INDUSTRIAL TRAINING CORPORATION
Employment Agreement
This Agreement made by and between Industrial Training Corporation
(hereinafter called the "Company") and Philip J. Facchina (hereinafter
called the "Executive"), effective as of January 1, 1995.
WHEREAS, the parties desire to enter into this Agreement setting forth the
terms and conditions of the employment relationship between ITC and
Executive;
WHEREAS, Executive has served since October 20, 1992 as Chief Financial
Officer of ITC and Vice President since October 27, 1992;
WHEREAS, the previous employment agreement dated October 27, 1993 by and
between Executive and the Company has expired; and
WHEREAS, the Board of Directors of ITC believes it is in the best
interests of ITC to enter into this Agreement with Executive in order to
recognize a mutual commitment to the growth and development of ITC and
Executive's contribution to ITC.
NOW THEREFORE, it is agreed as follows:
1. Employment. The Company agrees to employ the Executive and shall
have such duties as may be reasonably assigned to him from time
to time by the President, Chief Executive Officer and Board of
Directors.
2. Acceptance and Standards. The Executive hereby accepts employment
upon the terms and conditions set forth in this Agreement. During
the Term of this Agreement, and subject to the provisions of
Section 6(a) of this Agreement, the Executive agrees to devote
his full business time and services to the faithful performance
of the duties which may be reasonably assigned to him and which
are consistent with his Executive office. Executive shall perform
his duties under this Agreement in accordance with such
reasonable standards as are established from time to time by the
President, Chief Executive Officer and Board of Directors.
3. Compensation. For all services rendered by the Executive under
this Agreement, the Company shall pay the Executive a base salary
of $125,000 per year, payable in periodic installments in
accordance with the Company's normal payroll practices for
salaried employees. The Company agrees that, subject to approval
by the Board of Directors, Executive will be included in the
Company's Incentive Compensation Plans on an annual basis and
will participate therein in accordance with the terms of those
Plans. Nothing herein shall affect the eligibility of the
Executive to receive salary increases, bonus awards, stock option
grants, pension, profit-sharing arrangement, employee benefits
and the like which the Company may from time to time grant or
make available to the Executive. Once each year, consideration
shall be given by the Board of Directors of the Company to a
salary increase for the Executive and whether to award a bonus to
the Executive, and if so, in what amount.
4. Term. The initial Term of this Agreement shall begin on January
1, 1995 (the initial "commencement date") and shall continue
thereafter for one year through December 31, 1995. Subsequent to
December 31, 1995, this Agreement shall, without further action
on the part of Executive or the Company, be extended for
additional one (1) year terms beginning January 1 of each
subsequent year, provided that neither Executive or the Company
have given notice of termination, or otherwise terminated in
accordance with the provisions of Section 5 of this Agreement.
5. Termination. Unless the parties otherwise agree in writing,
termination of this Agreement in accordance with the provisions
of this Section shall also constitute termination of the
Executive's employment with the Company without the need for
further notice or action by either party.
(a) Incapacity. In the event the Executive shall be unable to
perform his duties owing to illness or other incapacity
for a period of more than 90 consecutive days or an
aggregate of 120 days in any 12 month period, the Company
may, at its option, by written notice addressed to the
Executive, and sent subsequent to such 90 days or 120
days, terminate this Agreement as of a date to be
specified in such notice, but not less than 30 days after
the date of the sending of such notice; provided,
however, that if prior to the date specified in such
notice the Executive's illness or other incapacity shall
have terminated and he shall have satisfactorily taken up
and performed his duties under this Agreement, the notice
of termination shall be disregarded, and this Agreement
shall continue in full force and effect. (See Sections 11
and 12 of this Agreement for medical, sick leave and
disability benefits).
(b) Death. In the event of the Executive's death during the
term of his/her employment hereunder, this Agreement
shall terminate as of the date of death, and the
Executive's spouse, or such other person whom the
Executive shall have designated in writing to the
Company, shall be paid the Executive's then prevailing
salary prorated to the date of the Executive's death. The
Company shall also pay to such spouse, or such other
designated person, a death benefit of $5,000.
(c) Withdrawal from Business. The Company shall terminate
this Agreement upon 60 days written notice to the
Executive of a bona fide decision by the Company to wind
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up its business and liquidate its assets (other than in
connection with a merger, consolidation, or other event
specified in Section 7), and all rights and obligations
of both parties hereto (except those under Section 6(d)
hereof) shall cease upon such termination. In this event,
the Executive shall be paid his then prevailing salary
prorated to the date of termination.
(d) Termination by the Company With Notice. The Company may
terminate this Agreement for a reason not set forth in
Section 5(a) or 5(c) at any time upon 60 days written
notice to the Executive. In this event the Executive
shall be paid his then prevailing salary prorated to the
date of termination, and, in addition a termination
allowance equal to 12 months' salary, based upon the
highest annual salary rate paid the Executive during the
Term of this Agreement. The termination allowance may, at
the option of the Company, be paid in periodic
installments over the first 12 months following
termination in accordance with the Company's regular
payroll periods or over such lesser period as the Company
may determine with the concurrence of the Executive.
(e) Termination by the Executive with Notice. The Executive
may terminate this Agreement at any time upon 4 months
written notice to the Company, in which event the
Executive shall be paid his then prevailing salary
prorated to the date of termination. In the event the
parties cannot agree as to whether the termination was,
in effect, a termination by the Company or by the
Executive, the parties shall submit such dispute for
arbitration, as provided for in Section 16 of this
Agreement. During a period of 6 months following any such
termination by the Executive, the Executive agrees to
provide such consulting services to the Company as it may
reasonably request, at such time or times within such
period as may be mutually agreed upon between the Company
and the Executive. The Executive shall be compensated for
any such consulting services at a rate of $1200 per day,
plus reimbursement for any reasonable out-of-pocket
expenses incurred by the Executive in rendering such
consulting services.
6. Outside Business Interests, Employee Solicitation and Company
Property.
(a) Without the written consent of the Board of Directors of
the Company, which consent shall not be unreasonably
withheld, the Executive agrees that during the Term of
this Agreement he will not be affiliated with any
competitor, supplier or customer of the Company, as an
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officer, director, partner, employee, agent, consultant
(or similar capacity) or more than a 1% stockholder.
(b) The Executive further agrees that during the Term of this
Agreement he will not, directly or indirectly, encourage
employees of the Industrial Training Corporation
(hereinafter meaning the Company and/or any of its
subsidiary companies now existing or hereafter formed) to
leave the employ of the Industrial Training Corporation
for the purpose of seeking or obtaining employment in any
other activity with which the Executive intends to become
affiliated.
(c) The Executive further agrees that during a period of two
years following the termination of employment, regardless
of the reasons for such termination, he will not,
directly or indirectly, hire, attempt to hire or
encourage employees of the Industrial Training
Corporation to leave the employ of the Industrial
Training Corporation.
(d) The Executive further agrees that following the
termination of his employment he will not, directly or
indirectly, take with him or use any Industrial Training
Corporation property, such as drawings, reports, data or
proposals, design or manufacturing information, wage and
salary information, records or the like relating or
peculiar to the Industrial Training Corporation's
products, research or development or other activities,
nor disclose to any others information of a privileged
nature, without prior written consent of the President of
the Company.
(e) The Executive further agrees that during a period of two
years following the termination of his employment he will
not, directly or indirectly, participate (on his own
behalf or on behalf of any other corporation, venture or
enterprise engaged in commercial activities) in any
matters which were the subject of outstanding bids or
solicitations of the Industrial Training Corporation or
of bids or solicitations in preparation by the Industrial
Training Corporation during his employ by the Company.
(f) The Executive further agrees that in the event he
voluntarily terminates employment with ITC for a period
of one year following such termination of employment, he
will not engage, directly or indirectly, as proprietor,
partner, shareholder, director, officer, employee, agent,
consultant, or in any other capacity or manner
whatsoever, in any business activity competitive with the
business of the Industrial Training Corporation, as
constituted during his employment and on the date of
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termination of his employment. If any court of competent
jurisdiction shall determine this covenant to be
unenforceable as to either the term or scope imposed
above, then this covenant nevertheless shall be
enforceable by such court as to such shorter term or such
lesser scope as may be determined by the court to be
reasonable and enforceable.
(g) The Executive further agrees that the provisions of this
Section 6 are of vital importance to the Company and
incorporate crucial company policies and a means of
safeguarding valuable proprietary rights and interests of
the Industrial Training Corporation. Accordingly, the
Executive agrees that the Company shall be entitled to
injunctive relief, in addition to all other remedies
permitted by law, to enforce the provisions of this
Section 6.
7. Merger or Acquisition. In the event the Company should
consolidate with, or merge into another corporation, or transfer
all or substantially all of its assets to another entity, this
Agreement shall continue in full force and effect. Additionally,
in the event that any of the foregoing occur and as a result,
there is a change in control of the Company, the Executive shall
be entitled to receive on the date of closing of any such
transaction an amount equal to two years of compensation in the
amount set forth in Section 3 of this Agreement.
8. Personnel Policies. To the extent not otherwise set forth
herein, the conditions of employment shall be governed by the
operating and personnel policies of the Company.
9. Vacations. The Executive shall be entitled to a reasonable
vacation each year of his term of employment.
10. Medical Expenses. Recognizing that the continued good health of
the Executive and his family is of vital concern to the Company,
since such good health is directly related to the services which
the Executive will be expected to render to the affairs of the
Company, the Executive agrees to undergo a thorough and complete
medical examination at least once during each year of his term of
employment. The Executive further agrees to have the examining
physician report the findings of each examination to the Company,
if so requested. Moreover, in keeping with the Company's
objectives in this regard, the Company agrees to reimburse the
Executive up to $1,000 during each calendar year of this
Agreement for those reasonable medical (including the
aforementioned annual medical examination), dental and optical
expenses incurred by the Executive during each such year in
behalf of himself and his immediate family if such expenses are
not otherwise reimbursed to the Executive through insurance. The
unused reimbursement in one calendar year will be carried forward
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up to a maximum of $3,000; expenses not reimbursed in one
calendar year can be submitted for reimbursement in subsequent
years. The Company, at its own expense, shall also provide the
Executive with medical insurance coverage under its group medical
insurance plan.
11. Sick Leave Benefits and Disability Insurance. During his absence
owing to illness or other capacity, the Executive shall be paid
sick leave benefits at his then prevailing salary rate, reduced
by the amount, if any, of Worker's Compensation or disability
benefits under the Company's group disability insurance plan. The
Company, at its own expense, shall provide the Executive with
disability benefits under its group disability insurance plan.
12. Life Insurance. The Company, at its own expense, shall provide
the Executive with life insurance benefits under its group life
insurance plan.
13. Non-Performance Based Stock Options. The Company hereby grants
(the "Non-Performance Grant") to Executive the option to acquire
25,000 shares of the common stock of ITC (the "Non-Performance
Shares") in accordance with the terms and conditions set forth
below. The terms of the Non-Performance Grant shall not be in
accordance with the terms and conditions of ITC's 1992 Key
Employee Incentive Stock Option Plan (the "ISO Plan"). The Non--
Performance Grant shall be subject to the following terms and
conditions:
(a) The Non-Performance Shares are not subject to a vesting
schedule and as a result, are immediately vested.
Therefore, Executive is immediately fully entitled to
acquire the applicable Non-Performance Shares.
(b) The purchase price for the Non-Performance Shares shall
be $6.50 per share (i.e., the fair market value of a
share of the common stock of ITC on February 8, 1995, the
date the Non-Performance Grant was approved by the Board
of Directors of ITC, which fair market value is the
closing price of ITC's common stock on the National
Association of Securities Dealers, Inc. ("NASD") NASDAQ
National Market System on such date. None of the
Non-Performance Shares will be issued to Executive until
the purchase price for such Non-Performance Shares to be
acquired by Executive are fully paid by Executive to ITC.
(c) Executive's option to acquire the Non-Performance Shares
shall terminate five (5) years from February 8, 1995 (the
"Non-Performance Grant Termination Date"), except that if
the Executive's employment is terminated, for whatever
reason, Executive shall have 90 days from the date of
termination to option for the Non-Performance Shares.
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(d) The Non-Performance Shares shall be issued from the
unregistered and authorized but unissued common stock of
ITC and shall be "restricted securities" in accordance
with Rule 144 of the Securities Act of 1933.
14. Breach of Agreement. In addition to any other remedy available
to the Company in the event of a material breach by the Executive
of any of the covenants set forth in this Agreement, the
Company's obligation to pay the Executive any incentive payouts,
deferred compensation, termination allowance or other benefits
accrued but unpaid as of the date of such breach (except any
vested rights the Executive may have under a Company Profit
Sharing Retirement Plan) shall terminate.
15. Waivers of Breach. Any waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed
as a waiver of any subsequent breach.
16. Disputes and Arbitration. Any dispute arising out of or
concerning this Agreement, which is not disposed of by agreement
between the two parties, shall be decided by an Arbitrator chosen
by the parties. Either party may initiate an arbitration action
by a written notification to the other. The parties agree to
choose the Arbitrator within 15 days thereafter. The Arbitrator
will follow the rules for arbitrations of the American
Arbitration Association to the extent that said rules are not
inconsistent with the terms and conditions of this Section. The
decision of the Arbitrator shall be final and conclusive in the
absence of statutory grounds for setting it aside. If the
Executive prevails in the arbitration proceedings, the Company
shall immediately reimburse the Executive for the out-of-pocket
costs of such proceedings, including reasonable attorney's fees,
and pay to him/her the amount of the arbitration award, whether
or not the Company seeks to have the award set aside. The
Executive shall not be reimbursed for the costs that he/she may
sustain on an appeal by him/her of the Arbitrator's decision.
17. Exclusive Agreement; Successors. This Agreement supersedes any
and all prior employment understandings or arrangements between
Executive and the Company. This Agreement shall be binding upon
and inure to the benefit of the Company and its successors and
assigns. This Agreement is personal to Executive and Executive
may not assign this Agreement.
18. Amendments. No amendments or additions to this Agreement shall
be binding unless in writing and signed by both parties, except
as herein otherwise provided. Failure to assert a breach or any
rights under this Agreement or waiver of a breach of any
provision of this Agreement shall not be construed as a waiver of
any subsequent breach.
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19. Headings, Severability, Governing Law. The paragraph headings
used in this Agreement are solely for convenience and shall not
affect its interpretation. The provisions of this Agreement are
severable and the invalidity or unenforceability of any one or
more shall not affect the validity or enforceability of the
others. This Agreement shall be governed by the laws of the
State of Virginia.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first written above.
Witness: Executive:
____________________________ _______________________________
Philip J. Facchina
Attest: Industrial Training Corporation
___________________________ ________________________________
Gerald H. Kaiz By: James H. Walton
Secretary Title: President
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