<PAGE>
 
                        INDUSTRIAL TRAINING CORPORATION
                        -------------------------------

                              EMPLOYMENT AGREEMENT
                              --------------------


          This Employment Agreement (the "Agreement") is made and entered into
effective as of the 1/st/ day of May, 1996 (the "Effective Date") by and between
Industrial Training Corporation (the "Company") and Frank A. Carchedi (the
"Executive").

                                    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.

          B.  The Executive is presently in the employ of the Company as Vice
President, Chief Financial Officer and Treasurer.

          C.  The Company has offered to continue to employ the Executive as
Vice President, Chief Financial Officer and Treasurer for the Company. The
Executive has indicated his willingness to accept said offer for continued
employment.

          D.  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 Chief
              ----------
Financial Officer and Treasurer for 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, Chief Executive Officer, or the
President of the Company then in office, or their designee.

          2.  Acceptance.  The Executive hereby accepts employment with the
              ----------
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.

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          3.  Compensation.
              ------------ 

          a.  In General.  For all services rendered by the Executive under
              ----------
this 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 of Directors of the Company, pay the Executive a basic salary of
$110,000 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 by the Company, in its reasonable discretion.

          d.  Reimbursements of Expenses.  The Company agrees to reimburse the
              --------------------------
Executive for all reasonable expenses (determined in the sole discretion of the
Company) 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 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 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 participate in the Company's health and
medical plan, dental plan, 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.

          g.  Discretionary Salary Increase and/or Bonus.  Once each year,
              ------------------------------------------
consideration shall be given by the Board of Directors of the Company, within
its sole discretion, to a salary increase for the Executive, and if so, in what
amount. 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, 1996 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.

          4.  Term.  The initial term of this Agreement shall begin on the
              ----
Effective Date and shall continue thereafter for a period of one (1) year. At
the end of the initial term of this Agreement, this Agreement may be renewed at
the option of the Company for an additional one (1) year term unless terminated
in accordance with the provisions of

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Section 5 of this Agreement. The initial and renewal terms 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 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 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 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 shall also pay to such spouse, or such other
designated person, a death benefit consistent with the Company's then current
normal policies, if any.

          c.  Withdrawal from Business.  The Company shall terminate this
              ------------------------
Agreement upon 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 terminate
              ------------------------------------
this Agreement if, within the reasonable judgment of the Company the Executive
shall (i) fail to carry out his duties hereunder, (ii) act in a manner inimical
to the Company, (iii) negligently perform the duties of the Executive's
position, or (iv) not be in compliance with the Company employee handbook.

          e.  Termination by the Company with Notice.  The Company may
              --------------------------------------
terminate this Agreement for a reason not set forth in Section 5.a., 5.c., or
5.d. at any time upon 60 days written notice to the Executive. In the event the
Executive is terminated for

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<PAGE>
 
any reason other than those set forth in Sections 5.a., 5.c., or 5.d., the
Company shall pay to the Executive the unpaid portion, if any, of his then
prevailing salary prorated to the date of termination, and, in addition the
Company shall pay to the Executive a termination allowance (the "Termination
Allowance") equal to 4 months' salary, based upon, his then prevailing annual
salary rate. The Termination Allowance may, at the option of the Company, be
paid in periodic installments over the first 4 months following termination in
accordance with the Company's regular payroll periods or over such lesser period
as the Company may determine with the concurrence of the Executive.

          f.  Termination by the Executive with Notice.  The Executive may
              ----------------------------------------
terminate this Agreement at any time upon 120 days written notice to the
Company, in which event the Executive shall be paid the unpaid portion, if any,
of his then prevailing salary prorated to the date of termination. In the event
the parties cannot agree as to whether the termination was, in effect, a
termination by the Company or by the Executive, the parties shall submit such
dispute for arbitration, as provided for in Section 15 of this Agreement. 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.

       6.  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, 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) of
more than a 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

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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 (1) 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
business 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 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 and conditions of the Executive's employment and benefits
shall be governed by the then prevailing operating and personnel policies of the
Company.

          9.  Vacations.   The Executive shall be entitled to a reasonable
              ---------
vacation during each year of his term of employment, as approved by the Chief
Executive Officer or the President of the Company.

          10. Medical Expenses.  Recognizing that the continued good health of
              ----------------
the 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

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<PAGE>
 
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 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 with life insurance benefits under its group life insurance plan.

          13. Breach of Agreement.  In addition to any other remedy available
              -------------------
to the Company in the event of a material breach by the Executive of any of the
covenants set forth in 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 (except any
vested rights the Executive may have under a Company Profit Sharing Retirement
Plan) shall terminate, as will the Executive's right to exercise any unexercised
stock options.

          14. Change Of Control.
              ----------------- 

          a.  In General.  For purposes of this Agreement, a "Change Of
              ----------
Control" shall be the occurrence of any one or more of the following events, and
the effective date of a Change Of Control shall be the effective date on which
such event occurs:

          (i)   A merger of the Company into another corporation in which the
Company is not the surviving corporation, other than a merger that manifestly
does not affect control such as a merger to change the state of incorporation.

          (ii)  A sale of substantially all of the assets of the Company.

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<PAGE>
 
          (iii) Any arrangement that gives to an entity or person (or group of
entities or persons acting in concert) the power to name a majority of the Board
of Directors of the Company.

          (iv)  Any other circumstance constituting an effective change of
ownership or control within the meaning of Section 280G of the Internal Revenue
Code and Regulations promulgated thereunder.

          b.  Consequences of a Change Of Control.  In the event of a Change Of
              -----------------------------------
Control, the Executive shall be entitled to remain in the employ of the Company,
in a manner consistent with the terms of this Agreement.

          15. Disputes and Arbitration.  Any dispute arising out of or
              ------------------------
concerning this Agreement, which is not disposed of by agreement between the two
parties, shall be decided by an Arbitrator, located in the metropolitan 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.

          16. 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.

          17. 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 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.

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<PAGE>
 
          18. 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.

          19. 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.

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          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/ Anne J. Fletcher         By: /s/ Philip J. Facchina
---------------------            --------------------------
                                 Name:  Philip J. Facchina
                                 Title: President and COO
 

                                 EXECUTIVE:
   

/s/ Anne J. Fletcher            /s/ Frank A. Carchedi
---------------------        ------------------------------
                                 FRANK A CARCHEDI


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