Exhibit 10.11
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT made effective as of this 5th day of October, 1998
by and between THE LEARNING COMPANY, INC., a Delaware corporation (the
"Corporation"), and Xxxx Xxxxxxx (the "Executive").
WHEREAS the Corporation desires to employ the Executive in the position
of President of the TLC Learning Division or a position with similar
responsibilities, and the Executive wishes to be so employed by the Corporation.
NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements hereinafter set forth and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties hereby
agree as follows:
ARTICLE I
EMPLOYMENT
1.1 EMPLOYMENT AND POSITION. Effective as of the date hereof and for the Term
(as defined in Section 3.1 herein), the Corporation hereby employs the Executive
in the capacity of President of the TLC Learning Division and the Executive
hereby accepts such employment, all on and pursuant to the terms and conditions
set out herein.
1.2 DUTIES AND RESPONSIBILITIES. The Executive shall have such powers and duties
as are customarily associated with the office or offices of the Corporation held
by the Executive and as may from time to time be prescribed by the Board of
Directors of the Corporation (the "Board") or the Chief Executive Officer or
such other officer to whom the Executive may then report. Notwithstanding the
foregoing, it is expressly understood and agreed that the Board, the Chief
Executive Officer or such other officer may at any time give any other person
authority equivalent or superior to that of the Executive if, in the reasonable
judgment of the Board such a change is advisable under the circumstances.
1.3 FULL TIME AND ATTENTION. The Executive shall well and faithfully serve the
Corporation and its subsidiaries and shall devote his or her full working time
and attention to the business and affairs of the Corporation and its
subsidiaries and the performance of his or her duties and responsibilities
hereunder; PROVIDED, HOWEVER, that the Executive may participate in other
business ventures and activities from time to time which do not interfere with
his or her duties hereunder.
1.4 PROHIBITED INTERESTS. Neither the Executive nor any member of his or her
immediate family shall purchase or hold an interest in any company doing
business with the Corporation (other than as a customer of the Corporation) or
competing with the Corporation other than a two percent or lesser interest in
publicly traded stock or such other interests to which the Corporation has given
its prior written consent.
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ARTICLE II
REMUNERATION AND BENEFITS
2.1 ANNUAL BASE SALARY. Effective as of the date hereof and for each year of
employment during the Term (an "Employment Year"), the Corporation shall pay to
the Executive an annual base salary (the "Annual Base Salary") of not less than
$325,000. The Annual Base Salary shall be payable twice monthly in equal
installments or in such other regular installments as the Corporation may pay
its employees from time to time.
2.2 BENEFITS. The Corporation shall provide to the Executive benefits consistent
with benefits provided under the existing benefit plans, practices, programs and
policies of the Corporation in effect for executive officers from time to time
during the Term.
2.3 VACATION. The Executive shall be entitled to paid vacation in accordance
with the Corporation's vacation policy, as the same may be in effect from time
to time; provided, however that the Executive shall be entitled to at least four
weeks of paid vacation per year.
2.4 BONUS. In addition to the Annual Base Salary, the Executive shall be
eligible to earn a bonus of up to $200,000 for each fiscal year, payable in
quarterly installments, based upon annual or quarterly measures of market share,
operating margin and individual objectives to be agreed upon between the
Executive and the officer to whom the Executive reports and approved by the
Corporation's Compensation Committee for each fiscal year (the "Bonus").
2.5 EXPENSES. During the Term the Corporation will reimburse the Executive for
all normal and customary expenses incurred by the Executive in carrying out his
or her duties under this Agreement, provided that the Executive complies with
the policies, practices and procedures of the Corporation for submission of
expense reports, receipts or other similar documentation of such expenses.
ARTICLE III
TERM AND TERMINATION
3.1 TERM. Unless otherwise terminated in accordance with the provisions hereof,
this Agreement shall have a term of two years from the effective date hereof, as
the same is first set forth above (the "Term"). On the expiration of the Term
and on each anniversary of the expiration of the Term this Agreement shall
automatically renew for an additional one year period (each of which renewal
periods shall form part of the Term) unless the Corporation notifies the
Executive in writing three months in advance of the expiration of the Term, or
any subsequent anniversary thereof, that the Corporation does not wish to
further extend this Agreement.
3.2 TERMINATION FOR JUST CAUSE.
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(a) The Corporation may terminate the employment of the Executive
hereunder at any time for Just Cause, such termination to be communicated by the
Corporation to the Executive by written notice. For the purposes hereof, "Just
Cause" means a determination by the Board, in the exercise of its reasonable
judgment and after permitting the Executive a reasonable opportunity to be
heard, that any of the following has occurred:
(i) the willful and continued failure by the Executive to
perform his or her duties and responsibilities with the Corporation
under this Agreement (other than any such failure resulting from
incapacity due to physical or mental illness or disability) which is
not cured within 30 days of receiving written notice from the
Corporation specifying in reasonable detail the duties and
responsibilities which the Corporation believes are not being
adequately performed;
(ii) the willful engaging by the Executive in any act which is
demonstrably and materially injurious to the Corporation;
(iii) the conviction of the Executive of a criminal offense
involving fraud, dishonesty or other moral turpitude;
(iv) any material breach by the Executive of the terms of this
Agreement or any other written agreement between the Executive and the
Corporation relating to proprietary information, confidentiality,
non-competition or non-solicitation which is not cured within 30 days
of receiving written notice from the Corporation specifying in
reasonable detail such breach; or
(v) the engaging by the Executive in any intentional act of
dishonesty resulting or intended to result, directly or indirectly, in
personal gain to the Executive at the Corporation's expense.
(b) Upon the termination of the Executive's employment for Just Cause,
the Executive shall not be entitled to any severance, termination or other
compensation payment other than unpaid base salary earned by the Executive up to
the date of termination, together with any amount to which the Executive may be
entitled under the provisions of applicable employment legislation in force at
the date of termination of the Executive's employment (less any deductions
required by law).
3.3 TERMINATION WITHOUT JUST CAUSE OR FOR GOOD REASON.
(a) The Corporation may terminate the employment of the Executive
hereunder at any time without Just Cause, such termination to be communicated by
the Corporation to the Executive by at least 30 days prior written notice. In
addition, the Executive may terminate his or her employment for Good Reason,
such termination to be communicated by the Executive to the Corporation by at
least 30 days prior written notice. For purposes of
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this Agreement, "Good Reason" shall mean (i) a substantial diminution in the
Executive's position, duties, responsibilities or authority with the
Corporation, (ii) any purported termination of the Executive's employment which
is not effected in accordance with this Agreement (which purported termination
shall not be effective), (iii) the failure of the Corporation to obtain a
satisfactory agreement from any successor to assume and agree to perform this
Agreement, as contemplated in Section 4.8 hereof or (iv) any material breach by
the Corporation of this Agreement which is not cured within 30 days of receiving
written notice from the Executive specifying in reasonable detail such breach.
The Executive's right to terminate his or her employment for Good Reason shall
not be affected by his or her incapacity due to physical or mental illness or
disability. The Executive's continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting Good
Reason hereunder.
(b) Upon the termination of the Executive's employment without Just
Cause or for Good Reason, the Corporation shall have the following obligations:
(i) if not theretofore paid, the Corporation shall pay to or
to the order of the Executive within 10 days after the date of
termination of the Executive's employment hereunder any unpaid base
salary earned by the Executive up to the date of termination (less any
deductions required by law);
(ii) the Corporation shall pay to or to the order of the
Executive, as compensation for the Executive's loss of employment, an
amount equal to two times the Annual Base Salary plus two times the
amount of all bonuses pursuant to Section 2.4 hereof paid to or accrued
by the Executive with respect to the four fiscal quarterly periods of
the Corporation immediately preceding such termination (less any
deductions required by law), such amount to be paid in equal
installments in accordance with the Corporation's normal payroll
practices over a two-year period (the "Continuation Period");
(iii) during the Continuation Period the Corporation shall
provide the Executive with medical and dental insurance benefits
identical or substantially similar to those which the Executive was
receiving immediately prior to the written notice of termination
referenced in section 3.3(a) hereof. On the date following the
termination of the Continuation Period, the Executive shall be eligible
to commence benefit coverage in accordance with the Consolidated
Omnibus Budget Reconciliation Act of 1995, as amended; and
(iv) the Corporation shall provide executive outplacement
services to the Executive pursuant to its current agreement with Xxxxxx
Group, or pursuant to any successor agreement for comparable
outplacement services with a similar, recognized outplacement support
firm; provided that if the Corporation does provide such services to
The
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Executive, the Corporation will reimburse the Executive for executive
outplacement services incurred by the Executive within one year of the
date of termination of employment in an amount not to exceed $10,000.
3.4 TERMINATION UPON DEATH OR DISABILITY OR BY EXECUTIVE FOR OTHER THAN GOOD
REASON.
(a) The Corporation may terminate the employment of the Executive
hereunder at any time forthwith upon the death or permanent disability of the
Executive, such termination to be communicated by written notice given by the
Corporation to the Executive or, in the event of the death of the Executive, to
his or her personal representative or his or her estate. The Executive shall be
considered to have become permanently disabled if in any period of 12
consecutive months during the Term, because of ill health, physical or mental
disability, or for other causes beyond the control of the Executive, the
Executive has been or is reasonably likely to be continuously unable or
unwilling or has failed to perform his or her duties and responsibilities
hereunder for 120 consecutive days, or if, during any period of 12 consecutive
months during the Term, the Executive has been unable or unwilling or has failed
to perform his or her duties and responsibilities hereunder for a total of 180
days, consecutive or not.
(b) The Executive may, upon three months' prior written notice to the
Corporation, voluntarily terminate his or her employment hereunder for other
than Good Reason.
(c) On termination of the Executive's employment as a result of the
Executive's death or as a result of the Executive having become permanently
disabled, or upon the termination by the Executive of his or her or her
employment for other than Good Reason, the Corporation shall pay to the
Executive or his or her personal representative on behalf of the estate of the
Executive, within 10 days after date of termination of the Executive's
employment, any unpaid base salary earned by the Executive up to the date of
termination, together with any amount to which the Executive may be entitled
under the provisions of applicable employment legislation in force at the date
of termination of the Executive's employment (less any deductions required by
law).
(d) The several payments and other obligations of the Corporation
described in this Section 3.4 are the only severance, compensation or
termination payments or benefits that the Executive will receive in the event of
any termination of employment set forth in this Section 3.4.
3.5 RETURN OF PROPERTY. Upon the termination of the employment of the Executive
hereunder, regardless of the reason therefor, the Executive will immediately
deliver or cause to be delivered to the Corporation all books, documents,
effects, money, securities, equipment or other property (including manuals,
computer disks and software products) belonging to the Corporation, or for which
the Corporation is liable to others, which are in the possession, charge or
custody of the Executive. The Executive agrees not to make for
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personal or business use or for the use of any other party any reproductions or
copies of any such books, documents, effects or other property belonging to the
Corporation or for which the Corporation is liable to others. Notwithstanding
the foregoing, the Executive shall be entitled to retain, as his own personal
property, one laptop computer (including both hardware and, if and only to the
extent permitted by applicable licenses, all software written onto non-removable
media therein) used by the Executive as of the date of his termination
hereunder.
ARTICLE IV
GENERAL
4.1 CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary capacity
for the benefit of the Corporation all secret or confidential information,
knowledge or data relating to the Corporation and its subsidiaries and their
respective businesses which shall have been obtained by the Executive during the
Executive's employment by the Corporation and which shall not be or become
public knowledge (other than by acts of the Executive or representatives of the
Executive in violation of this Agreement). If the employment of the Executive
hereunder is terminated for any reason, the Executive shall not, without the
prior written consent of the Corporation or as may otherwise be required by law
or legal process, communicate or divulge any such information, knowledge or data
to any person other than the Corporation and those persons designated by it.
4.2 NON-INTERFERENCE WITH PERSONNEL RELATIONS. During the Executive's employment
with the Corporation and for a period of twelve months thereafter, the Executive
will not, directly or indirectly, solicit, entice or persuade any employee of
the Corporation or any of its subsidiaries to leave the services of the
Corporation for any reason.
4.3 EQUITABLE RELIEF. The Executive acknowledges that a breach of the
restrictions contained in Sections 4.1 and 4.2 hereof will cause irreparable
damage to the Corporation, the exact amount of which will be difficult to
ascertain, and that the remedies at law for any such breach will be inadequate.
Accordingly, the Executive and the Corporation agree that if the Executive
breaches or attempts to breach any of the restrictions contained in Sections 4.1
and 4.2 hereof, then the Corporation shall be entitled to temporary or permanent
injunctive relief with respect to any such breach or attempted breach (in
addition to any other remedies, at law or in equity, as may be available to the
Corporation), without posting bond or other security.
4.4 RESIGNATIONS. If the employment of the Executive hereunder is terminated in
accordance with the terms of this Agreement, the Executive shall tender his or
her resignation from all positions he may hold as an officer or director of the
Corporation or any of its subsidiaries.
4.5 MITIGATION. The Executive shall have no duty to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise,
nor
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shall the amount of any payment provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employer after the date of termination of the Employee's employment with the
Corporation, or otherwise.
4.6 NOTICES. Any notice required or permitted to be given under this Agreement
shall be in writing and shall be properly given if delivered personally or
mailed by prepaid registered mail addressed as follows:
(a) in the case of the Corporation, to:
The Learning Company, Inc.
Xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxxx 00000
Attention: General Counsel
(b) in the case of the Executive, to:
Xxxx Xxxxxxx
0 Xxxxxxxxxx Xxxxx, #000
Xxxxxx, XX 00000
or to such other address as the parties may from time to time specify by notice
given in accordance herewith. Any notice so given shall be conclusively deemed
to have been given or made on the day of delivery, if delivered, or, if mailed
by registered mail, upon the date shown on the postal return receipt as the date
upon which the envelope containing such notice was actually received by the
addressee.
4.7 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement between
the parties with respect to the employment relationship contemplated hereby and
cancels and supersedes all prior understandings and agreements between the
parties with respect thereto, and 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 expressly set forth in this Agreement.
4.8 SUCCESSORS AND ASSIGNS. Neither the Executive nor the Corporation may assign
its rights hereunder to another person without the consent of the other;
provided, however, that the Corporation may assign its rights hereunder to a
successor corporation which acquires (whether directly or indirectly, by
purchase, arrangement, merger, consolidation, dissolution or otherwise) all or
substantially all of the business or assets of the Corporation and expressly
assumes and agrees to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place and provided that such successor shall reasonably be
able to perform all of its obligations under this Agreement. As used in this
Agreement, the term "Corporation" shall mean the Corporation (as herein defined)
and any successor to its business or assets as
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aforesaid which assumes and agrees to perform this Agreement by operation of law
or otherwise.
4.9 ENUREMENT. This Agreement shall enure to the benefit of and be binding upon
the Executive and his or her personal representatives and upon the Corporation
and its successors and permitted assigns.
4.10 FURTHER ASSURANCES. Each of the Corporation and the Executive agrees to
execute all such documents and to do all such acts and things as the other party
may reasonably request and as may be lawful and within its power to do or to
cause to be done in order to carry out or implement in full the provisions and
intent of this Agreement.
4.11 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Massachusetts and the federal
laws of the United States of America applicable therein. Each of the parties
assents to the jurisdiction of the courts of the Commonwealth of Massachusetts
to hear any action, suit or proceeding arising in connection with this
Agreement.
4.12 WAIVER OF RIGHTS. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
by the party against whom the same is sought to be enforced and no failure by
any party to enforce any of its rights hereunder shall, except as aforesaid, be
deemed to be a waiver of such right. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance with, any
provision of this Agreement to be performed by such other party shall be deemed
to be a waiver of a similar or dissimilar provision hereof at the same or at any
prior or subsequent time.
4.13 MANDATORY ARBITRATION. Except as expressly stated below, any dispute,
controversy or claim arising out of or relating to my employment by the
Corporation or its termination, including but not limited to claims of unlawful
discrimination or harassment (collectively, the "Arbitrable Claims"), will be
settled by binding arbitration in (a) Boston or Cambridge, Massachusetts (if the
Executive's primary place of work is in Massachusetts), or (b) Fremont or San
Francisco, California (if the Executive's primary place of work is in
California) or (c) in such city as is located the office of the Corporation in
which constitutes the Executive's primary place of work (if the Executive's
primary place of work is not in Massachusetts or California), in accordance with
the then current rules of the American Arbitration Association (the "AAA"),
before an experienced employment arbitrator licensed to practice law in the
state in which the arbitration is conducted (the "Arbitration Site") and
selected in accordance with the Model Employment Arbitration Procedures of the
AAA. Notwithstanding the foregoing, and for purposes of clarity, each of the
Corporation and the Executive acknowledges and agrees that any Arbitrable Claim
shall be governed by the internal laws of the Commonwealth of Massachusetts
(regardless of the Arbitration Site) without regard to the laws that might
otherwise apply under applicable principles of conflicts of laws. The
Corporation and the Executive each knowingly waive the right to a jury trial in
a court of law with respect to the Arbitrable Claims. For purposes of any
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arbitration under this Section 4.13, the Corporation and the Executive hereby
incorporate by reference, and adopt all of the discovery rights and procedures
referenced in, the Massachusetts Code of Civil Procedure, and agree that each of
the Corporation and the Executive shall pay the fees of its, his or her own
attorneys, the expenses of its, his or her own witnesses and any other expenses
connected with presenting its, his or her own claims. The fees of the arbitrator
will be paid half by the Executive and half by the Corporation, provided that
the Corporation will pay 100% of any portion of the arbitrator's fee that
exceeds $1000. The Arbitrator shall have the power to summarily adjudicate
claims and/or enter summary judgment in appropriate cases. Notwithstanding any
of the foregoing, any claim or counterclaim brought for infringement or
misappropriation of any patent, copyright, trade secret, trademark or other
proprietary right shall not be subject to arbitration, and neither the Executive
nor the Corporation waive any right to submit any such claim, or any factual or
legal issues relating to such a claim, to a court of competent jurisdiction.
IN WITNESS WHEREOF the parties hereto have executed this
Agreement on the date and year first above written.
/s/ XXXX XXXXXXX
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XXXX XXXXXXX
THE LEARNING COMPANY, INC.
By: /s/ XXXXXXX XXXXXXX
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Xxxxxxx Xxxxxxx
Vice President, Human Resources
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