Document:

EX-10.46

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of November 5, 2004 (“Effective Date”) by and between PLATO Learning,
Inc., a Delaware corporation headquartered in Minneapolis (“Company”), and Larry Betterley
(“Executive”).

WITNESSETH THAT:

WHEREAS, the Company currently employs Executive as Senior Vice President and Chief Financial
Officer, and the Company desires to continue to employ Executive in that capacity; and

WHEREAS, Executive desire to continue to be employed by the Company in that capacity;

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, it is hereby agreed by and between the parties as follows:

	 	1.	 	Employment. The Company hereby agrees to continue to employ Executive to perform the
duties set forth in Section 3 hereof, and Executive hereby accepts such continued employment,
on the terms and conditions of this Agreement.

	 	2.	 	Term. The term of this Agreement (“Term”) shall commence on the Effective Date and
shall end on December 31, 2005, subject to earlier termination pursuant to Section 6. On
January 1, 2006 and on each January 1 thereafter, unless earlier terminated pursuant to
Section 6, the Term will be automatically extended for an additional one (1) year, unless
either party gives written notice not to extend the Term hereof at least forty-five (45) days
prior to the date such extension would be effective. Notwithstanding anything contained
herein to the contrary, in the event of a Change in Control (as such term is defined in
Appendix A), the Term shall be automatically extended until the second anniversary of the
Change in Control.

	 	3.	 	Duties. Executive will serve as the Company’s Senior Vice President and Chief
Financial Officer, with the responsibilities and duties customarily associated with that
position, and any other consistent responsibilities and duties assigned or delegated to
Executive by the Board of Directors of the Company (“Board”) or the Company’s Chief Executive
Officer.

	 	4.	 	Time Commitment. Executive will devote Executive’s time, attention and energies to
the performance of his duties and responsibilities under this Agreement. Executive may not be
associated with, consult, advise, work for, be employed by, contract with, or otherwise devote
any of Executive’s time to the pursuit of any other work or business activities that may
interfere with the performance of such duties and responsibilities. The foregoing shall not
preclude Executive from devoting reasonable time to the supervision of his personal
investments, civic, charitable, educational, religious and similar types of activities,
speaking engagements and membership on other boards of directors, provided such activities do
not interfere in any way with the business of the Company; and provided further that, the
Executive cannot serve on the board of directors of more than one publicly-traded company
without the written consent of the Board. The time involved in such activities shall not be
treated as vacation time. The Executive shall be entitled to keep any amounts paid to him in
connection with such activities (e.g., director fees and honoraria).

	 	5.	 	Compensation and Benefits. The Company will pay the following compensation to
Executive in full consideration for performance of his services hereunder, payable in regular
installments in accordance with the Company’s usual payroll policies and procedures.

	 	(a)	 	Salary. Executive will receive an annual salary of Two Hundred
Thousand Dollars ($200,000). The Board will review Executive’s salary at least
annually. Executive’s salary will not be reduced, and after any increase the term
“salary” for purposes of this Agreement shall refer to Executive’s annual salary as
most recently increased.

	 	(b)	 	Bonus Compensation. Executive shall be eligible to receive annual cash
bonus compensation for each fiscal year of the Company during the Term based on bonus
amounts and performance criteria determined by the Board or the Compensation Committee
of the Board.

	 	(c)	 	Stock Options. Executive shall be eligible to be granted options to
purchase shares of Company common stock in accordance with the Company’s stock option
plan and at the discretion of the Board.

	 	(d)	 	Benefits. Executive shall be eligible to participate in such group
life insurance, major medical, and other employee benefit plans and programs
(collectively “Benefit Plans”) as established by the Company, in accordance with the
applicable terms and conditions of such Benefit Plans (including the requirements of
the Benefit Plans for participation). The benefits under the Benefit Plans available
to Executive shall be no less favorable than those available to other senior executives
of the Company, excluding the Company’s Chief Executive Officer.

	 	(e)	 	Expenses. The Company will reimburse Executive for all reasonable and
necessary expenses incurred by Executive in connection with the performance of his
services hereunder upon submission by Executive of appropriate documentation in
accordance with the Company’s expense reimbursement policy.

6. Termination.

	 	(a)	 	Death or Disability. This Agreement and Executive’s employment shall
be terminated immediately upon Executive’s death. In the event of Executive’s
Disability, this Agreement and Executive’s employment shall be terminated thirty (30)
days after the Company gives written notice to Executive, unless Executive has
returned to the substantial performance of his duties on a full-time basis. For
purposes of this Agreement, “Disability” means that as a result of physical or mental
incapacity Executive is unable for a period of 120 consecutive days during any
consecutive 180-day period to perform his duties hereunder on a full-time basis.

Upon termination by reason of Death or Disability, Executive shall be entitled only
to accrued but unpaid salary through the date of termination, together with any
other benefit or payment provided under the Company’s plans, policies or programs in
accordance with their terms (collectively, “Accrued Obligations”).

	 	(b)	 	Cause or Without Good Reason. The Company may terminate this Agreement
and Executive’s employment for Cause (as defined in paragraph (d) of this Section) upon
ten (10) day’s prior written notice to Executive. Executive may terminate the
Agreement and his employment without Good Reason (as defined in paragraph (d) of this
Section) upon thirty (30) days’ prior written notice to the Company.

Upon termination for Cause or without Good Reason, Executive shall be entitled only
to the Accrued Obligations.

	 	(c)	 	Good Reason; Without Cause. Executive may terminate this Agreement and
his employment for Good Reason upon thirty (30) days’ prior written notice to the
Company. The Company may terminate this Agreement and Executive’s employment without
Cause upon thirty (30) days’ prior written notice to Executive.

Upon termination for Good Reason or without Cause, Executive shall be entitled to:

(i) the Accrued Obligations;

	 	(ii)	 	a lump sum severance payment equal to one (1) times Executive’s
annual salary in effect on the termination date (without regard to any
reduction in salary referred to in clause (ii) of the definition of Good
Reason), which shall be paid to Executive within ten (10) business days
following such termination; and

	 	(iii)	 	continuation of health and other welfare benefits (including
life, accident and disability benefits) to Executive and his spouse and
dependents under the Benefit Plans in which they participated on the date of
Executive’s termination, for twelve (12) months following the date of
Executive’s termination on substantially the same terms and conditions
(including contributions by Executive) as in effect immediately prior to
Executive’s termination; provided, that the Company’s obligation to
provide such health or other welfare benefit shall cease with respect to such
benefit at the time Executive becomes eligible to participate in a group plan
of another employer providing comparable benefits in the aggregate.

To the extent that the health and other welfare benefits referred to in clause (iii)
above cannot be provided after termination of employment under applicable law or the
terms of the Benefit Plans then in effect (and cannot be provided through the
Company’s paying the applicable premium for Executive under COBRA), the Company
shall pay to Executive such amount as is necessary to provide Executive, on an
after-tax basis, with an amount equal to the cost of acquiring, for Executive and
his spouse and dependents, (on a non-group basis) those health and other welfare
benefits that would otherwise be lost to Executive and his spouse and dependents as
a result of Executive’s termination.

	 	(d)	 	Definitions. For the purposes of this Agreement, “Cause” shall mean
Executive’s:

	 	(i)	 	indictment or plea of guilty or nolo contendere
involving any felony or gross misdemeanor involving dishonesty, fraud, or
breach of trust under any law of the United States or any State thereof;

	 	(ii)	 	willful engagement in any conduct or gross negligence that in
either case materially injures the Company or any of its subsidiaries; or

	 	(iii)	 	willful and substantial nonperformance of assigned duties,
provided that such nonperformance has continued more than ten days after the
Company has given written notice of such nonperformance and of its intention to
terminate Executive’s employment because of such nonperformance.

For purpose of this Agreement “Good Reason” shall exist if the Company, without
Executive’s written consent:

	 	(i)	 	materially reduces the nature, scope, level or extent of
Executive’s responsibilities;

(ii) reduces Executive’s salary;

	 	(iii)	 	gives written notice to the Executive pursuant to Section 2
not to extend the Term of this Agreement; or

	 	(iv)	 	relocates Executive’s principal business office to a location
which is more than fifty (50) miles from both (A) Executive’s principal
business office immediately prior to such relocation and (B) Executive’s
principal place of residence at the time of such relocation.

	 	(e)	 	Conditions. Executive’s eligibility to receive the payment and
benefits under this Section is conditioned on (i) his compliance with the provisions of
Section 8 of this Agreement and (ii) his execution of a general release and waiver of
all claims against the Company and its directors, officers and subsidiaries, in a
reasonable and customary form prepared by the Company.

	 	(f)	 	Right of Recapture. In the event that (x) within one year after
termination of this Agreement and Executive’s employment for any reason the Company
determines that prior to such termination he engaged in any activity which would have
constituted a basis for termination by the Company for Cause while employed by the
Company or (y) Executive breaches the restrictive covenants of Section 8, then:

	 	(i)	 	the Company shall have no further obligations to pay the lump
sum severance payment or to continue providing Executive and his spouse and
dependents with health and other welfare benefits, as provided in paragraph (c)
above, if such termination was by the Company without Cause or by the Executive
for Good Reason;

	 	(ii)	 	upon written notice to Executive from the Company, Executive
shall pay to the Company within ten (10) business days any lump severance
payment received by Executive pursuant to paragraph (c) above, and

	 	(iii)	 	if Executive has exercised any stock options granted to him by
the Company, Executive shall pay to the Company within ten (10) business days
after written notice from the Company the difference between (A) the aggregate
fair market value on the date (or dates) of exercise of the shares subject to
stock options which were exercised by Executive on or after the date which is
one (1) year prior to Executive’s termination of employment and (B) the
aggregate exercise price of such stock options.

Notwithstanding anything contained herein, this paragraph shall not apply to any
breach of the provisions of Section 8(a) unless there has been substantial damage to
the Company. For purposes of this paragraph, “fair market value” on any date means
the per share closing price of the Company’s common stock on the Nasdaq Stock Market
on that date (or, if there was no reported closing price on that date, on the last
preceding date on which the closing price was reported) or, if the Company is not
then listed on the Nasdaq Stock Market, as determined by the Board in good faith.

7. Change in Control.

	 	(a)	 	Retention Bonus. In the event that Executive’s employment continues
for two (2) years after a Change in Control (as such term is defined in Appendix A),
Executive shall be entitled to a lump sum cash retention bonus equal to one (1) times
Executive’s annual salary then in effect. Such retention bonus shall be paid to
Executive within ten (10) business days following the second anniversary of the Change
in Control.

	 	(b)	 	Severance Payment and Benefits. In the event that Executive’s
employment is terminated less than two (2) years after a Change in Control by the
Company without Cause or by Executive for Good Reason, Executive shall be entitled to
the same rights, payments and benefits as provided in paragraph (c) of Section 6,
except that the amount of the lump sum severance payment shall be equal to one and
one-half (1-1/2) times Executive’s annual salary in effect on the termination date
(without regard to any reduction in salary referred to in clause (ii) of the definition
of Good Reason).

For purposes of this Section, Good Reason shall also include the Company’s failure
without Executive’s written consent to continue in effect any incentive or bonus
plan, or Benefit Plan, unless Executive is permitted to participate in other plans
providing Executive with substantially equivalent compensation and benefits in the
aggregate (and, with respect to life insurance, major medical and other employee
welfare benefit plans, at a substantially equivalent cost).

	 	(c)	 	Reduction of Payment. If, as provided in Appendix B, Executive would
otherwise be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code, the amounts payable under this Agreement shall be reduced as provided in Appendix
B.

	 	(d)	 	Legal Fees. If any contest or dispute shall arise under this Agreement
involving termination of Executive’s employment with the Company after a Change in
Control or involving the failure or refusal of the Company to perform fully in
accordance with the terms of this Section, the Company shall reimburse Executive for
all reasonable legal fees and related expenses, if any, incurred by Executive in
connection with such contest or dispute if a court of competent jurisdiction or an
arbitration panel substantially upholds Executive’s position.

8. Restrictive Covenants.

	 	(a)	 	Confidentiality. Executive agrees not to directly or indirectly,
without the Company’s prior written consent:

	 	(i)	 	use or disclose, for the benefit of any person, firm or entity
other than the Company and its subsidiaries, the Confidential Business
Information of the Company or any of its subsidiaries;

	 	(ii)	 	distribute or disseminate in any way to any person, firm or
entity anyone other than the Company and its subsidiaries, any Confidential
Business Information in any form whatsoever;

	 	(iii)	 	copy any Confidential Business Information other than for use
by the Company or any of its subsidiaries;

	 	(iv)	 	remove any Confidential Business Information from the premises
of the Company;

(v) fail to safeguard all confidential documents; and

	 	(vi)	 	copy any confidential documents belonging to any of the
Company’s customers.

For purposes of this Agreement, “Confidential Business Information” means
information or material that is not generally available to or used by others or the
utility or value of which is not generally known or recognized as a standard
practice, whether or not the underlying details are in the public domain, including
but not limited to its computerized and manual systems, procedures, reports, client
lists, review criteria and methods, financial methods and practices, plans, pricing
and marketing techniques, business methods and procedures and other valuable and
proprietary information relating to the pricing, marketing, design, manufacture and
formulation of educational software, as well as information regarding the past,
present and prospective clients of the Company or any of its subsidiaries, and their
particular needs and requirements, and their own confidential information.

Upon termination of employment under this Agreement for any reason, Executive agrees
to return to the Company all policy and procedure manuals, records, notes, data,
memoranda, and reports of any nature (including computerized and electronically
stored information) which are in Executive’s possession and/or control which relate
to (i) the Confidential Business Information of the Company or any of its
subsidiaries, (ii) the business activities or facilities of the Company or its past,
present, or prospective clients.

	 	(b)	 	Non-Compete. During the period of Executive’s employment and for a
period of one (1) year following termination of this Agreement and Executive’s
employment for any reason (the “Restricted Period”), Executive will not directly or
indirectly, on his behalf, or as a partner, officer, director, trustee, member,
employee, or otherwise, within the United States or in any foreign market in which
Executive was engaged in activities on behalf of the Company or any of its
subsidiaries, own, engage in or participate in, in any way, any business that is
similar to or competitive with any actual or planned business activity engaged in or
planned by the Company or any of its subsidiaries at the time the employment under this
Agreement was terminated. However, this Agreement shall not prohibit ownership by
Executive of up to 2% of the shares of stock of any corporation the stock of which is
listed on a national securities exchange or is traded in the over-the-counter market.

	 	(c)	 	Non-Solicitation. During the Restricted Period, Executive will not
directly or indirectly, for the purpose of selling services and/or products provided
or planned by the Company or any of its subsidiaries at the time the employment under
this Agreement was terminated, call upon, solicit or divert any actual customer or
prospective customer of the Company or any of its subsidiaries, unless employed by the
Company to do so. An actual customer, for purposes of this Section, is any customer
to whom the Company or any of its subsidiaries has provided services and/or products
within one year prior to Executive’s termination of employment under this Agreement.
A prospective customer, for purposes of this Section, is any prospective customer to
whom the Company or any of its subsidiaries sought to provide services and/or products
within one year prior to the date of Executive’s termination of employment under this
Agreement when Executive had knowledge of or was involved in such solicitation.

Executive further agrees that during the Restricted Period Executive shall not
directly or indirectly induce any person to leave the employ of the Company or any
of its subsidiaries, or solicit any person who is currently or was an employee of
the Company or any of its subsidiaries at any time during the twelve months prior to
Executive’s termination of employment under this Agreement.

	 	(d)	 	Judicial Modification. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section is invalid or
unenforceable, the parties agree that (i) the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope, duration, or
geographic area of the term or provision, to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the invalid
or unenforceable term or provision, (ii) the parties shall request that the court
exercise that power, and (iii) this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment or decision may be appealed.

	 	9.	 	Remedies. In the event Executive breaches or threatens to breach and provision of
Section 8 of this Agreement, the Company shall, in addition to the provisions of Section 6(f)
be entitled to injunctive relief, enjoining or restraining such breach or threatened breach.
Executive acknowledges that the Company’s remedy at law is inadequate and that the Company and
its subsidiaries will suffer irreparable injury if such conduct is not prohibited.

Executive further agrees that the covenants contained in Section 8 shall be construed as
separate and independent of other provisions of this Agreement and the existence of any
claim by Executive against the Company or any of its subsidiaries, except for a claim that
Executive was terminated without Cause or terminated his employment for Good Reason, shall
not constitute a defense to the enforcement by the Company of either Section 8 or this
Section.

	 	10.	 	Property Rights. All discoveries, designs, improvements, ideas, inventions,
intellectual property, creations, and works of art, whether or not patentable or subject to
copyright, relating to the business of the Company or any of its subsidiaries, or its clients,
conceived, developed or made by Executive during employment under this Agreement, either
solely or jointly with others (hereafter “Developments”) shall automatically become the sole
property of the Company. Executive shall immediately disclose to the Company all such
Developments and shall, without additional compensation, execute all assignments, application
or any other documents deemed necessary by the Company to perfect the Company’s rights
therein. These obligations shall continue throughout the Restricted Period under this
Agreement with respect to Developments conceived, developed or made by Executive during the
period of employment under this Agreement.

The Company acknowledges and agrees that the provisions of this section shall not apply to
inventions or for which no equipment, supplies, facility or trade secret information of the
Company or its clients were used by Executive and which were developed entirely on
Executive’s own time unless (a) such inventions relate (i) to the business of the Company or
(ii) to the Company’s actual or demonstrably anticipated research or development or (b) such
inventions result from any work performed by Executive for the Company.

	 	11.	 	Assignments. Neither party shall have the right or power to assign any rights or
duties under this Agreement without the written consent of the other party, provided, however,
that the Company shall have the right to assign this Agreement without consent pursuant to any
corporate reorganization, merger, or other transaction involving a change of control of the
Company or any of its subsidiary companies. Any attempted assignment in breach of this
Section shall be void.

If Executive performs services and duties for any subsidiary or other affiliated entity of
the Company, then the provisions of Sections 8 and 10 shall apply to the confidential
information and business activities, property rights, clients, and employees of that
subsidiary or other entity.

	 	12.	 	Severability. Each section, paragraph, clause, sub-clause and provision
(collectively “Provisions”) of this Agreement shall be severable from each of the others, and
if for any reason the Section, clause, sub-clause or provision is invalid or unenforceable,
such invalidity or unenforceability shall not prejudice or in any way affect the validity or
enforceability of any other Provision hereof.

13. Miscellaneous.

	 	(a)	 	This Agreement contains the entire agreement of the parties with respect to the
employment of Executive and supersedes all prior agreements, provisions, covenants,
arrangements, communications, representations or warrantees. whether written or oral,
by any officer, employee or representative of any party with respect to the subject
matter of this Agreement.

	 	(b)	 	Failure on the part of either party to insist upon strict compliance by the
other with respect to any of the terms, covenants and conditions hereof, shall not be
deemed a subsequent waiver of such term, covenant or condition.

	 	(c)	 	The provisions of any Section containing a continuing obligation after
termination shall survive such termination whether with or without Cause and even if
occasioned by the Company’s breach or wrongful termination.

	 	(d)	 	This Agreement may not be modified except in a written amendment signed by the
parties.

	 	(e)	 	Except for action by the Company to enforce the restrictive covenants of
Section 8, any dispute, controversy or difference that may arise between the parties
hereto out of or in relation to or in connection with this Agreement or for the breach
thereof which cannot be settled amicably by the parties within thirty (30) days shall
be finally and exclusively settled by arbitration in Minneapolis, Minnesota, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The arbitrator shall have discretion to award the
prevailing party reasonable attorney’s fees, subject to Section 7(d). In the event of
litigation under this Agreement, the court shall have discretion to award the
prevailing party reasonable attorney’s fees, subject to Section 7(d).

	 	(f)	 	The headings in this Agreement are inserted for convenience and identification
only and are not intended to describe, interpret, define or limit the scope, extent, or
intent of this Agreement or any provision hereof. Each party has cooperated in the
preparation of this Agreement. As a result, this Agreement shall not be construed
against any party on the basis that the party was the draftsperson.

	 	(g)	 	All forms of compensation referred to in this Agreement are subject to
reduction to reflect withholding for applicable income, payroll and other taxes.

	 	14.	 	Governing Law. It is the intention of the parties hereto that all questions with
respect to the construction, formation, and performance of this Agreement and the rights and
liabilities of the parties hereto shall be determined in accordance with the laws of the State
of Minnesota. The parties hereto submit to the jurisdiction and venue of the courts of
Hennepin County, Minnesota in respect to any dispute arising out of this agreement.

	 	15.	 	Insurance. For the period from the date hereof through at least the fifth
anniversary of Executive’s termination of employment from the Company, the Company agrees to
maintain Executive as an insured party on all directors’ and officers’ insurance maintained by
the Company for the benefit of its directors and officers on at least the same basis as all
other covered individuals.

	 	16.	 	Notices. Any notice required pursuant to this Agreement will be in writing and will
be deemed given upon the earlier of (i) delivery thereof, if by hand, (ii) five business days
after mailing if sent by mail (registered or certified mail, postage prepaid, return receipt
requested), (iii) the next business day after deposit if sent by a recognized overnight
delivery service, or (iv) upon transmission if sent by facsimile transmission or by electronic
mail, with return notification (provided that any notice sent by facsimile or electronic mail
shall also promptly be sent by one of the means described in clauses (i) through (iii) of this
Section. All notices will be addressed as follows or to such other address as a party may
identify in a written notice to the other party:

	 	 	 
	to the Company:

	 	PLATO Learning, Inc.

Attn: Chairman of the Board of Directors

10801 Nesbitt Avenue South

Bloomington, MN 55437-3109
	 
	 	 
	to Executive:

	 	Mr. Larry Betterley

PLATO Learning, Inc.

10801 Nesbitt Avenue South

Bloomington, MN 55437-3109

Each party named above may change its address and that of its representative for notice by
the giving of notice thereof in the manner hereinabove provided.

	 	17.	 	Counterparts. This Agreement may be executed in one or more counterparts, all of
which together shall constitute but one Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement in the State of
Minnesota effective as of the day and year first above written.

PLATO Learning, Inc.

	 	 	 
	Larry Betterley

	 	By:
	 
	 	 
	
 
	 	Its:
	
 
	 	 

1

APPENDIX A

“Change in Control” means the occurrence of any one of the following events:

(i) individuals who, on November 5, 2004, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to November 5, 2004 whose election or
nomination for election was approved by a vote of at least a majority of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies by or on behalf of any
person other than the Board shall be deemed to be an Incumbent Director;

(ii) any “person” (as such term is defined in the Exchange Act and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then outstanding
securities eligible to vote for the election of the Board (the “Company Voting Securities”);
provided, however, that the event described in this paragraph (ii) shall not
be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by
the Company or any subsidiary, (B) by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any subsidiary, (C) by any underwriter temporarily holding
securities pursuant to an offering of such securities, (D) pursuant to a Non-Qualifying
Transaction, as defined in paragraph (iii), or (E) by any person of Voting Securities from
the Company, if a majority of the Incumbent Board approves in advance the acquisition of
beneficial ownership of 50% or more of Company Voting Securities by such person;

(iii) the consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or any of its subsidiaries that requires
the approval of the Company’s stockholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately following such
Business Combination: (A) more than 60% of the total voting power of (x) the corporation
resulting from such Business Combination (the “Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the Surviving
Corporation (the “Parent Corporation”), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting Securities
among the holders thereof immediately prior to the Business Combination, (B) no person
(other than any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner,
directly or indirectly, of 50% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the members of the
board of directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business Combination were Incumbent
Directors at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination (any Business Combination which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”);

(iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or the consummation of a sale of all or substantially all of the
Company’s assets; or

(v) the occurrence of any other event that the Board determines by a duly approved
resolution constitutes a Change in Control.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any
person acquires beneficial ownership of more than 50% of the Company Voting Securities as a result
of the acquisition of Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control of the Company shall then occur.

2

APPENDIX B

Cut-back to Safe Harbor Cap on Payments

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be
determined that any payment, award, benefit or distribution (or any acceleration of any payment,
award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of
Executive, whether pursuant to the terms of this Agreement or otherwise (the “Payments”), would be
subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”), then the amounts payable to Executive under this Agreement shall
be reduced (reducing first the payments under Section 7(a) and (b), unless an alternative method of
reduction is elected by Executive) to the maximum amounts will result in no portion of the Payments
being subject to such excise tax (the “Safe Harbor Cap”). For purposes of reducing the Payments to
the Safe Harbor Cap, only amounts payable to Executive under this Agreement (and no other Payments)
shall be reduced, unless consented to by Executive.

(b) All determinations required to be made under this Appendix B shall be made by the public
accounting firm that is retained by the Company as of the date immediately prior to the Change in
Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the
Company and Executive within ten (10) business days of the receipt of notice from the Company or
Executive that there has been a Payment, or such earlier time as is requested by the Company.
Notwithstanding the foregoing, in the event (i) the Board shall determine prior to the Change in
Control that the Accounting Firm is precluded from performing such services under applicable
auditor independence rules or (ii) the Audit Committee of the Board determines that it does not
want the Accounting Firm to perform such services because of auditor independence concerns or (iii)
the Accounting Firm is serving as accountant or auditor for the person(s) effecting the Change in
Control, the Board shall appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses (including, but not limited to, the costs of
retaining experts) of the Accounting Firm shall be borne solely by the Company and the Company
shall enter into any agreement requested by the Accounting Firm in connection with the performance
of the services hereunder.

If the Accounting Firm determines that payments shall be reduced to the Safe Harbor Cap, it
shall furnish Executive with a written opinion to that effect, and to the effect that Executive is
not required to report any Excise Tax on Executive’s federal income tax return. If the Accounting
Firm determines that no Excise Tax would otherwise be payable by Executive, it shall furnish
Executive with a written opinion to such effect, and to the effect that Executive is not required
to report any Excise Tax on Executive’s federal income tax return. The determination by the
Accounting Firm shall be binding upon the Company and Executive (except as provided in paragraph
(c) below).

(c) If it is established pursuant to a final determination of a court or the Internal Revenue
Service (the “IRS”) proceeding which has been finally and conclusively resolved, that Payments have
been made to, or provided for the benefit of, Executive by the Company, which are in excess of the
limitations provided in this Section 5 (hereinafter referred to as an “Excess Payment”), Executive
shall repay the Excess Payment to the Company on demand, together with interest on the Excess
Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of
Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the determination, it is
possible that Payments which will not have been made by the Company should have been made (an
“Underpayment”), consistent with the calculations required to be made under this Appendix B. In
the event that it is determined (i) by the Accounting Firm, the Company (which shall include the
position taken by the Company, or together with its consolidated group, on its federal income tax
return) or the IRS or (ii) pursuant to a determination by a court, that an Underpayment has
occurred, the Company shall pay an amount equal to such Underpayment to Executive within ten (10)
days of such determination together with interest on such amount at the applicable federal rate
from the date such amount would have been paid to Executive until the date of payment. Executive
shall cooperate; to the extent Executive’s expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contests or disputes with the Internal
Revenue Service in connection with the Excise Tax or the determination of the Excess Payment.
Notwithstanding the foregoing, in the event that amounts payable under this Agreement were reduced
pursuant to paragraph (a) of this Appendix B and the value is stock options is subsequently
redetermined by the Accounting Firm (as defined below) within the context of Treasury Regulation
§1.280G-1 Q/A 33 that reduces the value of the Payments attributable to such options, the Company
shall promptly pay to Executive any amounts payable under this Agreement that were not previously
paid solely as a result of paragraph (a) up to the Safe Harbor Cap.

3EX-10.47

EMPLOYMENT AGREEMENT

AGREEMENT, dated as of January 1, 2005 (“Effective Date”) by and between PLATO Learning, Inc.,
a Delaware corporation headquartered in Minneapolis (“Company”), and David H. LePage (“Executive”).

WITNESSETH THAT:

WHEREAS, the Company and Executive have entered into an Employment Agreement, effective as of
January 1, 2002, and an Employment Security Agreement, dated as of January 30, 2001
(collectively, “Prior Agreements”); and

WHEREAS, the Company and Executive desire to amend and restate the Prior Agreements in their
entirety;

NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter set
forth, it is hereby agreed by and between the parties that the Prior Agreements are amended and
restated in their entirety by this Agreement, to read as follows:

	 	1.	 	Employment. The Company hereby agrees to continue to employ Executive to perform the
duties set forth in Section 3 hereof, and Executive hereby accepts such continued employment,
on the terms and conditions of this Agreement.

	 	2.	 	Term. The term of this Agreement (“Term”) shall commence on the Effective Date and
shall end on December 31, 2005, subject to earlier termination pursuant to Section 6. On
January 1, 2006 and on each January 1 thereafter, unless earlier terminated pursuant to
Section 6, the Term will be automatically extended for an additional one (1) year, unless
either party gives written notice not to extend the Term hereof at least forty-five (45) days
prior to the date such extension would be effective. Notwithstanding anything contained
herein to the contrary, in the event of a Change in Control (as such term is defined in
Appendix A), the Term shall be automatically extended until the second anniversary of the
Change in Control.

	 	3.	 	Duties. Executive will serve as the Company’s Senior Vice President of Operations,
with the responsibilities and duties customarily associated with that position, and any other
consistent responsibilities and duties assigned or delegated to Executive by the Board of
Directors of the Company (“Board”) or the Company’s Chief Executive Officer.

	 	4.	 	Time Commitment. Executive will devote Executive’s time, attention and energies to
the performance of his duties and responsibilities under this Agreement. Executive may not be
associated with, consult, advise, work for, be employed by, contract with, or otherwise devote
any of Executive’s time to the pursuit of any other work or business activities that may
interfere with the performance of such duties and responsibilities. The foregoing shall not
preclude Executive from devoting reasonable time to the supervision of his personal
investments, civic, charitable, educational, religious and similar types of activities,
speaking engagements and membership on other boards of directors, provided such activities do
not interfere in any way with the business of the Company; and provided further that, the
Executive cannot serve on the board of directors of more than one publicly-traded company
without the written consent of the Board. The time involved in such activities shall not be
treated as vacation time. The Executive shall be entitled to keep any amounts paid to him in
connection with such activities (e.g., director fees and honoraria).

	 	5.	 	Compensation and Benefits. The Company will pay the following compensation to
Executive in full consideration for performance of his services hereunder, payable in regular
installments in accordance with the Company’s usual payroll policies and procedures.

	 	(a)	 	Salary. Executive will receive an annual salary of Two Hundred Ten
Thousand Dollars ($210,000). The Board will review Executive’s salary at least
annually. Executive’s salary will not be reduced, and after any increase the term
“salary” for purposes of this Agreement shall refer to Executive’s annual salary as
most recently increased.

	 	(b)	 	Bonus Compensation. Executive shall be eligible to receive annual cash
bonus compensation for each fiscal year of the Company during the Term based on bonus
amounts and performance criteria determined by the Board or the Compensation Committee
of the Board.

	 	(c)	 	Stock Options. Executive shall be eligible to be granted options to
purchase shares of Company common stock in accordance with the Company’s stock option
plan at the discretion of the Board.

	 	(d)	 	Benefits. Executive shall be eligible to participate in such group
life insurance, major medical, and other employee benefit plans and programs
(collectively “Benefit Plans”) as established by the Company, in accordance with the
applicable terms and conditions of such Benefit Plans (including the requirements of
the Benefit Plans for participation). The benefits under the Benefit Plans available
to Executive shall be no less favorable than those available to other senior executives
of the Company, excluding the Company’s Chief Executive Officer.

	 	(e)	 	Expenses. The Company will reimburse Executive for all reasonable and
necessary expenses incurred by Executive in connection with the performance of his
services hereunder upon submission by Executive of appropriate documentation in
accordance with the Company’s expense reimbursement policy.

6. Termination.

	 	(a)	 	Death or Disability. This Agreement and Executive’s employment shall
be terminated immediately upon Executive’s death. In the event of Executive’s
Disability, this Agreement and Executive’s employment shall be terminated thirty (30)
days after the Company gives written notice to Executive, unless Executive has
returned to the substantial performance of his duties on a full-time basis. For
purposes of this Agreement, “Disability” means that as a result of physical or mental
incapacity Executive is unable for a period of 120 consecutive days during any
consecutive 180-day period to perform his duties hereunder on a full-time basis.

Upon termination by reason of Death or Disability, Executive shall be entitled only
to accrued but unpaid salary through the date of termination, together with any
other benefit or payment provided under the Company’s plans, policies or programs in
accordance with their terms (collectively, “Accrued Obligations”).

	 	(b)	 	Cause or Without Good Reason. The Company may terminate this Agreement
and Executive’s employment for Cause (as defined in paragraph (d) of this Section) upon
ten (10) day’s prior written notice to Executive. Executive may terminate the
Agreement and his employment without Good Reason (as defined in paragraph (d) of this
Section) upon thirty (30) days’ prior written notice to the Company.

Upon termination for Cause or without Good Reason, Executive shall be entitled only
to the Accrued Obligations.

	 	(c)	 	Good Reason; Without Cause. Executive may terminate this Agreement and
his employment for Good Reason upon thirty (30) days’ prior written notice to the
Company. The Company may terminate this Agreement and Executive’s employment without
Cause upon thirty (30) days’ prior written notice to Executive.

Upon termination for Good Reason or without Cause, Executive shall be entitled to:

(i) the Accrued Obligations;

	 	(ii)	 	a lump sum severance payment equal to one (1) times
Executive’s annual salary in effect on the termination date (without regard to
any reduction in salary referred to in clause (ii) of the definition of Good
Reason), which shall be paid to Executive within ten (10) business days
following such termination; and

	 	(iii)	 	continuation of health and other welfare benefits (including
life, accident and disability benefits) to Executive and his spouse and
dependents under the Benefit Plans in which they participated on the date of
Executive’s termination, for twelve (12) months following the date of
Executive’s termination on substantially the same terms and conditions
(including contributions by Executive) as in effect immediately prior to
Executive’s termination; provided, that the Company’s obligation to
provide such health or other welfare benefit shall cease with respect to such
benefit at the time Executive becomes eligible to participate in a group plan
of another employer providing comparable benefits in the aggregate.

To the extent that the health and other welfare benefits referred to in clause (iii)
above cannot be provided after termination of employment under applicable law or the
terms of the Benefit Plans then in effect (and cannot be provided through the
Company’s paying the applicable premium for Executive under COBRA), the Company
shall pay to Executive such amount as is necessary to provide Executive, on an
after-tax basis, with an amount equal to the cost of acquiring, for Executive and
his spouse and dependents, (on a non-group basis) those health and other welfare
benefits that would otherwise be lost to Executive and his spouse and dependents as
a result of Executive’s termination.

	 	(d)	 	Definitions. For the purposes of this Agreement, “Cause” shall mean
Executive’s:

	 	(i)	 	indictment or plea of guilty or nolo contendere
involving any felony or gross misdemeanor involving dishonesty, fraud, or
breach of trust under any law of the United States or any State thereof;

	 	(ii)	 	willful engagement in any conduct or gross negligence that in
either case materially injures the Company or any of its subsidiaries; or

	 	(iii)	 	willful and substantial nonperformance of assigned duties,
provided that such nonperformance has continued more than ten days after the
Company has given written notice of such nonperformance and of its intention to
terminate Executive’s employment because of such nonperformance.

For purpose of this Agreement “Good Reason” shall exist if the Company, without
Executive’s written consent:

	 	(i)	 	materially reduces the nature, scope, level or extent of
Executive’s responsibilities;

(ii) reduces Executive’s salary;

	 	(iii)	 	gives written notice to the Executive pursuant to Section 2
not to extend the Term of this Agreement; or

	 	(iv)	 	relocates Executive’s principal business office to a location
which is more than fifty (50) miles from both (A) Executive’s principal
business office immediately prior to such relocation and (B) Executive’s
principal place of residence at the time of such relocation.

	 	(e)	 	Conditions. Executive’s eligibility to receive the payment and
benefits under this Section is conditioned on (i) his compliance with the provisions of
Section 8 of this Agreement and (ii) his execution of a general release and waiver of
all claims against the Company and its directors, officers and subsidiaries, in a
reasonable and customary form prepared by the Company.

	 	(f)	 	Right of Recapture. In the event that (x) within one year after
termination of this Agreement and Executive’s employment for any reason the Company
determines that prior to such termination he engaged in any activity which would have
constituted a basis for termination by the Company for Cause while employed by the
Company or (y) Executive breaches the restrictive covenants of Section 8, then:

	 	(i)	 	the Company shall have no further obligations to pay the lump
sum severance payment or to continue providing Executive and his spouse and
dependents with health and other welfare benefits, as provided in paragraph (c)
above, if such termination was by the Company without Cause or by the Executive
for Good Reason;

	 	(ii)	 	upon written notice to Executive from the Company, Executive
shall pay to the Company within ten (10) business days any lump severance
payment received by Executive pursuant to paragraph (c) above, and

	 	(iii)	 	if Executive has exercised any stock options granted to him by
the Company, Executive shall pay to the Company within ten (10) business days
after written notice from the Company the difference between (A) the aggregate
fair market value on the date (or dates) of exercise of the shares subject to
stock options which were exercised by Executive on or after the date which is
one (1) year prior to Executive’s termination of employment and (B) the
aggregate exercise price of such stock options.

Notwithstanding anything contained herein, this paragraph shall not apply to any
breach of the provisions of Section 8(a) unless there has been substantial damage to
the Company. For purposes of this paragraph, “fair market value” on any date means
the per share closing price of the Company’s common stock on the Nasdaq Stock Market
on that date (or, if there was no reported closing price on that date, on the last
preceding date on which the closing price was reported) or, if the Company is not
then listed on the Nasdaq Stock Market, as determined by the Board in good faith.

7. Change in Control.

	 	(a)	 	Retention Bonus. In the event that Executive’s employment continues
for two (2) years after a Change in Control (as such term is defined in Appendix A),
Executive shall be entitled to a lump sum cash retention bonus equal to one (1) times
Executive’s annual salary then in effect. Such retention bonus shall be paid to
Executive within ten (10) business days following the second anniversary of the Change
in Control.

	 	(b)	 	Severance Payment and Benefits. In the event that Executive’s
employment is terminated less than two (2) years after a Change in Control by the
Company without Cause or by Executive for Good Reason, Executive shall be entitled to
the same rights, payments and benefits as provided in paragraph (c) of Section 6,
except that the amount of the lump sum severance payment shall be equal to one (1)
times Executive’s annual salary in effect on the termination date (without regard to
any reduction in salary referred to in clause (ii) of the definition of Good Reason).

For purposes of this Section, Good Reason shall also include the Company’s failure
without Executive’s written consent to continue in effect any incentive or bonus
plan, or Benefit Plan, unless Executive is permitted to participate in other plans
providing Executive with substantially equivalent compensation and benefits in the
aggregate (and, with respect to life insurance, major medical and other employee
welfare benefit plans, at a substantially equivalent cost).

	 	(c)	 	Reduction of Payment. If, as provided in Appendix B, Executive would
otherwise be subject to the excise tax imposed by Section 4999 of the Internal Revenue
Code, the amounts payable under this Agreement shall be reduced as provided in Appendix
B.

	 	(d)	 	Legal Fees. If any contest or dispute shall arise under this Agreement
involving termination of Executive’s employment with the Company after a Change in
Control or involving the failure or refusal of the Company to perform fully in
accordance with the terms of this Section, the Company shall reimburse Executive for
all reasonable legal fees and related expenses, if any, incurred by Executive in
connection with such contest or dispute if a court of competent jurisdiction or an
arbitration panel substantially upholds Executive’s position.

8. Restrictive Covenants.

	 	(a)	 	Confidentiality. Executive agrees not to directly or indirectly,
without the Company’s prior written consent:

	 	(i)	 	use or disclose, for the benefit of any person, firm or entity
other than the Company and its subsidiaries, the Confidential Business
Information of the Company or any of its subsidiaries;

	 	(ii)	 	distribute or disseminate in any way to any person, firm or
entity anyone other than the Company and its subsidiaries, any Confidential
Business Information in any form whatsoever;

	 	(iii)	 	copy any Confidential Business Information other than for use
by the Company or any of its subsidiaries;

	 	(iv)	 	remove any Confidential Business Information from the premises
of the Company;

(v) fail to safeguard all confidential documents; and

	 	(vi)	 	copy any confidential documents belonging to any of the
Company’s customers.

For purposes of this Agreement, “Confidential Business Information” means
information or material that is not generally available to or used by others or the
utility or value of which is not generally known or recognized as a standard
practice, whether or not the underlying details are in the public domain, including
but not limited to its computerized and manual systems, procedures, reports, client
lists, review criteria and methods, financial methods and practices, plans, pricing
and marketing techniques, business methods and procedures and other valuable and
proprietary information relating to the pricing, marketing, design, manufacture and
formulation of educational software, as well as information regarding the past,
present and prospective clients of the Company or any of its subsidiaries, and their
particular needs and requirements, and their own confidential information.

Upon termination of employment under this Agreement for any reason, Executive agrees
to return to the Company all policy and procedure manuals, records, notes, data,
memoranda, and reports of any nature (including computerized and electronically
stored information) which are in Executive’s possession and/or control which relate
to (i) the Confidential Business Information of the Company or any of its
subsidiaries, (ii) the business activities or facilities of the Company or its past,
present, or prospective clients.

	 	(b)	 	Non-Compete. During the period of Executive’s employment and for a
period of one (1) year following termination of this Agreement and Executive’s
employment for any reason (the “Restricted Period”), Executive will not directly or
indirectly, on his behalf, or as a partner, officer, director, trustee, member,
employee, or otherwise, within the United States or in any foreign market in which
Executive was engaged in activities on behalf of the Company or any of its
subsidiaries, own, engage in or participate in, in any way, any business that is
similar to or competitive with any actual or planned business activity engaged in or
planned by the Company or any of its subsidiaries at the time the employment under this
Agreement was terminated. However, this Agreement shall not prohibit ownership by
Executive of up to 2% of the shares of stock of any corporation the stock of which is
listed on a national securities exchange or is traded in the over-the-counter market.

	 	(c)	 	Non-Solicitation. During the Restricted Period, Executive will not
directly or indirectly, for the purpose of selling services and/or products provided
or planned by the Company or any of its subsidiaries at the time the employment under
this Agreement was terminated, call upon, solicit or divert any actual customer or
prospective customer of the Company or any of its subsidiaries, unless employed by the
Company to do so. An actual customer, for purposes of this Section, is any customer
to whom the Company or any of its subsidiaries has provided services and/or products
within one year prior to Executive’s termination of employment under this Agreement.
A prospective customer, for purposes of this Section, is any prospective customer to
whom the Company or any of its subsidiaries sought to provide services and/or products
within one year prior to the date of Executive’s termination of employment under this
Agreement when Executive had knowledge of or was involved in such solicitation.

Executive further agrees that during the Restricted Period Executive shall not
directly or indirectly induce any person to leave the employ of the Company or any
of its subsidiaries, or solicit any person who is currently or was an employee of
the Company or any of its subsidiaries at any time during the twelve months prior to
Executive’s termination of employment under this Agreement.

	 	(d)	 	Judicial Modification. If the final judgment of a court of competent
jurisdiction declares that any term or provision of this Section is invalid or
unenforceable, the parties agree that (i) the court making the determination of
invalidity or unenforceability shall have the power to reduce the scope, duration, or
geographic area of the term or provision, to delete specific words or phrases, or to
replace any invalid or unenforceable term or provision with a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the invalid
or unenforceable term or provision, (ii) the parties shall request that the court
exercise that power, and (iii) this Agreement shall be enforceable as so modified after
the expiration of the time within which the judgment or decision may be appealed.

	 	9.	 	Remedies. In the event Executive breaches or threatens to breach and provision of
Section 8 of this Agreement, the Company shall, in addition to the provisions of Section 6(f)
be entitled to injunctive relief, enjoining or restraining such breach or threatened breach.
Executive acknowledges that the Company’s remedy at law is inadequate and that the Company and
its subsidiaries will suffer irreparable injury if such conduct is not prohibited.

Executive further agrees that the covenants contained in Section 8 shall be construed as
separate and independent of other provisions of this Agreement and the existence of any
claim by Executive against the Company or any of its subsidiaries, except for a claim that
Executive was terminated without Cause or terminated his employment for Good Reason, shall
not constitute a defense to the enforcement by the Company of either Section 8 or this
Section.

	 	10.	 	Property Rights. All discoveries, designs, improvements, ideas, inventions,
intellectual property, creations, and works of art, whether or not patentable or subject to
copyright, relating to the business of the Company or any of its subsidiaries, or its clients,
conceived, developed or made by Executive during employment under this Agreement, either
solely or jointly with others (hereafter “Developments”) shall automatically become the sole
property of the Company. Executive shall immediately disclose to the Company all such
Developments and shall, without additional compensation, execute all assignments, application
or any other documents deemed necessary by the Company to perfect the Company’s rights
therein. These obligations shall continue throughout the Restricted Period under this
Agreement with respect to Developments conceived, developed or made by Executive during the
period of employment under this Agreement.

The Company acknowledges and agrees that the provisions of this section shall not apply to
inventions or for which no equipment, supplies, facility or trade secret information of the
Company or its clients were used by Executive and which were developed entirely on
Executive’s own time unless (a) such inventions relate (i) to the business of the Company or
(ii) to the Company’s actual or demonstrably anticipated research or development or (b) such
inventions result from any work performed by Executive for the Company.

	 	11.	 	Assignments. Neither party shall have the right or power to assign any rights or
duties under this Agreement without the written consent of the other party, provided, however,
that the Company shall have the right to assign this Agreement without consent pursuant to any
corporate reorganization, merger, or other transaction involving a change of control of the
Company or any of its subsidiary companies. Any attempted assignment in breach of this
Section shall be void.

If Executive performs services and duties for any subsidiary or other affiliated entity of
the Company, then the provisions of Sections 8 and 10 shall apply to the confidential
information and business activities, property rights, clients, and employees of that
subsidiary or other entity.

	 	12.	 	Severability. Each section, paragraph, clause, sub-clause and provision
(collectively “Provisions”) of this Agreement shall be severable from each of the others, and
if for any reason the Section, clause, sub-clause or provision is invalid or unenforceable,
such invalidity or unenforceability shall not prejudice or in any way affect the validity or
enforceability of any other Provision hereof.

13. Miscellaneous.

	 	(a)	 	This Agreement contains the entire agreement of the parties with respect to the
employment of Executive and supersedes all prior agreements, provisions, covenants,
arrangements, communications, representations or warrantees whether written or oral, by
any officer, employee or representative of any party with respect to the subject matter
of this Agreement. The Prior Agreements are amended and restated in their entirety by
this Agreement

	 	(b)	 	Failure on the part of either party to insist upon strict compliance by the
other with respect to any of the terms, covenants and conditions hereof, shall not be
deemed a subsequent waiver of such term, covenant or condition.

	 	(c)	 	The provisions of any Section containing a continuing obligation after
termination shall survive such termination whether with or without Cause and even if
occasioned by the Company’s breach or wrongful termination.

	 	(d)	 	This Agreement may not be modified except in a written amendment signed by the
parties.

	 	(e)	 	Except for action by the Company to enforce the restrictive covenants of
Section 8, any dispute, controversy or difference that may arise between the parties
hereto out of or in relation to or in connection with this Agreement or for the breach
thereof which cannot be settled amicably by the parties within thirty (30) days shall
be finally and exclusively settled by arbitration in Minneapolis, Minnesota, in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association then in effect. The arbitrator shall have discretion to award the
prevailing party reasonable attorney’s fees, subject to Section 7(d). In the event of
litigation under this Agreement, the court shall have discretion to award the
prevailing party reasonable attorney’s fees, subject to Section 7(d).

	 	(f)	 	The headings in this Agreement are inserted for convenience and identification
only and are not intended to describe, interpret, define or limit the scope, extent, or
intent of this Agreement or any provision hereof. Each party has cooperated in the
preparation of this Agreement. As a result, this Agreement shall not be construed
against any party on the basis that the party was the draftsperson.

	 	(g)	 	All forms of compensation referred to in this Agreement are subject to
reduction to reflect withholding for applicable income, payroll and other taxes.

	 	14.	 	Governing Law. It is the intention of the parties hereto that all questions with
respect to the construction, formation, and performance of this Agreement and the rights and
liabilities of the parties hereto shall be determined in accordance with the laws of the State
of Minnesota. The parties hereto submit to the jurisdiction and venue of the courts of
Hennepin County, Minnesota in respect to any dispute arising out of this agreement.

	 	15.	 	Insurance. For the period from the date hereof through at least the fifth
anniversary of Executive’s termination of employment from the Company, the Company agrees to
maintain Executive as an insured party on all directors’ and officers’ insurance maintained by
the Company for the benefit of its directors and officers on at least the same basis as all
other covered individuals.

	 	16.	 	Notices. Any notice required pursuant to this Agreement will be in writing and
will be deemed given upon the earlier of (i) delivery thereof, if by hand, (ii) five
business days after mailing if sent by mail (registered or certified mail, postage prepaid,
return receipt requested), (iii) the next business day after deposit if sent by a
recognized overnight delivery service, or (iv) upon transmission if sent by facsimile
transmission or by electronic mail, with return notification (provided that any notice sent
by facsimile or electronic mail shall also promptly be sent by one of the means described
in clauses (i) through (iii) of this Section. All notices will be addressed as follows or
to such other address as a party may identify in a written notice to the other party:

	 	 	 
	to the Company:

	 	PLATO Learning, Inc.

Attn: Chairman of the Board of Directors

10801 Nesbitt Avenue South

Bloomington, MN 55437-3109
	 
	 	 
	to Executive:

	 	Mr. David H. LePage

PLATO Learning, Inc.

10801 Nesbitt Avenue South

Bloomington, MN 55437-3109

Each party named above may change its address and that of its representative for notice by
the giving of notice thereof in the manner hereinabove provided.

	 	17.	 	Counterparts. This Agreement may be executed in one or more counterparts, all of
which together shall constitute but one Agreement.

IN WITNESS WHEREOF, the parties hereto have executed this Employment Agreement in the State of
Minnesota effective as of the day and year first above written.

PLATO Learning, Inc.

	 	 	 
	David H. LePage

	 	By:
	 
	 	 
	
 
	 	Its:
	
 
	 	 

1

APPENDIX A

“Change in Control” means the occurrence of any one of the following events:

(i) individuals who, on January 1, 2005, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the Board, provided
that any person becoming a director subsequent to January 1, 2005 whose election or
nomination for election was approved by a vote of at least a majority of the Incumbent
Directors then on the Board (either by a specific vote or by approval of the proxy statement
of the Company in which such person is named as a nominee for director, without written
objection to such nomination) shall be an Incumbent Director; provided,
however, that no individual initially elected or nominated as a director of the
Company as a result of an actual or threatened election contest with respect to directors or
as a result of any other actual or threatened solicitation of proxies by or on behalf of any
person other than the Board shall be deemed to be an Incumbent Director;

(ii) any “person” (as such term is defined in the Exchange Act and as used in Sections
13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company
representing 50% or more of the combined voting power of the Company’s then outstanding
securities eligible to vote for the election of the Board (the “Company Voting Securities”);
provided, however, that the event described in this paragraph (ii) shall not
be deemed to be a Change in Control by virtue of any of the following acquisitions: (A) by
the Company or any subsidiary, (B) by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any subsidiary, (C) by any underwriter temporarily holding
securities pursuant to an offering of such securities, (D) pursuant to a Non-Qualifying
Transaction, as defined in paragraph (iii), or (E) by any person of Voting Securities from
the Company, if a majority of the Incumbent Board approves in advance the acquisition of
beneficial ownership of 50% or more of Company Voting Securities by such person;

(iii) the consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving the Company or any of its subsidiaries that requires
the approval of the Company’s stockholders, whether for such transaction or the issuance of
securities in the transaction (a “Business Combination”), unless immediately following such
Business Combination: (A) more than 60% of the total voting power of (x) the corporation
resulting from such Business Combination (the “Surviving Corporation”), or (y) if
applicable, the ultimate parent corporation that directly or indirectly has beneficial
ownership of 100% of the voting securities eligible to elect directors of the Surviving
Corporation (the “Parent Corporation”), is represented by Company Voting Securities that
were outstanding immediately prior to such Business Combination (or, if applicable, is
represented by shares into which such Company Voting Securities were converted pursuant to
such Business Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company Voting Securities
among the holders thereof immediately prior to the Business Combination, (B) no person
(other than any employee benefit plan (or related trust) sponsored or maintained by the
Surviving Corporation or the Parent Corporation), is or becomes the beneficial owner,
directly or indirectly, of 50% or more of the total voting power of the outstanding voting
securities eligible to elect directors of the Parent Corporation (or, if there is no Parent
Corporation, the Surviving Corporation) and (C) at least a majority of the members of the
board of directors of the Parent Corporation (or, if there is no Parent Corporation, the
Surviving Corporation) following the consummation of the Business Combination were Incumbent
Directors at the time of the Board’s approval of the execution of the initial agreement
providing for such Business Combination (any Business Combination which satisfies all of the
criteria specified in (A), (B) and (C) above shall be deemed to be a “Non-Qualifying
Transaction”);

(iv) the stockholders of the Company approve a plan of complete liquidation or
dissolution of the Company or the consummation of a sale of all or substantially all of the
Company’s assets; or

(v) the occurrence of any other event that the Board determines by a duly approved
resolution constitutes a Change in Control.

Notwithstanding the foregoing, a Change in Control shall not be deemed to occur solely because any
person acquires beneficial ownership of more than 50% of the Company Voting Securities as a result
of the acquisition of Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting Securities that
increases the percentage of outstanding Company Voting Securities beneficially owned by such
person, a Change in Control of the Company shall then occur.

2

APPENDIX B

Cut-back to Safe Harbor Cap on Payments

(a) Notwithstanding anything in this Agreement to the contrary, in the event it shall be
determined that any payment, award, benefit or distribution (or any acceleration of any payment,
award, benefit or distribution) by the Company (or any of its affiliated entities) or any entity
which effectuates a Change in Control (or any of its affiliated entities) to or for the benefit of
Executive, whether pursuant to the terms of this Agreement or otherwise (the “Payments”), would be
subject to the excise tax (the “Excise Tax”) imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the “Code”), then the amounts payable to Executive under this Agreement shall
be reduced (reducing first the payments under Section 7(a) and (b), unless an alternative method of
reduction is elected by Executive) to the maximum amounts will result in no portion of the Payments
being subject to such excise tax (the “Safe Harbor Cap”). For purposes of reducing the Payments to
the Safe Harbor Cap, only amounts payable to Executive under this Agreement (and no other Payments)
shall be reduced, unless consented to by Executive.

(b) All determinations required to be made under this Appendix B shall be made by the public
accounting firm that is retained by the Company as of the date immediately prior to the Change in
Control (the “Accounting Firm”) which shall provide detailed supporting calculations both to the
Company and Executive within ten (10) business days of the receipt of notice from the Company or
Executive that there has been a Payment, or such earlier time as is requested by the Company.
Notwithstanding the foregoing, in the event (i) the Board shall determine prior to the Change in
Control that the Accounting Firm is precluded from performing such services under applicable
auditor independence rules or (ii) the Audit Committee of the Board determines that it does not
want the Accounting Firm to perform such services because of auditor independence concerns or (iii)
the Accounting Firm is serving as accountant or auditor for the person(s) effecting the Change in
Control, the Board shall appoint another nationally recognized public accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees and expenses (including, but not limited to, the costs of
retaining experts) of the Accounting Firm shall be borne solely by the Company and the Company
shall enter into any agreement requested by the Accounting Firm in connection with the performance
of the services hereunder.

If the Accounting Firm determines that payments shall be reduced to the Safe Harbor Cap, it
shall furnish Executive with a written opinion to that effect, and to the effect that Executive is
not required to report any Excise Tax on Executive’s federal income tax return. If the Accounting
Firm determines that no Excise Tax would otherwise be payable by Executive, it shall furnish
Executive with a written opinion to such effect, and to the effect that Executive is not required
to report any Excise Tax on Executive’s federal income tax return. The determination by the
Accounting Firm shall be binding upon the Company and Executive (except as provided in paragraph
(c) below).

(c) If it is established pursuant to a final determination of a court or the Internal Revenue
Service (the “IRS”) proceeding which has been finally and conclusively resolved, that Payments have
been made to, or provided for the benefit of, Executive by the Company, which are in excess of the
limitations provided in this Section 5 (hereinafter referred to as an “Excess Payment”), Executive
shall repay the Excess Payment to the Company on demand, together with interest on the Excess
Payment at the applicable federal rate (as defined in Section 1274(d) of the Code) from the date of
Executive’s receipt of such Excess Payment until the date of such repayment. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the determination, it is
possible that Payments which will not have been made by the Company should have been made (an
“Underpayment”), consistent with the calculations required to be made under this Appendix B. In
the event that it is determined (i) by the Accounting Firm, the Company (which shall include the
position taken by the Company, or together with its consolidated group, on its federal income tax
return) or the IRS or (ii) pursuant to a determination by a court, that an Underpayment has
occurred, the Company shall pay an amount equal to such Underpayment to Executive within ten (10)
days of such determination together with interest on such amount at the applicable federal rate
from the date such amount would have been paid to Executive until the date of payment. Executive
shall cooperate; to the extent Executive’s expenses are reimbursed by the Company, with any
reasonable requests by the Company in connection with any contests or disputes with the Internal
Revenue Service in connection with the Excise Tax or the determination of the Excess Payment.
Notwithstanding the foregoing, in the event that amounts payable under this Agreement were reduced
pursuant to paragraph (a) of this Appendix B and the value is stock options is subsequently
redetermined by the Accounting Firm (as defined below) within the context of Treasury Regulation
§1.280G-1 Q/A 33 that reduces the value of the Payments attributable to such options, the Company
shall promptly pay to Executive any amounts payable under this Agreement that were not previously
paid solely as a result of paragraph (a) up to the Safe Harbor Cap.

3

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