EXHIBIT 10
SEVERANCE AGREEMENT
THIS SEVERANCE AGREEMENT (this "Agreement") made as of the 15th day of
January, 1998 by and between COMPUTER LEARNING CENTERS, INC., a Delaware
corporation (the "Company"), and XXXXXXX X. XXXXXXXX (the "Executive").
The Executive is presently employed by the Company as its Vice President
and Chief Financial Officer.
The Board of Directors of the Company (the "Board") desires to set forth
the nature and amount of compensation and other benefits to be provided to
the Executive and any of the rights of the Executive in the event of his
termination of employment with the Company. The Executive is willing to
commit himself to continue to serve the Company, on the terms and conditions
herein provided.
In order to effect the foregoing, the Company and the Executive wish to
enter into this Agreement under the terms and conditions set forth below.
Accordingly, in consideration of the promises and the respective covenants
and agreements of the parties herein contained, and intending to be legally
bound hereby, the parties hereto agree as follows:
1. Employment. The Company hereby agrees to continue to employ the
Executive, and the Executive hereby agrees to continue to serve the Company,
on the terms and conditions set forth herein.
2. Term. The term of Executive's employment under Section 1 will
terminate upon the termination of Executive's employment with the Company for
any reason whatsoever. No such termination shall affect any of the Company's
other obligations under this Agreement arising at or after such termination
of employment.
3. Position and Duties. The Executive shall serve as Vice President
and Chief Financial Officer of the Company and shall have such
responsibilities and authority as may normally be exercised by a chief
financial officer of a company.
4. Place of Performance. The Executive shall be based at the current
principal executive offices of the Company in Northern Virginia, or in the
Company's headquarters, provided that such headquarters is not more than
thirty-five (35) miles from the location of the Company's principal executive
offices on the date hereof.
5. Compensation and Related Matters.
(a) Base Salary. During the Executive's employment with the
Company, the Company shall pay to the Executive a salary at a rate of not
less than One Hundred Sixty-Five Thousand Dollars ($165,000) per annum in
equal installments as nearly as practicable on the
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normal payroll periods for employees of the Company generally (the "Base
Salary"). The Base Salary may be increased from time to time and, if so
increased, shall not thereafter be decreased during the term of this
Agreement.
(b) Bonus. The Executive shall be eligible to receive an annual
bonus (the "Annual Bonus") payable under the Company's bonus plan in
accordance with the bonus criteria established by the Board for the Executive
on an annual basis.
(c) Expenses. During the term of the Executive's employment
hereunder, the Executive shall be entitled to receive prompt reimbursement
for all reasonable expenses incurred by the Executive in performing services
hereunder, including all expenses of travel and living expenses while away
from home on business or at the request of and in the service of the Company,
provided that such expenses are incurred and accounted for in accordance with
the policies and procedures established by the Company.
(d) Benefits. During the term of the Executive's employment
hereunder, the Company shall maintain in full force and effect, and the
Executive shall be entitled to continue to participate in, all of its
employee benefit plans and arrangements in effect on the date hereof in which
the Executive participates or receives benefits, or plans or arrangements
providing the Executive with at least equivalent benefits thereunder. The
Company shall not make any changes in such plans and arrangements which would
adversely affect the Executive's rights or benefits thereunder, unless such
change occurs pursuant to a program applicable to all officers of the Company
and does not result in a proportionately greater reduction in the rights of
or benefits to the Executive as compared with any other officers of the
Company. The Executive shall be entitled to participate in or receive
benefits under any employee benefit plan or arrangement made available by the
Company in the future to its officers and key management employees, subject
to and on a basis consistent with the terms, conditions and overall
administration of such plans and arrangements. Nothing paid to the Executive
under any plan or arrangement presently in effect or made available in the
future shall be deemed to be in lieu of any amounts payable to the Executive
pursuant to this Section 5.
6. Termination and Definitions.
(a) Cause. This Agreement shall immediately be terminated and
neither party shall have any future obligation hereunder, except for the
Company's obligations in Section 7 hereof, and except for the Executive's
obligations in Section 8 hereof, if the Executive's employment is terminated
for Cause.
(b) Termination by the Executive. The Executive may terminate his
employment hereunder for Good Reason.
(c) Notice of Termination. Any termination of the Executive's
employment by the Company or by the Executive shall be communicated by
written Notice of Termination to the other party hereto.
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(d) Definitions.
(i) For purposes of this Agreement, termination "for Cause"
shall arise where termination results from theft or dishonesty in the conduct
of the Company's business, or intoxication while on duty, or conviction of a
felony, in each case having a material adverse effect on the business of the
Company.
(ii) For purposes of this Agreement, "Good Reason" shall mean
(A) a Change in Control of the Company (as defined below), (B) a decrease in
the total amount of the Executive's Base Salary below its level in effect on
the date hereof, (C) a reduction in the importance of the Executive's job
responsibilities without the Executive's consent or (D) a geographical
relocation of the Executive without his consent.
(iii) For purposes of this Agreement, a "Change in Control" of
the Company shall be deemed to have occurred if (A) any person (as such term
is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
(the "Exchange Act"), is or becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Company representing twenty-five percent (25%) of more of the combined
voting power of the Company's then outstanding securities, (B) during any
period of two (2) consecutive years during the term of this Agreement,
individuals who at the beginning of such period constitute the Board cease
for any reason to constitute at least a majority thereof, unless the election
of each director who was not a director at the beginning of such period has
been approved in advance by directors representing at least two-thirds of the
directors then in office who were directors at the beginning of the period,
(C) the shareholders of the Company approve a merger or consolidation
involving the Company resulting in a change of ownership of a majority of the
outstanding shares of capital stock of the Company, or (D) the shareholders
of the Company approve a plan of liquidation or dissolution of the Company or
the sale or disposition by the Company of all or substantially all of the
Company's assets.
(iv) For purposes of this Agreement, a "Notice of Termination"
shall mean a notice which shall indicate the specific termination provision
in this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated.
7. Compensation upon Termination.
(a) Termination for Cause or Resignation Without Good Reason. If
(i) the Executive's employment shall be terminated for Cause, or (ii) the
Executive voluntarily resigns from the employ of the Company and Good Reason
shall not have occurred, then the Company shall pay the Executive his Base
Salary through the date of delivery to him of a Notice of Termination at the
rate then in effect at the time and date the Notice of Termination is
delivered, and the Company shall have no further obligations to the Executive
under this Agreement.
(b) Termination Without Cause or Resignation for Good Reason. If
the
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Company shall terminate the Executive's employment other than pursuant to
section 6(a) hereof (it being understood that a purported termination
pursuant to section 6(a) hereof, which is disputed and finally determined not
to have been pursuant to section 6(a) shall be a termination by the Company
pursuant to this section 6(b)), then:
(i) the Company shall pay to the Executive (A) his Base
Salary through the date of termination at the rate in effect at the time
Notice of Termination is delivered, plus (B) his Annual Bonus pro rated
through the date of termination; and
(ii) in lieu of any further salary or bonus payments to the
Executive for periods subsequent to the date of termination, the Company
shall pay on the date of termination, as severance pay to the Executive, a
lump sum payment in an amount equal to one (1) times the Executive's Base
Salary in effect as of the date of termination.
(c) Termination Upon a Change in Control. If there is a Change in
Control of the Company or there has been a public announcement of a Change in
Control of the Company (provided, however, that consummation of the Change in
Control of the Company shall be a condition precedent to the effectiveness of
this provision) and at any time thereafter the employment of the Executive
under this Agreement is terminated other than pursuant to section 6(a) hereof
by the Company or a successor entity, then:
(i) the Company shall pay to the Executive (A) his Base
Salary through the date of termination at the rate in effect at the time
Notice of Termination is given, plus (B) his Annual Bonus pro rated through
the date of termination; and
(ii) in lieu of any further salary or bonus payments to the
Executive for periods subsequent to the date of termination, the Company
shall pay on the date of termination as severance pay to the Executive, a
lump sum payment in an amount equal to (A) one and one half (1 1/2) times the
Executive's Base Salary in effect as of the date of termination plus (B) one
and one half (1 1/2) times the Annual Bonus paid to the Executive in the
prior fiscal year of the Company or the current year target bonus, which ever
is larger.
(d) Continuation of Benefit Plans. Upon any termination of the
Executive's employment other than pursuant to section 6(a) hereof, the
Company shall maintain in full force and effect for the continued benefit of
the Executive for twelve (12) months, or eighteen (18) months if there has
previously occurred a Change in Control of the Company, all employee benefit
plans and programs in which the Executive was entitled to participate.
(e) Participation in Benefit Plans after Termination of
Employment. The Executive shall be entitled to continue to participate in
any benefit plan or program of the Company for twelve (12) months after the
expiration of the period provided for in 7(d), provided, that the Executive
pays the direct cost of any such benefit plan or program.
8. Covenants Not to Compete or Hire Employees. It is recognized and
understood by the parties hereto that Executive, through Executive's
association with the Company as an employee, shall acquire a considerable
amount of knowledge and goodwill with respect to the
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business of the Company, which knowledge and goodwill are extremely valuable
to the Company and which would be extremely detrimental to the Company if
used by Executive to compete with the Company. It is, therefore, understood
and agreed by the parties hereto that, because of the nature of the business
of the Company, it is necessary to afford fair protection to the Company from
such competition by Executive. Consequently, as a material inducement to the
Company to enter into this Agreement, Executive covenants and agrees that for
the period commencing with the date hereof and ending one (1) year after
Executive's termination of employment with the Company, Executive shall not
engage, directly, indirectly or in concert with any other person or entity,
in the information technology training industry in the geographical area of
the contiguous forty-eight (48) states of the United States. Executive
further covenants and agrees that for the period commencing on the date of
Executive's termination of employment for any reason whatsoever and ending
one (1) year after Executive's termination of employment with the Company,
Executive shall not, directly or indirectly, hire or engage or attempt to
hire or engage any individual who shall have been an employee of the Company
at any time during the one (1)-year period prior to the date of Executive's
termination of employment with the Company, whether for or on behalf of
Executive or for any entity in which Executive shall have a direct or
indirect interest (or any subsidiary or affiliate of any such entity),
whether as a proprietor, partner, co-venturer, financier, investor or
stockholder, director, officer, employer, employee, servant, agent,
representative or otherwise.
9. Successors; Binding Agreement.
(a) Successors. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to the Executive, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. As used in this Agreement, "Company" shall mean the Company
as herein before defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
Section 9 or which otherwise becomes bound by all the terms and provisions of
this Agreement by operation of law.
(b) Binding Agreement. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
should die while any amounts would still be payable to him hereunder if he
had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the
Executive's devisee, legatee, or other designee or, if there be no such
designee, to the Executive's estate.
10. Notice. For the purposes of this Agreement, notices, demands and
all other communications provided for in the Agreement shall be in writing
and shall be deemed to have been duly given when delivered or (unless
otherwise specified) mailed by United States registered mail, return receipt
requested, postage prepaid, addressed as follows:
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If to the Executive: Xxxxxxx X. Xxxxxxxx
0000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
If to the Company: 00000 Xxxxxx Xxxxx Xxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
11. Prior Agreement. All prior agreements between the Company and the
Executive with respect to the employment of the Executive are hereby
superseded and terminated effective as of the date hereof and shall be
without further force or effect.
12. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed
to in writing signed by the Executive and duly authorized officer of the
Company. No waiver by either party hereto at any time of any breach by the
other hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. 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 set forth expressly in this Agreement. The
validity, interpretation, construction and performance of this Agreement
shall be governed by the laws of the Commonwealth of Virginia.
13. Validity. The invalidity or unenforceability of any provision or
provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement, which shall remain in full force
and effect.
14. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators, in Washington, D.C., in
accordance with the rules of the American Arbitration Association then in
effect. The expense of such arbitration shall be borne by the Company.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
and year first above written. COMPUTER LEARNING CENTERS, INC.
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, Chairman of the Board
EXECUTIVE:
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
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