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 1st day of March, 1997 (the "Effective Date") by and between
Industrial Training Corporation (the "Company") and Xxxx X. Xxxxxxx
("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 Company has offered to employ the Executive in the capacity of Senior
Vice President of the Company, and Executive wishes to be so employed.
C. 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 a Senior Vice
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President of 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 the
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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 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 Board
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of Directors of the Company and further subject to paragraph 3.g., pay the
Executive a basic salary of $125,000 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 selected
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by the Company, in its reasonable discretion.
d. Reimbursements of Expenses. The Company agrees to reimburse the Executive
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for all reasonable expenses (determined in the sole discretion of the
Company, and in accordance with corporate policies which may be promulgated
in the Employee Handbook or other published corporate policies) 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, but is not obligated to,
participate in the Company's 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. The parties agree that in lieu of
the Executive's participation in the Company's medical and dental plan(s),
the Executive shall participate in an IBM benefits program ("IBM Benefits
Program"). The Company agrees that it shall reimburse Executive in an
amount not to exceed $600.00 per month, for Executive's participation in
the IBM Benefits Program. Such reimbursement shall be made during the
initial term and renewal term, if any, of this Agreement, unless earlier
terminated. The parties agree that, in the event the IBM Benefits Program
is discontinued for any reason during the initial term, or any renewal
term, of this Agreement, Executive may participate in the Company's medical
and dental plan(s).
g. Discretionary Salary Increase and/or Bonus. Once each year, consideration
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shall be given by the Compensation Committee of the Board of Directors,
upon the recommendation of the CEO of the Company, and after the CEO of the
Company and the Executive have met to review Executive' s performance, to a
salary adjustment for the Executive, and if so, in what amount; provided
however, that the Executive's salary shall not be decreased below the
amount set forth in paragraph 3.b above if the Executive remains as Senior
Vice President and is
satisfactorily performing his duties in that capacity. 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, 1997 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.
h. Options. The Company shall grant to Executive in accordance with the terms
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and conditions of the Company's 1992 Key Employee Incentive Stock Option
Plan, the option to acquire 30,000 shares of the common stock of the
Company. The specific terms of the option grant shall be set forth in a
separate Stock Option Agreement to be executed by the Company and
Executive. The options granted herein shall be treated as incentive stock
options to the extent they qualify as such under section 422(d) of the
Internal Revenue Code, as amended.
4. Term. The initial term of this Agreement shall begin on the Effective Date
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and shall continue thereafter for a period of one (l) year, provided that
neither the 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. At the end of the initial term of this Agreement
(if not earlier terminated), this Agreement may be renewed upon the mutual
agreement of the Company and the Executive for an additional one (l) year
term. In the event either the Company or the Executive elects not to renew
the Agreement for the additional one year term, notice of such non-renewal
shall be given to the other party not less than ninety (90) days prior to the
scheduled expiration date. The renewal term of this Agreement shall be
subject to termination in accordance with the provisions of Section 5 of this
Agreement.
5. Termination. Unless the parties otherwise agree in writing, termination of
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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 at its own expense will provide
life insurance with benefits consistent with the Company's then current
normal policies, if any.
c. Withdrawal from Business. The Company shall terminate this Agreement upon
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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 immediately terminate
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the Executive' s employment for Cause (as hereinafter defined) by giving
the Executive notice in writing of such termination. For all purposes under
this Agreement, the term "Cause" shall mean (i) a breach by Executive of
any of his material obligations under this Agreement, including without
limitation Executive's obligations under Sections S(f) and 6 hereof, (ii)
any act by the Executive which constitutes gross misconduct, (iii) a
violation of a federal or state law, rule or regulation applicable to the
business of the Company of a type that is materially adverse to the
Company, or (iv) the conviction of the Executive of, or entry by the
Executive of a guilty or no contest plea to, a felony. No compensation or
benefits shall be paid or provided to the Executive under this Agreement on
account of a termination for Cause, or for periods following the date when
such a termination of employment is effective.
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 S.a., S.c., or S.d. at any
time upon 60 days written notice to the Executive, in which event 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 be paid,
at the sole option of the Company, 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 this
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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.
g. Acknowledgment of Termination Benefits. Executive agrees and acknowledges
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that all termination benefits to which he may be entitled are contained in
this Section 5, and specifically acknowledges and agrees that he shall not
be entitled to any termination benefits contained in any version, past,
present, or future, of the Employee Handbook or which are offered to the
Company's non-contract employees.
6. Outside Business Interests Employee Solicitation. and Company Property.
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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 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 (l) 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 principal
businesses 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 with, or
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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 terms
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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 of not
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less than three (3) weeks per year, 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 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 owing to
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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 Executive
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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 breach by the Executive of 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 if any, shall terminate, as will the Executive's
right to exercise any unexercised stock options.
14. Disputes and Arbitration. Any dispute arising out of or concerning this
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Agreement, which is not disposed of by agreement between the two parties,
shall be decided by an Arbitrator, chosen by the parties, and located in
Santa Xxxxx County, California. 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.
15. Alteration, Amendment, or Termination. No change or modification of this
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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.
16. Integration. This Agreement sets forth (and is intended to be an integration
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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.
17. Conflicts of Law. This Agreement shall be subject to and governed by the
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laws of the Commonwealth of Virginia irrespective of the fact that one or
more of the parties is now or may become resident of a different state.
18. Benefits and Burden. This Agreement shall inure to the benefit of, and shall
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be binding upon, the parties hereto and their respective successors, heirs,
and personal representatives. This Agreement shall not be assignable by
Executive.
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/ Xxxxxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxx
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Name: Xxxxx X. Xxxxxx
Title: CEO
EXECUTIVE:
/s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxxx
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