EMPLOYMENT AGREEMENT
EXHIBIT
10.11
This
Agreement among Xxxxxxx Xxxxx (the "Executive") and SmartForce PLC, a public
company limited by shares formed under the laws of the Republic of Ireland
("SmartForce PLC") and its wholly-owned subsidiary, SmartForce, a Delaware
corporation ("SmartForce"), is entered into as of June 10, 2002. The
effectiveness of this Agreement is subject to the occurrence of the Closing Date
as that term is defined in the Agreement and Plan of Merger by and among
SmartForce, SkillSoft Corporation and Slate Acquisition Corp. (the "Effective
Date"). If such Agreement and Plan of Merger is terminated prior to the Closing
Date, this Agreement shall be null and void. For purposes of this Agreement, the
term "Company" shall be used to refer to both SmartForce PLC and
SmartForce.
WHEREAS,
the Company desires to employ the Executive and the Executive desires to accept
employment with the Company on the terms and conditions set forth
below;
NOW,
THEREFORE, in consideration of the foregoing recital and the respective
covenants and agreements of the parties contained in this document, the Company
and the Executive agree as follows:
1. Employment
and Duties. The Executive shall be employed as President and Chief Executive
Officer of the Company effective as of the Effective Date reporting to the Board
of Directors of SmartForce PLC (the "Board"), and assuming and discharging such
responsibilities as are mutually agreed upon by the Executive and the Board
commensurate with such office and position. The Executive shall perform
faithfully the executive duties assigned to him to the best of his
ability.
2. Base
Salary. In consideration of the Executive's services, the Executive shall be
paid a minimum base salary at the rate of $225,000 per year during the period of
employment (the "Base Salary"), to be paid in installments in accordance with
the Company's standard payroll practices. This Base Salary shall be reviewed for
increases at least annually by the Board on the same basis as the Board shall
review the compensation of other executive officers of the Company.
3. Bonus.
In addition to the Base Salary, the Executive shall be eligible to receive an
annual performance bonus in the amount determined by the Board(the "Targeted
Bonus") based on performance metrics established by the Board. This Targeted
Bonus shall be reviewed for increases at least annually by the Board on the same
basis as the Board shall review the compensation of other executive officers of
the Company.
4. At-Will
Employment. The Company and the Executive acknowledge that the Executive's
employment is and shall continue to be at-will, as defined under applicable law.
If the Executive's employment terminates for any reason, the Executive shall not
be entitled to any payments, benefits, damages, awards or compensation other
than as provided by this Agreement, or as may otherwise be available in
accordance with the Company's established employee plans and policies or other
written agreements with the Executive at the time of termination.
5. Benefits;
Expenses. The Executive, together with his spouse and dependent children, shall
be permitted, to the extent eligible, to participate at the Company's expense in
any group medical, dental, life insurance and disability insurance plans, or
similar benefit plans of the Company that are available to other executive
officers in each case pursuant to the terms and conditions of each such plan or
program. The Executive shall also be entitled to four (4) weeks' annual
vacation. Without limiting the generality of the foregoing, the Company shall
reimburse the Executive for all reasonable business and travel expenses actually
incurred or paid by the Executive in the performance of services on behalf of
the Company, in accordance with the Company's expense reimbursement policy as in
effect from time to time.
6. Voluntary
Termination and Termination for Cause. In the event that the Executive
terminates his employment with the Company voluntarily (other than for Good
Reason, as defined below) or the Company terminates the Executive's employment
for Cause, Sections 6(a), 6(b) and 6(c) below shall apply. For purposes of this
Agreement, termination for "Cause" shall mean (i) any act of personal dishonesty
taken by the Executive in connection with his responsibilities as an employee
which is intended to cause a material personal financial benefit for the
Executive and is intended to cause a material financial detriment to the
Company, (ii) the Executive's conviction of or plea of nolo contendere to a
felony, (iii) a willful act by the Executive which constitutes misconduct and is
injurious to the Company, and (iv) continued willful violations by the Executive
of the Executive's obligations to the Company under this Agreement.
(a) Covenant
Not to Solicit. Beginning with the effective date of the Executive's voluntary
termination (other than for Good Reason) or termination for Cause and until the
later of (i) one (1) year thereafter or (ii) the date that is two (2) years
after the Effective Date (the "Non-Compete Period"), the Executive agrees that
he will not:
(i) solicit,
encourage, or take any other action which is intended to induce any other
employee of the Company to terminate his employment with the Company,
or
(ii)
interfere in any manner with the contractual or employment relationship between
the Company and any such employee of the Company.
The
foregoing shall not prohibit the Executive or any entity with which the
Executive may be affiliated from hiring a former employee of the Company,
provided that such hiring results from such employee's affirmative response to a
general recruitment effort carried out through a public solicitation or a
general solicitation.
(b) Covenant
Not to Compete. During the Non-Compete Period, the Executive agrees that he will
not, directly or indirectly, own, manage, operate, join, control, advise or
participate in, as a shareholder (other than as a shareholder with less than one
percent (1%) of the outstanding stock of a company), officer, manager,
executive, partner, consultant or technical or business advisor (or any foreign
equivalents of the foregoing) any company that derives more than ten percent
(10%) of its revenues from a Restricted Business, or any company or entity
controlling, controlled by or under common control with any company that derives
more than ten percent (10%) of its revenues from a Restricted Business (any such
company, a "Restricted Company").
For the
purposes of this Agreement, the term "Restricted Business" shall mean the
business of developing or selling computer-based training for information
technology professionals, on-line business degrees, or any other interactive
education business in which the Company is then involved.
The
foregoing will not in any way affect the Executive's right to take any of the
foregoing positions if he is involved only in parts of a company that do not
derive any revenues from the Restricted Business.
(i) In
the event that the Executive intends to associate with any Restricted Company
during the Non-Compete Period, the Executive must provide information in writing
to the Board of Directors of the Company relating to the business engaged in or
proposed to be engaged in by such Restricted Company. All such current
associations of the Executive are set out in Exhibit A hereto.
In
the event that the Board of Directors authorizes the Executive to engage in such
activity in writing, any activity by the Executive described in the written
information furnished to the Chairman of the Board and so authorized shall be
conclusively deemed not to be a violation of Section 6(a) and (b)
hereof.
(ii)
The Executive acknowledges that, pursuant to an Agreement and Plan of Merger
among the Company, SkillSoft Corporation ("SkillSoft") and Slate Acquisition
Corp., he is transferring all shares of SkillSoft owned by him and that the
Company will be irreparably injured if the provisions of this Section 6 are not
specifically enforced. If the Executive commits or, in the reasonable belief of
the Company, threatens to commit a breach of any of the provisions of this
Section 6, the Company and each of its subsidiaries and affiliates shall have
the right and remedy, in addition to any other remedy that may be available at
law or in equity, to have the provisions of this Section 6 specifically enforced
by any court having equity jurisdiction together with an accounting for any
benefit or gain by the Executive in connection with any such breach, it being
acknowledged and agreed that any such breach or threatened breach will cause
irreparable injury to the Company and its subsidiaries and that money damages
will not provide an adequate remedy therefor. Such injunction shall be available
without the posting of any bond or other security, and the Executive hereby
consents to the issuance of such injunction.
(c) The
Executive shall not receive any compensation or benefits under this Agreement on
account of his voluntary termination or termination for Cause. The Executive's
rights under the Company's benefit plans upon such a termination shall be
determined under the provisions of those plans.
7. Termination
without Cause and Involuntary Termination. If the Executive's employment with
the Company is involuntarily terminated by the Company other than for Cause or
by the Executive for Good Reason (an "Involuntary Termination Event"), Sections
7(a) and 7(b) below shall apply.
For
purposes of this Agreement, the term "Good Reason" shall mean (i) without the
Executive's express written consent, the assignment to the Executive of any
duties, or the removal from or reduction or limitation of the Executive's duties
or responsibilities, which in either case is a significant change in the
Executive's position, title, organization level, duties, responsibilities,
compensation and status with the Company; (ii) without the Executive's express
written consent, a substantial reduction of the facilities and perquisites
(including office space and location) available to the Executive immediately
prior to such reduction; (iii) without the Executive's express written consent,
a reduction by the Company in the base salary of the Executive as in effect
immediately prior to such reduction; (iv) without the Executive's express
written consent, a reduction by the Company in the kind or level of employee
benefits to which the Executive is entitled immediately prior to such reduction
with the result that the Executive's overall benefits package is significantly
reduced; (v) without the Executive's express written consent, the relocation of
the Executive to a facility or a location more than twenty (20) miles from the
Executive's then-present work location; (vi) any purported termination of the
Executive by the Company other than for Cause or by reason of the Executive's
death or Disability; (vii) the failure of the Company to obtain the assumption
of this Agreement by any successor as required by Section 12 below; (viii)
without the Executive's express written consent, the granting of options or
other equity, or the modification of the terms of existing options or other
equity, to the Chairman or Chief Strategy Officer of the Company, where the
amount or terms of such grant or modification of options or other equity are
better than the amount or the terms concurrently granted to, or modified for the
benefit of, the Executive or (ix) any material breach by the Company of any term
of this Agreement.
(a) Severance.
The Company shall, in addition to paying the Executive all amounts accrued by
the Executive on or prior to the date of the Involuntary Termination Event, make
a lump sum payment to him equal to his then base salary plus the then maximum
performance bonus for a period of the greater of (i) one (1) year or (ii) from
the date of the Involuntary Termination Event to the date that is two (2) years
after the Effective Date.
(b) Stock
Options. Notwithstanding that above Sections 6(a) and 6(b) will otherwise not
apply to the Executive as a result of the Involuntary Termination Event, the
Executive may elect to be bound by above Sections 6(a) and 6(b) in exchange for
continued vesting of the stock options granted to him by the Company for the
period during which such Sections 6(a) and (b) apply (i.e., through the later of
(i) one year following the Involuntary Termination Event or (ii) the date that
is two (2) years after the Effective Date); provided, however, that the
Executive has to notify the Company of said election within thirty (30) days of
such termination. Otherwise, the Executive's stock options will discontinue to
vest immediately upon termination of employment.
8. Death.
In the event of the Executive's death, except for obligations accrued at such
time, the Company shall have no obligation to pay or provide any compensation or
benefits under this Agreement. The Executive's rights under the Company's
benefit plans in the event of the Executive's death shall be determined under
the provisions of those plans.
9. Disability.
The Company may terminate the Executive's employment for Disability by giving
the Executive thirty (30) days' advance notice in writing. In the event that the
Executive resumes the performance of substantially all of his duties hereunder
before the termination of his employment under this Section 9 becomes effective,
the notice of termination shall automatically be deemed to have been revoked.
Except for such obligations that have accrued prior to the Executive's
Disability, no compensation or benefits will be paid or provided to the
Executive under this Agreement on account of termination for Disability. The
Executive's rights under the Company's benefit plans shall be determined under
the provisions of those plans. For all purposes under this Agreement,
"Disability" shall mean that the Executive, at the time notice is given, has
been unable to substantially perform his duties under this Agreement for a
period of not less than six (6) consecutive months as the result of his
incapacity due to physical or mental illness.
10. Tax
Provisions. In the event that all or any part of the benefits provided for in
the Agreement, when aggregated with any other payments or benefits received by
the Executive, would (i) constitute "parachute payments" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended (the "Code"), and
(ii) would be subject to the excise tax imposed by Section 4999 of the Code (the
"Excise Tax"), then the amount of the Executive's benefits to be paid or
delivered hereunder shall be either
(a) the
full amount of such benefits determined without regard to this Section 10,
or
(b) such
lesser amount which would result in no portion of such benefits being subject to
the Excise Tax, whichever of the foregoing amounts, taking into account the
applicable federal, state and local income taxes and the Excise Tax, results in
the receipt by the Executive on an after-tax basis, of the greatest amount of
benefits, notwithstanding that all or some portion of such benefits may be
taxable under Section 4999 of the Code. Unless the Company and the Executive
otherwise agree in writing, any determination required under this paragraph
shall be made in writing by the Company's independent public accountants (the
"Accountants") whose determination shall be conclusive and binding upon the
Executive and the Company for all purposes. For purposes of making the
calculations required by this paragraph, the Accountants may make reasonable
assumptions and approximations concerning applicable taxes and may rely on
reasonable, good faith interpretations concerning the application of Sections
280G and 4999 of the Code. The Company and the Executive shall furnish to the
Accountants such information and documents as the Accountants may reasonably
request in order to make a determination under this paragraph. The Company shall
bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this paragraph.
11. Proprietary
Information Agreement. In connection with commencement of the Executive's
employment with the Company, the Executive will sign the Company's standard
executive proprietary information agreement, provided that its provisions, if
any, concerning non-solicitation and non-competition shall be deleted in favor
of the provisions herein.
12. Successors.
The Company shall require any successor or assignee, in connection with any
sale, transfer or other disposition of all or substantially all of the assets or
business of SmartForce PLC, whether by purchase, merger, consolidation or
otherwise, expressly to assume and agree to perform the Company's obligations
under this Agreement in the same manner and to the same extent that the Company
would be required to perform if no such succession or assignment had taken
place. In such event, the term SmartForce PLC as used in this Agreement, shall
mean SmartForce PLC as defined above and any successor or assignee to the
business and assets which by reason hereof becomes bound by the terms and
provisions of this Agreement.
13. Confidentiality.
Except as required by applicable laws, neither party shall disclose the contents
of this Agreement without first obtaining the prior written consent of the other
party, provided, however, that (i) the Executive may disclose this Agreement to
his attorney, financial planner and tax advisor if such persons agree to keep
the terms hereof confidential and (ii) the Company may disclose this Agreement
if its counsel advises that it is required to do so under applicable
law.
14. Arbitration.
Any claim, dispute or controversy arising out of this Agreement, the
interpretation, validity or enforceability of this Agreement or the alleged
breach thereof shall be submitted by the parties to binding arbitration before
the American Arbitration Association in Nashua, New Hampshire; provided,
however, that this arbitration provision shall not preclude either party from
seeking injunctive relief from any court having jurisdiction with respect to any
disputes or claims relating to or arising out of this Agreement or Executive's
conduct as an officer, director or employee of the Company. All costs and
expenses of arbitration, excluding attorneys' fees, shall be paid by the
Company. The arbitrator shall have the power to award attorneys' fees where
provided by statute or rule. The arbitrator shall be neutral, and shall issue
all decisions in writing. Judgment may be entered on the award of the
arbitration in any court having jurisdiction.
15. Governing
Law. This Agreement shall be governed by and construed in accordance with the
laws of the State of New Hampshire applicable to agreements made and to be
performed entirely within such state.
16. Integration.
This Agreement, any written agreements or other documents evidencing matters
referred to herein and any written Company existing plans that are referenced
herein represent the entire agreement and understanding between the parties as
to the subject matter hereof and thereof and supersede all prior or
contemporaneous agreements as to the subject matter hereof and thereof, whether
written or oral. No waiver, alteration, or modification, if any, of the
provisions of this Agreement shall be binding unless in writing and signed by
duly authorized representatives of the parties hereto.
17. Notices.
Notices and all other communications contemplated by this Agreement shall be in
writing and shall be deemed to have been duly given when personally delivered or
when mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid. In the case of the Executive, mailed notices shall be addressed
to him at the home address that he most recently communicated to the Company in
writing. In the case of the Company, mailed notices shall be addressed to its
corporate headquarters, and all notices shall be directed to the attention of
its Secretary.
18. No
Mitigation. In the event the Executive's employment with the Company terminates,
the Executive shall not be required to mitigate damages or the amount of any
payment provided under this Agreement by seeking other employment or otherwise,
nor shall the amount of any payment provided under this Agreement be reduced by
any compensation earned by the Executive as a result of employment by another
employer or by retirement benefits after such termination, or
otherwise.
19. Waiver.
If either party should waive any breach of any provisions of this Agreement, he
or it shall not thereby be deemed to have waived any preceding or succeeding
breach of the same or any other provision of this Agreement.
20. Counterparts.
This Agreement may be executed in counterparts, which together will constitute
one instrument.
[Remainder
of page intentionally left blank]
EXECUTIVE SMARTFORCE
PLC
By: /s/
Xxxxxxx X.
Xxxxx By: /s/ Xxxxxxx X.
Xxxxxx
------------------------------------
---------------------------
Name: Xxxxxxx X
Xxxxxx
Title: President &
CEO
SMARTFORCE
By: /s/ Xxxxxxx X.
Xxxxxx
---------------------------
Name: Xxxxxxx X.
Xxxxxx
Title: President
& CEO
December
23, 2008
Xxxxxxx
Xxxxx
SkillSoft
Corporation
000
Xxxxxxxxxxxx Xxxxxxxxx
Xxxxxx,
XX 00000
Dear
Xxxxx:
To ensure
compliance with Section 409A of the Internal Revenue Code of 1986, as amended,
SkillSoft Public Limited Company, incorporated in the Republic of Ireland (the
“Company”), and you hereby agree to amend the employment agreement dated as of
June 10, 2002 by and between SmartForce PLC (as a predecessor to the Company),
SmartForce (as predecessor to SkillSoft Corporation, its subsidiary), and you
(the “Employment Agreement”) as follows:
|
1.
|
Section
3 is amended by inserting at the end the
following:
|
“The
Company will pay any bonus due to the Executive between January 1 and June 30 of
the year following the year in which the services were rendered, unless the
bonus program specifically provides for a different payment schedule that
complies with Section 409A.”
|
2.
|
Section
5 is amended by inserting at the end the
following:
|
“To
receive reimbursement or have expenses paid, the Executive must submit all
required substantiation no later than the 30th day following the later of the
date the Executive incurred the expense or the date such documentation related
to the expense was first available to the Executive. The Company will
reimburse the Executive for expenses that fit its policy no later than the end
of the month following the month in which it receives such
substantiation.”
|
3.
|
Section
7(a) is amended by inserting at the end the
following:
|
“Payment
of any accrued amounts shall not be accelerated in a manner that would subject
them to extra taxation under Section 409A(a)(2) of the Code but shall instead be
paid in accordance with their terms. The lump sum severance shall be
paid as provided in Section 21.”
|
4.
|
Section
9 is amended by inserting after the third sentence the
following:
|
“Payment
of any accrued amounts shall not be accelerated in a manner that would subject
them to extra taxation under Section 409A(a)(2) of the Code but shall instead be
paid in accordance with their terms.”
|
5.
|
Section
10 is amended by inserting after the first sentence the
following:
|
“If
necessary to carry out the preceding sentence, amounts payable under this
Agreement will be reduced or eliminated as follows, as determined by the
Company, in the following order: (i) nonacceleration of any stock
options whose exercise price is at or above the fair market value of the stock
as determined in the discretion of the Board’s Compensation Committee (taking
into account, as appropriate, the proceeds that would be received in connection
with the event covered by Section 4999) (“Underwater Options”), (ii) the
payments due under Section 7(a) above, (iii) nonacceleration of any stock
options other than Underwater Options, and (iv) any vesting or distribution of
restricted stock or restricted stock units. Within each category
described in clauses (i), (iii), and (iv), reductions or eliminations shall be
made in reverse order beginning with vesting or distributions that are to be
paid the farthest in time from the date of event covered by Section
4999.”
|
6.
|
Section
21 is added to read as follows:
|
“Tax
Considerations. Any payments due under this Agreement shall be
reduced by any amounts that the Company is required to withhold under applicable
law. The Executive acknowledges that this Agreement is intended to
comply, to the extent applicable, with the provisions of Section 409A of the
Internal Revenue Code of 1986, as amended (“Section 409A”) and shall, to the
extent practicable, be construed in accordance with such
section. Terms defined in this Agreement have the meanings given such
terms under Section 409A if and to the extent required to comply with Section
409A. If and to the extent any portion of any payment, compensation
or other benefit provided to the Executive in connection with the Executive’s
separation from service (as defined in Section 409A) is determined to
constitute “nonqualified deferred compensation” within the meaning of Section
409A and the Executive is a “specified employee” as defined in Section
409A(a)(2)(B)(i), as determined by the Company in accordance with its procedures
and Treasury Regulation 1.409A-1(i)(6)(i), by which determination the Executive
hereby agrees to be bound, such portion of the payment, compensation or other
benefit shall not be paid before the earlier of (i) the day that is six months
plus one day after the date of separation from service or (ii) ten (10) days
after the Executive’s date of death (either, the “New Payment
Date”). The aggregate of any payments that would otherwise have been
paid to the Executive during the period between the date of separation from
service and the New Payment Date shall be paid to the Executive in a lump sum on
such New Payment Date, and any remaining payments will be paid on their original
schedule. For purposes of this Agreement, each amount to be paid or
benefit to be provided will be construed as a separate identified payment for
purposes of Section 409A, and any payments that are due within the “short term
deferral period” as defined in Section 409A will not be treated as deferred
compensation unless applicable law requires otherwise. Neither the
Company nor the Executive has the right to accelerate or defer the delivery of
any such payments or benefits except to the extent Section 409A specifically
permits or requires such acceleration or deferral.
Notwithstanding
the foregoing, to the extent that this Agreement or any payment or benefit
hereunder is determined not to comply with Section 409A, then neither the
Company, its Board, nor any of its designees, agents, or employees will be
liable to the Executive or any other person for any actions, decisions, or
determinations made under the Agreement or for any resulting adverse tax
consequences.”
Except as
modified by this letter or by other intervening amendments, all other terms and
conditions of the Agreement shall remain in full force and
effect. This letter may be executed in counterparts, each of which
shall be deemed to be an original, and all of which shall constitute one and the
same document.
| SKILLSOFT PUBLIC LIMITED COMPANY | |||
|
|
By:
|
/s/ Xxxxxx X. Nine | |
| Xxxxxx X. Nine | |||
| Chief Operating Officer | |||
| SKILLSOFT CORPORATION (FORMERLY SMARTFORCE) | |||
|
|
By:
|
/s/ Xxxxxx X. Nine | |
| Xxxxxx X. Nine | |||
| Chief Operating Officer | |||
| Acknowledged and agreed: | ||
|
By:
|
/s/ Xxxxxxx X. Xxxxx | |
| Xxxxxxx X. Xxxxx | ||
| Date | December 23, 2008 | |
