SkillSoft pays severance of $583,379 to chairman

SkillSoft paid chairman Greg Priest $583,379 (€455,267) last week in a severance deal that has seen him step down as a full-time executive at the technology company.

However, Mr Priest will remain chairman of the board of directors at SkillSoft and will take up a new position at the firm as a strategic adviser. His base salary will be reduced from $318,379 per year to an annual salary of $50,000 under his new employment deal with the firm.

In a filing to the Securities and Exchange Commission, SkillSoft said it had made a one-time cash payment to Mr Priest, which represented the severance payment amount that would have been due to him under the terms of his employment agreement.

The severance payment is based upon Mr Priest's base salary of $318,379 per year, his annual car and housing allowance worth $68,379, and the maximum possible annual performance bonus worth $265,000.

SkillSoft, which employs up to 100 staff in Dublin, said that, as a result of the one-time cash payment, the cash severance provisions of his employment agreement had now been eliminated.

Mr Priest's new contract with SkillSoft detail that he will have to make himself available to devote at least 30 hours per week to his role as strategic adviser. This role will see Mr Priest considering, identifying and reviewing business opportunities, and assisting the firm to evaluate the opportunities.

The contract also extends liability insurance to Mr Priest for his duration as a director of the board in case he becomes embroiled in a legal dispute.

SkillSoft, which acquired Irish e-learning firm SmartForce in 2002 and is still registered in the Republic, has faced several legal battles in recent years, most of which herald from the activities of SmartForce in the 1990s.

Mr Priest was chief executive of SmartForce between December 1998 and 2002 and chief financial officer from 1995 to December 1997. He was named in a 1998 class-action lawsuit taken by SmartForce shareholders, which alleged the firm had defrauded shareholders by making untrue statements of material fact to induce people to purchase its shares. The firm agreed to pay $16 million to settle the suit in 2003, with its insurers paying an additional $16 million.

SkillSoft was also forced to restate its financial accounts after it was found to have overstated its profits by $127 million over a three-year period to 2002.

SkillSoft's annual report shows that Mr Priest made $551,596 in salary, bonus and other entitlements in 2003. He also exercised 433,751 share options during the year, netting a further $2,299,274. The report shows he had a further 1.7 million exercisable options.