SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
LINCOLN EDUCATIONAL SERVICES CORPORATION
Date: October 2, 2006
By: /s/ Cesar Ribeiro
----------------------------------------------
Name: Cesar Ribeiro
Title: Senior Vice President, Chief Financial
Officer and Treasurer
Exhibit 10.1
EMPLOYMENT AGREEMENT (this "Agreement"), effective as of
September 26, 2006, between LINCOLN EDUCATIONAL SERVICES CORPORATION, a New
Jersey corporation (the "Company"), and Shaun E. McAlmont (the "Executive").
WHEREAS, the Executive is currently employed by the Company;
WHEREAS, the Company wishes to continue to employ the
Executive, and the Executive wishes to continue his employment with the Company,
on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. EFFECTIVENESS OF AGREEMENT
This Agreement shall become effective as of the date hereof
(the "Effective Date").
2. EMPLOYMENT AND DUTIES
2.1 Position and Duties. The Company hereby employs the
Executive, and the Executive agrees to serve, as Executive Vice President and
President-Online of the Company, to be responsible for Marketing and Product
Development, upon the terms and conditions contained in this Agreement. The
Executive shall report to the Chief Executive Officer of the Company and perform
duties and services for the Company commensurate with the Executive's position.
Except as may otherwise be approved in advance by the Board or the Compensation
Committee of the Board (the "Committee"), the Executive shall render his
services exclusively to the Company during his employment under this Agreement
and shall devote substantially all of his working time and efforts to the
business and affairs of the Company.
2.2 Term of Employment. The Executive's employment under this
Agreement shall commence as of the Effective Date and shall terminate on
December 31, 2008, unless terminated earlier pursuant to Section 5 or extended
pursuant to Section 6.1 (the "Employment Period").
2.3 Location of Work. The Executive shall be based in the United
States in West Orange, New Jersey. However, the Executive agrees to undertake
whatever domestic and worldwide travel is required by the Company. The Executive
shall not be required or permitted to relocate without the mutual, written
consent of the Executive and the Company.
3. COMPENSATION
3.1 Base Salary. Subject to the provisions of Sections 5 and 6,
the Executive shall be entitled to receive a base salary (the "Base Salary") at
a rate of $275,000 per annum during the Employment Period. Such rate shall be
adjusted upwards, but not downwards, from time to time by the Board or the
Committee, in its sole discretion. The Base Salary shall be paid in equal
installments on a biweekly basis or in accordance with the Company's current
payroll practices,
less all required deductions. The Base Salary shall be pro-rated for any period
of service less than a full year.
3.2 Annual Bonus. Subject to the provisions of Sections 5 and 6,
the Executive shall be eligible to earn an annual bonus for 2006 and each full
calendar year thereafter during the Employment Period (the "Annual Bonus"), the
amount of which shall be based upon performance targets or such other criteria
that are determined by the Board or the Committee pursuant to the provisions of
the Company's Key Management Team Incentive Compensation Plan (the "Incentive
Plan") in effect for the applicable calendar year; provided, however, that the
Annual Bonus payable to the Executive for 2006 shall be not less than $150,000.
The Company shall pay the Annual Bonus to the Executive no later than three
weeks following receipt by the Board or the Committee of the Company's audited
financial statements for the applicable fiscal year. The Annual Bonus shall be
prorated for any year in which the Executive's employment is terminated due to
death or Disability (as defined in Appendix A). If during the Employment Period
the Executive's employment is terminated by the Company (or any successor
thereto) for Cause (as defined in Exhibit A) or the Executive resigns from his
employment other than for Good Reason (as defined in Exhibit A) prior to the
payout of any Annual Bonus due for a completed calendar, the Executive shall not
receive such Annual Bonus.
3.3 Reimbursement of Expenses. The Company shall reimburse the
Executive for reasonable travel and other business expenses incurred by him in
the fulfillment of his duties hereunder upon presentation by the Executive of an
itemized account of such expenditures, in accordance with Company practices.
3.4 Future Compensation Actions. At such time or times during
the Term as salary increases or equity-based incentive awards are being
considered for other executive officers of the Company, the Executive shall also
be considered for such an increase or award.
4. EMPLOYEE BENEFITS
4.1 General. The Executive shall, during the Employment Period,
be included, to the extent eligible thereunder, in all employee benefit plans,
programs and arrangements (including, without limitation, any plans, programs or
arrangements providing for retirement benefits, profit sharing, disability
benefits, health and life insurance or vacation and paid holidays) that shall be
established by the Company for, or made available to, its senior executives. In
addition, the Company shall furnish the Executive with coverage by the Company's
customary director and officer indemnification arrangements, subject to
applicable law.
4.2 Automobile. During the Employment Period, the Company shall
provide the Executive with an automobile for business and personal use and pay
for associated costs, including automobile insurance, parking and fuel, in
accordance with the Company's practices as consistently applied to other key
employees.
4.3 Relocation. The Company shall pay and reimburse the
Executive the reasonable costs of his relocation from Denver, Colorado to West
Orange, New Jersey. Such relocation assistance shall include the purchase by the
Company of the Executive's home in Denver, Colorado, the price to be paid for
such home to be equal to the average of the amount of
two appraisals provided by two independent appraisers selected by the Company
and reasonably acceptable to the Executive.
5. TERMINATION OF EMPLOYMENT
5.1 Effect of an Involuntary Termination. Subject to the
provisions of Sections 6, 9.5 and 11.2, if during the Employment Period there is
an "Involuntary Termination" (as defined below) of the Executive's employment,
the Company shall pay to the Executive:
(i) an amount equal to one and a half times the sum of (x) the
Executive's annual Base Salary, at a rate in effect at the date of such
termination and (y) the average of the Annual Bonuses paid to the
Executive for the two years immediately prior to the year in which the
Involuntary Termination occurs;
(ii) all outstanding reasonable travel and other business
expenses that he incurred as of the date of his termination; and
(iii) the employer portion of the premiums necessary to
continue the Executive's health care coverage until the earlier of (1)
the first anniversary of the date of such Involuntary Termination and
(2) the date on which the Executive is covered under another group
health plan (which coverage, once obtained, must be promptly disclosed
by the Executive to the Company).
The Executive shall also be entitled to (i) the continued use of an automobile
and payment of associated costs by the Company pursuant to Section 4.2 until the
later of (x) the first anniversary of the date of such Involuntary Termination
and (y) the second anniversary of the Effective Date and (ii) receive any other
accrued compensation and benefits otherwise payable to him as of the date of his
termination, including, without limitation, any Annual Bonus due for a completed
calendar year. All payments made under Sections 5.1(a)(i) and (ii) above shall
be made by the Company (or its successor) in a lump-sum amount no later than
thirty days after the date of the Executive's termination of employment;
provided, however, that the payment of such lump sum shall be deferred for six
months and one day following such termination (i) if necessary to comply with
Section 409A of the Code (as defined below) or (ii) in the event such payment,
as determined in the sole discretion of the Company (or its successor), could
cause the Executive to be subject to interest and penalties under Section 409A
of the Code.
For purposes of this Agreement, "Involuntary Termination" means the termination
of the Executive's employment (i) by the Company (or any successor thereto)
without Cause or (ii) by the Executive for Good Reason.
5.2 Effect of a Termination for Cause or Resignation without
Good Reason. Subject to the provisions of Sections 3.2 and 6, if during the
Employment Period, the Executive's employment is terminated by the Company (or
any successor thereto) for Cause or the Executive resigns from his employment
other than for Good Reason, the Company shall pay to the Executive, any (i)
accrued but unpaid Base Salary earned through the date of his termination, (ii)
unreimbursed expenses, plus (iii) accrued but unpaid employee benefits set forth
in Section 4.1 above as determined in accordance with the provisions of the
applicable employee benefit plans or programs of the Company.
5.3 Effect of a Termination due to Death or Disability. Subject
to the provisions of Sections 3.2 and 6, if during the Employment Period, the
Executive's employment is terminated by the Company (or any successor thereto)
due to death or Disability, the Company shall pay to the Executive, or if
applicable his estate any (i) accrued but unpaid Base Salary earned through the
date of his termination, (ii) unreimbursed expenses, plus (iii) accrued but
unpaid employee benefits set forth in Section 4.1 above as determined in
accordance with the provisions of the applicable employee benefit plans or
programs of the Company including, without limitation, any Annual Bonus due but
not yet paid for a completed calendar year.
6. EFFECT OF A CHANGE IN CONTROL
6.1 New Term of Employment. Notwithstanding anything to the
contrary in this Agreement, upon the occurrence of a Change in Control (as
defined in Appendix A) during the Employment Period, the Company (or its
successor) shall continue the employment of the Executive, and the Executive
shall continue performing services for the Company, for a period of two years
commencing on the date of the Change in Control and ending on the second
anniversary of the date of the Change in Control.
6.2 Acceleration of Options. Notwithstanding anything to the
contrary in any of the Option Documents (as defined in Appendix A), upon a
Change in Control, all outstanding stock options granted by the Company or any
of its affiliates to the Executive shall become fully vested and immediately
exercisable on the date of the Change in Control.
6.3 Right of Termination. Notwithstanding anything to the
contrary in this Agreement, during a thirty-day period commencing on the first
anniversary of the date of the Change in Control, the Executive shall have the
right to resign from his employment with the Company (or its successor) for any
reason and receive an amount equal to (i) one and a half times the amount of his
Base Salary, as is then in effect, and (ii) one and a half times the average of
the Annual Bonuses paid to the Executive for the two years immediately prior to
the year in which such resignation occurs; provided, however, that, if such
resignation constitutes an Involuntary Termination, Section 5.1 shall apply (in
lieu of this Section 6.3). All payments made under this Section 6.3 shall be
made by the Company (or its successor) in a lump-sum amount no later than thirty
days after the date of the Executive's termination of employment; provided,
however, that the payment of such lump sum shall be deferred for six months and
one day following such termination (i) if necessary to comply with Section 409A
of the Code (as defined below) or (ii) in the event such payment, as determined
in the sole discretion of the Company (or its successor), could cause the
Executive to be subject to interest and penalties under Section 409A of the
Code.
7. REDUCTION OF PAYMENTS
If any amounts due to the Executive under this Agreement and
any other agreement, plan or arrangement of or with the Company or any of its
affiliates constitute a "parachute payment" as such term is defined in Section
280G(b)(2) of the Internal Revenue Code of 1986, as amended (the "Code"), and
the amount of the parachute payment, reduced by all federal, state and local
taxes applicable thereto, including the excise tax imposed pursuant to Section
4999 of the Code, is less than the amount the Executive would receive if he was
paid
three times his "base amount", as defined in Section 280G(b)(3) of the Code,
less $1.00, reduced by all federal, state and local taxes applicable thereto,
then the aggregate of the amounts constituting the parachute payment will be
reduced (or returned by the Executive if it has already been paid to him) to an
amount that will equal three times the Executive's base amount less $1.00. Any
determination to be made with respect to this Section 7 shall be made by an
accounting firm jointly selected by the Company and the Executive and paid for
by the Company, and which may be the Company's independent auditors.
8. NO ADDITIONAL RIGHTS
The Executive shall have no right to receive any compensation
or benefits upon his termination or resignation of employment, except (i) as
expressly set forth in Sections 5 and 6 above, where applicable, or (ii) as
determined in accordance with the provisions of the employee benefit plans or
programs of the Company.
9. RESTRICTIVE COVENANTS
9.1 Noncompetition. During the term of the Executive's
employment with the Company (or any successor thereto) and continuing for one
year thereafter, the Executive shall not, without the prior written consent of
the Company, directly or indirectly, own, manage, operate, join, control, or
participate in the ownership, management, operation or control of, or be
employed by or connected in any manner with, any Competing Business, whether for
compensation or otherwise; provided, however, that the Executive shall be
permitted to hold, directly or indirectly, less than 1% of any class of
securities of any entity that is listed on a national securities exchange or on
the NASDAQ National Market System. Notwithstanding the foregoing, this Section
9.1 shall cease to apply upon the termination of the Executive's employment with
the Company (or any successor thereto) resulting from (i) an Involuntary
Termination or (ii) the Executive's resignation pursuant to Section 6.3. For
purposes of this Agreement, "Competing Business" means any business within the
United States that involves for-profit, post secondary education.
9.2 Nonsolicitation. During the term of the Executive's
employment with the Company (or any successor thereto) and continuing for one
year thereafter, the Executive shall not, without the prior written consent of
the Company, directly or indirectly, as a sole proprietor, member of a
partnership, stockholder, investor, officer or director of a corporation, or as
an employee, associate, consultant or agent of any person, partnership,
corporation or other business organization or entity other than a member of the
Company or any of its subsidiaries or affiliates (the "Company Group") (i)
solicit or endeavor to entice away from any member of the Company Group, any
person or entity who is, or was on the date of this Agreement, employed by, or
serving as a key consultant of, any member of the Company Group or (ii) solicit
or endeavor to entice away from any member of the Company Group, any person or
entity who is, or was on the date of this Agreement, a customer or client (or
reasonably anticipated to become a customer or client) of any member of the
Company Group.
9.3 Confidentiality. (a) The Executive shall not at any time,
except in performance of his obligations to the Company Group under the
provisions of this Agreement and as an employee of the Company, directly or
indirectly, disclose or use any secret or protected
information that he may learn or has learned by reason of his association with
any member of the Company Group. The term "protected information" includes trade
secrets and confidential and proprietary business information of the Company
Group, including, but not limited to, customers (including potential customers),
sources of supply, processes, methods, plans, apparatus, specifications,
materials, pricing information, intellectual property (including applications
and rights in discoveries, inventions or patents), internal memoranda, marketing
plans, contracts, finances, personnel, research and internal policies, but shall
exclude any information which (i)is or becomes available to the public or is
generally known in the industry or industries in which the Company Group
operates other than as a result of disclosure by the Executive in violation of
this Section 9.3 or (ii)the Executive is required to disclose under any
applicable laws, regulations or directives of any government agency, tribunal or
authority having jurisdiction in the matter or under subpoena or other process
of law.
(b) The Executive hereby agrees that he shall keep the
provisions of this Agreement confidential, and shall not, except as required by
law, disclose such provisions to any person other than his immediate family or
professional advisors (who also must keep the provisions of this Agreement
confidential).
9.4 Exclusive Property. The Executive confirms that all
protected information is and shall remain the exclusive property of the Company
Group. All business records, papers and documents kept or made by the Executive
relating to the business of the Company shall be and remain the property of the
Company Group.
9.5 Compliance with Restrictive Covenants. Without intending to
limit any other remedies available to the Company Group and except as required
by law, in the event that the Executive breaches or threatens to breach any of
the covenants set forth in this Section 9, (i) the Company Group shall be
entitled to seek a temporary restraining order and/or a preliminary or permanent
injunction restraining the Executive from engaging in activities prohibited by
this Section 9 or such other relief as may be required to enforce any of such
covenants and (ii) all obligations of the Company to make payments and provide
benefits under this Agreement shall immediately cease.
10. ARBITRATION
10.1 General. Subject to Section 9.5 above, any dispute or
controversy arising under or in connection with this Agreement that cannot be
mutually resolved by the Executive and the Company shall be settled exclusively
by arbitration in West Orange, New Jersey before three arbitrators of exemplary
qualifications and stature. The Executive and the Company shall each select one
arbitrator. The arbitrators selected by the Executive and the Company shall
jointly select the third arbitrator. Judgment may be entered on the arbitrators'
award in any court having jurisdiction. The Executive and the Company hereby
agree that the arbitrators shall be empowered to enter an equitable decree
mandating specific enforcement of the provisions of this Agreement.
10.2 Associated Costs. The cost of the arbitration shall be
borne by the parties in the manner determined by the arbitrators. If, however,
the dispute concerns contractual rights that arise in the event of or subsequent
to a Change in Control, the costs of arbitration (and any
reasonable attorney's fees incurred by the Executive) shall be borne by the
Company, unless the arbitrators determine that the Executive commenced such
arbitration on unfounded or unreasonable grounds.
11. MISCELLANEOUS
11.1 Communications. All notices and other communications given
or made pursuant hereto shall be in writing and shall be deemed to have been
duly given or made as of the date delivered, or on the fifth business day after
mailed if delivered personally or mailed by registered or certified mail
(postage prepaid, return receipt requested), to the relevant party at the
following address (or at such other address for a party as shall be specified by
like notice, except that notices of change of address shall be effective upon
receipt):
if to the Company:
200 Executive Drive, Suite 340
West Orange, New Jersey 07052
Attention: Alexandra Luster
if to the Executive:
15 Ursula Court
Mendham, NJ 07945
11.2 Waiver and Release. As a condition to receiving the
payments set forth in Section 5.1 or Section 6.3, the Executive shall be
required to execute and not revoke a Waiver and Release (relating to the
Executive's release of claims against the Company Group) substantially in the
form attached hereto as Appendix B.
11.3 Waiver of Breach; Severability. (a) The waiver by the
Executive or the Company of a breach of any provision of this Agreement by the
other party hereto shall not operate or be construed as a waiver of any
subsequent breach by either party.
(b) The parties hereto recognize that the laws and public
policies of various jurisdictions may differ as to the validity and
enforceability of covenants similar to those set forth herein. It is the
intention of the parties that the provisions of this Agreement be enforced to
the fullest extent permissible under the laws and policies of each jurisdiction
in which enforcement may be sought, and that the unenforceability (or the
modification to conform to such laws or policies) of any provisions hereof shall
not render unenforceable, or impair, the remainder of the provisions hereof.
Accordingly, if at the time of enforcement of any provision hereof, a court of
competent jurisdiction holds that the restrictions stated herein are
unreasonable under circumstances then existing, the parties hereto agree that
the maximum period, scope, or geographic area reasonable under such
circumstances shall be substituted for the stated period, scope or geographical
area and that such court shall be allowed to revise the restrictions contained
herein to cover the maximum period, scope and geographical area permitted by
law.
11.4 Assignment; Successors. No right, benefit or interest
hereunder shall be assigned, encumbered, charged, pledged, hypothecated or be
subject to any setoff or recoupment by the Executive. This Agreement shall inure
to the benefit of and be binding upon the successors and assigns of the Company.
11.5 Entire Agreement. This Agreement and the Option Documents
represent the entire agreement of the parties and shall supersede any and all
previous contracts, arrangements or understandings between the Company and the
Executive relating to the subject matter hereof, including, without limitation,
the Original Agreement and the New Employment Agreement. This Agreement may be
amended at any time by mutual written agreement of the parties hereto.
11.6 Withholding. The payment of any amount pursuant to this
Agreement shall be subject to applicable withholding and payroll taxes, and such
other deductions as may be required under the Company's employee benefit plans,
if any.
11.7 Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New Jersey.
11.8 Headings. The headings in this Agreement are for
convenience only and shall not be used to interpret or construe any of its
provisions.
11.9 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
duly executed and the Executive has hereunto set his hand as of the day and year
first written above.
LINCOLN EDUCATIONAL SERVICES CORPORATION
By: /s/ David F. Carney
-------------------------------
Name: David F. Carney
Title: Chairman and Chief
Executive Officer
EXECUTIVE
/s/ Shaun E. McAlmont
----------------------------------
Shaun E. McAlmont
APPENDIX A
"Cause" shall mean, with respect to the Executive, the following:
(a) prior to a Change in Control, (i) the Executive's
willful failure to perform the duties of his
employment in any material respect, (ii) malfeasance
or gross negligence in the performance of the
Executive's duties of employment, (iii) the
Executive's conviction of a felony under the laws of
the United States or any state thereof (whether or
not in connection with his employment), (iv) the
Executive's intentional or reckless disclosure of
protected information respecting any member of the
Company Group's business to any individual or entity
which is not in the performance of the duties of his
employment, (v) the Executive's commission of an act
or acts of sexual harassment that would normally
constitute grounds for termination, or (vi) any other
act or omission by the Executive (other than an act
or omission resulting from the exercise by the
Executive of good faith business judgment), which is
materially injurious to the financial condition or
business reputation of any member of the Company
Group; provided, however, that in the case of (i) and
(ii) above, the Executive shall not be deemed to have
been terminated for cause unless he has received
written notice of the alleged basis therefor from the
Company, and fails to remedy the matter within 30
days after he has received such notice, except that
no such "cure opportunity" shall be required in the
case of two separate episodes occurring within any
12-month period that give the Company the right to
terminate for cause for such reason; or
(b) on or after a Change in Control, (i) the Executive's
willful failure to perform the duties of his
employment in any material respect, (ii) malfeasance
or gross negligence in the performance of the
Executive's duties of employment, (iii) the
Executive's conviction of a felony under the laws of
the United States or any state thereof (whether or
not in connection with his employment), (iv) the
Executive's intentional or reckless disclosure of
protected information respecting any member of the
Company Group's business to any individual or entity
which is not in the performance of the duties of his
employment; provided, however, that in the case of
(i) and (ii) above, the Executive shall not be deemed
to have been terminated for cause unless he has
received written notice of the alleged basis therefor
from the Company, and fails to remedy the matter
within 30 days after he has received such notice,
except that no such "cure opportunity" shall be
required in the case of two separate episodes
occurring within any 12-month period that give the
Company the right to terminate for cause for such
reason.
"Change in Control" shall mean:
(a) when a "person" (as defined in Section 3(a)(9) of the
Exchange Act), including a "group" (as defined in
Section 13(d) and 14(d) of the
Exchange Act), either directly or indirectly becomes
the "beneficial owner" (as defined in Rule 13d-3
under the Exchange Act) of 25% or more of either (1)
the then outstanding Common Stock, or (2) the
combined voting power of the then outstanding voting
securities of the Company entitled to vote generally
in the election of directors; provided, however, that
the following acquisitions shall not constitute a
Change in Control: (1) any acquisition directly from
the Company; (2) any acquisition by the Company; or
(3) any acquisition by an employee benefit plan (or
related trust) sponsored or maintained by the Company
or any corporation controlled by the Company;
(b) when, during any period of 24 consecutive months
during the Employment Period, the individuals who, at
the beginning of such period, constitute the Board
(the "Company Incumbent Directors") cease for any
reason other than death to constitute at least a
majority thereof; provided, however, that a director
who was not a director at the beginning of such
24-month period shall be deemed to be a Company
Incumbent Director if such director was elected by,
or on the recommendation of or with the approval of
at least two-thirds of the directors of the Company,
who then qualified as Company Incumbent Directors;
(c) when the stockholders of the Company approve a
reorganization, merger or consolidation of the
Company without the consent or approval of a majority
of the Company Incumbent Directors;
(d) consummation of a merger, amalgamation or
consolidation of the Company with any other
corporation, the issuance of voting securities of the
Company in connection with a merger, amalgamation or
consolidation of the Company or sale or other
disposition of all or substantially all of the assets
of the Company or the acquisition of assets of
another corporation (each, a "Business Combination"),
unless, in each case of a Business Combination,
immediately following such Business Combination, all
or substantially all of the individuals and entities
who were the beneficial owners of the Common Stock
outstanding immediately prior to such Business
Combination beneficially own, directly or indirectly,
more than 50% of the then outstanding shares of
common stock and 50% of the combined voting power of
the then outstanding voting securities entitled to
vote generally in the election of directors, as the
case may be, of the entity resulting from such
Business Combination (including, without limitation,
an entity which as a result of such transaction owns
the Company or all or substantially all of the
Company's assets either directly or through one or
more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to
such Business Combination, of the Common Stock; or
(e) a complete liquidation or dissolution of the Company
or the sale or other disposition of all or
substantially all of the assets of the Company;
provided, however, that in no event shall a Change in Control be deemed to have
occurred so long as Stonington, together with Five Mile and any of their
respective affiliates, remain the person or group with the largest single
beneficial ownership stake in the outstanding Common Stock and combined voting
power of the then outstanding voting securities of the Company entitled to vote
generally in the election of the Company's directors.
"Disability" shall mean the inability of the Executive to perform substantially
his duties and responsibilities to the Company or any of its subsidiaries by
reason of a physical or mental disability or infirmity (a) for a continuous
period of six months or (b) at such earlier time as the Executive submits
medical evidence of such disability satisfactory to the Committee acting
reasonably that the Executive has a physical or mental disability or infirmity
that shall likely prevent him from substantially performing his duties and
responsibilities for six months or longer. The date of such Disability shall be
on the last day of such six-month period or the day on which the Committee
determines that the Executive has a physical or mental disability or infirmity
as provided in clause (b) herein.
"Good Reason" shall mean, with respect to the Executive, any of the following
(without his written consent): (a) a reduction in the Executive's Base Salary or
minimum guaranteed Annual Bonus; (b) an adverse change in the Executive's title,
authority, duties, responsibilities or reporting lines as specified in Section
2.1; (c) the relocation of the Executive's principal place of employment to a
location more than 10 miles from West Orange, New Jersey; (d) a failure by the
Company to pay material compensation when due in connection with the Executive's
employment; or (e) a material breach of this Agreement by the Company; provided,
however, that, if any such Good Reason is susceptible to cure, then the
Executive shall not terminate his employment hereunder unless the Executive
first provides the Company with written notice of his intention to terminate and
of the grounds for such termination, and the Company has not, within 10 business
days following receipt of such written notice, cured such Good Reason.
"Option Documents" shall mean, with respect to the Executive, each of the
following documents to the extent applicable: (a) the Lincoln Technical
Institute Management Stock Option Plan, effective January 1, 2002, and any stock
option agreement thereunder; and (b) the Lincoln Education Services Corporation
2005 Long Term Incentive Plan, and any stock option agreement thereunder.
APPENDIX B
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