1
EXHIBIT 10.15
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of _______________
by and among Provant, Inc., a Delaware corporation (including, for purposes of
Sections 5(c) and (d), 7, 8, 9 and 12(a), its direct and indirect subsidiaries,
the "Company"), and Xxxx X. Xxxxxxxx of Boston, Massachusetts (the "Executive").
In consideration of the mutual promises, terms, provisions and
conditions set forth in this Agreement, the parties hereby agree as follows:
1. EMPLOYMENT. Subject to the terms and conditions set forth in this
Agreement, the Company hereby offers and the Executive hereby accepts
employment.
2. TERM. Subject to earlier termination as hereafter provided, the
Executive's employment hereunder shall be for a term of three (3) years,
commencing effective upon the closing of the Company's initial public offering
(the "IPO") of its common stock, $.01 par value per share (the "Effective
Date"). The term of this Agreement, as from time to time extended or renewed, is
hereafter referred to as "the term of this Agreement" or "the term hereof."
3. CAPACITY AND PERFORMANCE.
(a) During the term hereof, the Executive shall serve as the
Chief Executive Officer of the Company. In addition, and without
further compensation, the Executive shall serve as a director and/or
officer of the Company and/or one or more of the Company's subsidiaries
if so elected or appointed from time to time. The Company and the
Executive acknowledge that the Executive currently is a director of the
Company.
(b) During the term hereof, the Executive shall be employed by
the Company on a full-time basis, shall have all powers and duties
consistent with his position as the Chief Executive Officer of the
Company (including without limitation the power to conduct and direct
the day-to-day operations of the Company, the power to hire and dismiss
personnel, and those other powers customarily exercised by the Chief
Executive Officer of a publicly-held business), subject to the
direction and control of the Company's Board of Directors (the
"Board"), and shall perform such other duties and responsibilities on
behalf of the Company and its subsidiaries as may reasonably be
designated from time to time by the Board.
(c) During the term hereof, the Executive shall devote
substantially all of his full business time and his best efforts,
business judgment, skill and knowledge to the advancement of the
business and interests of the Company and to the discharge of his
duties and responsibilities hereunder. The
2
Executive shall not engage in any other business activity or serve in
any industry, trade, professional, governmental or academic position
during the term of this Agreement, except (i) as set forth on Schedule
1 hereto, or (ii) as may be expressly approved in advance by the Board
in writing or to the extent that any such activity or service does not
materially and adversely affect the discharge of his duties and
responsibilities hereunder.
(d) The Company shall not require the Executive to relocate or
reassign the Executive to any location beyond a fifty (50) mile radius
of the location of the Company's headquarters as of the date hereof,
nor shall the Executive's duties hereunder be materially changed,
without the Executive's prior written consent.
4. COMPENSATION AND BENEFITS. As compensation for all services
performed by the Executive under and during the term hereof and subject to
performance of the Executive's duties and obligations, pursuant to this
Agreement or otherwise:
(a) BASE SALARY. For the period of one (1) year from the
Effective Date (the "Initial Period"), the Company shall pay the
Executive a base salary at the rate of Fifty Thousand Dollars ($50,000)
per annum, payable in accordance with the payroll practices of the
Company for its executives. Following the Initial Period, the Company
shall pay the Executive a base salary at a rate determined by the Board
(or a compensation committee of the Board) in its sole discretion, and
subject to increase from time to time by the Board (or a compensation
committee of the Board) in its sole discretion. Such base salary, as
from time to time increased, is hereafter referred to as the "Base
Salary."
(b) BONUS COMPENSATION. The Executive shall be entitled to
participate in such bonus plan as the Company provides to its
executives generally, in accordance with the terms of that plan, as
amended by the Company from time to time. Following the period of one
(1) year from the Effective Date, the Executive may receive a bonus of
up to forty percent (40%) of his then Base Salary.
(c) VACATIONS. During the term hereof, the Executive shall be
entitled to four (4) weeks of vacation per annum, to be taken at such
times and intervals as shall be determined by the Executive, subject to
the reasonable business needs of the Company. Vacation time shall not
cumulate from year to year.
(d) OTHER BENEFITS. During the term hereof and subject to any
contribution therefor generally required of employees of the Company,
the Executive shall be entitled to participate in any and all employee
benefit plans from time to time in effect for employees of the Company
generally, except to
-2-
3
the extent such plans are in a category of benefit (including without
limitation bonus compensation and severance compensation) otherwise
provided to the Executive. Such participation shall be subject to (i)
the terms of the applicable plan documents, (ii) generally applicable
Company policies and (iii) the discretion of the Board or any
administrative or other committee provided for in or contemplated by
such plan. The Company may alter, modify, add to or delete any of the
employee benefit plans maintained for its employees generally at any
time as it, in its sole judgment, determines to be appropriate, without
recourse by the Executive. The Executive shall receive an option under
the Company's 1998 Equity Incentive Plan to purchase 44,092 shares of
common stock of the Company, at an exercise price equal to the price at
which the common stock is offered in the IPO and exercisable upon the
closing of the IPO.
(e) BUSINESS EXPENSES. The Company shall pay or reimburse the
Executive for all reasonable and necessary business expenses incurred
or paid by the Executive in the performance of his duties and
responsibilities hereunder, subject to any maximum annual limit and
other restrictions on such expenses set by the Board and to such
reasonable substantiation and documentation as may be specified by the
Company from time to time.
5. TERMINATION OF EMPLOYMENT AND SEVERANCE BENEFITS. Notwithstanding
the provisions of Section 2 hereof, the Executive's employment hereunder shall
terminate prior to the expiration of the term hereof under the following
circumstances:
(a) DEATH. In the event of the Executive's death during the
term hereof, the Executive's employment hereunder shall immediately and
automatically terminate. In that event, the Company shall pay to the
Executive's designated beneficiary or, if no beneficiary has been
designated by the Executive, to his estate, any earned and unpaid Base
Salary, prorated through the date of his death.
(b) DISABILITY.
(i) The Company may terminate the Executive's employment
hereunder, upon notice to the Executive, in the event that the
Executive becomes disabled during his employment hereunder through
any illness, injury, accident or condition of either a physical or
psychological nature and, as a result, is unable to perform
substantially all of his duties and responsibilities hereunder for
ninety (90) days during any period of three hundred sixty-five
(365) consecutive calendar days.
-3-
4
(ii) The Board may designate another employee to act in
the Executive's place during any period of the Executive's
disability. Notwithstanding any such designation, the Executive
shall continue to receive the Base Salary in accordance with
Section 4(a) and his other benefits pursuant to Section 4(d), to
the extent permitted by the then-current terms of the applicable
benefit plans, until the Executive becomes eligible for disability
income benefits under any disability income plan provided by the
Company or until the termination of his employment, whichever
shall first occur.
(iii) If any question shall arise as to whether, during
any period, the Executive is disabled through any illness, injury,
accident or condition of either a physical or psychological nature
such that he is unable to perform substantially all of his duties
and responsibilities hereunder, the Executive may, and at the
request of the Company shall, submit to a medical examination by a
physician selected by the Company to whom the Executive or his
duly appointed guardian, if any, has no reasonable objection, to
determine whether the Executive is so disabled, and such
determination shall for the purposes of this Agreement be
conclusive of the issue. If such question shall arise and the
Executive shall fail to submit to such medical examination, the
Company's determination of the issue shall be binding on the
Executive.
(c) BY THE COMPANY FOR CAUSE. The Company may terminate the
Executive's employment hereunder for Cause at any time upon notice to
the Executive setting forth in reasonable detail the nature of such
Cause. The following, as determined by the Board in its reasonable and
good faith judgment, shall constitute Cause for termination: (i)
conviction in a court of law of any felony or a plea of NOLO CONTENDERE
to such an offense, (ii) commission of any act involving theft,
embezzlement, fraud, dishonesty or moral turpitude which act relates to
or otherwise has an adverse effect (including through publicity) on the
Company, (iii) material breach of any of the material provisions of
this Agreement (other than breaches of the nature described in clause
(iv) below) or of any other material agreement between the Executive
and the Company, or (iv) repeated and consistent willful misconduct or
dereliction of duty in the performance of his duties under this
Agreement, or repeated and consistent failure to be present at work,
which conduct or failure continues for more than thirty (30) days after
notice given to the Executive, such notice to set forth in reasonable
detail the nature of such conduct or failure. Upon the giving of notice
of termination of the Executive's employment hereunder for Cause, the
Company shall not have any further obligation or liability to the
Executive, other than for Base Salary earned and unpaid, accrued
vacation time and unreimbursed business expenses outstanding at the
date of termination.
-4-
5
(d) SEVERANCE PAYMENTS UPON EXPIRATION. If the Executive shall
cease to be employed by the Company upon the expiration of this
Agreement, the Executive shall be entitled, subject to the immediately
following sentence, to receive as a severance benefit periodic payments
in an amount equal to his Base Salary in effect at the date of such
expiration divided by the number of payroll periods per year then
applicable to executives of the Company (hereinafter, "Severance
Payments"), for a period of six months from and after the date of such
expiration. The Executive's rights to receive Severance Payments
hereunder is conditioned upon (X) the Executive's prior execution and
delivery to the Company of a general release of any and all claims and
causes of action of the Executive against the Company and the Company's
and its subsidiaries' officers and directors, excepting only the right
to any Base Salary and/or reimbursable expenses then accrued and unpaid
under Section 4 of this Agreement, and (Y) the Executive's continued
performance of those obligations hereunder that continue by their
express terms after the termination of his employment, including
without limitation those set forth in Sections 7 and 8. Any Severance
Payments to be paid hereunder shall be payable in accordance with the
payroll practices of the Company for its executives generally as in
effect from time to time, and subject to all required withholding of
taxes.
6. EFFECT OF TERMINATION. Upon termination of this Agreement, all
obligations and provisions of this Agreement shall terminate except with respect
to any accrued and unpaid monetary obligations and except for the provisions of
Section 7 through (and inclusive of) 22 hereof.
7. COVENANT NOT TO COMPETE. Provided only that the Company is not
then in default on its payment obligations under this Agreement, for a period of
five (5) years from the Effective Date the Executive will not engage or become
interested, directly or indirectly, as an owner, employee, director, partner,
consultant, through stock ownership, investment of capital, lending of money or
property, rendering of services, or otherwise, either alone or in association
with others, in the operation, management or supervision of any type of business
or enterprise in any way similar to or competitive with the business of the
Company. In addition, during such period the Executive will not, directly or
indirectly, whether on his behalf or on behalf of anyone else, (i) solicit or
accept orders from any present or past customer of the Company for a product or
service offered or sold by, or competitive with a product or service offered or
sold by, the Company; (ii) induce or attempt to induce any such customer to
reduce such customer's purchases from the Company; (iii) use for the benefit of
the Executive or disclose the name and/or requirements of any such customer to
any other person or persons, natural or corporate; or (iv) solicit any of the
Company's employees or consultants to leave the employ of the Company or hire
anyone who was an employee of the Company or a consultant to the Company at any
time within one year prior to the date the Executive's employment with the
-5-
6
Company terminated. The foregoing restrictions shall not prevent the Executive
from hiring or otherwise engaging any professional firm.
8. CONFIDENTIAL INFORMATION.
(a) The Executive acknowledges that the Company will
continually develop Confidential Information, that the Executive may
develop Confidential Information for the Company and that the Executive
may learn of Confidential Information during the course of employment.
The Executive agrees that, except as required for the proper
performance of his duties for the Company, he will not, directly or
indirectly, use or disclose any Confidential Information, as defined
below. The Executive understands and agrees that this restriction will
continue to apply after his employment terminates, regardless of the
reason for termination.
(b) The Executive agrees that all Confidential Information
which he creates or to which he has access as a result of his
employment is and shall remain the sole and exclusive property of the
Company. Except as required for the proper performance of his duties,
the Executive will not copy any documents, tapes or other media
containing Confidential Information ("Documents") or remove any
Documents, or copies, from Company premises. The Executive will return
to the Company immediately after his employment terminates, and at such
other times as may be specified by the Company, all Documents and
copies and all other property of the Company then in his possession or
control.
9. ENFORCEMENT OF COVENANTS. The Executive acknowledges that he has
carefully read and considered all the terms and conditions of this Agreement,
including the restraints imposed upon him pursuant to Sections 7 and 8 hereof.
The Executive further agrees that all goodwill of the Company is its exclusive
property. The Executive further acknowledges and agrees that, were he to breach
any of the covenants contained in Section 7 or 8 hereof, the damage would be
irreparable. The Executive therefore agrees that the Company, in addition to any
other remedies available to it, shall be entitled to preliminary and permanent
injunctive relief against any breach or threatened breach by the Executive of
any of said covenants, without having to post bond, provided the Company has
made a prima facie showing of such a breach or threatened breach.
10. INDEMNIFICATION. Subject to the second sentence of this
Section 10, the Company agrees to indemnify the Executive against all
liabilities and expenses, including amounts paid in satisfaction of judgments,
in compromise or as fines and penalties, together with counsel fees, in each
case reasonably incurred by him in connection with the defense or disposition of
any action, suit or other proceeding, whether civil or criminal, in which he may
be involved or with which he may be
-6-
7
threatened during the term of this Agreement or thereafter, in each case to the
extent incurred by reason of his serving or having served (a) as an executive
officer or director of the Company, or (b) at its request as a director or
executive officer of any organization in which the Company directly or
indirectly owns shares or of which it is directly or indirectly a creditor, or
(c) at its request in any capacity with respect to any employee benefit plan.
Notwithstanding the immediately preceding sentence, the Company shall not
indemnify the Executive if the Executive (i) did not act in good faith and in a
manner the Executive reasonably believed to be in or not opposed to the best
interests of the Company, or (ii) with respect to any criminal action or
proceeding, had reasonable cause to believe that the Executive's conduct was
unlawful. The Company shall purchase and maintain in force directors' and
officers' liability insurance having policy limits and other terms reasonably
determined by the Company's Board of Directors.
11. CONFLICTING AGREEMENTS. The Executive hereby represents and
warrants that the execution of this Agreement and the performance of his
obligations hereunder will not breach or be in conflict with any other agreement
to which the Executive is a party or is bound and that the Executive is not
subject to any covenants against competition or similar covenants that would
affect the performance of his obligations hereunder. The Executive will not
disclose or use any proprietary information of a third party without such
party's consent.
12. DEFINITIONS. Words or phrases which are initially capitalized or
are within quotation marks shall have the meanings provided in this Section 12
and as provided elsewhere herein. For purposes of this Agreement, the following
definitions apply:
(a) "Confidential Information" means any and all information,
inventions, discoveries, ideas, research, engineering methods,
practices, processes, systems, formulae, designs, concepts, products,
projects, improvements and developments that are not generally known by
others, developed by or known to the Executive prior to or during the
term of this Agreement and relating in any material respect to the
Company, including its business, products or services (or learned by
the Executive after the term hereof from a source known to the
Executive to be violating an obligation to the Company not to disclose
the same) or that are developed by the Executive during the term of
this Agreement and that have applicability to the business, products or
services of the Company, including but not limited to (i) products and
services, technical data, methods and processes, (ii) marketing
activities and strategic plans, (iii) costs and sources of supply, (iv)
the identity and special needs of customers and prospective customers
and vendors and prospective vendors, and (v) the people and
organizations with whom the Company has or plans to have business
relationships and those relationships. Confidential Information also
includes such information that the Company
-7-
8
may receive or has received belonging to customers or others who do
business with the Company and any publication or literary creation of
the Executive, developed in whole or in significant part during the
term hereof, in whatever form published, whose content in whole or in
part is competitive in any material respect with the products or
services offered by the Company (including as such products or services
could reasonably be expected to evolve or be extended in the
foreseeable future).
(b) "Person" means an individual, a corporation, an
association, a partnership, an estate, a trust and any other entity or
organization.
13. WITHHOLDING. All payments made under this Agreement shall be
reduced by any tax or other amounts required to be withheld under applicable
law.
14. ASSIGNMENT. Neither the Company nor the Executive may make any
assignment of this Agreement or any interest herein, by operation of law or
otherwise, without the prior written consent of the other; provided, however,
that the Company may assign its rights and obligations under this Agreement
without the consent of the Executive in the event that the Company shall
hereafter effect a reorganization, consolidate with, or merge into, any other
Person or transfer all or substantially all of its properties or assets to any
other Person unless the Executive shall object in writing to such assignment
within 60 days following the effective date thereof, in which event the
Executive's sole remedy shall be to terminate this Agreement, which termination
shall have the effect set forth in Section 6 hereof. This Agreement shall inure
to the benefit of and be binding upon the Company and the Executive, and their
respective successors, executors, administrators, heirs and permitted assigns.
15. SEVERABILITY. If any portion or provision of this Agreement shall
to any extent be declared illegal or unenforceable by a court of competent
jurisdiction, then the remainder of this Agreement, or the application of such
portion or provision in circumstances other than those as to which it is so
declared illegal or unenforceable, shall not be affected thereby, and each
portion and provision of this Agreement shall be valid and enforceable to the
fullest extent permitted by law.
16. WAIVER. No waiver of any provision hereof shall be effective
unless made in writing and signed by the waiving party. The failure of either
party to require the performance of any term or obligation of this Agreement, or
the waiver by either party of any breach of this Agreement, shall not prevent
any subsequent enforcement of such term or obligation or be deemed a waiver of
any subsequent breach.
17. NOTICES. Any and all notices, requests, demands and other
communications provided for by this Agreement shall be in writing and shall be
-8-
9
effective when delivered in person or deposited in the United States mail,
postage prepaid, registered or certified, and addressed to the Executive at his
last known address on the books of the Company or, in the case of the Company,
at the Company's principal place of business, to the attention of the President,
or to such other address as either party may specify by notice to the other
actually received.
18. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior communications, agreements and
understandings, written or oral, with respect to the terms and conditions of the
Executive's employment, including without limitation any agreements relating to
employment between the Executive and any corporate predecessor or promoter of
the Company, any such agreement being hereby terminated by the mutual agreement
of the parties without liability to either party.
19. AMENDMENT. This Agreement may be amended or modified only by a
written instrument signed by the Executive and by an expressly authorized
representative of the Company.
20. HEADINGS. The headings and captions in this Agreement are for
convenience only and in no way define or describe the scope or content of any
provision of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which together shall
constitute one and the same instrument.
22. GOVERNING LAW. This Agreement shall be construed and enforced
under and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without regard to the conflict of laws principles thereof.
-9-
10
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Executive and by the Company by its duly authorized
representative, as of the date first above written.
Executive: PROVANT, INC.
_______________________________ By: _____________________________
Xxxx X. Xxxxxxxx Name:
Title:
-10-
