EXHIBIT 10.12
EMPLOYMENT AGREEMENT
This Employment
Agreement among Jerald A. Nine (the "Executive") and SmartForce
PLC, a public company limited by shares formed under the laws of
the Republic of Ireland ("SmartForce PLC") and its wholly-owned
subsidiary, SmartForce, a Delaware corporation ("SmartForce"), is
entered into as of June 10, 2002. The effectiveness of this
Agreement is subject to the occurrence of the Closing Date as that
term is defined in the Agreement and Plan of Merger by and among
SmartForce PLC, SkillSoft Corporation and Slate Acquisition Corp.
(the "Effective Date"). If such Agreement and Plan of Merger is
terminated prior to the Closing Date, this Agreement shall be null
and void. For purposes of this Agreement, the term "Company" shall
be used to refer to both SmartForce PLC and SmartForce.
WHEREAS, the
Company desires to employ the Executive and the Executive desires
to continue employment with the Company on the terms and conditions
set forth below;
NOW, THEREFORE, in
consideration of the foregoing recital and the respective covenants
and agreements of the parties contained in this document, the
Company and the Executive agree as follows:
1. Employment and
Duties. The Executive shall be employed as Executive Vice
President, Content Solutions and General Manager, Books Division of
the Company effective as of the Effective Date reporting to the
Chief Executive Officer of SmartForce PLC (the "CEO"), and assuming
and discharging such responsibilities as are mutually agreed upon
by the Executive and the CEO commensurate with such office and
position. The Executive shall perform faithfully the executive
duties assigned to him to the best of his ability.
2. Base Salary. In
consideration of the Executive's services, the Executive shall be
paid a minimum base salary at the rate of $200,000 per year during
the period of employment (the "Base Salary"), to be paid in
installments in accordance with the Company's standard payroll
practices. This Base Salary shall be reviewed for increases at
least annually by the Board on the same basis as the Board shall
review the compensation of other executive officers of the
Company.
3. Bonus. In
addition to the Base Salary, the Executive shall be eligible to
receive an annual performance bonus in the amount determined by the
Board (the "Targeted Bonus") based on performance metrics
established by the Board. This Targeted Bonus shall be reviewed for
increases at least annually by the Board on the same basis as the
Board shall review the compensation of other executive officers of
the Company.
4. At-Will
Employment. The Company and the Executive acknowledge that the
Executive's employment is and shall continue to be at-will, as
defined under applicable law. If the Executive's employment
terminates for any reason, the Executive shall not be entitled to
any payments, benefits, damages, awards or compensation other than
as provided by this Agreement, or as may otherwise be available in
accordance with the Company's established employee plans and
policies or other written agreements with the Executive at the time
of termination.
5.
Benefits; Expenses. The Executive, together with his spouse and
dependent children, shall be permitted, to the extent eligible, to
participate at the Company's expense in any group medical, dental,
life insurance and disability insurance plans, or similar benefit
plans of the Company that are available to other executive officers
in each case pursuant to the terms and conditions of each such plan
or program. The Executive shall also be entitled to four (4) weeks'
annual vacation. Without limiting the generality of the foregoing,
the Company shall reimburse the Executive for all reasonable
business and travel expenses actually incurred or paid by the
Executive in the performance of services on behalf of the Company,
in accordance with the Company's expense reimbursement policy as in
effect from time to time.
6. Voluntary
Termination and Termination for Cause. In the event that the
Executive terminates his employment with the Company voluntarily
(other than for Good Reason, as defined below) or the Company
terminates the Executive's employment for Cause, Sections 6(a),
6(b) and 6(c) below shall apply. For purposes of this Agreement,
termination for "Cause" shall mean (i) any act of personal
dishonesty taken by the Executive in connection with his
responsibilities as an employee which is intended to cause a
material personal financial benefit for the Executive and is
intended to cause a material financial detriment to the Company,
(ii) the Executive's conviction of or plea of nolo contendere to a
felony, (iii) a willful act by the Executive which constitutes
misconduct and is injurious to the Company, and (iv) continued
willful violations by the Executive of the Executive's obligations
to the Company under this Agreement.
(a)
Covenant Not to Solicit. Beginning with the effective date of the
Executive's voluntary termination (other than for Good Reason) or
termination for Cause and until one (1) year thereafter (the
"Non-Compete Period"), the Executive agrees that he will
not:
(i) solicit,
encourage, or take any other action which is intended to induce any
other employee of the Company to terminate his employment with the
Company, or
(ii)
interfere in any manner with the contractual or employment
relationship between the Company and any such employee of the
Company.
The foregoing
shall not prohibit the Executive or any entity with which the
Executive may be affiliated from hiring a former employee of the
Company, provided that such hiring results from such employee's
affirmative response to a general recruitment effort carried out
through a public solicitation or a general solicitation.
(b)
Covenant Not to Compete. During the Non-Compete Period, the
Executive agrees that he will not, directly or indirectly, own,
manage, operate, join, control, advise or participate in, as a
shareholder (other than as a shareholder with less than one percent
(1%) of the outstanding stock of a company), officer, manager,
executive, partner, consultant or technical or business advisor (or
any foreign equivalents of the foregoing) any company that derives
more than ten percent (10%) of its revenues from a Restricted
Business, or any company or entity controlling, controlled by or
under common control with any company that derives more than ten
percent (10%) of its revenues from a Restricted Business (any such
company, a "Restricted Company").
For the
purposes of this Agreement, the term "Restricted Business" shall
mean the business of developing or selling computer-based training
for information technology professionals, on-line business degrees,
or any other interactive education business in which the Company is
then involved.
The foregoing will
not in any way affect the Executive's right to take any of the
foregoing positions if he is involved only in parts of a company
that do not derive any revenues from the Restricted
Business.
(i) In
the event that the Executive intends to associate with any
Restricted Company during the Non-Compete Period, the Executive
must provide information in writing to the CEO of the Company
relating to the business engaged in or proposed to be engaged in by
such Restricted Company. All such current associations of the
Executive are set out in Exhibit A hereto. In the event that the
CEO authorizes the Executive to engage in such activity in writing,
any activity by the Executive described in the written information
furnished to the CEO and so authorized shall be conclusively deemed
not to be a violation of Section 6(a) and (b) hereof.
(ii)
The Executive acknowledges that, pursuant to an Agreement and Plan
of Merger among the Company, SkillSoft Corporation ("SkillSoft")
and Slate Acquisition Corp., he is transferring all shares of
SkillSoft owned by him and that the Company will be irreparably
injured if the provisions of this Section 6 are not specifically
enforced. If the Executive commits or, in the reasonable belief of
the Company, threatens to commit a breach of any of the provisions
of this Section 6, the Company and each of its subsidiaries and
affiliates shall have the right and remedy, in addition to any
other remedy that may be available at law or in equity, to have the
provisions of this Section 6 specifically enforced by any court
having equity jurisdiction together with an accounting for any
benefit or gain by the Executive in connection with any such
breach, it being acknowledged and agreed that any such breach or
threatened breach will cause irreparable injury to the Company and
its subsidiaries and that money damages will not provide an
adequate remedy therefor. Such injunction shall be available
without the posting of any bond or other security, and the
Executive hereby consents to the issuance of such
injunction.
(c)
The Executive shall not receive any compensation or benefits under
this Agreement on account of his voluntary termination or
termination for Cause. The Executive's rights under the Company's
benefit plans upon such a termination shall be determined under the
provisions of those plans.
7. Termination
without Cause and Involuntary Termination. If the Executive's
employment with the Company is involuntarily terminated by the
Company other than for Cause or by the Executive for Good Reason
(an "Involuntary Termination Event"), Sections 7(a) and 7(b) below
shall apply. For purposes of this Agreement, the term "Good Reason"
shall mean (i) without the Executive's express written consent, the
assignment to the Executive of any duties, or the removal from or
reduction or limitation of the Executive's duties or
responsibilities, which in either case is a significant change in
the Executive's position, title, organization level, duties,
responsibilities, compensation and status with the
Company;
(ii) without
the Executive's express written consent, a substantial reduction of
the facilities and perquisites (including office space and
location) available to the Executive immediately prior to such
reduction; (iii) without the Executive's express written consent, a
reduction by the Company in the base salary of the Executive as in
effect immediately prior to such reduction; (iv) without the
Executive's express written consent, a reduction by the Company in
the kind or level of employee benefits to which the Executive is
entitled immediately prior to such reduction with the result that
the Executive's overall benefits package is significantly reduced;
(v) without the Executive's express written consent, the relocation
of the Executive to a facility or a location more than twenty (20)
miles from the Executive's then-present work location; (vi) any
purported termination of the Executive by the Company other than
for Cause or by reason of the Executive's death or Disability;
(vii) the failure of the Company to obtain th
