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.
(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.
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.
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) 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.
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.
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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:
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/s/ Xxxxxx X. Nine | |
Xxxxxx X. Nine | |||
Chief Operating Officer | |||
SKILLSOFT CORPORATION (FORMERLY SMARTFORCE) | |||
|
By:
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/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 | |