Employment Agreement

EMPLOYMENT AGREEMENT





THIS AGREEMENT is made as of July 1, 1996, between UNIVERSITY ONLINE, INC., a corporation organized and existing under the laws of the State of Delaware ("UOL") and CARL N. TYSON ("Tyson").



WHEREAS, UOL desires to employ Tyson and Tyson desires to accept such employment on the terms and conditions hereinafter set forth; and



WHEREAS, the parties hereby acknowledge that the goodwill, continued patronage, names, addresses and specific business requirements of UOL's c lients and customers, and the designs, procedures, systems, strategies, business methods and know-how of UOL, having been acquired through UOL's efforts and the expenditure of considerable time and money, are among the principal assets of UOL; and



WHEREAS, the parties hereby acknowledge that as a result of the position(s) in which Tyson is and will be employed, Tyson has developed and will continue to develop special skills and knowledge peculiar to UOL's business, whereby h e has become and will continue to become, through his employment with UOL, acquainted with the identities of the clients and customers of UOL, and has acquired and will continue to acquire access to the techniques of UOL in carrying on its bus iness, as well as other confidential and proprietary information; and



WHEREAS, the parties hereto acknowledge that the Covenants set forth in Section 8 of this Agreement are necessary for the reasonable and proper protection of U OL's confidential and proprietary information (as defined herein), customer relationships, and the goodwill of UOL's business, and that such Covenants constitute a material portion of the consideration for Tyson's employment hereunder.



NOW, THEREFORE, in consideration of the premises and mutual promises and covenants contained herein, and for other good and valuable consideration, the receipt and legal sufficiency of which are hereby acknowledged, the parties agree as follows:



1. Term. UOL agrees to employ Tyson, and Tyson agrees to be employed, as President and Chief Operating Officer of UOL, or in such other management position as the Board of Directors may from time to time assign, for a term of two (2) years commencing July 1, 1996 and ending June 30, 1998 (the "Initial Term"), unless such employment is sooner terminated as provided herein.



2. Renewal Terms. Unless either party provides written notice to the other of its/his intention not to renew this Agreement at least sixty (60) days prior to the expiration of the Initial Term (or then-current renewal term hereof), this



















Agreement shall be automatically renewed for consecutive additional one (1) year renewal terms, subject to the termination provisions set forth in Section 7 hereof.



3. Compensation. In consideration of Tyson's services as President and Chief Operating Officer (or any other capacity in which Tyson may be employed by UOL), UOL shall pay Tyson a minimum annual base salary of Two Hundred Ten Thousand Dollars ($210,000.00) per annum, payable in equal monthly installments in accordance with UOL's normal payroll practices, plus an annual performance bonus of up to fifty percent (50%) of Tyson's base salary in an amount to be determined by the Board of Directors of UOL in its sole discretion, based upon the growth rate in revenues and earnings of UOL during the term hereof. Tyson's total compensation shall be reviewed by the Board of Directors of UOL on an annual basis during the term hereof (including renewal terms) and may be increased as UOL deems appropriate in its sole discretion.



4. Employee Benefits; Vacation. During the term of this Agreement, Tyson shall be eligible to receive and/or participate in all employee benefits that are offered by UOL to its executive employees, including, without limitation, major medical, dental, and long t erm disability insurance coverage for Tyson. During the term hereof, Tyson shall be entitled to receive up to three (3) weeks (i.e., fifteen (15) days) of paid vacation per calendar year. Up to five (5) days of accrued but unused vacation may be c arried over by Tyson from one calendar year to the next.



5. Reimbursement of Expenses. Tyson is authorized to incur reasonable expenses in connection with the business of UOL including expenses for travel and similar items. UOL will reimbur se Tyson for all such reasonable expenses upon itemized account of expenditures.



6. Illness or Disability. Tyson shall receive full compensation for any period of illness or disability during the term of this Agreement until such time as h e receives benefits under the long term disability insurance coverage referred to in paragraph 4, supra. Notwithstanding the foregoing, UOL shall have the right to terminate this Agreement without further obligation to Tyson if such illness or dis ability shall be of such a character as totally to disable Tyson from rendering any services to UOL for a period of more than six (6) consecutive months on giving at least thirty (30) days' written notice of intention to do so.



7. T ermination of Employment. Tyson's employment hereunder is employment at will, and either UOL or Tyson may terminate this Agreement and Tyson's employment at any time, with or without cause. For purposes of this Agreement, notice of inte nt not to renew this Agreement given by UOL to Tyson shall not be deemed a termination hereof.





















a. Severance Benefit Payable. If Tyson terminates this Agreement for Good Reason (as defined below), or if UOL terminates th e Agreement other than (i) for Cause (defined below) or (ii) due to Tyson's Disability as described in Section 6 hereof, Tyson shall be entitled to receive, as his exclusive remedy for such termination, the severance benefit set forth in s ubsection 7d hereof (the "Severance Benefit"). Such Severance Benefit shall be payable to Tyson in equal monthly installments consistent with UOL's standard payroll practices, the first of such installments to be due within thirty (30) days after te r mination hereof. In order, however, to invoke termination for "Good Reason" hereunder, Tyson must communicate such termination in advance and by written notice UOL, which written notice (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts an ...