Document:

EX-10.1

CONTRACT OF EMPLOYMENT

BETWEEN:

	 	(1)	 	Allied World Assurance Company (Europe) Limited registered as an overseas company at
22 Billiter Street, 3rd Floor — West, London EC3M 2SS, United Kingdom (the
“Company"); and

(2) Mr John Redmond, 22 The Paddocks, Weybridge, Surrey KT13 9RL

This Contract of Employment (the “Agreement”) sets out the terms and conditions of your employment
with the Company at the 1st of January 2007. From this date hereof, the following terms and
conditions of permanent employment shall supersede any prior terms and conditions of permanent
employment between you and Allied World Assurance Company (Europe) Limited and Allied World
Assurance Company Holdings, Ltd or any of its subsidiaries; it is the only legally binding
agreement between the parties relating to your employment by the Company or any Group Company (as
defined below).

	1.	 	Definitions and Interpretation

	1.1	 	In this Agreement, “Group Company” shall mean any undertaking (other than the Company) which
from time to time is the Company’s subsidiary or its ultimate holding company or is a
subsidiary of the Company’s ultimate holding company. The words “subsidiary” and “holding
company” shall have the meanings attributed to them by the Companies Act 1985, as amended, and
“ultimate holding company” shall mean a holding company which is not also a subsidiary.

	2.	 	Commencement and Continuous Employment

	2.1	 	Your start date with the Company was the 2nd July 2002 (the “Commencement Date").

	2.2	 	Your employment with the Company shall continue (subject to the provisions of this Agreement)
until terminated by either party giving to the other not less than three months’ notice in
writing.

	2.3	 	Except as otherwise provided in clause 2.1 above, no employment with a previous employer
counts as part of your period of continuous employment with the Company and therefore your
continuous employment begins on the Commencement Date.

	3.	 	Job Title & Duties

	3.1	 	You shall be employed as the President of Allied World Assurance Company (Reinsurance)
Limited and Allied World Assurance Company (Europe) Limited or in such other capacity of a
like status on the terms set out in this Agreement.

	3.2	 	You shall carry out your duties in a proper, loyal and efficient manner and use your best
endeavours to promote the interests and reputation of the Company and any Group Company. You
shall carry out your duties in a competent manner.

	3.3	 	The Company reserves the right to require you to perform other duties consistent with your
position, including, if so required, acting as a director of the Company or any Group Company.

	3.4	 	You shall at all times keep the Board of Directors of the Company (the “Board”) promptly and
fully informed (in writing if so requested) of your conduct of the business or affairs of the
Company and any Group Company and provide such explanations of your conduct as the Board may
require.

	4.	 	Location

Your normal place of work is 22 Billiter Street, 3rd Floor — West, London EC3M
2SS or such other location in the United Kingdom as may be required by the Company. The
Company may from time to time require you to undertake any travel as may be necessary for
the proper performance of your duties.

	5.	 	Working on Behalf of Other Group Companies

As part of this Agreement the Company may require you to perform your duties on behalf of
other Group Companies without any entitlement to additional remuneration.

	6.	 	Changes to Your Terms of Employment

	6.1	 	The Company reserves the right to make changes to your terms and conditions of employment.

	6.2	 	You will be notified of minor changes by way of notice to all employees and any such changes
will take effect from the date of notice.

	6.3	 	You will be given not less than one month’s notice of any significant changes to your terms
and conditions of employment. Such changes will take effect within one month of such notice.

	7.	 	Salary

	7.1	 	Your salary is £177.376 per annum payable monthly in arrears on the 25th day of
each month. Payment of salary for an incomplete monthly period of service is calculated on the
basis of annual salary divided by 260 (the total number of working days in a calendar year)
and multiplied by the number of actual days worked in the period.

	 	 	 	 	 
	7.2	 	You will receive no additional payment for any overtime worked.

	 
	 	 	 	 
	7.3

	 	(a)
	 	You will be eligible for a discretionary annual bonus which will be

approved by the Company, and will be based on individual and Company

performance. In the first and last years of employment bonuses will be

pro–rated according to the length of time you have been employed from the

Commencement Date.

	 	(b)	 	Bonuses, where appropriate, are only payable if the individual has not
resigned and has not received or given notice of termination at the date the bonus is
paid.

	 	(c)	 	The Company reserves the right to change the nature of the bonus, the
timing and amount of payment and the method of calculation. The Company reserves the
right to discontinue the bonus scheme at any time without notice.

	7.4	 	Your salary will be reviewed annually.

	7.5	 	You shall not be entitled to any fees in respect of your directorship of the Company or any
Group Company.

	8.	 	Hours of work

Your normal hours of work are 9:30 a.m. to 5:30 p.m. Monday to Friday with a lunch break
of one hour, which should start between 1:00 p.m. and 2:00 p.m. (for example, 1:30 p.m. to
2:30 p.m.). You may be required to work outside these hours in the course of performing
your duties without further remuneration. The Company reserves the right to vary your
normal working hours upon reasonable notice to you.

	9.	 	Holidays

	9.1	 	Your leave entitlement is 27 working days on full pay in addition to the usual public
holidays in England and Wales.

	9.2	 	The holiday year runs from 1 January to 31 December. Holiday request forms must be
completed, approved by your manager and returned to Human Resources. Leave entitlement (to a
maximum of five days) may only be carried forward to a subsequent year on an exceptional basis
and with the approval of your manager. Any leave not taken in the calendar year (or permitted
carry forward period) will be lost.

	9.3	 	In the first year of employment, leave will be on a pro-rata basis to 31 December of the year
of joining.

	9.4	 	In the year of termination, holiday entitlement will be pro-rated. The Company may require
you to take any outstanding holiday entitlement in any calendar year during any notice period.

	9.5	 	In the event of termination, you shall either be entitled to salary in lieu of any
outstanding pro-rata holiday entitlement or be required to repay to the Company any salary
received in respect of holiday taken in excess of your pro-rata holiday entitlement. Such
payment will be calculated on the basis of 1/260th of your annual salary for each day of
outstanding or excess holiday entitlement, as appropriate. Where your employment is
terminated pursuant to clause 14, you will only be entitled to such sum as the Company may in
its absolute discretion decide in lieu of holiday not taken at the date your employment
terminates.

	10.	 	Sickness Absence

	10.1	 	If you are absent from work because of sickness or injury you must:

	 	10.1.1	 	notify your manager or Human Resources before 10.00 a.m. on the first morning of
absence and inform the Company of your expected date of return;

	 	10.1.2	 	complete and return to the Company a self-certification form in respect of the
first seven days (including weekends) of any sickness absence; and

	 	10.1.3	 	provide the Company with a medical certificate from your GP or other registered
medical practitioner for periods of sickness absence over seven days (including
weekends) and with medical certificates for each subsequent week of sickness absence.
The Company may, in certain circumstances, require a certificate from your GP for
periods of sickness of less than 7 days’ duration. You will be notified if this is
required, and, in this case, any fee charged by your GP will be reimbursed by the
Company.

	11.	 	Medical Reports and Pay During Sickness

	11.1	 	The Company may, at any time require you to undergo a medical examination at the Company’s
expense by a medical practitioner nominated by the Company, the results of which will be
disclosed to the Company.

	11.2	 	Provided you have complied with the procedures referred to in clause 11, you will be entitled
to be paid your full pay for periods of sickness absence of not more than six months (whether
consecutive or not) in any period of 12 consecutive months. Thereafter you may be paid at the
discretion of the Company. Payments of sick pay will be reduced by any state sickness benefit
you may be entitled to receive and any payments that you receive under clause 12.4.

	11.3	 	During any prolonged period of sickness absence the Company shall be entitled at any time to
appoint a further employee to carry out your duties.

	12.	 	Benefits

	12.1	 	Pension

Membership of a Defined Contribution Pension Plan (the “Pension Plan") is available to all
employees who have completed six months’ service with the Company and is subject to a
minimum age of 18. Membership is subject to the rules of the Pension Plan and the Inland
Revenue limits from time to time. Details of the Pension Plan are available from Human
Resources.

	12.2	 	Life Insurance

The Company shall pay premiums to a life assurance scheme selected by the Company and
approved by the Inland Revenue save that the Company shall not be bound to pay such
premiums to the extent that, and for as long as, in the opinion of the Company, life
assurance at appropriate levels cannot reasonably be obtained for you at normal rates of
premium for your age and sex.

	12.3	 	Private Medical Health Insurance

The Company shall pay premiums to a private medical healthcare scheme (BUPA) in respect of
all employees who have completed their probationary period, and in respect of their
spouses and dependent children up to the age of 18. This benefit is subject to the rules
of the scheme from time to time in force.

	12.4	 	Permanent Health Insurance

	 	12.4.1	 	The Company will pay premiums to a prolonged disability scheme. Eligibility and
cover provided is subject to any restrictions imposed by the provider of the scheme.
Subject to the rules of the scheme from time to time in force, benefits are payable
after a period of 26 weeks’ continuous absence from work.

	 	12.4.2	 	Your entitlement to receive sick pay will cease if you become eligible to receive
benefits under the prolonged disability scheme or any other such scheme in respect of
which the Company or any Group Company pays or has paid premiums on your behalf. In
this case, the Company shall have no further obligations to you in relation to sick
pay.

	12.5	 	Tax Preparation

During your term of employment, you shall also be entitled to reimbursement for tax
preparation advice and planning, such reimbursement not to exceed £5,000 per year.

	13.	 	Termination

	13.1	 	You or the Company may, at any time, terminate this Agreement by giving notice in accordance
with clause 2.2.

	13.2	 	Once either party has given notice to the other to terminate this Agreement, the Company may
at any time notify you that it has decided to cease to provide work for you. If this happens,
you may be required by the Company in its absolute discretion not to attend your place of work
at any time and not to perform any duties for the Company or to perform only such duties,
specific projects or tasks as are assigned to you expressly by the Company (provided that such
duties, projects or tasks are consistent with your status) provided that you will be entitled
to receive full pay and benefits.

	13.3	 	On termination of this Agreement (or where the Company has exercised its rights under clause
13.2), you will immediately return all property belonging to the Company or any Group Company
in good condition and order.

	13.4	 	Should the Company exercise its right under clause 13.2, during any such period the Board
shall be entitled at any time to appoint a further executive, director or employee having
similar responsibilities to you to act jointly with you. Should the Board do this, you will
perform your duties in a manner consistent with that appointment.

	13.5	 	On termination of this Agreement, you shall promptly resign from the Board and the boards of
any Group Company of which you are director.

	13.6	 	Upon the execution of this Agreement, you shall appoint the Company as your attorney by
executing a Power of Attorney in the form set out in Schedule 1.

	14.	 	Summary Termination

	14.1	 	The Company will be entitled to terminate your employment immediately without any payment by
way of compensation, damages, payment in lieu of notice or otherwise if you have:

	 	(i)	 	committed any serious breach or repeated or continued breach (after
warning) any material or persistent breach of your obligations under this Agreement;

	 	(ii)	 	been guilty of conduct which, in the reasonable opinion of the Company,
tends to bring yourself, the Company or any Group Company into disrepute;

	 	(iii)	 	failed to perform your duties to a satisfactory standard after having
received a written warning from the Company relating to the same;

	 	(iv)	 	committed any criminal or civil acts prejudicial to the Company whether or
not committed in the course of your employment; or

	 	(v)	 	been disqualified from holding office in the Company or any other company
under the Insolvency Act 1986 or the Company Directors Disqualification Act 1986.

	 	 	 	Please note that this list is not exhaustive.

	14.2	 	Any delay by the Company in exercising such right of termination shall not constitute a
waiver thereof.

	15.	 	Disciplinary and Grievance Procedure

	15.1	 	Any disciplinary or dismissal matters affecting you will be dealt with by your manager.
There are no specific disciplinary or dismissal rules affecting you, save for the statutory
disciplinary and dismissal procedure under the Employment Act 2002 and the Employment Act 2002
(Dispute Resolution) Regulations 2004 (the “Statutory Disciplinary Procedure”). A copy of the
Statutory Disciplinary Procedure is available from Human Resources. The Statutory
Disciplinary Procedure does not form part of your terms and conditions of employment. Should
you wish to appeal against any disciplinary or dismissal decision you should submit your
appeal in writing to your manager whose decision on such appeal shall be final.

	15.2	 	If you wish to seek redress for any grievance relating to your employment, you should first
discuss the matter with your manager or Human Resources. If the matter is not then settled,
you should submit your grievance to the Board in writing whose decision on such grievance
shall be final. The statutory grievance procedure under the Employment Act 2002 and the
Employment Act 2002 (Dispute Resolution) Regulations 2004 (the “Statutory Grievance
Procedure”) apply to you. A copy of the Statutory Grievance Procedure does not form part of
your terms and conditions of employment.

	15.3	 	In order to investigate a complaint against you, the Company reserves the right to suspend
you on full pay and to exclude you from any premises of the Company and/or any Group Company
for so long as it deems necessary to carry out a proper investigation and to hold any
appropriate disciplinary hearings.

	16.	 	Confidentiality

	16.1	 	You acknowledge that during your employment you will, in the performance of your duties,
become aware of trade secrets and other confidential information relating to the Company, any
Group Companies, their businesses and its and their past, current and prospective clients or
customers and their businesses.

	16.2	 	It is a fundamental term of your employment that you will not, during your employment or at
any time after it terminates, disclose or communicate to any person or persons or make use
(other than in the proper performance of your duties under this Agreement) and shall use your
best endeavours to prevent any disclosure, communication or use by any other person of trade
secrets and other confidential information.

	16.3	 	Disclosure of any such confidential information should only be made with the express prior
written consent of the Company or where such disclosure is required by law.

	16.4	 	Nothing in this clause shall prevent you from using your generic skills learned while
employed by the Company.

	17.	 	Post Termination Restrictions

	17.1	 	You shall not, without the prior written consent of the Company, at any time during the
period of one year starting with the date your employment terminates (the “Termination Date")
directly or indirectly solicit away, endeavour to solicit away, entice or endeavour to entice
away, or employ, engage or endeavour to employ or engage any person who has at any time during
the twelve months preceding the Termination Date been employed by the Company or any Group
Company.

	17.2	 	The period of one year shall be reduced by the amount of time (if any) the Company has ceased
to provide work for you under clause 13.2 of this Agreement.

	18.	 	Collective Agreements

There are no collective agreements affecting your terms and conditions of employment.

	19.	 	Data Protection

By signing this Agreement, you consent to:

	19	 	.1 the Company and any other Group Company holding and processing, both electronically and
manually, the data it collects in relation to you, in the course of your employment, for
general business purposes including for the purposes of administration and management of the
employees and the business of the Company and the Group Companies and for compliance with
applicable procedures, laws and regulations; and

	19.2	 	to the transfer, storage and processing by the Company or any Group Company (or their agent)
of such data outside the European Economic Area, in particular to and in Bermuda, Dublin and
any other country in which the Company or any Group Company (or their agent) has offices.

	20.	 	Deductions

	20.1	 	You shall pay to the Company or any Group Company any sums owing by you to the Company or any
Group Company upon demand by the Company or any Group Company at any time (whether during your
employment or after the termination of your employment with the Company).

	20.2	 	You shall indemnify the Company for itself and on behalf of any Group Company in relation to
any income tax and employees’ national insurance contributions not already deducted from your
remuneration and any penalties, fines, charges, and costs thereon for which the Company or any
Group Company has an obligation at any time to account (whether during your employment or
after the termination of your employment with the Company) in relation to you.

	20.3	 	You consent to the deduction from your wages or from any other sums owed to you by the
Company or any Group Company (including any bonus owed under clause 7.3) of any sums owing by
you to the Company or any Group Company at any time.

	20.4	 	This clause is without prejudice to the rights of the Company to recover any sums or balance
of sums owing by you to the Company by legal proceedings.

	21.	 	Intellectual Property Rights

	21.1	 	To the extent permitted by law, all intellectual property rights which arise during your
period of employment with the Company and by virtue of your activities in the course of your
employment shall belong to the Company absolutely. These shall include (without limitation)
copyright, trade marks, patents and other rights in inventions, trade and business names,
design rights and registered designs, rights in know-how and rights in databases and in each
case whether registered or unregistered which may from time to time subsist in any part of the
world and all applications for the grant of the foregoing.

	21.2	 	You shall, at the request and expense of the Company, execute such documents and do such
things as may reasonably be required to obtain, defend and enforce the Company’s interest in
any intellectual property rights mentioned above.

	21.3	 	Where any intellectual property rights falling within the scope of this clause have been
created jointly by you and any other person or persons, you shall, without prejudice to your
obligations under this clause, use your best endeavours to procure that the other person or
persons assign(s) to the Company his or their interest in such rights.

	21.4	 	You shall immediately on the termination of your employment (or if the Company exercises its
rights under clause 13.2) deliver to Human Resources or such person as the Company may
nominate in writing all materials in your possession or control relating to any intellectual
property rights belonging to the Company or any Group Company (including rights falling within
the scope of this Clause which have not yet formally vested in the Company) which shall
include (without limitation) all reports, studies, data, drawings, diagrams, charts, designs,
records and computer software on whatever media together with all drafts and working papers
relating to such materials.

	22.	 	Notices

Any notice to be given under this Agreement shall be in writing. Notices may be served by
either party by personal service or by recorded delivery or by first-class post addressed
to the other party or by leaving such notice at (in the case of the Company) its
registered office for the time being and (in the case of the employee) his last known
address and any notice given shall be deemed to have been served at the time at which the
notice was personally served or if sent by recorded delivery at the time of delivery as
recorded or if sent by first-class post on the second working day after posting or in the
case of being left as appropriate at the registered office or last known address, the date
on which it was so left.

	23.	 	General

	23.1	 	Any Group Company may enforce and take the benefit of those clauses of this Agreement in
which reference is expressly made to such Group Companies, subject to the provisions of the
Contracts (Rights of Third Parties) Act 1999. No consent of any such Group Company will be
required for the variation or rescission of this Agreement. Except as provided in this
clause, a person who is not a party to this Agreement has no right under the Contracts (Rights
of Third Parties) Act 1999 to enforce any term of this Agreement but this does not affect any
right or remedy of a third party which exists or is available apart from that Act.

	23.2	 	No failure or delay by the Company in exercising any remedy, right, power or privilege under
or in relation to this Agreement shall operate as a waiver of the same nor shall any single or
partial exercise of any remedy, right, power or privilege preclude any further exercise of the
same or the exercise of any other remedy, right, power or privilege.

	23.3	 	No waiver by the Company of any of the requirements of this Agreement or of any of its rights
under this Agreement shall have effect unless given in writing and signed by the Company. No
waiver of any particular breach of the provisions of this Agreement shall operate as a waiver
of any repetition of that breach.

	23.4	 	If any provision of this Agreement shall be, or become, void or unenforceable for any reason
within any jurisdiction, this shall affect neither the validity of that provision within any
other jurisdiction nor any of the remaining provisions of this Agreement.

	23.5	 	You represent to the Company that you are entitled to enter into this Agreement and that by
so doing you are not in breach of any obligation (contractual or otherwise) to any third party
which would entitle that third party to damages or any other remedy at law.

1

	24.	 	Governing Law/Jurisdiction

This Agreement shall be interpreted and construed in accordance with the laws of England
and governed by the non-exclusive jurisdiction of the English courts.

By:      /s/ Scott Carmilani     

Name: Scott Carmilani

Title: Director

for Allied World Assurance (Europe) Limited as of the 1st day of January, 2007.

ENDORSEMENT:

I acknowledge receipt of my Contract of Employment with Allied World Assurance (Europe) Limited

dated as of the 1st day of January, 2007 of which this is a copy and I agree to abide by
the terms and conditions of my employment set out in this Agreement.

By:      /s/ John Redmond     

Name: John Redmond

2EX-10.1

RESIGNATION AGREEMENT AND GENERAL RELEASE

This Resignation Agreement (“Agreement”) and the General Release which is attached hereto and
incorporated by reference as Exhibit A (“the Release”), are made by and between Larry Betterley
(“Employee”) on behalf of himself, his agents, heirs, executors, administrators, attorneys and
successors, and PLATO Learning, Inc., and any related parent or subsidiary corporations,
successors, predecessors, and attorneys, whether in their individual or official capacities
(“Employer”) (Employer and Employee collectively “Parties”).

The Parties to this Agreement have considered their rights, options and alternatives under
this Agreement and the attached Release; and have agreed to the following terms and conditions:

The Employer and Employee have mutually agreed that it is in the Parties’ best interests for
the Employee to resign;

The Employee’s employment with the Employer, and, except to the extent otherwise specifically
provided in Section 6 of this Agreement, the Parties’ Employment Agreement which became effective
November 5, 2004 (the “Employment Agreement”), shall terminate effective upon the close of business
on January 16, 2007 (“Resignation Date”).

NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND ALL OF THE TERMS AND CONDITIONS
SET FORTH HEREIN, THE PARTIES AGREE AS FOLLOWS:

1. Consideration. Employer shall, after receipt of this fully executed Resignation
Agreement and General Release, and after expiration of all applicable rescission periods, provide
Employee with the Consideration described below:

	 	A.	 	Severance. Employer will pay Employee a gross amount of
$239,210.00, representing one year of the Employee’s current salary. The
Employer will distribute that gross amount, subject to applicable taxes and
withholding, in one lump sum after the expiration of all applicable rescission
periods, and after receipt from the Employee of written confirmation that the
Employee has made no effort to rescind this Agreement or the attached General
Release.	 

	 	B.	 	Bonus. Employee will be eligible to receive a prorated Annual
Executive Incentive Plan Bonus, from November 1, 2006 through January 16, 2007
according to the terms of the Annual Executive Incentive Plan document.	 

	 	C.	 	Vacation. Employer will, after the Resignation Date, and in
the course of its regular payroll, pay the Employee his accrued vacation
balance as of the Resignation Date, subject to taxes and withholding.	 

	 	D.	 	Insurance Continuation. Employer will provide the Employee
with information and election materials regarding continuation coverage under
Employer’s group medical, dental and life insurance plans in accordance with
applicable state and federal law (“COBRA”). Employee’s COBRA continuation
period will begin on February 1, 2007. If Employee elects COBRA continuation
coverage, Employee will pay the full cost of such COBRA continuation coverage
each month, and Employer will, for twelve (12) months, pay Employee an amount
equal to the difference between the amount Employee pays for such COBRA
continuation coverage each month and the amount paid by a full-time active
employee each month for the same level of coverage elected by Employee, on an
after-tax basis. In order to receive payment pursuant to this Section,
Employee must comply with any reasonable policies and procedures specified by
Employer.	 

	 	E.	 	Outplacement Assistance. The Employer will provide the
Employee with outplacement assistance through a firm selected by the Employee,
and to an extent that the Employer will determine, and for which the Employer
will directly pay the outplacement assistance provider up to a maximum of
$10,000.	 

The foregoing Consideration, with the exception of those benefits identified in paragraph D,
shall be subject to appropriate taxes and withholding, as Consideration for Employee’s release of
any and all alleged claims, which may have arisen at any time during Employee’s employment with, or
in the course of Employee’s resignation from employment with the Employer.

2. Continuation of Directors’ and Officers’ Insurance Coverage.  The Employer will,
from the Employee’s Resignation Date through at least the fifth anniversary of that Resignation
Date, maintain the Employee as an insured party on all directors’ and officers’ insurance
maintained by the Employer for the benefit of its directors and officers on at least the same basis
as all other covered individuals.

3. Employer’s Right to Terminate and Recover Consideration. Except as otherwise
prohibited by Law with respect to the release of claims under the Age Discrimination in Employment
Act, Employer’s obligation to provide the Consideration as described in Section 1 of this Agreement
is expressly conditioned upon Employee’s compliance with all obligations outlined and agreed to in
this Agreement and the Release, and Employee’s obligations under his Employment Agreement which
survive his resignation from employment. Should Employee violate any of the terms of this
Agreement and Release, Employer will be entitled to discontinue or recover the Consideration
provided for by this Agreement.

4. Expense Reimbursement: The Employer agrees to provide the Employee with
reimbursement for any and all of the Employee’s legitimate outstanding expenses provided these are
submitted immediately following resignation.

5. Return and Release of All Property: Employee agrees to return, on or before his
last day of active employment, all Employer property in Employee’s possession or control, including
any computers, fax machines, cell phones, access cards, keys, reports, manuals, records, product
samples, correspondence and/or other documents or materials related to Employer’s business that
Employee has compiled, generated or received while working for the Employer, including all copies,
samples, computer data or records of such material, on or before his Resignation Date.
Furthermore, Employee agrees that he will, prior to his Resignation Date, deliver all passwords in
use at the time of the separation, a list of any documents that Employee created or is otherwise
aware that are password-protected, and the password(s) necessary to access such password-protected
documents. Employee also agrees to cooperate with the Employer and to use Employee’s best efforts
to ensure that both the Employer’s interests and those of Employee are mutually protected, and to
be available, on a reasonable basis, to answer questions that may arise to achieve a smooth
transition. Employer’s obligations under this Agreement are contingent upon Employee returning all
Employer property and cooperating with the Employer as set forth above. Notwithstanding the
foregoing, Employee may retain his current mobile telephone number and the laptop computer
currently in his possession, along with the business software currently installed on the laptop,
but excluding all company files.

6. Compliance with Prior Agreements and Confidentiality. The Employee’s Employment
Agreement and employment with Employer will terminate effective as of the Resignation Date without
any ongoing duties or obligations of the Parties under that Agreement, except that Employee will
continue to be bound by Sections 8, 9, 10, and 11 of his Employment Agreement in accordance with
their terms. Employee also agrees not to divulge or use any trade secrets, confidential
information, or other proprietary information of Employer, which he/she obtained, or to which
Employee had access during his employment or consulting arrangement with Employer. “Confidential
Information,” shall include that information designated as such in the Employee’s Employment
Agreement, and also means information that is not generally known and that is proprietary to
Employer or that Employer is obligated to treat as proprietary, which shall include, but is not
limited to, the terms of this Agreement and any Exhibits attached hereto. Any information that
Employee reasonably considers Confidential Information, or that Employer treats as Confidential
Information, will be presumed to be Confidential Information (whether Employee or others originated
it and regardless of how Employer obtained it). Except as specifically authorized by an authorized
officer of Employer or its affiliates, or by written policies of Employer, Employee will not,
either during or after the term of this Agreement, use or disclose Confidential Information to any
person who is not an employee of Employer, except as is necessary to perform Employee’s duties
under this Agreement. Except as otherwise provided in this Resignation Agreement, the Employer
shall have no obligations to the Employee, under his Employment Agreement or otherwise, after the
Employee’s Resignation Date.

7. Stipulation of No Charges. Employee affirmatively represents that he/she has not
filed nor caused to be filed any charges, claims, complaints, or actions against Employer before
any federal, state, or local administrative agency, court, or other forum.

Employee further waives any right to any form of recovery or compensation from any legal
action, excluding any action claiming this Agreement and Release violate the ADEA and/or OWBPA,
filed or threatened to be filed by Employee or on Employee’s behalf based on his employment, terms
of employment, or termination from Employer. Employee understands that any Consideration paid to
Employee pursuant to this Agreement may be deducted from any monetary award he/she may receive as a
result of a successful ADEA and/or OWBPA challenge to this Agreement and Release.

8. Non-Disparagement. Employee and Employer mutually agree that they will make no
disparaging or defamatory comments regarding each other in any respect or make any comments
concerning any aspect of their relationship or the conduct or events which precipitated Employee’s
resignation from employment or negotiation of this Agreement. Furthermore, Employee agrees not to
assist or encourage in any way any individual or group of individuals to bring or pursue a lawsuit,
charge, complaint, or grievance, or make any other demands against Employer. Employee agrees that,
in any and all future proceedings of whatever nature, he/she will fully cooperate with Employer,
and will testify truthfully and will testify against Employer only to the extent that Employee is
compelled to do so by a lawful subpoena or other judicial or administrative action.

9. Transition of Employee’s Responsibilities. Employee agrees to cooperate fully,
completely and to the extent reasonably required by Employer in order to assure smooth transition
of files and pending matters that are or will be assigned to other staff. This includes, but is not
limited to, assisting and advising Employer from time to time with respect to matters in which
Employee was involved and had knowledge as an employee of the Employer.

10. Damages for Violation of Non-Disparagement. The Non-Disparagement provision in
Section No. 8 of this Agreement has substantially induced the parties to enter into this Agreement.
Any violation by either party to this Agreement of the non-disparagement provision of this
Agreement shall entitle the other party to bring a legal action for appropriate equitable relief as
well as damages. In addition to any other rights or remedies available at law, in equity, or by
statute, the parties consent to the specific enforcement of the non-disparagement provision of this
Agreement through an injunction or restraining order issued by an appropriate court, without the
requirement of posting a bond.

11. Release. In exchange for the Consideration paid by and other undertakings of
Employer stated in this Agreement, the Employee will voluntarily sign the attached General Release
after his Resignation Date. The Employee understands that he is not entitled to the Consideration
unless he signs, and does not rescind, the attached Release.

12. Non-Admissions. Employer expressly denies any and all liability or wrongdoing and
agrees that nothing in this Agreement shall be deemed to represent any concession or admission of
such liability or wrongdoing or any waiver of any defense.

12. Invalidity. In case any one or more of the provisions of this Agreement shall be
held invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained in this Agreement will not in any way be affected or impaired
thereby.

13. Voluntary and Knowing Action. Employee acknowledges that he/she has had more than
twenty-one (21) days to review this Agreement and Release with his attorney, that he/she has read
and understands the terms of this Agreement and attached Release, and that he/she has voluntarily
and knowingly entered into this Agreement to resolve any and all charges, claims, demands or causes
of action which he/she now has or may have with respect to Employer.

14. Governing Law. This Agreement will be construed and interpreted in accordance
with applicable federal laws and the laws of the State of Minnesota.

15. Legal Counsel and Fees. Except as otherwise provided in this Agreement and the
Release, the parties to this Agreement agree to bear their own costs and attorneys’ fees, if any.
Employee acknowledges that Employer, by this Agreement, has advised him/her to consult with an
attorney of his choice prior to executing this Agreement and the Release. Employee acknowledges
that he/she has had the opportunity to be represented by legal counsel during the negotiation and
execution of this Agreement and Release, and that he/she understands he/she will be fully bound by
this Agreement and Release.

16. Successors and Assigns. This Agreement is binding on and inures to the benefit of
Employer’s successors and assigns.

17. Modification. This Agreement may be modified or amended only by a writing signed
by both Employer and Employee.

18. Notices. All notices and other communications required or permitted under this
Agreement shall be in writing and shall be hand-delivered or sent by registered or certified
first-class mail, postage prepaid, or commercial overnight delivery service and shall be effective
upon delivery if hand-delivered, three (3) days after mailing if mailed or one (1) day after
delivery to a commercial overnight delivery service, to Employer at PLATO Learning, Inc., 10801
Nesbitt Avenue South, Bloomington, Minnesota, Attn: Vice President, Human Resources and to Employee
at 5060 Lexington Avenue North, Shoreview, MN 55126. These addresses may be changed at any time by
like notice.

19. Waivers. No failure or delay by either Employer or Employee in exercising any
right or remedy under this Agreement will waive any provision of the Agreement.

	 	 	 	 	 
	 	 	 	 	EMPLOYEE:
	Dated:      , 2007

	 	 	 	Larry Betterley
	 
	 	 	 	 
	
 
	 	 	 	EMPLOYER:
	
 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 
	Dated:      , 2007

	 	By:
	 	

	 
	 	 	 	 
	
 
	 	Its:
	 	Vice President, Human Resources

1

EXHIBIT A

GENERAL RELEASE

	I.	 	Definitions. I intend all words used in this General Release to have their plain
meanings in ordinary English. Technical legal words are not needed to describe what I mean.
Specific terms I use in this Release have the following meanings:

	 	A.	 	“I,” “me,” and “my” include both me, Larry Betterley,
and anyone who has or obtains any legal rights or claims through me.

	 	B.	 	“Company” or “Employer” as used in this Release and related Resignation
Agreement, shall at all times mean PLATO Learning, Inc., and any related parent or
subsidiary corporations, successors, predecessors and assigns, present or former
officers, directors, shareholders, agents, assigns, employees, and attorneys, whether
in their individual or official capacities, benefit plans and plan administrators, and
insurers.

	 	C.	 	“My Claims” mean any and all of the actual or potential claims of any
kind whatsoever I may have had, or currently may have against Company, regardless of
whether I now know about those claims, that are in any way related to my employment
with or separation (resignation of employment) from the Company, including, but not
limited to any claims for expense reimbursement, relocation reimbursement or expenses,
claims for invasion of privacy; breach of written or oral, express or implied,
contract; fraud or misrepresentation; violation of the federal Fair Labor Standards Act
(“FLSA”), 29 U.S.C. § 203(s), the Age Discrimination in Employment Act of 1967
(“ADEA”), 29 U.S.C. § 626, as amended, the Older Workers Benefit Protection Act of 1990
(“OWBPA”), 29 U.S.C. 626(f), Title VII of the Civil Rights Act of 1964 (“Title VII”),
as amended, 42 U.S.C. § 2000e, et seq., the Americans with Disabilities
Act (“ADA”), 29 U.S.C. § 2101, et seq., the Family and Medical Leave
Act (“FMLA”), 29 U.S.C. § 2601 et seq., the Employee Retirement Income
Security Act of 1978 (“ERISA”), as amended, 29 U.S.C. §§ 1001, et seq., Equal Pay Act
(“EPA”), 29 U.S.C. § 206(d), the Worker Adjustment and Retraining Notification Act
(“WARN”), 29 U.S.C. § 2101 et seq., the Minnesota Human Rights Act,
Minn. Stat. § 363A.01, et seq., Minnesota Statutes § 181 et
seq., or other state human rights or fair employment practices act, or any
other federal, state, local or foreign statute, law, rule, regulation, ordinance or
order. This includes, but is not limited to, claims for violation of any civil rights
laws based on protected class status; claims for assault, battery, defamation,
intentional or negligent infliction of emotional distress, breach of the covenant of
good faith and fair dealing, promissory estoppel, negligence, negligent hiring,
retention or supervision, retaliation, constructive discharge, violation of
whistleblower protection laws, unjust enrichment, violation of public policy, and all
other claims for unlawful employment practices, and all other common law or statutory
claims.

	 	 	 
	II.

	 	Agreement to Release My Claims. Except as stated in Paragraph

IV, I agree to give up all My Claims, waive any rights

thereunder, and withdraw any and all of my charges and lawsuits

against Company. In exchange for my agreement to release My

Claims, I am receiving satisfactory Consideration

(compensation) from Company to which I am not otherwise

entitled by law, contract, or under any Company policy. The

Consideration I am receiving is a full and fair payment for the

release of all My Claims. Company does not owe me anything in

addition to what I will be receiving.
	 
	 	 
	III.

	 	Older Workers Benefit Protection Act. I understand and have

been advised that the above release of My Claims is subject to

the terms of the Older Workers Benefit Protection Act

(“OWBPA”). The OWBPA provides that an individual cannot waive

a right or claim under the Age Discrimination in Employment Act

(“ADEA”) unless the waiver is knowing and voluntary. I have

been advised of this law, and I agree that I am signing this

Release voluntarily, and with full knowledge of its

consequences. I understand that the Company is giving me at

least twenty-one (21) days from the date I received a copy of

this Release to decide whether I want to sign it. I

acknowledge that I have been advised to use this time to

consult with an attorney about the effect of this Release. If

I sign this Release before the end of the twenty-one (21) day

period it will be my personal, voluntary decision to do so, and

will be done with full knowledge of my legal rights. I agree

that material and/or immaterial changes to this Release will

not restart the running of this consideration period.
	 
	 	 
	IV.

	 	Exclusions from Release. My Claims do not include my rights,

if any, to claim the following: Re-employment Insurance

benefits; claims for my vested post-termination benefits under

any 401(k) or similar retirement benefit plan; my COBRA rights;

my rights to enforce the terms of this Release; or my rights to

assert claims that are based on events occurring after this

Release becomes effective.

	 	A.	 	Nothing in this Release interferes with my right to file a charge with the
Equal Employment Opportunity Commission (“EEOC”), or participate in any manner in an
EEOC investigation or proceeding under Title VII, the ADA, the ADEA, or the EPA. I,
however, understand that I am waiving my right to recover individual relief including,
but not limited to, back pay, front pay, reinstatement, attorneys’ fees, and/or
punitive damages, in any administrative or legal action whether brought by the EEOC,
me, or any other party.

	 	B.	 	Nothing in this Release interferes with my right to challenge the knowing and
voluntary nature of this Release under the ADEA and/or OWBPA.

	 	C.	 	Nothing in this Release shall interfere with my right to apply for unemployment
benefits.

	 	D.	 	I agree that the Company reserves any and all defenses, which it has or might
have against any claims brought by me. This includes, but is not limited to, the
Company’s right to have any monetary award granted to me, if any, reduced by the amount
of money that I received in consideration for this Release.

	V.	 	Right to Rescind and/or Revoke. I understand that insofar as this Release relates to
my rights under the Age Discrimination in Employment Act (“ADEA”), it shall not become
effective or enforceable until seven (7) days after I sign it. I further understand that
insofar as this Release relates to my rights under the Minnesota Human Rights Act (“MHRA”), it
shall not become effective or enforceable until fifteen (15) days after I sign it. I have the
right to rescind this Release only insofar as it extends to potential claims under the ADEA by
written notice to Company within seven (7) calendar days following my signing this Release,
and within fifteen (15) calendar days as to waiver of claims under the MHRA. Any such
rescission must be in writing and hand-delivered to Company or, if sent by mail, postmarked
within the applicable time period, sent by certified mail, return receipt requested, and
addressed as follows:

	 	A.	 	post-marked within the seven (7) or fifteen (15) day period;

	 	B.	 	properly addressed to:

Ms. Jill Lyttle

Vice President, Human Resources

PLATO Learning, Inc.

10801 Nesbitt Avenue South

Bloomington, MN 55437

	 	C.	 	sent by certified mail, return receipt requested.

I understand that the payment I am receiving for settling and releasing My Claims is
contingent upon my agreement to be bound by the terms of this Release. Accordingly, if I
decide to revoke this Release, I understand that I am not entitled to the payments offered
in the Resignation Agreement. I further understand that if I attempt to revoke my release
of any claim, I must immediately return to the Company any Consideration I have received
under my Resignation Agreement.

	 	 	 
	VI.

	 	I Understand the Terms of this Release. I have had the

opportunity to read this Release carefully and understand all

its terms. I have reviewed this Release with my own

attorney. In agreeing to sign this Release, I have not

relied on any statements or explanations made by Company or

their attorneys. I understand and agree that this Release

and the attached Resignation Agreement contain all the

agreements between Company and me. We have no other written

or oral agreements.
	 
	 	 
	Dated:

	 	     , 2007
	
 
	 	 

2366841 v04 01/08/2007

Larry Betterley

2

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