Document:

Prepared by MerrillDirect

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the
“Agreement”) is entered into as of May ___, 2001  (the “Effective Date”) between Click2learn.com, Inc., a
Washington corporation with its principal offices located at 110-110th Avenue N.E.,
Bellevue, Washington 98004-5840, and/or one or more subsidiaries of
Click2learn.com, Inc. (collectively the “Company”) and SUDHEER KONERU
(“Employee”).

In consideration of the promises and the
terms and conditions set forth in this Agreement, the parties agree as follows:

1.          Position

During the term of this Agreement,
Company will employ Employee and Employee will serve as an executive officer of
the Company with the title of Executive Vice President of Products and
Strategy.

2.          Duties

Employee will be responsible for all
aspects of Click2Learn’s products, including market research, planning,
development and product marketing, and will have such additional duties as are
reasonably determined by the Company consistent with his position as Executive
Vice President of Products and Strategy. 
Employee will comply with and be bound by Company’s operating policies,
procedures, and practices from time to time in effect during Employee’s
employment.  Employee hereby represents
and warrants that he is free to enter into and fully perform this Agreement and
the agreements referred to herein without breach of any agreement or contract
to which he is a party or by which he is bound.

3.          Exclusive
Service

Employee will devote his full
professional time and efforts exclusively to this employment and apply all his
skill and experience to the performance of his duties and advancing the
Company’s interests in accordance with Employee’s experience and skills.  In addition, Employee will not engage in any
consulting activity except with the prior written approval of Company, or at
the direction of Company, and Employee will otherwise do nothing incompatible
with the performance of his duties hereunder.

4.          Term of Agreement

This
Agreement will commence on the Effective Date and will continue until the
earlier of one year after the Effective Date or when terminated pursuant to
Section 7 hereof.  The expiration or
termination of this Agreement will not result in the termination of Employee’s
employment, but Employee will become an “at will” employee upon such
termination or expiration.

5.          Compensation
and Benefits

             (a)         Base Salary.  The Company agrees to pay Employee an
initial base salary of $130,000 through December 31, 2001.  Effective January 1, 2002 Employee’s base
salary will be increased to $190,000 per year.   Employee’s salary will be payable as earned in accordance with
Company’s customary payroll practice, which currently is to pay salary on a
bi-weekly basis.

             (b)        Additional Benefits.  Employee will be eligible to participate in
Company’s employee benefit plans of general application, including without
limitation the Company’s 401(k) Plan and those plans covering life, health,
disability and dental insurance in accordance with the rules established for
individual participation in any such plan and applicable law.  Employee will receive 4 weeks of paid
vacation per year (consisting of the week from December 25 through January 1
plus three additional weeks to be taken in the discretion of Employee), and in
addition will receive such other benefits, including health club membership,
holidays and sick leave, as the Company generally provides to its employees
holding similar positions as that of Employee.

             (c)         Bonus Plan.  Employee shall be eligible to participate in
the Click2learn.com, Inc. 2001 Bonus Plan.  
Bonuses are determined based on corporate revenue and operating
income.  As EVP of Products, Employee’s
target bonus is 30% of annual base salary, with a maximum bonus of 100% of base
salary.

             (d)        Business Expenses.     The Company will reimburse Employee for all
reasonable and necessary expenses incurred by Employee in connection with the
Company’s business, provided that such expenses are deductible to the Company,
are in accordance with the Company’s applicable policy and are property documented
and accounted for in accordance with the requirements of the Internal Revenue
Service.

6.          Proprietary
Rights

Employee hereby agrees that concurrently
with the execution of this Agreement, Employee will execute Click2learn’s
standard form of Employee Invention, Confidentiality, Non-raiding and
Noncompetition Agreement (the “Invention Agreement”).

7.          Termination

             (a)         Events
of Termination.    Employee’s
employment with the Company shall terminate upon any one of the following:

                           (i)          the Company’s determination made in
good faith that it is terminating the Employee for “cause” as defined under
Section 7(b) below (“Termination for Cause”); or

                           (ii)         the effective date of a written notice
sent to Employee stating that the Company is terminating his employment,
without cause, which notice can be given by the Company at any time after the
Effective Date at the Company’s sole discretion, for any reason or for no
reason (“Termination Without Cause”); or

                           (iii)        the effective date of a written notice
sent to the Company from Employee stating that Employee is electing to
terminate his employment with the Company “Voluntary Termination”).

             (b)        “Cause” Defined.         For purposes of this Agreement, “cause”
for Employee’s termination will exist at any time after the happening of one or
more of the following events:

                           (i)          a failure or refusal to comply in any
material respect with the reasonable policies, standards or regulations of the
Company;

                           (ii)         a good faith determination by the
Company  that Employee’s performance is unsatisfactory
after reasonable notice of the ways in which performance is unsatisfactory and
a reasonable opportunity to correct any such deficiencies;

                           (iii)        a failure or refusal in any material
respect to perform his duties determined by the Company in accordance with this
Agreement or the customary duties of Employee’s employment (except for any
failure due to ill health or disability);

                           iv)         unprofessional, unethical or fraudulent
conduct or conduct that materially discredits the Company or is materially
detrimental to the reputation, character or standing of the Company;

                           (v)        dishonest conduct or a deliberate
attempt to do an injury to the Company;

                           (vi)       Employee’s material breach of a term of
this Agreement or the Invention Agreement, including, without limitation,
Employee’s unauthorized disclosure or theft of the Company’s proprietary
information;

                           (vii)      an unlawful or criminal act which would
reflect badly on the Company in the Company’s reasonable judgment; or

                           (viii)     Employee’s death.

8.          Effect of Termination

             (a)         Termination
for Cause or Voluntary Termination.       In
the event of any termination of this Agreement pursuant to Sections 7(a)(i) or
7(a)(iii), the Company shall pay Employee the compensation and benefits
otherwise payable to Employee under Section 5 through the date of
termination.  Employee’s rights under
the Company’s benefit plans of general application shall be determined under
the provisions of those plans

             (b)        Termination Without Cause.   In the event of any termination of this
Agreement pursuant to Section 7(a)(ii) during the period ending one year after
the Effective Date:

                           (i)          the Company shall pay Employee the
compensation and benefits otherwise payable to Employee under Section 5 through
the date of termination (including a pro rata portion of any bonus compensation
that may become payable for the calendar quarter that includes the date of
termination, which bonus compensation shall be paid following the end of such
calendar quarter);

                           ii)          for a period ending on the later of one
year after the Effective Date or six months following the date of termination,
the Company shall continue to pay Employee his base salary under Section 5(a)
above at Employee’s then current salary, less applicable withholding taxes,
payable on the Company’s normal payroll dates during that period;

                           (iii)        Employee’s rights under the Company’s
benefit plans of general application shall be determined under the provisions
of those plans.

9.          Miscellaneous

             (a)         Arbitration.      Employee and the Company shall submit to
mandatory binding arbitration in Seattle, Washington any controversy or claim
arising out of, or relating to, this Agreement or any breach hereof, provided,
however, that Employee and the Company retain their right to and shall not be
prohibited, limited or in any other way restricted from, seeking or obtaining
equitable relief from a court having jurisdiction over the parties.  Such arbitration shall be conducted in
accordance with the employment dispute arbitration rules of the American
Arbitration Association in effect at that time, and judgment upon the
determination or award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.

             (b)        Severability.     If any provision of this Agreement shall be
found by any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and to the extent that to do so
would not deprive one of the parties of the substantial benefit of its
bargain.  Such provision shall, to the
extent allowable by law and the preceding sentence, be modified by such
arbitrator or court so that it becomes enforceable and, as modified, shall be
enforced as any other provision hereof, all the other provisions continuing in
full force and effect.

 

             (c)         Remedies.         The Company and Employee acknowledge that the service to be
provided by Employee is of special, unique, unusual, extraordinary and
intellectual character, which gives it peculiar value the loss of which cannot
be reasonably or adequately compensated in damages in an action at law.  Accordingly, Employee hereby consents and
agrees that for any breach or violation by Employee of any of the provisions of
this Agreement including, without limitation, Section 3, a restraining order
an/or injunction may be issued against Employee, in addition to any other
rights and remedies the Company may have, at law or equity, including without
limitation the recovery of money damages.

             (d)        No Waiver.      The failure by either party at any time to require performance
or compliance by the other of any of its obligations or agreements shall in no
way affect the right to require such performance or compliance at any time
thereafter.  The waiver by either party
of a breach of any provision hereof shall not be taken or held to be a waiver
of any preceding or succeeding beach of such provision or as a waiver of the
provision itself.  No waiver of any kind
shall be effective or binding, unless it is in writing and is signed by the
party against whom such waiver is sought to be enforced.

             (e)         Assignment.    This Agreement and all rights hereunder are
personal to Employee and may not be transferred or assigned by Employee at any
time.  The Company may assign its
rights, together with its obligations hereunder, to any parent, subsidiary,
affiliate or successor, or in connection with the sale, transfer, or other
disposition of all or substantially all of its business and assets,
provided, however, that any such assignee assumes the Company’s obligations
hereunder.

             (f)         Withholding.   All sums payable to Employee hereunder shall
be reduced by all federal, state, local and other withholding and similar taxes
and payments required by applicable law.

             (g)        Entire Agreement.        This Agreement and the Invention
Agreement constitute the entire and only agreement between the parties relating
to employment of Employee with the Company, and this Agreement and the
Invention Agreement supersede and cancel any and all previous contracts,
arrangements or understandings with respect thereto.

             (h)        Amendment.    This Agreement may be amended, modified, superseded, canceled,
renewed or extended only by an agreement in writing executed by both parties
hereto.

             (i)          Notices.            All notices and other communications required or
permitted under this Agreement shall be in writing and hand delivered, sent by
telecopier, sent by certified first class mail, postage prepaid, or sent by
nationally recognized express courier service. 
Such notices and other communications shall be effective upon receipt if
hand delivered or sent by telecopier, five days after mailing if sent by U.S.
mail, and one day after dispatch if sent by express courier, to the following
addresses, or such other addresses as any party shall notify the other parties:

	 	If
  to the Company:	110-110th
  Avenue N.E., Suite 700
	 	 	Bellevue,
  WA 98004-5840
	 	Telecopier:	206-637-1540
	 	Attention:	Chairman
  of the Board of Directors
	 	 	 
	 	If
  to Employee:	Sudheer
  Koneru 
	 	(at
  the address on the records of the Company)	 

             (j)          Binding Nature.            This Agreement shall be binding
upon, and inure to the benefit of, the successors and personal representatives
of the respective parties hereto.

             (k)         Governing Law.            This Agreement and the rights and
obligations of the parties hereto shall be construed in accordance with the
laws of the State of Washington, without giving effect to the principles of
conflict of laws; provided, however, that if Employee is relocated to another
jurisdiction then the laws of such jurisdiction shall apply, and in the event
of any claim made following termination, the laws of the jurisdiction where
Employee was located on the date of termination shall apply.

             IN
WITNESS WHEREOF the Company and Employee have executed this Agreement as of the
date first above written.

	“COMPANY”	 	“EMPLOYEE”
	CLICK2LEARN.COM,
  INC.	 	 
				

 

 

	By:
  	 	 	 
	 	

	 	

	 	 	 	Sudheer
  Koneru
	Name	 	 	 
	 	

	 	 
	Title:Prepared by MerrillDirect

EMPLOYMENT AGREEMENT

 

This Employment Agreement (the
“Agreement”) is entered into as of May ___, 2001  (the “Effective Date”) between Click2learn.com, Inc., a
Washington corporation with its principal offices located at 110-110th Avenue N.E.,
Bellevue, Washington 98004-5840, and/or one or more subsidiaries of
Click2learn.com, Inc. (collectively the “Company”) and SRINIVASAN CHANDRASEKAR
(“Employee”).

In consideration of the promises and the
terms and conditions set forth in this Agreement, the parties agree as follows:

1.          Position

During the term of this Agreement,
Company will employ Employee and Employee will serve as an executive officer of
the Company with the title of Senior Vice President of Technology.

2.          Duties

Employee will be responsible for all aspects
of Click2Learn’s product development, and will have such additional duties as
are reasonably determined by the Company consistent with his position asSenior
Vice President of Technology.  Employee
will comply with and be bound by Company’s operating policies, procedures, and
practices from time to time in effect during Employee’s employment.  Employee hereby represents and warrants that
he is free to enter into and fully perform this Agreement and the agreements
referred to herein without breach of any agreement or contract to which he is a
party or by which he is bound.

3.          Exclusive
Service

Employee will devote his full
professional time and efforts exclusively to this employment and apply all his
skill and experience to the performance of his duties and advancing the
Company’s interests in accordance with Employee’s experience and skills.  In addition, Employee will not engage in any
consulting activity except with the prior written approval of Company, or at the
direction of Company, and Employee will otherwise do nothing incompatible with
the performance of his duties hereunder.

4.          Term of
Agreement

This Agreement will commence on the
Effective Date and will continue until the earlier of one year after the
Effective Date or when terminated pursuant to Section 7 hereof.  The expiration or termination of this
Agreement will not result in the termination of Employee’s employment, but
Employee will become an “at will” employee upon such termination or expiration.

5.          Compensation
and Benefits

             (a)         Base Salary.     The Company agrees to pay Employee an
initial base salary of $100,000 through December 31, 2001.  Effective January 1, 2002 Employee’s base
salary will be increased to $150,000 per year. 
Employee’s salary will be payable as earned in accordance with Company’s
customary payroll practice, which currently is to pay salary on a bi-weekly
basis.

             (b)        Additional Benefits.    Employee will be eligible to participate in
Company’s employee benefit plans of general application, including without
limitation the Company’s 401(k) Plan and those plans covering life, health,
disability and dental insurance in accordance with the rules established for
individual participation in any such plan and applicable law.  Employee will receive 4 weeks ofpaid
vacation per year (consisting of the week from December 25 through January 1
plus three additional weeks to be taken in the discretion of Employee), and in
addition will receive such other benefits, including health club membership,
holidays and sick leave, as the Company generally provides to its employees
holding similar positions as that of Employee.

             (c)         Bonus Plan.  Employee shall be eligible to participate in
the Click2learn.com, Inc. 2001 Bonus Plan.  
Bonuses are determined based on corporate revenue and operating income.  As SVP of Technology, Employee’s target
bonus is 30% of annual base salary, with a maximum bonus of 100% of base
salary.

             (d)        Business Expenses.  The Company will reimburse Employee for all
reasonable and necessary expenses incurred by Employee in connection with the
Company’s business, provided that such expenses are deductible to the Company,
are in accordance with the Company’s applicable policy and are property
documented and accounted for in accordance with the requirements of the
Internal Revenue Service.

6.          Proprietary
Rights

Employee hereby agrees that concurrently
with the execution of this Agreement, Employee will execute Click2learn’s
standard form of Employee Invention, Confidentiality, Non-raiding and
Noncompetition Agreement (the “Invention Agreement”).

7.          Termination

             (a)         Events of Termination.  Employee’s employment with the Company shall
terminate upon any one of the following:

                           (i)          the Company’s determination made in
good faith that it is terminating the Employee for “cause” as defined under
Section 7(b) below (“Termination for Cause”); or

 

                           (ii)         the effective date of a written notice
sent to Employee stating that the Company is terminating his employment,
without cause, which notice can be given by the Company at any time after the Effective
Date at the Company’s sole discretion, for any reason or for no reason
(“Termination Without Cause”); or

                           (iii)        the effective date of a written notice
sent to the Company from Employee stating that Employee is electing to
terminate his employment with the Company “Voluntary Termination”).

             (b)        “Cause” Defined.         For purposes of this Agreement, “cause”
for Employee’s termination will exist at any time after the happening of one or
more of the following events:

                           (i)          a failure or refusal to comply in any
material respect with the reasonable policies, standards or regulations of the
Company;

                           (ii)         a good faith determination by the
Company  that Employee’s performance is
unsatisfactory after reasonable notice of the ways in which performance is
unsatisfactory and a reasonable opportunity to correct any such deficiencies;

                           (iii)        a failure or refusal in any material
respect to perform his duties determined by the Company in accordance with this
Agreement or the customary duties of Employee’s employment (except for any
failure due to ill health or disability);

                           (iv)       unprofessional, unethical or fraudulent
conduct or conduct that materially discredits the Company or is materially
detrimental to the reputation, character or standing of the Company;

                           (v)        dishonest conduct or a deliberate
attempt to do an injury to the Company;

                           (vi)       Employee’s material breach of a term of
this Agreement or the Invention Agreement, including, without limitation,
Employee’s unauthorized disclosure or theft of the Company’s proprietary
information;

                           (vii)      an unlawful or criminal act which would
reflect badly on the Company in the Company’s reasonable judgment; or

                           (viii)     Employee’s death.

8.          Effect of Termination

             (a)         Termination
for Cause or Voluntary Termination.       In
the event of any termination of this Agreement pursuant to Sections 7(a)(i) or
7(a)(iii), the Company shall pay Employee the compensation and benefits
otherwise payable to Employee under Section 5 through the date of
termination.  Employee’s rights under
the Company’s benefit plans of general application shall be determined under
the provisions of those plans.

             (b)        Termination Without Cause.   In the event of any termination of this
Agreement pursuant to Section 7(a)(ii) during the period ending one year after
the Effective Date:

 

                           (i)          the Company shall pay Employee the
compensation and benefits otherwise payable to Employee under Section 5 through
the date of termination (including a pro rata portion of any bonus compensation
that may become payable for the calendar quarter that includes the date of
termination, which bonus compensation shall be paid following the end of such
calendar quarter);

                           (ii)         for a period ending on the later of one
year after the Effective Date or six months following the date of termination,
the Company shall continue to pay Employee his base salary under Section 5(a)
above at Employee’s then current salary, less applicable withholding taxes,
payable on the Company’s normal payroll dates during that period;

                           (iii)        Employee’s rights under the Company’s
benefit plans of general application shall be determined under the provisions
of those plans.

9.          Miscellaneous

             (a)         Arbitration.      Employee and the Company shall submit to
mandatory binding arbitration in Seattle, Washington any controversy or claim
arising out of, or relating to, this Agreement or any breach hereof, provided,
however, that Employee and the Company retain their right to and shall not be
prohibited, limited or in any other way restricted from, seeking or obtaining
equitable relief from a court having jurisdiction over the parties.  Such arbitration shall be conducted in
accordance with the employment dispute arbitration rules of the American
Arbitration Association in effect at that time, and judgment upon the
determination or award rendered by the arbitrator may be entered in any court
having jurisdiction thereof.

             (b)        Severability.     If any provision of this Agreement shall be
found by any arbitrator or court of competent jurisdiction to be invalid or
unenforceable, then the parties hereby waive such provision to the extent that
it is found to be invalid or unenforceable and to the extent that to do so
would not deprive one of the parties of the substantial benefit of its
bargain.  Such provision shall, to the
extent allowable by law and the preceding sentence, be modified by such
arbitrator or court so that it becomes enforceable and, as modified, shall be
enforced as any other provision hereof, all the other provisions continuing in
full force and effect.

             (c)         Remedies.         The Company and Employee acknowledge that the service to be
provided by Employee is of special, unique, unusual, extraordinary and
intellectual character, which gives it peculiar value the loss of which cannot
be reasonably or adequately compensated in damages in an action at law.  Accordingly, Employee hereby consents and
agrees that for any breach or violation by Employee of any of the provisions of
this Agreement including, without limitation, Section 3, a restraining order an/or
injunction may be issued against Employee, in addition to any other rights and
remedies the Company may have, at law or equity, including without limitation
the recovery of money damages.

             (d)        No Waiver.      The failure by either party at any time to require performance
or compliance by the other of any of its obligations or agreements shall in no
way affect the right to require such performance or compliance at any time
thereafter.  The waiver by either party
of a breach of any provision hereof shall not be taken or held to be a waiver
of any preceding or succeeding beach of such provision or as a waiver of the
provision itself.  No waiver of any kind
shall be effective or binding, unless it is in writing and is signed by the
party against whom such waiver is sought to be enforced.

             (e)         Assignment.  This Agreement and all rights hereunder are
personal to Employee and may not be transferred or assigned by Employee at any
time.  The Company may assign its
rights, together with its obligations hereunder, to any parent, subsidiary,
affiliate or successor, or in connection with the sale, transfer, or other
disposition of all or substantially all of its business and assets,
provided, however, that any such assignee assumes the Company’s obligations
hereunder.

             (f)         Withholding.   All sums payable to Employee hereunder shall
be reduced by all federal, state, local and other withholding and similar taxes
and payments required by applicable law.

             (g)        Entire Agreement.        This Agreement and the Invention
Agreement constitute the entire and only agreement between the parties relating
to employment of Employee with the Company, and this Agreement and the
Invention Agreement supersede and cancel any and all previous contracts,
arrangements or understandings with respect thereto.

             (h)        Amendment.    This Agreement may be amended, modified, superseded, canceled,
renewed or extended only by an agreement in writing executed by both parties
hereto.

             (i)          Notices.            All notices and other communications required or
permitted under this Agreement shall be in writing and hand delivered, sent by
telecopier, sent by certified first class mail, postage prepaid, or sent by
nationally recognized express courier service. 
Such notices and other communications shall be effective upon receipt if
hand delivered or sent by telecopier, five days after mailing if sent by U.S.
mail, and one day after dispatch if sent by express courier, to the following
addresses, or such other addresses as any party shall notify the other parties:

	 	If
  to the Company:	110-110th
  Avenue N.E., Suite 700
	 	 	Bellevue,
  WA 98004-5840
	 	Telecopier:	206-637-1540
	 	Attention:	Chairman
  of the Board of Directors
	 	If
  to Employee:	Srinivasan
  Chandrasekar 
	(at
  the address on the records of the Company)	 

             (j)          Binding Nature.            This Agreement shall be binding
upon, and inure to the benefit of, the successors and personal representatives
of the respective parties hereto.

             (k)         Governing Law.            This Agreement and the rights and
obligations of the parties hereto shall be construed in accordance with the
laws of the State of Washington, without giving effect to the principles of
conflict of laws; provided, however, that if Employee is relocated to another
jurisdiction then the laws of such jurisdiction shall apply, and in the event
of any claim made following termination, the laws of the jurisdiction where
Employee was located on the date of termination shall apply.

IN WITNESS WHEREOF the Company and
Employee have executed this Agreement as of the date first above written.

	 	“COMPANY”	 	“EMPLOYEE”
	 	CLICK2LEARN.COM,
  INC.	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	By:	 	 	 
	 	

	 	

	 	 	 	Srinivasan
  Chandrasekar
	Name	 	 	 
	 	

	 	 
	Title:

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