EXHIBIT 10.01
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is entered into as of March 21, 2002
(the "Effective Date") between Click2learn, Inc., a Washington corporation with
its principal offices located at 000-000xx Xxxxxx X.X., Xxxxxxxx, Xxxxxxxxxx
00000-0000, and/or one or more subsidiaries of Click2learn, Inc. (collectively
the "Company") and XXXXX XXXXX ("Employee").
In consideration of the promises and the terms and conditions set forth in this
Agreement, the parties agree as follows:
1. POSITION
During the term of this Agreement, Company will employ Employee and Employee
will serve as President, and Chief Executive Officer. Employee will also serve
as Chairman of Company's Board of Directors.
2. DUTIES
Employee will be responsible for all aspects of the business of the Company, and
will have such other duties as are reasonably determined by the Board of
Directors. Employee will comply with and be bound by Company's operating
policies, procedures, and practices from time to time in effect during
Employee's employment. Employee hereby represents and warrants that he is free
to enter into and fully perform this Agreement and the agreements referred to
herein without breach of any agreement or contract to which he is a party or by
which he is bound.
3. EXCLUSIVE SERVICE
Employee will devote his full professional time and efforts exclusively to this
employment and apply all his skill and experience to the performance of his
duties and advancing the Company's interests in accordance with Employee's
experience and skills. In addition, Employee will not engage in any consulting
activity except with the prior written approval of the Board, or at the
direction of the Board, and Employee will otherwise do nothing incompatible with
the performance of his duties hereunder. Subject to written approval by the
Board, Employee may serve on external boards provided that service does not
interfere with his performance of the duties hereunder or conflict with the
interests of the Company. Employee understands and agrees that any service on an
external board is performed in his personal capacity and not as a representative
of the Company or as part of his duties to the Company, and he shall communicate
that fact to any such external boards.
4. TERM OF AGREEMENT
This Agreement will commence on the Effective Date and will continue until the
earlier of two years after the Effective Date or when terminated pursuant to
Section 7 hereof. The expiration of this Agreement will not result in the
termination of Employee's employment, but Employee will become an "at will"
employee upon such expiration, and either Employee or the Company may terminate
employment with or without cause or advance notice.
5. COMPENSATION AND BENEFITS
(a) Base Salary. The Company agrees to pay Employee an initial base
salary of $250,000 per year. Employee's salary will be payable as earned in
accordance with Company's customary payroll practice, which currently is to pay
salary on a bi-weekly basis.
(b) Additional Benefits. Employee will be eligible to participate in
Company's employee benefit plans of general application, including without
limitation the Company's 401(k) Plan and those plans covering life, health,
disability and dental insurance in accordance with the rules established for
individual participation in any such plan and applicable law. Employee will
receive such other benefits, including health club membership, vacation,
holidays and sick leave, as the Company generally provides to its employees
holding similar positions as that of Employee.
(c) Bonus Plan. Employee shall be eligible to participate in such
executive bonus plans as may be adopted by the Board from time to time during
the term of this Agreement. Bonuses are based on factors determined by the Board
and set forth in the bonus plan. As President and CEO, Employee's target bonus
is 40% of annual base salary, with a maximum bonus of 100% of base salary.
(d) Business Expenses. The Company will reimburse Employee for all
reasonable and necessary expenses incurred by Employee in connection with the
Company's business, provided that such expenses are deductible to the Company,
are in accordance with the Company's applicable policy and are properly
documented and accounted for in accordance with the requirements of the Internal
Revenue Service.
6. PROPRIETARY RIGHTS
Employee hereby agrees that the Employee Invention, Confidentiality, Non-raiding
and Noncompetition Agreement (the "Invention Agreement") he executed with the
Company on September 30, 1997 remains in full force and effect.
7. TERMINATION
(a) Events of Termination. Employee's employment with the Company shall
terminate upon any one of the following:
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(i) the Company's determination made in good faith that it is
terminating the Employee for "cause" as defined under Section 7(b) below
("Termination for Cause"); or
(ii) the effective date of a written notice sent to Employee stating
that the Company is terminating his employment, without cause, which notice can
be given by the Company at any time after the Effective Date at the Company's
sole discretion, for any reason or for no reason ("Termination Without Cause");
or
(iii) the effective date of a written notice sent to the Company
from Employee stating that Employee is electing to terminate his employment with
the Company ("Voluntary Termination").
(b) "Cause" Defined. For purposes of this Agreement, "cause" for
Employee's termination will exist at any time after the happening of one or more
of the following events:
(i) a failure or refusal to comply in any material respect with the
reasonable policies, standards or regulations of the Company;
(ii) a good faith determination by the Company's Board of Directors,
with Employee abstaining from any vote on such matter, that Employee's
performance is unsatisfactory after reasonable notice of the ways in which
performance is unsatisfactory and a reasonable opportunity to correct any such
deficiencies;
(iii) a failure or refusal in any material respect to perform his
duties determined by the Company in accordance with this Agreement or the
customary duties of Employee's employment (except for any failure due to ill
health or disability);
(iv) unprofessional, unethical or fraudulent conduct or conduct that
materially discredits the Company or is materially detrimental to the
reputation, character or standing of the Company;
(v) dishonest conduct or a deliberate attempt to do an injury to the
Company;
(vi) Employee's material breach of a term of this Agreement or the
Invention Agreement, including, without limitation, Employee's unauthorized
disclosure or theft of the Company's proprietary information;
(vii) an unlawful or criminal act which would reflect badly on the
Company in the Company's reasonable judgment; or
(viii) Employee's death.
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8. EFFECT OF TERMINATION
(a) Termination for Cause or Voluntary Termination. In the event of any
termination of this Agreement pursuant to Sections 7(a)(i), or 7(a)(iii), the
Company shall pay Employee the compensation and benefits otherwise payable to
Employee under Section 5 through the date of termination. Employee's rights
under the Company's benefit plans of general application shall be determined
under the provisions of those plans.
(b) Termination Without Cause. In the event of any termination of this
Agreement pursuant to Section 7(a)(ii) during the period ending one year after
the Effective Date:
(i) the Company shall pay Employee the compensation and benefits
otherwise payable to Employee under Section 5 through the date of termination
(including a pro rata portion of any bonus compensation that may become payable
for the calendar quarter that includes the date of termination, which bonus
compensation shall be paid following the end of such calendar quarter);
(ii) for a period ending on the later of two years after the
Effective Date or six months following the date of termination, the Company
shall continue to pay Employee his base salary under Section 5(a) above at
Employee's then current salary, less applicable withholding taxes, payable on
the Company's normal payroll dates during that period;
(iii) Employee's rights under the Company's benefit plans of
general application shall be determined under the provisions of those plans.
9. CHANGE OF CONTROL TRANSACTION.
If during the term of Agreement any of the following transactions occurs: (a) a
merger or consolidation in which the Company is not the surviving corporation
(other than a merger or consolidation with a wholly-owned subsidiary, a
reincorporation of the Company in a different jurisdiction, or other transaction
in which there is no substantial change in the stockholders of the Company and
Employee's options are assumed, converted or replaced with equivalent options by
the successor corporation), (b) a merger in which the Company is the surviving
corporation but after which the stockholders of the Company immediately prior to
such merger cease to own their shares or other equity interest in the Company,
(c) the sale of substantially all of the assets of the Company, or (d) the
acquisition, sale, or transfer of more than 50% of the outstanding shares of the
Company by tender offer or similar transaction, then Employee's unvested options
shall accelerate and become fully exercisable immediately prior to the closing
of any such transaction.
10. MISCELLANEOUS
(a) Arbitration. Employee and the Company shall submit to mandatory
binding arbitration in Seattle, Washington any controversy or claim arising out
of, or relating to, this Agreement or any breach hereof, provided, however, that
Employee and the Company retain their
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right to and shall not be prohibited, limited or in any other way restricted
from, seeking or obtaining equitable relief from a court having jurisdiction
over the parties. Such arbitration shall be conducted in accordance with the
commercial arbitration rules of the American Arbitration Association in effect
at that time, and judgment upon the determination or award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.
(b) Severability. If any provision of this Agreement shall be found by
any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and to the extent that to do so would
not deprive one of the parties of the substantial benefit of its bargain. Such
provision shall, to the extent allowable by law and the preceding sentence, be
modified by such arbitrator or court so that it becomes enforceable and, as
modified, shall be enforced as any other provision hereof, all the other
provisions continuing in full force and effect.
(c) Remedies. The Company and Employee acknowledge that the service to
be provided by Employee is of special, unique, unusual, extraordinary and
intellectual character, which gives it peculiar value the loss of which cannot
be reasonably or adequately compensated in damages in an action at law.
Accordingly, Employee hereby consents and agrees that for any breach or
violation by Employee of any of the provisions of this Agreement including,
without limitation, Section 3 and 6, a restraining order an/or injunction may be
issued against Employee, in addition to any other rights and remedies the
Company may have, at law or equity, including without limitation the recovery of
money damages.
(d) No Waiver. The failure by either party at any time to require
performance or compliance by the other of any of its obligations or agreements
shall in no way affect the right to require such performance or compliance at
any time thereafter. The waiver by either party of a breach of any provision
hereof shall not be taken or held to be a waiver of any preceding or succeeding
beach of such provision or as a waiver of the provision itself. No waiver of any
kind shall be effective or binding, unless it is in writing and is signed by the
party against whom such waiver is sought to be enforced.
(e) Assignment. This Agreement and all rights hereunder are personal to
Employee and may not be transferred or assigned by Employee at any time. The
Company may assign its rights, together with its obligations hereunder, to any
parent, subsidiary, affiliate or successor, or in connection with the sale,
transfer, or other disposition of all or substantially all of its business and
assets, provided, however, that any such assignee assumes the Company's
obligations hereunder.
(f) Withholding. All sums payable to Employee hereunder shall be reduced
by all federal, state, local and other withholding and similar taxes and
payments required by applicable law.
(g) Entire Agreement. This Agreement and the Invention Agreement
constitute the entire and only agreement between the parties relating to
employment of Employee with the
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Company, and this Agreement and the Invention Agreement supersede and cancel any
and all previous contracts, arrangements or understandings with respect thereto.
(h) Amendment. This Agreement may be amended, modified, superseded,
canceled, renewed or extended only by an agreement in writing executed by both
parties hereto.
(i) Notices. All notices and other communications required or permitted
under this Agreement shall be in writing and hand delivered, sent by telecopier,
sent by certified first class mail, postage prepaid, or sent by nationally
recognized express courier service. Such notices and other communications shall
be effective upon receipt if hand delivered or sent by telecopier, five days
after mailing if sent by U.S. mail, and one day after dispatch if sent by
express courier, to the following addresses, or such other addresses as any
party shall notify the other parties:
If to the Company: 000-000xx Xxxxxx X.X., Xxxxx 000
Xxxxxxxx, XX 00000-0000
Telecopier: 000-000-0000
Attention: Chairman of the Board of Directors
If to Employee: Xxxxx Xxxxx
Address on Company Records
(j) Binding Nature. This Agreement shall be binding upon, and inure to
the benefit of, the successors and personal representatives of the respective
parties hereto.
(k) Governing Law. This Agreement and the rights and obligations of the
parties hereto shall be construed in accordance with the laws of the State of
Washington, without giving effect to the principles of conflict of laws;
provided, however, that if Employee is relocated to another jurisdiction then
the laws of such jurisdiction shall apply, and in the event of any claim made
following termination, the laws of the jurisdiction where Employee was located
on the date of termination shall apply.
IN WITNESS WHEREOF the Company and Employee have executed this Agreement
as of the date first above written.
"COMPANY" "EMPLOYEE"
CLICK2LEARN, INC.
By:
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Xxxxx Xxxxx
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Name
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Title:
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