Exhibit 10.6
INDUSTRIAL TRAINING CORPORATION
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EMPLOYMENT AGREEMENT
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This Employment Agreement (the "Agreement") is made and entered into
effective as of the 30th day of November, 1996 (the "Effective Date") by and
between Industrial Training Corporation (the "Company") and Xxxxxx X. Xxxxx (the
"Executive").
RECITALS
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A. The Company is duly organized and validly existing as a corporation in
good standing under the laws of the State of Maryland. The Company is engaged
in the business of developing, marketing, and selling training materials,
primarily in multimedia platforms.
B. The Executive is presently in the employ of the Company as Executive
Vice President, and also serves as Chief Executive Officer and President of
ComSkill Learning Centers, Inc., a wholly-owned subsidiary of the Company.
C. The Company has offered to continue to employ the Executive in the
capacity of President of the Company and Chief Executive Officer of ComSkill
Learning Centers, Inc. The Executive has indicated his willingness to accept
said offer for continued employment in these capacities.
D. The parties hereto believe that it is in their best interests to
provide for the specific terms and conditions of employment and to impose
restrictions upon the parties in the event of the termination of the employment
relationship.
NOW, THEREFORE, in consideration of the mutual promises and covenants as
hereinafter set forth, and of other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Employment. The Company agrees to employ the Executive as President of
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the Company in accordance with the terms and conditions set forth in this
Agreement. The Executive shall have such specific duties as may be reasonably
assigned to him from time to time by the Board of Directors of the Company or
the Chief Executive Officer then in office, or their designee.
2. Acceptance and Standards. The Executive hereby accepts employment with
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the Company in accordance with the terms and conditions set forth in this
Agreement. During the term of this Agreement, and subject to the provisions of
Sections 5 and 6 of this Agreement, the Executive agrees to devote his full
business time and services and his best efforts to the faithful performance of
the duties which may be
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reasonably assigned to him and which are consistent with his position under
Section 1 of this Agreement.
3. Compensation.
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a. In General. For all services rendered by the Executive under this
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Agreement, the Company shall provide the Executive with the various forms of
compensation and benefits set forth in this Section 3.
b. Basic Compensation. The Company shall, subject to the approval of the
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Board of Directors of the Company, pay the Executive a basic salary of $130,000
per year, payable in periodic installments in accordance with the Company's
normal payroll practices for salaried employees.
c. Vehicle. The Executive shall receive the use of a Company vehicle
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selected by the Company, in its reasonable discretion.
d. Reimbursements of Expenses. The Company agrees to reimburse the
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Executive for all reasonable expenses (determined in the sole discretion of the
Company) incurred by the Executive in the course of the pursuance of his duties
hereunder in accordance with the Company's then current reimbursement policy.
e. Working Facilities. The Company, at its own cost, shall furnish the
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Executive with an office together with supplies, equipment, and such other
facilities and services suitable to his position and adequate for the
performance of his duties.
f. Fringe Benefits. Nothing herein shall affect the eligibility of the
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Executive to receive salary increases, bonus awards, stock option grants,
pension or profit-sharing agreements, employee benefits and the like which the
Company may, in its sole discretion, from time to time grant or make available
to the Executive. The Executive may participate in the Company's health and
medical plan, dental plan, 401(k) plan and Employee Stock Ownership Plan
("ESOP") if the Executive complies with the eligibility requirements thereunder
and otherwise in a manner consistent with the Company's then current normal
policies and procedures.
g. Discretionary Salary Increase and/or Bonus. Once each year,
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consideration shall be given by the Board of Directors of the Company, within
its sole discretion, to a salary increase for the Executive, and if so, in what
amount. The Executive shall, to the extent permitted by the Board of Directors
of the Company, also participate in the Company's Incentive Compensation Plan
commencing with the Company's fiscal year to end December 31, 1996 if the
Executive complies with the eligibility requirements thereunder and otherwise in
a manner consistent with the Company's then current normal policies and
procedures.
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4. Term. The initial term of this Agreement shall begin on the Effective
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Date and shall continue thereafter for a period of one (1) year, and thereafter
shall, without further action on the part of Executive or the Company, be
extended for additional one (1) year terms, provided that neither Executive or
the Company have given notice of termination, or otherwise terminated this
Agreement in accordance with the provisions of section 5 of this Agreement.
5. Termination. Unless the parties otherwise agree in writing,
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termination of this Agreement in accordance with the provisions of this Section
shall also constitute termination of the Executive's employment with the Company
without the need for further notice or action by either party.
a. Incapacity. In the event the Executive shall be unable to perform his
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duties owing to illness or other incapacity for a period of more than 90
consecutive days or an aggregate of 120 days in any 12 month period, the Company
may, at its option, by written notice addressed to the Executive, and sent
subsequent to such 90 days or 120 days, terminate this Agreement as of a date to
be specified in such notice, but not less than 30 days after the date of the
sending of such notice; provided, however, that if prior to the date specified
in such notice the Executive's illness or other incapacity shall have terminated
and he shall have satisfactorily taken up and performed his duties under this
Agreement, the notice of termination shall be disregarded, and this Agreement
shall continue in full force and effect. (See Sections 10 and 11 of this
Agreement for medical, sick leave, and disability benefits).
b. Death. In the event of the Executive's death during the term of his
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employment hereunder, this Agreement shall terminate as of the date of death,
and the Executive's spouse, or other such person whom the Executive shall have
designated in writing to the Company, shall be paid the unpaid portion, if any,
of the Executive's then prevailing salary prorated to the date of the
Executive's death. The Company shall also pay to such spouse, or such other
designated person, a death benefit consistent with the Company's then current
normal policies, if any.
c. Withdrawal from Business. The Company shall terminate this Agreement
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upon 60 days written notice to the Executive of a bona fide decision by the
Company to wind up its business and liquidate its assets (other than in
connection with a merger, consolidation, or other event specified in Section 7),
and all rights and obligations of both parties are hereto (except those under
Section 6.d. hereof) shall cease upon such termination. In this event, the
Executive shall be paid the unpaid portion, if any, of his then prevailing
salary prorated to the date of termination.
d. Termination by the Company for Cause. The Company may terminate this
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Agreement if, within the reasonable judgment of the Company the Executive shall
(i) fail to carry out his duties hereunder, (ii) act in a manner inimical to the
Company, (iii) negligently perform the duties of the Executive's position, or
(iv) not be in compliance with the Company employee handbook.
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e. Termination by the Company with Notice. The Company may terminate this
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Agreement for a reason not set forth in Section 5.a., 5.c., or 5.d. at any time
upon 60 days written notice to the Executive, and in addition, the Company shall
pay to the Executive a termination allowance (the "Termination Allowance") equal
to ten (10) months' salary, based upon his then-prevailing annual salary rate.
The Termination Allowance may, at the option of the Company, be paid in periodic
installments over the first 10 months following termination in accordance with
the Company's regular payroll periods or over such lesser period as the Company
may determine.
f. Termination by the Executive with Notice. The Executive may terminate
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this Agreement at any time upon 120 days written notice to the Company, in which
event the Executive shall be paid through the date of termination. During a
period of 180 days following any such termination by the Executive, the
Executive agrees to provide such consulting services to the Company as it may
reasonably request, at such time or times within such period as may be mutually
agreed upon between the Company and the Executive. The Executive shall be
compensated for any such consulting services at 120% of the daily rate when last
employed by the Company plus reimbursement for any reasonable out-of-pocket
expenses incurred by the Executive in rendering such consulting services.
6. Outside Business Interests, Employee Solicitation, and Company
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Property.
a. Without the written consent of the Board of Directors of the Company,
which consent shall not be unreasonably withheld, the Executive agrees that
during the term of this Agreement he will not be affiliated with any competitor,
supplier, or customer of the Company, as an officer, director, partner,
employee, agent, consultant (or similar capacity) or more than 1% stockholder.
b. The Executive further agrees that during the term of this Agreement he
will not, directly or indirectly, encourage employees of ITC (hereinafter
meaning the Company and/or any of its subsidiary companies or divisions now
existing or hereafter formed) to leave the employ of ITC for the purpose of
seeking or obtaining employment in any other activity with which the Executive
intends to become affiliated.
c. The Executive further agrees that during a period of two (2) years
following the termination of employment, regardless of the reasons for such
termination, he will not, directly or indirectly, solicit, attempt to hire, or
encourage employees of ITC to leave the employ of ITC.
d. The Executive further agrees that during the term of this Agreement and
following the termination of his employment he will not, other than in the
normal and valid course of his employment with the Company, directly or
indirectly, take with him or use any ITC property, such as drawings, reports,
data or proposals, design or manufacturing information, wage and salary
information, records or the like relating or
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peculiar to ITC's products, research or development or other activities, nor
disclose to any others information of a privileged nature.
e. The Executive further agrees that during the term of this Agreement and
during a period of two (2) years following the termination of his employment, he
will not, directly or indirectly, participate (on his own behalf or on behalf of
any other corporation, venture, or enterprise engaged in commercial activities)
in any proposals which were the subject of outstanding bids or solicitations of
ITC or of bids or solicitations in preparation by ITC during his employment by
the Company.
f. The Executive further agrees that in the event his employment is
terminated, and without regard for the reason for said termination, for a period
of one (1) year following such termination of employment, he will not engage,
directly or indirectly, as proprietor, partner, shareholder, director, officer,
employee, agent, consultant, or in any other capacity or manner whatsoever, in
any business activity competitive with the business of ITC, as constituted
during his employment and on the date of termination of his employment. If any
court of competent jurisdiction shall determine this covenant to be
unenforceable as to either the term or scope imposed above, then this covenant
nevertheless shall be enforceable by such court as to such shorter term or
lesser scope as may be determined by the court to be reasonable and enforceable.
g. The Executive further agrees that the provisions of this Section 6 are
of vital importance to the Company and incorporate crucial Company policies and
a means of safeguarding valuable proprietary rights and interests of ITC.
Accordingly, the Executive agrees that the Company shall be entitled to
injunctive relief, in addition to all other remedies permitted by the law, to
enforce the provisions of this Section 6.
7. Merger or Acquisition. In the event the Company should consolidate
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with, or merge into another corporation, or transfer all or substantially all of
its assets to another entity, this Agreement shall continue in full force and
effect and be binding upon the Company's successor or transferee.
8. Personnel Policies. To the extent not otherwise set forth herein, the
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terms and conditions of the Executive's employment and benefits shall be
governed by the then prevailing operating and personnel policies of the Company.
Executive hereby waives any past, present or future entitlement, if any, to
termination pay offered by the Company to its non-contract employees.
9. Vacations. The Executive shall be entitled to a reasonable vacation
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during each year of his term of employment, as approved by the Chief Executive
Officer of the Company.
10. Medical Expenses. Recognizing that the continued good health of the
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Executive and his family is of vital concern to the Company, since such good
health is directly related to the services which the Executive will be expected
to render to the
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affairs of the Company, the Executive agrees to undergo a thorough and complete
medical examination at least once during each year of his term of employment.
The executive further agrees to have the examining physician report the findings
of each examination to the Company, if so requested. Moreover, in keeping with
the Company's objectives in this regard, the Company agrees to reimburse the
Executive up to $1,000 during each calendar year of this Agreement for those
reasonable medical (including the aforementioned annual medical examination),
dental, and optical expenses incurred by the Executive during each such year on
behalf of himself and his immediate family if such expenses are not otherwise
reimbursed to the Executive through insurance. The unused reimbursement in one
calendar year will be carried forward up to a maximum of $3,000; expenses not
reimbursed in one calendar year can be submitted for reimbursement in subsequent
years. The Company, at its own expense, shall also provide the Executive with
medical insurance coverage under its group medical insurance plan.
11. Sick Leave Benefits and Disability Insurance. During his absence
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owing to illness or other incapacity, the Executive shall be paid sick leave
benefits at his then prevailing salary rate, reduced by the amount, if any, of
Worker's compensation or disability benefits under the Company's group
disability insurance plan. The Company, at its own expense, shall provide the
Executive with disability benefits under its group disability insurance plan.
12. Life Insurance. The Company, at its own expense, shall provide the
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Executive with life insurance benefits under its group life insurance plan.
13. Breach of Agreement. In addition to any other remedy available to the
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Company in the event of a material breach by the Executive of any of the
covenants set forth in this Agreement, the Company's obligation to pay the
Executive any incentive payouts, deferred compensation, termination allowance,
or other benefits accrued but unpaid as of the date of such breach (except any
vested rights the Executive may have under a Company Profit Sharing Retirement
Plan), if any, shall terminate, as will the Executive's right to exercise any
unexercised stock options.
14. Change Of Control.
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a. In General. For purposes of this Agreement, a "Change Of Control"
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shall be the occurrence of any one or more of the following events, and the
effective date of a Change Of Control shall be the effective date on which such
event occurs:
(i) A merger of the Company into another corporation in which the Company
is not the surviving corporation, other than a merger that manifestly does not
affect control such as a merger to change the state of incorporation.
(ii) A sale of substantially all of the assets of the Company.
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(iii) Any arrangement that gives to an entity or person (or group of
entities or persons acting in concert) the power to name a majority of the Board
of Directors of the Company.
(iv) Any other circumstance constituting an effective change of ownership
or control within the meaning of Section 280G of the Internal Revenue Code and
Regulations promulgated thereunder.
b. Consequences of a Change Of Control. In the event of a Change Of
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Control, the Executive shall be entitled to remain in the employ of the Company,
in a manner consistent with the terms of this Agreement. If within one (1) year
of the effective date of a Change of Control the Executive's employment with the
Company is terminated by the Company for any reason other than that set forth in
Section 5.d. above, the Company shall pay the Executive, the unpaid portion, if
any, of his then prevailing salary prorated to the date of termination, and in
addition the Company shall pay to the Executive a Termination Allowance equal to
12 months' salary, based upon his then prevailing annual salary rate, less such
number of months salary that the Executive actually received from the effective
date of the Change of Control through the date of termination. The Termination
Allowance may, at the option of the Company, be paid in periodic installments
over the number of months' salary, to be paid in accordance with the Company's
regular payroll periods or over such lesser period as the Company may determine
with the concurrence of the Executive.
15. Disputes and Arbitration. Any dispute arising out of or concerning
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this Agreement, which is not disposed of by agreement between the two parties,
shall be decided by an Arbitrator, located in the metropolitan Washington, D.C.
area, chosen by the parties. Either party may initiate an arbitration action by
a written notification to the other. The parties agree to choose the Arbitrator
within 15 days thereafter. The Arbitrator will follow the rules for arbitration
of the American Arbitration Association to the extent that said rules are not
inconsistent with the terms and conditions of this Section. The decision of the
Arbitrator shall be final and conclusive in the absence of statutory grounds for
setting it aside. Neither party shall be reimbursed for the costs that he or it
may sustain in connection with an arbitration under this Agreement.
16. Alteration, Amendment, or Termination. No change or modification of
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this Agreement shall be valid unless the same is in writing and signed by the
parties hereto. No waiver of any provision of this Agreement shall be valid
unless in writing and signed by the person against whom it is sought to be
enforced. The failure of any party at any time to insist upon strict
performance of any condition, promise, agreement, or understanding set forth
herein shall not be construed as a waiver or relinquishment of the right to
insist upon strict performance of the same condition, promise, agreement, or
understanding at a future time. The invalidity or unenforceability of any
particular provision of this Agreement shall not affect the other provisions
hereof, and this Agreement shall be construed in all respects as if such invalid
or unenforceable provisions were omitted.
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17. Integration. This Agreement sets forth (and is intended to be an
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integration of) all of the promises, agreements, conditions, understandings,
warranties, and representations, oral or written, express or implied, among them
with respect to the terms of the employment relationship and there are no
promises, agreements, conditions, understandings, warranties, or
representations, oral or written, express or implied, among them with respect to
the terms of the employment relationship other than as set forth herein.
18. Conflicts of Law. This Agreement shall be subject to and governed by
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the laws of the Commonwealth of Virginia irrespective of the fact that one or
more of the parties is now or may become a resident of a different state.
19. Benefits and Burden. This Agreement shall inure to the benefit of,
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and shall be binding upon, the parties hereto and their respective successors,
heirs, and personal representatives. This Agreement shall not be assignable.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date and year first above written.
WITNESS/ATTEST: COMPANY:
INDUSTRIAL TRAINING CORPORATION
/s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: Chairman and Chief Executive Officer
EXECUTIVE:
/s/ Xxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxx
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XXXXXX X. XXXXX
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