Employment Agreement - Capella Education Co. and Paul Schroeder
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into as of this 30th day
of May, 2006 between Paul Schroeder ("Employee") and Capella Education Company.
RECITALS
WHEREAS, Capella Education Company and its affiliates and subsidiaries,
including without limitation Capella University, Inc., (individually and
collectively "CEC") are engaged in the business of providing, developing,
selling and marketing on-line educational products and services;
WHEREAS, CEC employed Employee as its Senior Vice President, Business Team
Management;
WHEREAS, CEC desired Employee to move into the position of Senior Vice
President, Capella University;
WHEREAS, Employee also desired to move into the position of Senior Vice
President, Capella University; and
WHEREAS, in March, 2006, Employee moved into the position of Senior Vice
President, Capella University.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and the
following undertakings, CEC and Employee agree as follows:
1. Employment.
(a) Position. CEC has employed Employee effective this date as its
Senior Vice President, Capella University. Employee reports to
the President of Capella University.
(b) Duties. Employee's duties are as set forth on Exhibit A hereto,
subject to modification from time to time as jointly agreed by
Employee and CEC.
2. Term of Employment. CEC will continue to employ Employee on an at-will
basis with no fixed employment termination date. Either Employee or
CEC may terminate Employee's employment with CEC at any time and for
any reason upon 30 days' prior written notice.
3. Compensation. As compensation for services to be rendered by Employee
under this Agreement, CEC will provide the following:
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(a) Base Salary. CEC will pay to Employee a base salary at the same
rate currently in effect for Employee, which salary shall be paid
in accordance with CEC's normal payroll policies and procedures.
(b) Management Incentive Plan. The terms of the Management Incentive
Plan for 2006 shall continue to apply to Employee. If Employee's
employment with CEC ends prior to December 31, 2006, he shall not
receive a bonus for calendar year 2006; provided, however, that
if Employee gives notice of termination on or before October 31,
2006, but his employment does not end until December 31, 2007 or
later, he shall be entitled to receive a bonus for full calendar
year 2006, regardless of when such bonus is paid by CEC.
(c) Participation in Benefit Plans. Employee shall be entitled to
participate in employee benefit plans or programs established by
CEC from time to time to the extent that he is eligible under the
terms of the plan or program. Employee's participation in any
such plan or program shall be subject to the terms, rules, and
laws applicable thereto.
4. Stock Options. Employee shall be entitled to receive an annual stock
option grant in 2006, provided that he is still an employee of CEC at
the time of the grant.
5. Severance Plan.
(a) Participation in Severance Plan. Employee shall be eligible to
participate in the Capella Education Company Executive Severance
Plan (the "Severance Plan"), as amended from time to time,
according to its terms.
(b) Termination for Cause. If CEC terminates Employee's employment at
any time for "Cause," as defined in the Severance Plan, Employee
shall not be entitled to receive severance benefits outlined in
the Severance Plan.
(c) Termination other than for Cause. If CEC terminates Employee's
employment at any time other than for "Cause," as defined in the
Severance Plan, Employee shall be entitled to receive severance
benefits outlined in the Severance Plan.
(d) Voluntary Termination Prior to January 31, 2007. If Employee
voluntarily terminates his employment with CEC such that his
employments ends before January 31, 2007, Employee shall not be
entitled to receive severance benefits outlined in the Severance
Plan.
(e) Voluntary Termination Between January 31, 2007 and April 30,
2007. If Employee voluntarily terminates his employment with CEC
by providing advance notice of termination on or before October
31, 2006, such that his employment ends on or after January 31,
2007, and on or before April 30,
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2007, he shall be entitled to receive severance benefits outlined
in the Severance Plan.
6. Confidentiality Agreement. The Confidentiality, Non-Competition and
Inventions Agreement entered into between Employee and CEC on May 9,
2001 ("Confidentiality Agreement") shall remain in effect and shall
not expire upon termination of Employee's employment.
7. Release of Claims. As a condition of receiving the severance payments
described in Section 5 above, Employee must sign a release of all
claims in a form prescribed by CEC and allow all applicable rescission
and revocation periods to expire without a rescission or revocation.
Without limiting the generality of the foregoing, it is intended that
the release will release all claims that Employee may have against
CEC, its shareholders, directors, officers, insurers, agents,
representatives, and employees that relate in any manner to Employee's
employment by CEC or the termination of his employment from CEC.
8. Term of Agreement. This Agreement shall remain in effect until May 1,
2007, and shall terminate on that date. In the event that Employee is
still employed by CEC on May 1, 2007, such employment shall be at-will
and on such terms as are at such time agreed by Employee and CEC.
9. Covenant by Employee. In consideration of the commitments made by CEC
in Section 5 above, Employee agrees that, from the date hereof until
October 31, 2006, he shall not actively search for employment
opportunities outside of CEC.
10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered to
Employee or to the Chief Executive Officer of CEC or when mailed by
United States registered or certified mail (return receipt requested,
postage pre-paid) or sent by express delivery service to the last
known residence address of the Employee or, in the case of the
Company, to its principal executive office to the attention of the
Chief Executive Officer, 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 receipt.
11. Successors and Assigns. This Agreement is binding on and inures to the
benefit of Employee and Employee's heirs and legal representatives and
on CEC and its successors and assigns. No rights or obligations of the
Employee hereunder may be assigned, pledged, disposed of, or
transferred to any other person or entity without the prior written
consent of CEC.
12. Governing Law. This Agreement shall be construed under and governed by
the laws of the State of Minnesota without regard for the conflicts of
law principles of any state.
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13. Amendments and Waivers. No provision hereof may be modified, waived,
or discharged in any way whatsoever except by written agreement
executed by both parties. No delay or failure of either party to
insist, in any one or more instances, upon performance of any of the
terms and conditions of this Agreement or to exercise any rights or
remedies hereunder shall constitute a waiver of such rights or
remedies or any other rights or remedies hereunder.
14. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the specific subjects addressed
herein, and this Agreement supersedes all prior oral and written
agreements, representations, and promises between the parties which
are inconsistent with the terms herein. It is specifically understood
that this Agreement does not supersede any agreements or terms of
employment not specifically discussed or contradicted herein, such as,
by way of example but not limitation, stock option agreements
currently in place between Employee and CEC, the Management Incentive
Plan, the Confidentiality Agreement and the Severance Plan.
IN WITNESS WHEREOF, the parties have hereunto set their hands, intending to
be legally bound, as of the date first above written.
CAPELLA EDUCATION COMPANY
By: /s/ Stephen Shank
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Its: Chair and CEO
EMPLOYEE:
/s/ Paul Schroeder
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Paul Schroeder
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EXHIBIT A
DESCRIPTION OF DUTIES
As a core member of the senior management team of CEC and reporting to the
President of Capella University, the Senior Vice President participates in the
development and implementation of CEC's strategic direction and works
effectively with the organization's business functions which provide financial,
marketing, operations and technology support to the University.
The Senior Vice President provides overall direction and direct day-to-day
management for the University, which includes five schools, learner support, and
related academic support services. The Senior Vice President will lead the
University in efforts to offer a broad range of innovative educational programs
ensuring the highest possible quality, exceptional teaching and student services
capabilities, and outstanding learning outcomes.
Specific expectations for the position will include but not be limited to:
- ensuring the high quality implementation of the academic programs,
including improving institutional research and data collection for planning
and benchmarking purposes;
- promulgating best practices in higher education and incorporating them
throughout the University;
- developing and achieving multiple-year budgets to support the strategic
plan;
- championing and continuing to develop an effective and interactive
educational process;
- providing inspirational leadership and collaborative management, while
developing and empowering a strong academic management team;
- addressing key learner management issues, such as retention and completion
rates, through development of academic requirements, advising and
residency;
- managing, recruiting and developing a faculty community;
- providing the leadership and professional development opportunities
necessary for the faculty and administration; and
- diversifying the current course and degree offerings according to market
demands.
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