Exhibit 10.6
ITC LEARNING CORPORATION
------------------------
SEPARATION AGREEMENT
--------------------
This Separation Agreement (the "Agreement") is made and entered into
effective as of the 13th day of June, 1997, by and between ITC Learning
Corporation (the "Company") and Xxxxxx X. Xxxxx ("Xxxxx").
RECITALS
--------
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.
X. Xxxxx is presently in the employ of the Company as President and
Director of the Company, and also serves as Chief Executive Officer and
President of ComSkill Learning Centers, Inc., a wholly-owned subsidiary of the
Company; Director of Xxxxxxxx Soft-Teach, Incorporated, a wholly-owned
subsidiary of the Company; Managing Director of Activ Training, Ltd., a UK
wholly-owned subsidiary; and Director of ITC Australasia Pty. Ltd., an
Australian wholly-owned subsidiary.
C. The Company has offered to continue to employ Xxxxx for a limited time
subject to certain conditions set forth herein. Xxxxx has indicated his
willingness to accept said offer for limited continued employment under the
stated conditions.
D. The parties hereto believe that it is in their best interests to
provide for the specific terms and conditions of the continued employment and
expected separation.
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:
A. OBLIGATIONS OF XXXXX:
1. Resignations. Immediately upon execution of this Agreement, Xxxxx will
-------------
tender his resignation from the following positions: President and Director of
the Company; Chief Executive Officer and President of ComSkill Learning Centers,
Inc., a wholly-owned subsidiary of the Company; Director of Xxxxxxxx Soft-Teach,
Incorporated, a wholly-owned subsidiary of the Company; Managing Director of
Activ Training, Ltd., a UK wholly-owned subsidiary; and Director of ITC
Australasia Pty. Ltd., an Australian wholly-owned subsidiary; and any others he
may currently hold with the Company or its affiliates.
2. Return of Property. Immediately upon execution of this Agreement,
-------------------
Xxxxx will vacate his offices located at the Herndon, Virginia, and Los Gatos,
California, offices of the Company and will surrender any and all Company
property in his possession, including any keys, credit cards, equipment,
proprietary information, products, etc.
3. Non-Disparagement. During the term of this Agreement, Xxxxx agrees not
------------------
to make any disparaging remarks about the Company to other employees, customers,
shareholders, investors, affiliates, suppliers, competitors, or anyone else.
1
4. Full Time and Attention. During the term of this Agreement, and
------------------------
subject to the provisions of Sections A.7 of this Agreement, Xxxxx agrees to
devote his full business time and services and his best efforts to the faithful
performance of the duties which may be reasonably assigned to him. In this
regard, Xxxxx agrees to be responsive to inquiries from the Company and to make
himself available for any duties assigned to him by the Company.
5. Support of Company Position. If contacted by any person about any
----------------------------
aspect of the business of the Company or its affiliates, Xxxxx agrees that he
will immediately determine from the Chief Executive Officer (Xxxxx X. Xxxxxx)
the position of the Company and he will fully support such position as described
by the Chief Executive Officer or have no comment.
6. Continuing Duty of Loyalty and Fiduciary Obligations. Xxxxx
-----------------------------------------------------
acknowledges that his duty of loyalty to the Company and fiduciary duties to the
Company continue as an employee and a Director of the Company.
7. Outside Business Interests, Employee Solicitation, and Company
--------------------------------------------------------------
Property.
--------
a. Without the written consent of the Board of Directors of the
Company, which consent shall not be unreasonably withheld, Xxxxx agrees that
during the term of this Agreement he will not be affiliated with or employed by
any competitor, supplier, or customer of the Company, as an officer, director,
partner, employee, agent, consultant (or similar capacity) or more than 1%
stockholder.
x. Xxxxx 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 Xxxxx intends
to become affiliated.
x. Xxxxx 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.
x. Xxxxx 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 peculiar to ITC's products,
research or development or other activities, nor disclose to any others
information of a privileged nature.
x. Xxxxx 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.
2
x. Xxxxx 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, Xxxxx 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 Section 7.
g. If any court of competent jurisdiction or arbitrator 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 or arbitrator as to such shorter term or lesser scope as may be determined
by the court to be reasonable and enforceable.
B. OBLIGATIONS OF THE COMPANY
1. Employment. The Company agrees to employ Xxxxx in accordance with the
----------
terms and conditions set forth in this Agreement. Xxxxx shall have such 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. Compensation.
------------
a. In General. For holding himself available to the Company and for
----------
all services rendered by Xxxxx under this Agreement, the Company shall provide
Xxxxx with the various forms of compensation and benefits set forth in this
Section B.2.
b. Basic Compensation. The Company shall, subject to the approval
------------------
of the Board of Directors of the Company, pay Xxxxx a salary at the rate of
$130,000 per year, payable on the 16th and the 1st day of each month during the
term of this Agreement in accordance with the Company's normal payroll practices
for salaried employees.
c. Vehicle. Xxxxx shall continue to receive the use of the Company
-------
vehicle already assigned to him, that is, a 1997 Ford Explorer. Said vehicle
shall be returned to the Los Gatos, California, office of Xxxxxxxx Soft-Teach,
Inc., upon the termination of this Agreement. Xxxxx shall be responsible for
his own personal liability insurance and the Company shall be responsible for
the insurance on the vehicle during the term of this Agreement. The vehicle was
provided to Xxxxx in new condition. Xxxxx shall return the vehicle in good
condition, understanding that a normal amount of wear and tear is expected. All
operational expenses, including mileage expense above the annual base lease
term, are the responsibility of Xxxxx.
d. Reimbursements of Expenses. The Company agrees to reimburse
--------------------------
Xxxxx for all reasonable expenses (determined in the sole discretion of the
Company) incurred by Xxxxx in the course of the pursuance of any duties which
may be reasonably assigned to him in accordance with the Company's then current
reimbursement policy.
e. Working Facilities. Xxxxx shall not have an office at the
------------------
Company and shall not enter the premises of the Company or its affiliates unless
directed to do so by the Chief Executive Officer or his designee.
Notwithstanding this provision, the Company, at its own cost, shall furnish
Xxxxx with any supplies, equipment, and such other facilities and services
required to perform the duties which may be reasonably assigned to him.
3
f. Fringe Benefits. Xxxxx will not participate in any fringe
---------------
benefits provided for employees, except Xxxxx may participate in the Company's
health and medical plan; life insurance; and dental plan in accordance with the
Company's then current normal policies and procedures regarding such plans.
Nothing in this agreement shall be construed to entitle Xxxxx to any paid leave,
eligibility to participate in the Company's pension or profit-sharing
agreements, including the 401(k) plan and Employee Stock Ownership Plan
("ESOP"), other employee benefits and the like which the Company may, in its
sole discretion, from time to time grant or make available to other employees.
3. Term. The term of this Agreement shall begin on June 13, 1997, and
----
shall continue thereafter for a period of one (1) year.
4. Termination. This agreement shall terminate on June 12, 1998, without
-----------
the need for further notice or action by either party.
5. Merger or Acquisition. In the event the Company should consolidate
---------------------
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.
6. Personnel Policies. To the extent not otherwise set forth herein, the
------------------
terms and conditions of Xxxxx'x employment and benefits shall be governed by the
then prevailing operating and personnel policies of the Company. Xxxxx hereby
waives any past, present or future entitlement, if any, to termination pay
offered by the Company to either its contract or non-contract employees.
7. Non-Disparagement. During the term of this Agreement, the Company
-----------------
agrees not to make any disparaging remarks about Xxxxx.
C. REMEDIES
1. Acknowledged Damages. Both parties acknowledge that compliance with
--------------------
this Agreement is necessary to protect the interests of the Company and that a
breach of this Agreement will damage the Company.
2. Disputes and Arbitration. Any dispute arising out of or concerning
------------------------
this Agreement, which is not disposed of by agreement between the two parties,
and regarding which the Company, in its sole discretion, chooses not to pursue a
temporary restraining order, preliminary and permanent injunctive relief, 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.
3. Other Damages. Xxxxx agrees that for any period of time during which
-------------
Xxxxx violates this Agreement, the Company shall be entitled to recover the
amount of fees, compensation, or other remuneration earned by Xxxxx as a result
of any breach. In addition to any other remedy available to the Company, in the
event of a breach by Xxxxx of any of
4
his obligations under this agreement, the Company's obligation to pay Xxxxx
compensation or benefits hereunder shall cease immediately.
4. Survival. The Term of this Agreement and the obligations of Xxxxx
--------
under paragraph A.7 above shall survive regardless of any action taken by the
Company as a result of Xxxxx'x breach(es), including the termination of
compensation and benefits to Xxxxx.
D. MISCELLANEOUS
1. Opportunity to Consult With Advisors. Xxxxx acknowledges that he had
------------------------------------
ample opportunity to consult with his own advisors before signing this Agreement
and that he fully understands the terms of this Agreement and accepts them
freely and voluntarily after having considered his decision to do so.
2. Alteration, Amendment, or Termination. No change or modification of
-------------------------------------
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.
3. Integration. This Agreement sets forth (and is intended to be an
-----------
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 separation 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 and separation other than as set forth
herein.
4. Conflicts of Law. This Agreement shall be subject to and governed by
----------------
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.
5. Benefits and Burden. This Agreement shall inure to the benefit of, and
-------------------
shall be binding upon, the parties hereto and their respective successors,
heirs, and personal representatives. This Agreement shall not be assignable.
5
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date and year first above written.
WITNESS/ATTEST: COMPANY:
ITC LEARNING CORPORATION
/s/Xxxxxxxxxxx X. Xxxx By: /s/Xxxxx X. Xxxxxx
----------------------- --------------------------
Name: XXXXX X. XXXXXX
Title: CEO
Employee:
/s/Xxxxxxxxxxx X. Xxxx /s/Xxxxxx X. Xxxxx
----------------------- ------------------------------
XXXXXX X. XXXXX
6
