Exhibit 10.41
SEPARATION AGREEMENT AND GENERAL RELEASE
This is a Separation Agreement and General Release (this "Agreement") dated
as of April 28, 2003, by and between Robert E. Zobel ("Employee") and Nobel
Learning Communities, Inc., a Delaware corporation ("NLCI").
Background
Whereas, Employee is employed by NLCI in the capacity of Vice Chairman -
Corporate Affairs and Chief Financial Officer; and
Whereas, Employee has expressed his intent to resign as an employee and
director of NLCI, and NLCI has agreed to accept Employee's resignation, on the
terms and conditions hereinafter provided; and
Whereas, the parties wish to conclude amicably any and all issues relating
to Employee's employment and termination of employment with NLCI;
Now, Therefore, in consideration of the premises and the mutual promises
contained herein, It Is Hereby Agreed by and between Employee and NLCI as
follows:
1. Resignation as Employee. Effective as of the close of business on the
latest to occur of (a) May 23, 2003; (b) the filing with the Securities and
Exchange Commission of NLCI's Quarterly Report on Form 10-Q for the period ended
March 31, 2003; or (c) the date on which Employee has completed the Designated
Tasks (as that term is defined in Section 3(a)) (such latest date, the
"Separation Date"), Employee shall resign as NLCI's Vice Chairman - Corporate
Affairs and Chief Financial Officer. Such separation shall be irrevocable and
final, and effective as of the Separation Date, neither Employee, NLCI nor any
of its parent corporations, subsidiaries, affiliates or other related companies
(collectively with NLCI, the "NLCI Parties"), shall have any further obligation
of any nature to the other, except as specifically set forth in this Agreement.
2. Resignation as Director. Effective as of the date of this Agreement,
Employee hereby resigns as a director of NLCI and each NLCI Party, and of any
committee thereof.
3. Scope of Duties During Transition Period.
(a) As used in this Agreement, the term "Transition Period" shall
mean that period of time commencing on the date of this Agreement, and
continuing through the Separation Date. During the Transition Period, Employee's
sole duty and responsibility to NLCI shall be to serve as NLCI's principal
financial officer, and in addition, to complete such tasks as shall be agreed to
in writing by NLCI's Chairman of the Board and Chief Executive Officer ("NLCI's
Chairman") and Employee (the "Designated Tasks"). Notwithstanding the foregoing,
Employee acknowledges that, effective as of the date of this Agreement, except
as required in connection with his duties as NLCI's principal financial officer
or in order to complete the Designated Tasks, Employee no longer has the power
or authority to bind any NLCI
Party or to assume or create any obligation or responsibility, express or
implied, on the part of any NLCI Party, or in the name of any NLCI Party, and
Employee shall not represent to any person or entity that Employee has such
power or authority.
(b) NLCI acknowledges and agrees that, commencing on the date of this
Agreement, Employee will not be prohibited from seeking alternative employment,
even where such pursuit involves a portion of Employee's business and
professional time; provided, that the foregoing activities do not interfere with
the performance of Employee's duties during the Transition Period pursuant to
Section 3(a).
4. Compensation During Transition Period. During the Transition Period,
as Employee's sole compensation and consideration for Employee's services and
responsibilities as set forth in Section 3(a), NLCI will pay Employee, and
Employee will accept, only such compensation and benefits as are expressly
itemized in this Section 4:
(a) Base Salary. NLCI shall pay to Employee a salary equivalent to
the annual rate of Two Hundred and Thirty Thousand Dollars ($230,000), but pro
rated and payable only for the Transition Period (including any holidays
observed by NLCI for its employees generally). Such amount will be paid at such
intervals as NLCI pays the salaries of its employees generally.
(b) Car Allowance. NLCI shall pay to Employee a car allowance to
cover all car expenses, including gasoline, equivalent to the annual rate of
$7,200, but pro rated and payable only for the Transition Period (including any
holidays observed by NLCI for its employees generally). Such amount will be paid
at such intervals as NLCI pays the salaries of its employees generally.
(c) Other Benefits. Employee shall be entitled to continue to
participate in any group health, group life insurance, hospital and medical
plans maintained by NLCI for its employees generally during the Transition
Period, on the same basis that Employee participated in the same as of the date
of this Agreement. Notwithstanding the foregoing, Employee acknowledges and
agrees that, effective as of the date of this Agreement, Employee shall cease to
be covered by any severance plan of an NLCI Party (including, without
limitation, NLCI's Executive Severance Plan and Senior Executive Severance
Plan).
(d) Loan. During the Transition Period, NLCI will continue to
forgive, on the 2/nd/ day of each month, 1/34 of the principal amount and
associated interest of the relocation loan previously made by NLCI to Employee
in the principal amount of $50,000, as reflected by that certain promissory note
of Employee, dated as of July 1, 2002 (the "Relocation Loan").
5. Separation Arrangements.
(a) Separation. Commencing on the Separation Date, NLCI will pay to
Employee the sum of $80,279 (the "Separation Amount"). The Separation Amount
represents six (6) month's pay, based on Employee's annual salary as of the date
of this Agreement, less the amount of $34,721, which the parties agree
represents the aggregate amount of principal and
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associated interest that will be outstanding on the Relocation Loan as of the
Separation Date. The Separation Amount shall be paid in ten (10) equal,
consecutive bi-weekly installments, beginning with the first payroll period
occurring on or after the Separation Date. Employee acknowledges that but for
this provision of this Agreement, Employee would not be entitled to the payment
provided for in this Section 5(a). At the time the tenth (10/th/) and final
installment payment of the Separation Amount is made to Employee, NLCI shall, at
Employee's request thereafter, also return to Employee the canceled promissory
note of Employee, dated as of July 1, 2002 reflecting the Relocation Loan (the
"Promissory Note"), or an affidavit of loss with respect thereto, and Employee
shall thereafter have no further obligations to NLCI with respect to the
Promissory Note.
(b) Medical Coverage. Effective on the Separation Date, Employee will
be afforded the opportunity, at Employee's own expense, to convert Employee's
then existing group health insurance coverage per normal COBRA conversion
privileges.
(c) Vesting of Options. NLCI previously granted to Employee, in
connection with Employee's employment with NLCI, options to purchase an
aggregate of 65,000 shares of NLCI common stock. Such options were subject to a
three-year vesting schedule, with one-third of the shares subject to such
options becoming exercisable on each of February 21, 2003, 2004 and 2005, if the
conditions set forth in the related stock option agreement were then satisfied.
NLCI and Employee each hereby confirm their understanding that, effective upon
the Separation Date, Employee's options to purchase up to 21,667 shares of NLCI
common stock will be fully vested, and Employee will have ninety (90) days
thereafter in which to exercise such options.
(d) Unused Vacation Time. On the Separation Date, NLCI will pay to
Employee his accrued and unused vacation time. It is agreed that the aggregate
accrued and unused vacation time to which Employee will be entitled as of the
Separation Date is 11 days ($9,731.04).
6. Withholding; Taxation. NLCI shall issue a Form 1099 indicating as
"Other Income" to Employee the full amount of the Separation Amount. NLCI and
Employee agree that NLCI has made no representations to Employee concerning the
tax treatment or consequences of the Separation Amount, and Employee agrees to
pay all federal, state and local taxes, if any, which may be required by law to
be paid with respect to any portion of the Separation Amount. Employee shall
further indemnify, defend and hold NLCI harmless from any and all claims made
under federal, state or local tax laws relating to the treatment or consequences
of the Separation Amount.
7. 401(k) Plan. Pursuant to the terms of NLCI's 401(k) plan and
applicable law, following the Separation Date, NLCI will distribute the funds
accrued to Employee's account under such plan, if any, to Employee or as
Employee directs.
8. Property of the NLCI Parties. Employee covenants and agrees that on or
before the Separation Date, Employee will return to NLCI's Chairman, or his
designee, all tangible property of any NLCI Party then in Employee's possession,
custody or control, including all company keys and credit cards, and all client
contact information and any other documents,
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records, reports, writings and other similar materials containing confidential
or proprietary information (whether in written, electronic or other form), and
will not retain any copies, extracts or notations of the same. Employee agrees
that all outstanding expense reports shall be submitted to NLCI's Chairman, or
his designee, no later than the close of business on the Separation Date. NLCI
will promptly pay to Employee all outstanding items properly owed, as reflected
in such expense reports.
9. Cooperation. From the date hereof, and continuing on and after the
Separation Date, Employee will cooperate with the NLCI Parties in the defense or
prosecution of all disputes with third parties. In furtherance thereof, if
requested by NLCI, upon reasonable notice, Employee will provide, at such times
as the parties shall mutually agree, written and oral evidence and testimony in
any proceedings and will meet with NLCI's attorneys or other representatives at
reasonable times and places in connection therewith. No NLCI Party shall be
required to pay further consideration to Employee for any such cooperation and
testimony, except that Employee will be reimbursed by NLCI for reasonable
out-of-pocket expenses actually incurred in connection with such cooperation or
testimony, plus any legal fees if the Company at its sole discretion deems
separate counsel is appropriate.
10. Certain Covenants of Employee. In consideration of payment of the
Separation Amount to Employee, Employee hereby agrees to the following
additional covenants:
(a) Intellectual Property. Employee acknowledges and agrees that all
rights in and to any and all inventions, ideas, techniques, methods,
developments, works, improvements and other forms of intellectual property
("Intellectual Property"), whether or not patentable, which Employee (either
alone or in conjunction with others) conceived, made, obtained or reduced to
product or commenced so to do during his employment with NLCI are and shall be
the property of NLCI. The foregoing shall not apply to Intellectual Property
unrelated to any subject matter of actual or potential concern or interest to
NLCI which were not conceived, made, obtained or reduced to product in the
course of Employee's employment or with the use of the time, material or
facilities of NLCI. Employee will, at any time or times , at NLCI's request and
expense but without additional compensation to Employee, execute and deliver
such foreign and domestic patent, trademark or copyright applications,
assignments and other papers and take such other action as NLCI considers
necessary to vest, perfect, defend or maintain NLCI's rights in and to such
Intellectual Property.
(b) Nondisclosure of Confidential Information. Employee shall not at
any time, unless authorized to do so in writing by NLCI, directly or indirectly
disclose or permit to be known to, or used for the benefit of, any person,
corporation or other entity (outside of the employ of any NLCI Party), or
himself, any confidential information acquired by him during the course of or as
an incident to his employment or association with NLCI, regardless of whether
pursuant to this Agreement. As used herein, the term "confidential information"
shall include, but not be limited to, all trade secrets, confidential or
proprietary knowledge or information with respect to the conduct or details of
NLCI's businesses including, but not limited to, financial information,
projections, business plans, lists of customers or suppliers of NLCI's
businesses, pricing strategies, business files and records, trade secrets,
curriculum, processes, costs, marketing methods or any other financial,
educational, curricular or other information about
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NLCI's businesses or curriculum not in the public domain. The term "confidential
information" shall not include any information which (i) is generally available
to the public as of the date hereof, (ii) becomes generally available to the
public after the date hereof, provided that such public disclosure did not
result, directly or indirectly, from any act, omission or fault of Employee, or
(iii) becomes available to Employee after the Separation Date on a
non-confidential basis from a source other than NLCI, or any of its agents,
provided that such source is not bound to any NLCI Party or its representatives
by agreement, fiduciary duty or otherwise not to disclose such information.
(c) Non-Competition and Nonsolicitation. For a period of two (2)
years following the Separation Date (the "Restricted Period"), Employee will not
(a) employ, or enter into any consultancy arrangement with, any person who was
on the payroll of any NLCI Party on the Separation Date or one (1) year prior to
that date, (b) take any action to solicit the employment of any such person, or
(c) direct or encourage any person to take any such action. In addition, during
the Restricted Period, Employee shall not, directly or indirectly, operate,
manage, own, control, be employed by, provide consulting services to, or in any
way be connected with or be concerned with or be interested in (i) any
pre-school, private school, child care center or program or day camp of any
type, (ii) any for profit or nonprofit business which provides educational
services of the nature provided by any of the NLCI Parties, in each case, where
services are provided within 25 miles of any place where any NLCI Party now or
hereafter offers or plans to offer services; provided however, that nothing
contained in this Section 10(c) shall prohibit Employee from (A) providing
services to, or in any way being connected with, concerned with or interested in
(x) Saint Andrews' School, located in Boca Raton, Florida; or (y) Congregation
B'Nai Israel, located in Boca Raton, Florida; or (B) owning in the aggregate
less than 2% of the publicly traded stock of any company.
(d) Consulting Services From and After Separation Date. From and
after the Separation Date and until the date of the final installment payment of
the Separation Amount, Employee agrees to provide such consulting services for
NLCI as may from time to time reasonably be requested by NLCI's Chairman with
appropriate advance notice (the "Subsequent Consulting Services"). In connection
therewith, Employee will be acting in the capacity of an independent contractor,
and not as an employee of any Nobel Party. In consideration of Employee's
performance of the Subsequent Consulting Services, NLCI will reimburse Employee
for any reasonable out-of-pocket business expenses which Employee actually
incurs in connection with the performance of the Subsequent Consulting Services,
upon timely submission by Employee of vouchers or itemized statements thereof
prepared in compliance with such rules relating thereto as NLCI may from time to
time adopt (which rules may include the requirement that Employee receive
advance approval of such expenses), provided Employee has such notice of such
rules.
(e) Remedies. Employee acknowledges that if he breaches his promises
set forth in this Section 10, NLCI will suffer irreparable damages, the amount
of which will be impossible to ascertain and which cannot be reasonably or
adequately compensated in an action of law. Accordingly, in addition to all
other remedies under this Agreement, NLCI shall be entitled as a matter of right
to injunctive relief, including specific performance, with respect to any such
breach or violation, in any court of competent jurisdiction. The remedies
granted to
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NLCI in this Agreement are cumulative and are in addition to remedies otherwise
available to NLCI at law or in equity. If NLCI is obliged to resort to the
courts for the enforcement of a covenant of Employee contained in Section 10(c),
such covenant shall be extended for a period of time equal to the period of such
breach, which extended period will commence on the later to occur of (i) the
date on which the original (unextended) term of such covenant is scheduled to
terminate, or (ii) the date of the final court order (without further right of
appeal) enforcing such covenant. To the extent that any statutes providing for
discovery in any action to enforce any of the covenants or obligations of this
Section 10 delay the time in which any party may initially propound, request or
serve any discovery, the parties waive such provisions of such statues. Employee
will not seek, and hereby waives any requirement for, the securing of posting of
a bond or proving actual damages in connection with NLCI's seeking or obtaining
any injunctive or equitable relief in connection with Employee's covenants or
other obligations under this Section 10. If, despite the foregoing waivers, a
court would nonetheless require the posting of a bond, the parties agree that a
bond in the amount of $5,000 would be a fair and reasonable amount, particularly
in light of the difficulty in quantifying what the actual loss caused by an
injunction would be. Employee consents to in personam jurisdiction and venue in
each of the United States District Court for the Eastern District of
Pennsylvania and the Court of Common Pleas of Chester County, Pennsylvania, and
waives the right to contest in personam jurisdiction and venue in such courts.
11. General Release.
(a) General Release by Employee. In consideration of the payments and
benefits set forth in Section 5(a), and the release by NLCI set forth in Section
11(b), Employee, on behalf of himself and his agents, assigns, heirs, executors
and administrators, finally and unconditionally releases and discharges each
NLCI Party, and all of their respective officers, directors, agents, employees,
partners, shareholders, predecessors, successors and assigns (collectively, the
"NLCI Released Parties") from any and all claims, demands, liabilities, damages,
obligations, actions or causes of action (collectively, "Claims") of any kind,
known or unknown, past or present, asserted or unasserted, suspected or
unsuspected, matured or unmatured, which Employee now has, may have or could
claim to have against any of the NLCI Released Parties up to and including the
date hereof, including, but not limited to, any and all claims arising out of,
relating to, or in connection with, Employee's employment or termination from
such employment. The claims released by Employee include, but are not limited
to, claims for wrongful termination, constructive discharge, sexual harassment,
breach of contract, breach of the covenant of good faith and fair dealing,
breach of fiduciary duty, bad faith discharge, fraud, defamation, libel,
retaliation, invasion of privacy and intentional or negligent infliction of
emotional distress, as well as any and all claims for counsel fees and costs.
The claims released by Employee further include, but are not limited to, claims
under all federal, state and local laws, including, but not limited to, claims
under any laws prohibiting employment discrimination, including, but not limited
to, the Age Discrimination in Employment Act, Title VII of the Civil Rights Act
of 1964, the Fair Labor Standards Act, the Americans with Disabilities Act, the
Employee Retirement Income Security Act, the Family and Medical Leave Act, the
Pennsylvania Human Relations Act and the Pennsylvania Equal Pay Law.
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(b) General Release by NLCI. In consideration of the provisions of
Section 10, and the release by Employee set forth in Section 11(a), NLCI, on
behalf of itself and its agents, successors and assigns, finally and
unconditionally releases and discharges Employee, his agents, assigns, heirs,
executors and administrators from any and all Claims of any kind, known or
unknown, past or present, asserted or unasserted, suspected or unsuspected,
matured or unmatured, which NLCI now has, may have or could claim to have
against Employee up to and including the date hereof.
(c) No Re-employment. Employee releases any right or claimed right to
re-employment or reinstatement with any NLCI Party from and after the Separation
Date. Employee shall not at any time seek employment with any NLCI Party. If,
notwithstanding such covenant, Employee applies for such employment, such NLCI
Party shall be under no obligation to consider Employee's application.
(d) Broad Scope of Release. The releases contained herein are
intended to be complete and final and to cover not only claims which are known,
but also claims which are unknown or which either Employee or any NLCI Party
does not suspect to exist in his or its favor which, if known at the time of
executing this Agreement, might have affected his or its actions. Employee and
NLCI each acknowledge and agree that their respective agreements set forth
herein are not and shall not be construed to be an admission of any violation of
any federal, state or local statute or regulation, or of any duty owed by either
of them or any NLCI Party, and that this Agreement is made voluntarily to
provide an amicable conclusion of Employee's employment with NLCI.
12. Non-Disparagement. Employee and NLCI agree that they will not
disparage in any way the professional or personal reputation or character of
each other, including any NLCI Party, or any officers, directors, employees,
agents or representatives of any NLCI Party.
13. Miscellaneous.
(a) Binding Agreement. This Agreement and the covenants contained
herein shall be binding upon and inure to the benefit of the parties hereto and
their respective successors, assigns, heirs, executors and administrators.
(b) Notices. All notices, requests, demands and other communications
hereunder shall be in writing and shall be transmitted by messenger, courier
service or mail addressed to the other party at the following addresses (or at
such other address as shall be given in writing by any party to the other
pursuant to this section) and shall be effective upon delivery or refusal of
delivery.
If to NLCI, to:
Nobel Learning Communities, Inc.
1615 West Chester Pike
West Chester, PA 19382
Attn: Chief Executive Officer
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If to Employee, to:
Robert E. Zobel
c/o McCausland, Keen & Buckman
Radnor Court Suite 160
259 North Radnor-Chester Road
Radnor, PA 19087
Attn: Janeen Olsen Dougherty, Esq.
(c) Governing Law; Jurisdiction. This Agreement shall be governed by
and construed in accordance with the laws of the Commonwealth of Pennsylvania.
Each party hereto agrees that any and all actions or proceedings hereunder or
relating in any way to this Agreement shall be brought only in the federal and
state courts for the Commonwealth of Pennsylvania.
(d) Effect of Violation. If Employee violates any of the provisions
of this Agreement, the payments provided by NLCI pursuant to Section 5(a) shall
cease, and, in addition to any other rights which NLCI may have, NLCI shall be
entitled to recover from Employee all payments previously made pursuant hereto,
and all reasonable attorneys' fees and court or arbitration costs incurred in
enforcement of this Agreement. If NLCI violates the provisions of this
Agreement, Employee shall be entitled to recover from NLCI all reasonable
attorney's fees and court or arbitration costs incurred in enforcement of this
Agreement.
(e) Entire Agreement; Amendment. This Agreement and the Promissory
Note constitute the entire agreement between Employee and NLCI relative to the
subject matter of this Agreement, and there are no agreements, representations
or warranties not set forth herein or therein. This Agreement supersedes any
prior written or oral agreement or understanding relating to the subject matter
hereof, other than the Promissory Note. Employee affirms that (i) the only
consideration for Employee's execution of this Agreement is the Separation
Amount; (ii) Sections 4 and 5 specify all payment obligations of NLCI and
Employee is releasing any other entitlements which Employee may have, including,
but not limited to, any claim for any bonus; and (iii) no other promise or
agreement of any kind has been made to or with Employee by any person or entity
whatsoever to cause Employee to execute this Agreement. Any amendments to this
Agreement must be in writing, signed by Employee and a duly authorized
representative of NLCI, and must state that the parties intend to amend this
Agreement. A waiver of the breach of any term or condition of this Agreement
shall not be deemed to constitute a waiver of any subsequent breach of the same
or any other term or condition.
(f) Partial Invalidity. If any term or provision of this Agreement or
the application thereof to any person or circumstance shall, to any extent, be
held invalid or unenforceable by a court of competent jurisdiction, the
remainder of this Agreement or the application of any such term or provision to
persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and each term and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law. If any of the provisions contained in this Agreement shall for any reason
be held to be excessively broad as to duration, scope, activity or subject, it
shall be construed by limiting and
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reducing it, so as to be valid and enforceable to the extent compatible with the
applicable law or the determination by a court of competent jurisdiction.
(g) Validity of Photocopies. Photocopies of executed originals of
this Agreement shall have the same force and effect and shall be as legally
binding and enforceable as the original.
14. Attorney Review. Employee acknowledges that this Agreement will have
important legal consequences and imposes significant requirement on Employee,
including, without limitation, the obligation to refrain from certain activities
after the Separation Date, and Employee's agreement to release and forever
discharge NLCI and related parties completely from all liability to Employee.
Accordingly, Employee acknowledges that NLCI has recommended that he retain
legal counsel to review this Agreement and consult with Employee, and that he
has been provided with adequate time to obtain such review.
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left blank]
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In Witness Whereof, the parties hereto have executed this Agreement.
Date: April 25, 2003 /s/ Robert E. Zobel
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Employee
Date: April 25, 2003 Nobel Learning Communities, Inc.
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By: /s/ A.J. Clegg
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Name: A.J. Clegg
Title: Chairman and CEO
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