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SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "Agreement") made as of the 15th day of
June, 1998 by and between COMPUTER LEARNING CENTERS, INC., a Delaware
corporation (the "Company"), and XXXXX X. XXXXXX (the "Executive").
The Executive is presently employed by the Company as its Vice President
and Chief Operating Officer.
The Board of Directors of the Company (the "Board") desires to set forth
the nature and amount of compensation and other benefits to be provided to
Executive and any of the rights of the Executive in the event of her termination
of employment with the Company. The Executive is willing to commit herself to
continue to serve the Company, on the terms and conditions herein provided.
In order to effect the foregoing, the Company and the Executive wish to
enter into this Agreement under the terms and conditions set forth below.
Accordingly, in consideration of the promises and the respective covenants and
agreements of the parties herein contained, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue to serve the Company, on
the terms and conditions set forth herein.
2. Term. The term of Executive's employment under Section 1 will terminate
upon the termination of Executive's employment with the Company for any reason
whatsoever. No such termination shall affect any of the Company's other
obligations under this Agreement arising at or after such termination of
employment.
3. Position and Duties. The Executive shall serve as Vice President and
Chief Operating Officer of the Company and shall have such responsibilities and
authority as may normally be exercised by a chief operating officer of a
company.
4. Place of Performance. The Executive shall be based at the current
principal executive offices of the Company in Northern Virginia, or in the
Company's headquarters, provided that such headquarters is not more than
thirty-five (35) miles from the location of the Company's principal executive
offices on the date hereof.
5. Compensation and Related Matters.
(a) Base Salary. During the Executive's employment with the Company,
the Company shall pay to the Executive a salary at a rate of not less than
One Hundred Fifty-Seven Thousand Five Hundred Dollars ($157,500) per annum
in equal installments as nearly as practicable on the normal payroll
periods for employees of the Company generally (the "Base Salary"). The
Base Salary may be increased from time to time and, if so increased, shall
not thereafter be decreased during the term of this Agreement.
(b) Expenses. During the term of the Executive's employment
hereunder, the Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by the Executive in performing
services hereunder, including all expenses of travel and living expenses
while away from home on business or at the request of and in the service of
the Company, provided that such expenses are incurred and accounted for in
accordance with the policies and procedures established by the Company.
(c) Benefits. During the term of the Executive's employment
hereunder, the Company shall maintain in full force and effect, and the
Executive shall be entitled to continue to participate in, all of its
employee benefit plans and arrangements in effect on the date hereof in
which the Executive participates or receives benefits, or plans or
arrangements providing the Executive with at least equivalent benefits
thereunder. The Company shall not make any changes in such plans and
arrangements which would adversely affect the Executive's rights or
benefits thereunder, unless such change occurs pursuant to a program
applicable to all officers of the Company and does not result in a
proportionately greater reduction in the rights of or benefits to the
Executive as compared with any other officers of the Company. The Executive
shall be entitled to participate in or receive benefits under any employee
benefit plan or arrangement made available by the Company in the future to
its officers and key management
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employees, subject to and on a basis consistent with the terms, conditions
and overall administration of such plans and arrangements. Nothing paid to
the Executive under any plan or arrangement presently in effect or made
available in the fixture shall be deemed to be in lieu of any amounts
payable to the Executive pursuant to this Section 5.
6. Termination and Definitions.
(a) Cause. This Agreement shall immediately be terminated and neither
party shall have any future obligation hereunder, except for the Company's
obligations in Section 7 hereof, and except for the Executive's obligations
in Section 8 hereof, if the Executive's employment is terminated for Cause.
(b) Termination by the Executive. The Executive may terminate her
employment hereunder for Good Reason.
(c) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive shall be communicated by
written Notice of Termination to the other party hereto.
(d) Definitions.
(i) For purposes of this Agreement, termination "for Cause" shall
arise where termination results from theft or dishonesty in the conduct
of the Company's business, or intoxication while on duty, or conviction
of a felony, in each case having a material adverse effect on the
business of the Company.
(ii) For purposes of this Agreement, "Good Reason" shall mean (A) a
Change in Control of the Company (as defined below), (B) a decrease in
the total amount of the Executive's Base Salary below its level in
effect on the date hereof, (C) a reduction in the importance of the
Executive's job responsibilities without the Executive's consent or (D)
a geographical relocation of the Executive without her consent.
(iii) For purposes of this Agreement, a "Change in Control" of the
Company shall be deemed to have occurred if (A) any person (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934 (the "Exchange Act"), is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing twenty-five percent (25%) or
more of the combined voting power of the Company's then outstanding
securities, (B) during any period of two (2) consecutive years during
the term of this Agreement, individuals who at the beginning of such
period constitute the Board cease for any reason to constitute at least
a majority thereof unless the election of each director who was not a
director at the beginning of such period has been approved in advance by
directors representing at least two-thirds of the directors then in
office who were directors at the beginning of the period, (C) the
shareholders of the Company approve a merger or consolidation involving
the Company resulting in a change of ownership of a majority of the
outstanding shares of capital stock of the Company or (D) the
shareholders of the Company approve a plan of liquidation or dissolution
of the Company or the sale or disposition by the Company of all or
substantially all of the Company's assets.
(iv) For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated.
7. Compensation upon Termination.
(a) Termination for Cause or Resignation Without Good Reason. If (i)
the Executive's employment shall be terminated for Cause, or (ii) the
Executive voluntarily resigns from the employ of the Company and Good
Reason shall not have occurred, then the Company shall pay the Executive
her Base Salary through the date of delivery to her of a Notice of
Termination at the rate then in effect at the time
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and date the Notice of Termination is delivered, and the Company shall have
no further obligations to the Executive under this Agreement.
(b) Termination Without Cause or Resignation for Good Reason. If the
Company shall terminate the Executive's employment other than pursuant to
sec.6(a) hereof (it being understood that a purported termination pursuant
to sec.6(a) hereof, which is disputed and finally determined not to have
been pursuant to sec.6(a), shall be a termination by the Company pursuant
to this sec.6(b), then:
(i) the Company shall pay to the Executive her Base Salary through
the date of termination at the rate in effect at the time Notice of
Termination is delivered.
(ii) in lieu of any further salary payments to the Executive for
periods subsequent to the date of termination, the Company shall pay on
the date of termination, as severance pay to the Executive, a lump sum
payment in an amount equal to one (1) times the Executive's Base Salary
in effect as of the date of termination.
(c) Termination Upon a Change in Control. If there is a Change in
Control of the Company or there has been a public announcement of a Change
in Control of the Company (provided, however, that consummation of the
Change in Control of the Company shall be a condition precedent to the
effectiveness of this provision) and at any time thereafter the employment
of the Executive under this Agreement is terminated other than pursuant to
sec.6(a) hereof by the Company or a successor entity, then:
(i) the Company shall pay to the Executive her Base Salary through
the date of termination at the rate in effect at the time Notice of
Termination is delivered; and
(ii) in lieu of any further salary payments to the Executive for
periods subsequent to the date of termination, the Company shall pay on
the date of termination as severance pay to the Executive, a lump sum
payment in an amount equal to one and one half (1 1/2) times the
Executive's Base Salary in effect as of the date of termination.
(d) Continuation of Benefit Plans. Upon any termination of the
Executive's employment other than pursuant to sec.6(a) hereof, the Company
shall maintain in full force and effect for the continued benefit of the
Executive for twelve (12) months, or eighteen (18) months if there has
previously occurred a Change in Control of the Company, all employee
benefit plans and programs in which the Executive was entitled to
participate.
(e) Participation in Benefit Plans after Termination of
Employment. The Executive shall he entitled to continue to participate in
any benefit plan or program of the Company for twelve (12) months after the
expiration of the period provided for in 7(d), provided, that the Executive
pays the direct cost of any such benefit plan or program.
8. Covenants Not to Compete or Hire Employees. It is recognized and
understood by the parties hereto that Executive, through Executive's association
with the Company as an employee, shall acquire a considerable amount of
knowledge and goodwill with respect to the business of the Company, which
knowledge and goodwill are extremely valuable to the Company and which would be
extremely detrimental to the Company if used by Executive to compete with the
Company. It is, therefore, understood and agreed by the parties hereto that,
because of the nature of the business of the Company, it is necessary to afford
fair protection to the Company from such competition by Executive. Consequently,
as a material inducement to the Company to enter into this Agreement, Executive
covenants and agrees that for the period commencing with the date hereof and
ending one (1) year after Executive's termination of employment with the
Company, Executive shall not engage, directly, indirectly or in concert with any
other person or entity, in the information technology training industry in the
geographical area of the contiguous forty-eight (48) states of the United
States. Executive further covenants and agrees that for the period commencing on
the date of Executive's termination of employment for any reason whatsoever and
ending one (1) year after Executive's termination of employment with the
Company, Executive shall not, directly or indirectly, hire or engage or attempt
to hire or engage any individual who shall have been an employee of the Company
at any time during the one (1)-year period prior to the date of Executive's
termination of employment with the Company, whether for or on
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behalf of Executive or for any entity in which Executive shall have a direct or
indirect interest (or any subsidiary or affiliate of any such entity), whether
as a proprietor, partner, co-venturer, financier, investor or stockholder,
director, officer, employer, employee, servant, agent, representative or
otherwise.
9. Successors; Binding Agreement.
(a) Successors. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which executes and delivers the agreement
provided for in this Section 9 or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
(b) Binding Agreement. This Agreement and all rights of the Executive
hereunder shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amounts would still be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
10. Notice. For the purposes of this Agreement, notices, demands and all
other communications provided for in the Agreement shall be in writing and shall
be deemed to have been duly given when delivered or (unless otherwise specified)
mailed by United States registered mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive: Xxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
If to the Company: 00000 Xxxxxx Xxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
11. Prior Agreement. All prior agreements between the Company and the
Executive with respect to the employment of the Executive are hereby superseded
and terminated effective as of the date hereof and shall be without further
force or effect.
12. Miscellaneous. No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is agreed to in
writing signed by the Executive and duly authorized officer of the Company. No
waiver by either party hereto at any time of any breach by the other hereto of,
or compliance with, any condition or provision of this Agreement to be performed
by such other party shall be deemed a waiver of similar or dissimilar provisions
or conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Virginia.
13. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
14. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a panel of three arbitrators, in Washington, D.C., in
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accordance with the rules of the American Arbitration Association then in
effect. The expense of such arbitration shall be borne by the Company.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written.
COMPUTER LEARNING CENTERS, INC.
By:
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Xxxxx Xxxxxx, Chairman of the Board
EXECUTIVE:
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Xxxxx X. Xxxxxx
