Exhibit 10.33
AGREEMENT
THIS AGREEMENT (this "Agreement") made as of the 1st day of
February, 1997, between COMPUTER LEARNING CENTERS, INC., a Delaware
corporation (the "Company"), and XXXX X. XXXXXXX (the "Executive").
The Executive is presently employed by the Company as
President and Chief Executive Officer.
The Board of Directors of the Company (the "Board") recognizes
that the Executive's contribution to the growth and success of the Company
during the past six (6) years has been substantial. The Board desires to
provide for the continued employment of the Executive and to make certain
changes in the Executive's employment arrangements with the Company which the
Board has determined will reinforce and encourage the continued attention and
dedication to the Company of the Executive, as is deemed to be in the best
interest of the Company and its shareholders. 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 on 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 hereof will commence on the date hereof
and end after one (1) year, unless sooner terminated as hereinafter provided
or unless renewed as provided in Section 8 herein.
3. Position and Duties. The Executive shall serve as
President and Chief Executive Officer of the Company and shall have such
responsibilities and authority as may normally be exercised by a chief
executive officer of a company.
4. Place of Performance. In connection with the Executive's
employment by the Company, 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.
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5. Compensation and Related Matters.
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(a) Base Salary. During the period of the Executive's
employment hereunder, the Company shall pay to the Executive a salary at a
rate of not less than Two Hundred and Fifty Thousand Dollars ($250,000) per
annum in equal installments as nearly as practicable on the normal payroll
periods for employees of the Company generally (the "Base Salary"). The Base
Salary may be increased from time to time as determined by the Compensation
Committee of the Board and, if so increased, shall not thereafter during the
term of this Agreement be decreased.
(b) Bonuses. The Executive shall be paid on an annual
basis bonuses as follows (collectively, the "Annual Bonus"):
(i) At the end of each fiscal year during the
period of the Executive's employment hereunder, the Company shall pay a bonus
to the Executive equal to twenty-five percent (25%) of the Base Salary (the
"Guaranteed Bonus"). The Guaranteed Bonus shall be paid to the Executive
irrespective of any thresholds or benchmarks which trigger any other bonus or
incentive program to which the Executive is eligible.
(ii) Ninety (90) days after the end of each fiscal
year during the period of the Executive's employment hereunder, the Company
shall pay an additional bonus to the Executive as calculated pursuant to
Exhibit A attached hereto and made a part hereof (the "Formula Bonus"), it
being understood that the Formula Bonus shall be established, upon mutual
written agreement of the Company and the Executive, for each fiscal year of
the Company after the fiscal year ending January 31, 1998. If the Company
and the Executive are unable to agree on the terms of the Formula Bonus for
any such subsequent fiscal year prior to the date the Company issues its
final financial statements for the prior fiscal year, the Executive shall
receive as the Formula Bonus for such fiscal year a bonus calculated pursuant
to the formula set forth in Exhibit B attached hereto (the "Default Formula
Bonus").
(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) Insurance. During the term of the Executive's
employment hereunder and for a period of two (2) years thereafter, the
Company shall pay on behalf of the Executive or his designees, premiums on
life insurance policies under which the Executive and/or his spouse are the
insured, up to ______________ Dollars ($__________) per annum; provided,
however, that the Company shall continue to pay such premiums for three (3)
years after the term of the Executive's employment if there has been a Change
in Control of the Company, as defined herein; and provided, further, that the
Company shall not be obligated to pay such premiums after the term if there
shall be Termination for Cause of the Executive.
(e) Other Benefits. 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, or plans
or arrangements providing the Executive with a 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
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amounts payable to the Executive pursuant to Section 5 hereof. Any payments
(including bonus) or benefits payable to the Executive hereunder in respect
of any year during which the Executive is employed by the Company for less
than the entire such year shall, unless otherwise provided in the applicable
plan or arrangement, be prorated in accordance with the number of days in
such year during which he is so employed.
6. Termination. The Executive's employment hereunder may be
terminated without any breach of this Agreement only under the following
circumstances:
(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 10 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.
(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 or Guaranteed
Bonus below its level in effect on the date hereof, or a decrease in the
bonus percentage or formula to which the Executive is entitled, without the
Executive's consent (provided, however, nothing herein shall be construed to
guarantee the Executive's bonus award under Section 5.(b)(ii) hereof if
performance is below target), (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 25% of more of the combined voting
power of the Company's then outstanding securities, (B) during any period of
two 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 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.
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7. Compensation upon Termination.
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(a) If (A) the Executive's employment shall be
terminated for Cause, or (B) the Executive voluntarily resigns from the
employ of the Company and Good Reason shall not occurred, then the Company
shall pay the Executive his full salary through the date of delivery to him
of a Notice of Termination at the rate in effect at the time date of
termination is given plus his bonuses under Section 5.(b) hereof pro rated
through the time of date of termination, and the Company shall have no
further obligations to the Executive under this Agreement.
(b) If in the breach of this Agreement, the 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 proper shall be a termination by the Company in breach of this
Agreement), then:
(i) the Company shall pay to the Executive his full
salary through the date of termination at the rate in effect at the time
Notice of Termination is given plus his bonuses under Section 5.(b) hereof
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 an amount equal to two (2) times the following: (x) the Base
Salary rate in effect as of the date of termination plus (y) the Guaranteed
Bonus which would be payable to the Executive with respect to the year in
which the date of termination occurs.
(c) 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 for any reason whatsoever, then:
(i) the Company shall pay to the Executive his full
salary through the date of termination at the rate in effect at the time
Notice of Termination is given plus his bonuses under Section 5.(b) hereof
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 an amount equal to three (3) times the greater of: (x) the average
annual total compensation (cash plus the cash value of all benefits not
generally provided to all employees of the Company) paid to the Executive
over the Company's last three fiscal years prior to the date of termination;
or (y) the total compensation paid to the Executive during the Company's
fiscal year ended January 31, 1997 (i.e., Five Hundred and Sixty-Five
Thousand Six Hundred Dollars ($565,600);
(d) Upon any termination of the Executive's employment
for any reason whatsoever, the Company shall maintain in full force and
effect for the continued benefit of the Executive for two (2) years, or three
(3) years 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, pursuant to Section 5.(e) or otherwise, immediately
prior to the date of termination, provided that the Executive's continued
participation is possible under the general terms and provisions of such
plans and programs. In the event that the Executive's participation in any
such plan or program is barred, the Company shall arrange to provide the
Executive with equivalent benefits substantially similar to those which the
Executive would otherwise have been entitled to receive under such plans and
program from which his continued participation is barred.
(e) The Executive shall be entitled to continue to
participate in any benefit plan or program of the
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Company for two (2) years after the expiration of the period provided for in
Section 7.(d), or three (3) years if there has previously occurred a Change
of Control, provided, that the Executive pays the direct cost of any such
benefit plan or program.
8. Renewal of Term of Agreement. At the end of the initial
term of this Agreement, the Agreement shall be automatically renewed each
year for an additional one year, unless the Company notifies the Executive of
nonrenewal, such notice to be delivered at least ninety (90) days prior to
the end of the initial term or any extended term. Upon notice of nonrenewal
by the Company, (i) the Executive will be entitled to the protections of this
Agreement for the remaining term of this Agreement, subject to all other
provisions of this Agreement, and (ii) the Executive shall be entitled to the
payments specified in Sections 7.(b)(i) and 7.(b)(ii) hereof.
9. Counsel Fees. In the event that (i) the Company
terminates, or seeks to terminate, this Agreement, alleging as justification
for such termination a material breach by Executive or a Cause, or Causes,
set out in Section 6.(a) hereof; Executive disputes such termination or
attempted termination; and Executive prevails, or (ii) Executive elects to
terminate his service hereunder pursuant to Section 6.(b) of this Agreement;
the Company disputes its obligation to pay to Executive his Base Salary,
Guaranteed Bonus or Formula Bonus as provided in Section 7; and Executive
prevails; the Company shall pay, or reimburse to Executive, all reasonable
costs incurred by him in such dispute, including attorneys' fees and costs.
10. 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 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; provided, however, that
nothing in this Section 10 or elsewhere in this Agreement shall prevent the
Executive from teaching or lecturing in any field or being employed or
engaged in any capacity by a non-profit entity exempt from Federal income
taxes. 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.
11. Successors; Binding Agreement.
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(a) 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 hereinbefore defined and any successor to its business and/or assets as
aforesaid which executes and delivers the agreement provided for in this
Section 11 or which otherwise becomes bound by all the terms and provisions
of this Agreement by operation of law.
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(b) 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.
12. 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:
If to the Executive: 0000 Xxxxxxxx Xxxxx
Xxx
Xxxxxxx, 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.
13. 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.
14. 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.
15. 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.
16. 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:________________________________
Xxxxx Xxxxxx, Chairman
of the Board
EXECUTIVE:
____________________________________
Xxxx X. Xxxxxxx
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