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November 17, 2000
To the Board of Directors
of PLATO Learning, Inc.
Ladies and Gentlemen:
I hereby resign from the offices of Chairman of the Board and Chief
Executive Officer of PLATO Learning, Inc. (the "Company") and from all offices
that I hold with subsidiaries of the Company, effective upon the Board of
Directors' election of John Murray to the office of Chief Executive Officer of
the Company and conditioned upon the following understanding which the Company
confirms by signing below:
1. My resignation is under clause (b) of Section 1 of the Severance
and Noncompetition Agreement, dated as of September 20, 1989, among the
Company, its subsidiary and me (the "Agreement") with "Good Reason," as
defined in Section 6 of the Agreement, entitling me to the payments and
benefits specified in Section 1 of the Agreement, commencing on the
effective date of my resignation. The payments and benefits I will receive
under Section 1 of the Agreement are limited to the following:
(a) Continued salary at the rate of $20,671.88 per month, for the
two-year period following the effective date of my resignation,
payable according to the Company's regular payroll policies.
(b) Continued coverage under the Company's Group Medical and
Dental Benefit Plan for myself and my former spouse, for the two-year
period following the effective date of my resignation, according to
the terms of the Group Medical Plan, on the same basis and at the same
contribution rate as applies to active employees electing similar
coverage.
(c) Continued coverage under the Company's group life insurance
policy, having a death benefit of $400,000, for the two-year period
following the effective date of my resignation.
2. No later than January 15, 2001, the Company will pay to me a total
of $24,000 (which amount is equal to two years of premiums, prior to the
renewal increase in 2000, for the supplemental life insurance policy on my
life having a death benefit of $2 million). The Company will have no
further responsibility with respect to such supplemental life insurance
policy.
3. I will be entitled to receive my bonus payable for the fiscal year
ended October 31, 2000, payable in January 2001, determined according to
the terms of the Company's 2000 annual bonus plan, as adopted by the Board
at its meeting in June 2000 (having the performance criteria specified by
the Board at such meeting, including a pre-tax income target, calculated
before bonus expense).
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4. My continued service on the Company's Board of Directors will count
toward the vesting and expiration of my stock options; provided that any of
my unvested stock options will become vested on the effective date of my
termination of service on the Board. To effect the provisions of this
paragraph 4, prior to my resignation, the Board shall take all action
necessary to amend the agreements relating to my stock options and the
plans pursuant to which my stock options were granted to provide that (a)
my unvested stock options will continue to vest during my service on the
Board, (b) none of my stock options will expire until the earlier of 10
years from their date of grant and 90 days following my termination of
service on the Board and (c) upon my termination of service on the Board,
all of my unvested stock options will vest in full.
5. In addition to the continued coverage under the Group Medical Plan
for the two-year period following the effective date of my resignation as
described in paragraph 1 above, the Company will provide me and my former
spouse with coverage under the Group Medical and Dental Plan for an
additional period of six months following such two-year period, on the same
basis and at the same contribution rate as applies to active employees
electing similar coverage. At the end of such six-month period, I and my
former spouse will be entitled to elect further continued coverage under
the Group Medical and Dental Plan, at my expense, for a period of up to 18
months, pursuant to COBRA.
6. The Company shall provide me at its expense with continued use of
the office space at 3150 West Higgins Road, Suite 155, Hoffman Estates,
Illinois, including utilities and secretarial assistance, on the same basis
as currently provided for the six-month period following the effective date
of my resignation.
7. In connection with my resignation and the election of John Murray
as Chief Executive Officer of the Company, the Company will issue a press
release in the form attached as Exhibit A hereto and will make no further
statements with respect to my resignation other than statements that are
wholly consistent with the statements set forth in such press release. At
the time of the issuance of such press release, a letter will be sent from
me to all employees of the Company in the form attached as Exhibit B
hereto.
8. The Company will pay the reasonable legal fees and expenses, in an
amount not to exceed $15,000, actually incurred by me in connection with
the negotiation of my resignation.
9. In consideration of the payments described above and the other
agreements and representations in this letter, on my own behalf and on
behalf of my heirs, executors, administrators and assigns, I release and
forever discharge the Company and all of its related companies, affiliated
enterprises, parents, subsidiaries, successors and predecessors (together
with the Company, the "PLATO Learning Parties"), and all of the PLATO
Learning Parties' past, present, and future administrators, agents,
officers, directors, employees, shareholders, insurers, successors,
predecessors, assigns and attorneys, of and from all manner of actions,
cause or causes of action, suits, debts, agreements, promises, charges,
claims and demands, whatsoever, in law or in equity, that I now have or may
have, both known and unknown, arising out of my employment with any of the
PLATO Learning Parties. This waiver and release includes, but is not
limited to, any claims arising under Title VII of the Civil Rights Act of
1964, as amended; the
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Age Discrimination in Employment Act, as amended by the Older Workers
Benefit Protection Act of 1990; the Americans with Disabilities Act; the
Illinois Human Rights Act, any state or local employment or
non-discrimination statute, regulation, rule, or ordinance; or any claim
for discrimination or harassment of any kind, breach of contract or public
policy, wrongful or retaliatory discharge, defamation and/or any other
claim to any form of compensation or benefits, including attorney fees,
arising prior to the date of this letter; provided, however, that nothing
contained in this paragraph 9 shall apply to, or release the PLATO Learning
Parties from (a) any obligation of the Company contained in this letter, in
the Agreement or in any plan or program of the Company under which I am
entitled to a benefit in accordance with this letter or the Agreement or
under which I have an accrued or vested benefit, (b) any obligation of the
Company to indemnify me pursuant to its certificate of incorporation or
by-laws or the Delaware General Corporation Law in connection with my
service as an officer or director of the Company or (c) any obligation
covered by the directors and officers liability insurance policy maintained
by the Company.
10. I acknowledge that I have consulted with an attorney before
signing this letter, that I have read and understand this letter in its
entirety, and that I am knowingly and voluntarily agreeing to the waiver
and release and other provisions of this letter. I understand that I have
had up to twenty-one (21) days to consider the terms of this letter and
that I may revoke and rescind my acceptance of those terms at any time
within seven (7) days of the date I sign this letter by providing notice to
the Company. All rights, duties, and obligations of the parties under this
letter shall, upon revocation and rescission, become null and void and of
no further force and effect, and I shall promptly repay any payments or
benefits conferred upon me under this letter prior to the date of
revocation and rescission.
Very truly yours,
William R. Roach
Accepted and Agreed on November 17, 2000.
PLATO LEARNING, INC.
By John Murray
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Its President and Chief Executive Officer
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