentation by
Executive to the Company of appropriate documentation therefore.

	5.	 	Termination. Executive’s employment may be terminated during the Term or any Renewal
Term as follows:

	 	5.1.	 	By Company With Cause. The Company may immediately terminate Executive’s
employment under this Agreement for Cause (as defined below) during the Term or any
Renewal Term by providing written notice of such termination to Executive. In the event
that Executive’s employment is terminated for Cause under this Section 5.1, Executive
shall be entitled to receive only Executive’s Base Salary then in effect, prorated to
the date of termination, and all fringe benefits through the date of termination. As of
the effective date of such termination of Executive’s employment by the Company, the
Company shall be relieved of all other obligations and liabilities to Executive under
this Agreement, including any obligation to pay any bonus or incentive compensation
under Section 3.2 above (whether earned for a Company fiscal year prior to the fiscal
year that includes the Executive’s date of termination or for the Company fiscal year
that includes the year of termination) or the severance benefits provided in Section 5.6
below.

	 	 	 	In the event that the Company terminates Executive’s employment without Cause as set
forth in Section 5.2 below, but the Company subsequently determines that the Company
had the right to terminate the Executive’s employment for Cause pursuant to this
Section 5.1, the Company may terminate the payment of all amounts to the Executive
pursuant to Section 5.6, and Executive shall return all previous payments made to
Executive pursuant to Section 5.6, other than the prorated Base Salary.

	 	 	 	For purposes of this Agreement, “Cause” shall mean the occurrence of any of the
following, as determined by the Company’s Board of Directors, in its sole discretion,
after consultation with National American University’s Board of Governors:

	 	(a)	 	Executive’s failure to materially perform Executive’s duties to the
reasonable satisfaction of the Company, provided that such failure is not cured
by Executive, or is not capable of being cured by Executive, within thirty (30)
days after the Company delivers written notice of such failure to Executive; or

	 	(b)	 	conduct by Executive which is (or will be if continued)
demonstrably injurious to the Company, monetarily or otherwise; or

	 	(c)	 	fraud, misappropriation, or embezzlement by the Executive; or

	 	(d)	 	Executive’s conviction of a felony crime, gross misdemeanor, or a
crime of moral turpitude; or

	 	(e)	 	Executive’s material breach of this Agreement or the Company’s
policies, provided that such breach is not cured by Executive, or is not capable
of being cured by Executive, within thirty (30) days after the Company delivers
written notice of such breach to Executive.

	5.2.	 	By Company Without Cause. Executive’s employment under this Agreement
may be terminated by the Company effective immediately without Cause. In the event that
Executive is terminated by the Company without Cause,
Executive shall be entitled to the severance benefits provided in Section 5.6 below.

 

 

 

	 	5.3.	 	Death. Should Executive die during the Term or any Renewal Term of this
Agreement, this Agreement shall immediately terminate, but the Company shall pay to
Executive’s estate the Base Salary that would otherwise be payable to Executive to the
end of the month in which death occurs. Executive’s estate will continue to receive the
remaining installments due under Section 3.2 above, if any, for any bonus or incentive
compensation earned for a Company fiscal year prior to the fiscal year that includes the
Executive’s date of death. As of the effective date of such termination of Executive’s
employment by the Company, the Company shall be relieved of all other obligations and
liabilities to Executive or Executive’s estate under this Agreement, including any
obligation to pay any bonus or incentive compensation under Section 3.2 above for the
year of termination or for the severance benefits provided in Section 5.6 below.

	 	5.4.	 	Disability. Should Executive be unable to perform Executive’s duties
under this Agreement due to sickness or disability, after being provided with any
reasonable accommodation the Company may be obligated by law to provide, the Company
may, during the Term or any Renewal Term, immediately terminate Executive’s Employment
by providing written notice of such termination to Executive. Executive will continue
to receive the remaining installments due under Section 3.2, if any, for any bonus or
incentive compensation earned for a Company fiscal year prior to the fiscal year that
includes the Executive’s date of termination. As of the effective date of such
termination of Executive’s employment by the Company, the Company shall be relieved of
all other obligations and liabilities to Executive under this Agreement, including any
obligation to pay any bonus or incentive compensation under Section 3.2 above for the
year of termination or the severance benefits provided in Section 5.6 below.

	 	5.5.	 	By Executive With Good Reason. During the Term or any Renewal Term,
Executive may terminate Executive’s employment at any time with Good Reason (as defined
below), provided that Executive has provided the Company at least thirty (30) days
advance written notice stating the specific reason for such resignation and provided
that such reason has not been cured by the Company within such notice period. In the
event that Executive terminates employment with Good Reason, Executive shall be entitled
to the severance benefits provided in Section 5.6 below.

	 	 	 	For purposes of this Agreement, “Good Reason” means the occurrence of one or more of
the following events without the Executive’s prior written consent: (a) a material
diminution in Executive’s title or duties such that he is not CEO; (b) a failure by
the Company to provide Executive any material payments or benefits owed to Executive;
(c) a material diminution of Executive’s compensation or benefits, other than as part
of a salary reduction program among similar executive employees; or (d) relocation of
the Company’s offices to a place more than fifty (50) miles away from the Company’s
headquarters. Executive will be deemed to have given consent to any event described
in this Section 5.5 if Executive does not provide written notice to the Company of
Executive’s intent to exercise Executive’s rights pursuant to this Section 5.5 within
thirty (30) days following the first occurrence of such event.

	 	5.6.	 	Severance Pay Upon Termination Without Cause Or With Good Reason. In the
event that Executive’s employment is terminated by the Company without Cause or by
Executive with Good Reason during the Term or any Renewal Term, or if the Company
exercises its right not to renew the Agreement under Section 2, the Company shall pay
Executive the following:

	 	(a)	 	Executive’s Base Salary then in effect, prorated to the date of
termination;

	 	(b)	 	The remaining installments due under Section 3.2, if any, for any
bonus earned for a Company fiscal year prior to the fiscal year that includes the
Executive’s date of termination;

	 	(c)	 	Severance pay in a gross amount, before applicable withholdings,
equal to (i) the greater (A) the remainder of the current Term or (B) fifteen
(15) months of Executive’s annualized Base Salary at the time of such
termination, less the amount of any debt then owed by Executive to the Company,
whether or not such debt is then due or payable (the “Severance Payment”), plus
(ii) a pro rata portion of any bonus or incentive compensation payable under
Section 3.2 above that Executive would have earned had Executive been employed
for the full fiscal year in which Executive’s employment terminates; provided
that in no event will Executive be eligible to earn a pro rata annual bonus if
Executive and the Company’s annual performance metrics for that year were not
achieved; such pro rata annual bonus, if any, will be earned and calculated based
on the number of full months worked by Executive during that fiscal year (the
“Severance Bonus”); and

	 	(d)	 	COBRA and state continuation premiums for monthly health and dental
insurance premiums for Executive and Executive’s dependents to continue the
coverage in effect at termination under the Company’s group
insurance plans subject to these plans’ eligibility requirements for a period
of twelve (12) months (the “Premium Payment Period”). The Premium Payment
Period shall run concurrently with the first twelve (12) months of Executive’s
COBRA and state benefits continuation period. Executive acknowledges that in
order for the Company to make the payments described in this Section 5.6(d),
Executive must execute all documentation necessary to elect insurance
continuation coverage.

 

 

 

	 	 	 	The Company shall pay Executive the Severance Payment in a lump sum, less all required
or authorized tax or other withholdings, ninety (90) days after the Executive’s
separation from service. The Company shall pay Executive the Severance Bonus in a
lump sum, less all required or authorized tax or other withholdings, ninety (90) days
after the end of the Company’s fiscal year in which the Executive’s separation from
service occurs. For purposes of the foregoing, the Company’s fiscal year shall be
deemed to be June 1 through May 31. For purposes of this provision, separation from
service shall mean “separation from service” as defined in Treas. Reg. § 1.409A-1(h).

	 	 	 	Notwithstanding the foregoing, Executive shall only be entitled to receive the
Severance Payment and Severance Bonus if Executive signs and does not rescind a
Severance Agreement (the “Severance Agreement”) at the time of termination in a form
prepared by and acceptable to the Company that includes adequate provisions for at
least the following: (i) Executive’s general release of any and all legal claims that
could be asserted or that arise out of or relate to his employment with the Company,
or his separation from the Company, whether or not any such claim is known to him at
the time he signs the release; (ii) Executive’s return of all of the Company’s
property in Executive’s possession; (iii) nondisparagement of the Company, any
affiliated entities, and their employees and representatives; (iv) confidentiality of
terms; (v) acknowledgement of Executive’s continuing contractual obligations to the
Company, including Executive’s continuing noncompetition, confidentiality, and
invention obligations under Sections 6, 7, 8, and 9 of this Agreement; and (vi)
Executive’s forfeiture of and repayment to Company of 75% of the Severance Payment and
Severance Bonus upon any breach by Executive of the Severance Agreement or his
noncompetition, confidentiality, and invention obligations under Sections 6, 7, 8, and
9 of this Agreement.

	 	5.7.	 	Resignation of Board or Other Positions. Executive agrees that should
Executive’s employment terminate for any reason, Executive will be deemed to have
immediately resigned all other positions (including board membership) that Executive may
hold on behalf of the Company.

	 	5.8.	 	When a Payment is Considered Made. Except as otherwise required by
Internal Revenue Code Section 409A, an amount will be considered to be paid to Executive
as of the date specified for payment in Section 3.2 above or this Section 5 if the
amount is paid to the Executive after the date as long as it is paid in the same
calendar year as the date or, if later, by the 15th day of the third calendar
month following the date and the Executive is not permitted to designate, directly or
indirectly, the taxable year of payment.

	6.	 	Confidential Information. For purposes hereof, “Confidential Information” shall mean
any information about or related to the Company or any affiliated entity (including, but not
limited to, National American University Holdings, Inc. and National American University)
(hereinafter, collectively referred to as the “Affiliates”) or any of their employees,
contractors, directors, representatives, suppliers, vendors, members, customers, students, or
other third parties or entities with whom the Company or the Affiliates do business which
Executive learns or develops during the time Executive is employed with the Company that
derives independent economic value from being not generally known or readily ascertainable by
other persons who could obtain economic value from its disclosure or use, including, but not
limited to, trade secrets, Inventions as defined in Section 8 below, financial information,
personnel information, and information relating to such matters as existing or contemplated
products, services, insurance arrangements, profit margins, fee schedules, pricing, design,
processes, formulae, business plans, sales techniques, marketing techniques, training manuals
and materials, policies or practices related to business, personnel or other matters, computer
databases, computer programs, software and other technology, customer lists, member lists,
student lists, and preferences or requirements, vendor lists, or supply information. Any
information disclosed to Executive or to which Executive has access during the time of
Executive’s employment that Executive reasonably considers to be Confidential Information, or
which the Company or any of the Affiliates treat as Confidential Information, will be presumed
Confidential Information.

	 	 	Executive agrees not to directly or indirectly use or disclose any Confidential Information
for the benefit of anyone other than the Company either during the course of employment or
after the termination of employment, regardless of the reason for such termination.
Executive recognizes that the Confidential Information constitutes a valuable asset of the
Company and hereby agrees to act in such a manner as to prevent its disclosure and use by
any person unless such use is for the benefit of the Company. Executive’s obligations under
this Section are unconditional and shall not be excused by any conduct on the part of the
Company, except prior voluntary disclosure by the Company of the information.

	7.	 	Return of Confidential Information and Company’s Property. When Executive’s
employment terminates with Company, regardless of the reason for such termination, Executive
will promptly turn over to Company in good condition
all property of the Company or the Affiliates in Executive’s possession or control,
including, but not limited to, all originals, copies of, or electronically stored documents
or other materials containing Confidential Information, regardless of who prepared them. In
the case of electronically stored information retained by Executive outside of Company’s
electronic systems, Executive will promptly make a hard copy of such information in paper,
audio recording, disc format, or other format as appropriate, turn that hard copy over to
Company, and then destroy Executive’s electronically stored information. Further, Executive
agrees to execute written confirmation that all Confidential Information in the Executive’s
possession, or to which the Executive has access, has been turned over to Company or
destroyed.

 

 

 

	8.	 	Inventions. Executive agrees to promptly disclose to the Company in writing any
invention, improvement, work of authorship, discovery, or idea (whether patentable or not and
including those which may be subject to copyright protection) generated, conceived, or reduced
to practice by the Executive, alone or in conjunction with others, during or after working
hours, while an employee of the Company (“Inventions”); and all such Inventions shall be the
exclusive property of the Company and are hereby assigned to the Company, except if the
Invention does not relate to the existing or reasonably foreseeable business interests of the
Company, the Company may, in its sole discretion, release or license that Invention to the
Executive upon written request.

	 	 	Further, Executive will, at the Company’s expense, give the Company all assistance it
reasonably requires to perfect, protect, and use its rights to Inventions. In particular,
but without limitation, Executive will sign all documents, do all things, and supply all
information that the Company may deem necessary or desirable to:

	 	(a)	 	Transfer or record the transfer of Executive’s entire right, title,
and interest in Inventions; and

	 	(b)	 	Enable the Company to obtain patent, copyright, or trademark
protection for Inventions anywhere in the world.

	 	 	The obligations of Executive under this Section shall continue beyond the termination of
employment with respect to Inventions conceived or made by Executive during the period of
Executive’s employment and shall be binding upon assigns, executors, administrators, and
other legal representatives. For purposes of this Agreement, any Invention relating to the
business of the Company on which Executive markets a new competitive product, files a patent
application, or seeks copyright protection within one (1) year after termination of
employment with the Company shall be presumed to be an Invention conceived by Executive
during the term of Executive’s employment, subject to proof to the contrary by good faith,
written and duly corroborated records establishing that such Invention was conceived and made
following termination of employment.

	9.	 	Non-Competition.

	 	9.1.	 	Acknowledgement. Executive acknowledges that (a) Executive’s services to
be performed for Company are of a special and unique nature; (b) the Company operates in
a highly competitive environment and would be substantially harmed if Executive were to
compete with Company or divulge its confidential information; (c) the Company’s
business, a substantial portion of which is conducted on-line, is international in scope
and the Company, in the course of such business, recruits students and faculty
throughout the United States and from around the world; (d) Executive has received
valuable and sufficient consideration for entering into this Agreement, including, but
not limited to, the Company’s offer of employment to Executive under this Agreement, the
payments and benefits associated with that employment, and receipt of the Company’s
Confidential Information; and (e) the provisions of this Section 9, including all of its
subparts, are reasonable and necessary to protect the Company’s business.

	 	9.2.	 	Covenant Not to Compete. Executive agrees that during Executive’s
employment with the Company and for an additional period of fifteen (15) months
following Executive’s termination of employment with the Company, regardless of the
reason for such termination (the “Noncompete Period”), Executive shall not, directly or
indirectly, anywhere within the United States of America (a) own (except as a
stockholder of a public company in which Executive owns less than two percent (2%) of
the issued and outstanding capital stock of such company), manage, control, participate
in, consult with, render services for, be employed by, or in any manner engage in the
operation of (i) a for-profit, post-secondary education institution, or (ii) any other
business that competes with the business activities of the Company in which Executive
had significant involvement prior to termination of Executive’s employment; (b) solicit
funds on behalf of, or for the benefit of, any for-profit, post-secondary education
institution (other than the Company) or any other entity that competes with the Company;
(c) solicit individuals who are current or prospective students of the Company to be
students for any other for-profit, post-secondary education institution; (d) induce or
attempt to induce any employee of the Company to leave the employ of the Company or in
any way interfere with the relationship between the Company and any employee thereof; or
(e) induce or attempt to induce any student, customer, supplier, licensee, or other
business relation of the Company to cease doing business
with, or modify its business relationship with, the Company or in any way interfere
with or hinder the relationship between any such student, customer, supplier,
licensee, or business relation and the Company.

 

 

 

	 	9.3.	 	Disclosure of Obligations. During the Noncompete Period, Executive will,
prior to accepting employment or any other business relationship with any other person
or entity, inform that person or entity of Executive’s obligations under Sections 7 to 9
of this Agreement.

	 	9.4.	 	Extension of Noncompete Period. If the Company obtains a court order or
judgment finding that Executive has violated any portion of this Section 9, Executive
agrees that the Noncompete Period will be extended for a period of time equal to the
period of time during which Executive was found to be in breach of this Section 9, plus
an additional six (6) months thereafter.

	10.	 	Insurance. During Executive’s employment with the Company, and thereafter with
respect to occurrences during his employment, Executive will be covered by the Company’s
director and officer insurance policy to the same extent as all other senior executive
officers of the Company.

	11.	 	No Violation of Rights of Third Parties. Executive represents and warrants to the
Company that Executive is not currently a party, and will not become a party, to any other
agreement that is in conflict with, or will prevent Executive from complying with, this
Agreement. Executive further represents and warrants to the Company that Executive’s
performance of all of the terms of this Agreement as an employee of the Company does not and
will not breach any agreement to keep in confidence any proprietary information, knowledge, or
data acquired by Executive in confidence or trust prior to Executive’s employment with the
Company. Executive acknowledges and agrees that the representations and warranties in this
Section 11 are a material part of this Agreement.

	12.	 	Miscellaneous.

	 	12.1.	 	Integration. This Agreement embodies the entire agreement and
understanding among the parties relative to subject matter hereof and supersedes all
prior employment agreements, understandings, or past practices, whether written or oral,
relating to such subject matter, including, but not limited to, Executive’s Employment
Agreement with the Company dated November 18, 2009.

	 	12.2.	 	Payments. All amounts paid under this Agreement shall be subject to
normal withholdings or such other treatment as required by law.

	 	12.3.	 	Survival of Sections 6, 7, 8, and 9. Executive’s confidentiality,
Inventions, and noncompete obligations set forth at Sections 6, 7, 8, and 9 of this
Agreement shall survive the Term, any Renewal Term, and the termination of this
Agreement and Executive’s termination of employment with the Company, regardless of the
reason for such terminations.

	 	12.4.	 	Applicable Law; Venue. This Agreement and the rights of the parties
shall be governed by and construed and enforced in accordance with the laws of the State
of South Dakota, without regard to any state’s choice of law principles or rules. The
venue for any action hereunder shall be in the State of South Dakota, whether or not
such venue is or subsequently becomes inconvenient, and the parties consent to the
jurisdiction of the courts of the State of South Dakota, County of Pennington and the
U.S. District Court, District of South Dakota.

	 	12.5.	 	Counterparts. This Agreement may be executed in several counterparts
and as so executed shall constitute one agreement binding on the parties hereto.

	 	12.6.	 	Binding Effect. This Agreement is personal in nature to the Executive
and the Executive shall not assign any right or obligation hereunder in whole or in
part, without the prior written consent of the Company, and any attempt to do so shall
be void. The rights and obligations of the Company under this Agreement may, in the
discretion of the Company, be transferred to the Company’s successor and assigns.

	 	12.7.	 	Notices. All notices, requests, and other communications hereunder
shall be given in writing and deemed to have been duly given or served if personally
delivered, sent by a confirmed receipt facsimile, or sent by first class, certified
mail, return receipt requested, postage prepaid, to the party at the address as provided
below, or to such other address as such party may hereafter designate by written notice
to the other party:

	 	(a)	 	If to the Company, to the address of its then principal office.

	 	(b)	 	If to Executive, to the address last shown in the records of the Company.

 

 

 

	 	12.8.	 	Remedies. Executive acknowledges and agrees that a violation of this
Agreement, including, but not limited to, Executive’s obligations under Sections 6, 7,
8, and 9, would cause irreparable harm to Company and that Company’s remedy at law for
any such violations would be inadequate. In recognition of the foregoing, Executive
agrees that, in addition to any other relief afforded by law or this Agreement,
including damages sustained by a breach of this Agreement, and without any necessity of
proof of actual damages or posting any bond, Company will have the right to enforce this
Agreement by specific remedies which include, among other things, temporary and
permanent injunctions.

	 	12.9.	 	Modification by the Parties. This Agreement shall not be modified or
amended except by a written instrument signed by the parties. In addition, no waiver of
any provision of this Agreement shall be binding unless set forth in a writing signed by
the party effecting the waiver. Any waiver shall be limited to the circumstance or
event specifically referenced in the written waiver document and shall not be deemed a
waiver of any other term of this Agreement or of the same circumstance or event upon any
recurrence thereof.

	 	12.10.	 	Severability; Blue Pencil. The invalidity or partial invalidity of any
portion of this Agreement shall not invalidate the remainder thereof, and said remainder
shall remain in full force and effect. Moreover, if one or more of the provisions
contained in this Agreement shall, for any reason, be held to be excessively broad as to
scope, activity, subject, or otherwise, so as to be unenforceable at law, such provision
or provisions shall be construed by the appropriate judicial body by limiting or
reducing it or them, so as to be enforceable to the maximum extent compatible with then
applicable law.

	 	12.11.	 	Headings. The section headings contained in this Agreement are for reference
purposes only and shall not in any way affect the meaning or interpretation of this
Agreement.

	 	12.12.	 	Third Party Beneficiaries. Executive acknowledges and agrees that the
Affiliates are third party beneficiaries of this Agreement and may enforce the
provisions of this Agreement that confer benefits on them as if they were each a
signatory to this Agreement.

	 	12.13.	 	Opportunity to Obtain Advice of Counsel. Executive acknowledges that
Executive has been advised by the Company to obtain legal advice prior to executing this
Agreement and that Executive had sufficient opportunity to do so prior to signing this
Agreement and, therefore, this Agreement shall not be construed against the Company as
the drafter of the Agreement.

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

	 	 	 	 	 	 	 

	 	 	COMPANY:

DLORAH, INC.	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Robert D. Buckingham	 	 
	 	 	 	 	 
	 

	 	By:
	 	Robert D. Buckingham	 	 
	 

	 	 	 	Its: Chairman	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Ronald Shape	 	 
	 	 	 	 	 
	 	 	Dr. Ronald ShapeExhibit 10.2

Exhibit 10.2

Ron Shape

EFFECTIVE DATE

June 1, 2010 to May 31, 2011

CHIEF EXECUTIVE OFFICER INCENTIVE COMPENSATION PLAN

This incentive compensation plan is provided pursuant to Section 3.2 of that certain Executive
Employment Agreement between Dlorah, Inc., a South Dakota corporation and a wholly-owned subsidiary
of National American University Holdings, Inc. (the “Company”) and Dr. Ronald Shape, dated
effective as of June 1, 2010.

For the fiscal year ending May 31, 2011, the Company will pay to Dr. Ronald Shape a cash bonus
based on the audited consolidated financial statements for the Company for such fiscal year, as
follows:

	 	1.	 	If the Company achieves an Operating Ratio (as defined below) of less than 90%,
then Dr. Shape will not receive a merit award pursuant to this incentive compensation
plan.

	 	2.	 	If the Company achieves an Operating Ratio equal to 90%, then Dr. Shape will be
entitled to receive a merit award of 0.1% of the Company’s Total Revenue.

	 	3.	 	If the Company achieves an Operating Ratio between 80% and 90%, then Dr. Shape
will be entitled to receive a merit award of between 0.1% and 1.0% of the Company’s
Total Revenue, prorated in accordance with the following schedule:

	 	a.	 	Total Revenue

	 	b.	 	For a 90% Operating Ratio, the amount payable
pursuant to paragraph 2 above (i.e., Total Revenue times 0.1%)

	 	c.	 	For an 80% Operating Ratio, the amount payable
pursuant to paragraph 4 below (i.e., Total Revenue times 1.0%, less the
amount of Dr. Shape’s base salary)

	 	d.	 	Operating Ratio

	 	e.	 	Merit award difference when Operating Ratio is
between 90% and 80% as follows: ((line (d) less 80), times (line (c) less
line (b)), divided by 10)

	 	f.	 	Merit award as follows: line (c) minus line (e)

	 	4.	 	If the Company achieves an Operating Ratio of 80% or less, then Dr. Shape will be
entitled to receive a merit award of 1.0% of the Company’s Total Revenue, less the
amount of Dr. Shape’s base salary.

For purposes of this plan, “Operating Ratio” means the ratio of (a) Total Operating Expenses, over
(b) Total Revenue, but excluding Interest Income, Interest Expense and Taxes, and any revenue or
expenses relating to extraordinary items (e.g., gains or losses from the sale of major corporate
properties (however, revenue from the sale of individual condominium units will be included in
Total Revenue), revenues or expenses relating to corporate acquisitions, or costs and expenses
associated with responding to the United States Senate Inquiry) as determined by the Company’s
Compensation Committee. All items set forth in the paragraph will be determined based on the
Company’s audited Consolidated Statements of Operations and Comprehensive Income (Loss) for the
Year Ended May 31, 2011.

Exhibit A attached hereto sets forth examples of the annual incentive compensation calculations
based on this plan.

 

 

 

IN WITNESS WHEREOF, the parties have executed this Incentive Compensation Plan effective as of the
date herein first above written.

	 	 	 	 	 	 	 

	 	 	COMPANY:

DLORAH, INC.	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Robert D. Buckingham	 	 
	 	 	 	 	 
	 

	 	By:
	 	Robert D. Buckingham	 	 
	 

	 	 	 	Its: Chairman	 	 
	 
	 	 	 	 	 	 
	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 	 	/s/ Ronald Shape	 	 
	 	 	 	 	 
	 	 	Dr. Ronald Shape

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