1
EXHIBIT 10.17
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of May 1, 2001 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 Xxxxxx Xxxxxxxx of Upper Saddle River, New Jersey (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 on May 15,2001 or on such earlier date as shall be mutually agreed
upon by the Company and the Executive (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 Financial Officer & Executive Vice President of the Company. In addition,
and without further compensation, the Executive shall serve as a director of the
Company and an officer and/or director of one or more of the Company's
subsidiaries if so elected or appointed from time to time.
(b) During the term hereof, the Executive shall be employed by
the Company on a full-time basis and shall have all powers and duties consistent
with his position as the Chief Financial Officer & Executive Vice President of
the Company, subject to the direction and control of the Company's Chief
Executive Officer, 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 consistent with the position of Chief Financial
Officer.
(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 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 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.
2
(d) The Company will require the Executive to relocate to Provant's
Corporate Headquarters. Attachment A includes the temporary living and moving
benefits.
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. The Company shall pay the Executive a base
salary at the rate of Two Hundred Fifty Thousand Dollars ($250,000) per annum,
payable in accordance with the payroll practices of the Company for its
executives (the "Base Salary").
(b) BONUS COMPENSATION. The Executive shall receive a bonus
equal to 40% of his then Base Salary upon the achievement of goals and
objectives to be agreed upon by the Executive and the Compensation Committee of
the Board. Bonus goals and objectives shall be consistent with the bonus goals
and objectives of other senior executives of the Company. All bonuses shall be
paid at such time as bonuses are regularly paid to senior executives of the
Company. One half of fiscal 2002 bonus (20%) is guaranteed.
(c) STOCK OPTIONS. The Executive shall receive an option under
the Company's 1998 Equity Incentive Plan or 1998 Non-Qualified Stock Option Plan
to purchase One Hundred Thousand (100,000) shares of Common Stock of the Company
at an exercise price equal to the closing price for shares of Common Stock of
the Company as reported on Nasdaq on the date hereof, the fair market value of a
share of the Company's Common Stock on the date the Executive accepted
employment. This option shall contain terms and conditions consistent with the
terms and conditions of options regularly granted to senior executives of the
Company and the Company's 1998 Equity Incentive Plan or 1998 Non-Qualified Stock
Option Plan.
(d) 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.
(e) OTHER BENEFITS. During the term hereof and subject to any
contribution therefore 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
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.
(f) 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
-2-
3
performance of his duties and responsibilities hereunder, subject to any maximum
annual limit and other restrictions on such expenses set by the Board or the
Chief Executive Officer of the Company 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 as set forth below:
(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.
(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(e), 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.
-3-
4
(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.
(d) BY THE COMPANY WITHOUT CAUSE. The Company may terminate
the Executive's employment hereunder without Cause at any time upon notice.
(e) SEVERANCE PAYMENTS. In the event that (i) the Company
terminates the Executive's employment without Cause (as defined above) (ii)
within six (6) months of a Change of Control the Executive terminates his
employment with the Company for Good Reason (as hereinafter defined) or (iii)
the Company elects not to continue the Executive's employment following the term
hereof, 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 termination divided by the
number of payroll periods per year then applicable to executives of the Company
(hereinafter, "Severance Payments"), for 24 months if employment terminates
under the circumstances described in clauses (i) or (ii) or for 12 months if
employment terminates under the circumstances described in clause (iii) . The
Executive's right to receive Severance Payments hereunder is conditioned upon
(i) 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 (ii) 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.
(f) OPTIONS. In the event that the Executive is entitled to
receive Severance Payments pursuant to Section 5(e) above, any options held by
the Executive to purchase shares of the Common Stock of the Company will
continue to vest and become exercisable in accordance with their terms and
remain exercisable until the first anniversary of the date of the
-4-
5
termination of the Executive's employment with the Company, at which time the
options will terminate. Further, upon the occurrence of a Change in Control, any
options held by the Executive to purchase shares of the Company's Common Stock
that are not fully exercisable shall become immediately exercisable in full.
(g) CHANGE IN CONTROL. For purposes of this Agreement, a
"Change in Control" shall mean a change in control of the Company of a nature
that would be required to be reported in response to Item 6(e) of Schedule 14A
of Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), whether or not the Company is in fact required to
comply therewith; provided, that, without limitation, such a change in control
shall be deemed to have occurred if:
(i) any "person" (as such term is used in Sections
13(d) and 14(d) of the Exchange Act) , other than the Company,
any trustee or other fiduciary holding securities under an
employee benefit plan of the Company or a corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock
of the Company, is or becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act) , directly or
indirectly, of securities of the Company representing 50.01%
or more of the combined voting power of the Company's then
outstanding securities;
(ii) during the period of twenty-four (24)
consecutive months (not including any period prior to the date
of this Agreement), individuals who at the beginning of such
period constitute the Board and any new director whose
election by the Board or nomination for election by the Board
or by the stockholders of the Company was approved by a vote
of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of such
period or whose election or nomination for election was
previously so approved, cease for any reason to constitute a
majority thereof;
(iii) the Company shall have consummated a merger or
consolidation with any other corporation, other than a merger
or consolidation which results in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at
least 50% of the combined voting securities of the Company or
such surviving entity outstanding immediately after such
merger or consolidation; or
(iv) the Company shall have liquidated or sold all or
substantially all of the Company's assets.
(h) GOOD REASON. For purposes of this Agreement, "Good Reason"
means:
(i) the assignment to the Executive of any duties
inconsistent in any respect with his position (including
status, offices, titles and reporting requirements),
authority, duties or responsibilities as in effect on the date
of the
-5-
6
Change of Control, or any other action by the Company which
results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith
and which is remedied by the Company promptly after receipt of
notice from the Executive;
(ii) any reduction of the Executive's Base Salary or
the failure by the Company to provide him with incentive
compensation, welfare benefits, retirement benefits and other
benefits which in the aggregate are no less favorable than the
benefits to which he was entitled prior to the Change of
Control;
(iii) the Company's requiring the Executive to be
based at any office or location other than the office and
location at which he is employed on the date of the Change of
Control, except for travel reasonably required in the
performance of his responsibilities; or
(iv) any action taken or suffered by the Company as
of or following the Change of Control (such as, without
limitation, transfer or encumbrance of assets or incurring of
indebtedness) which materially impairs the ability of the
Company to make any payments due or which may become due to
the Executive under this Agreement.
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. For a period of two (2) years from the date
the Executive's employment with the Company terminates, whether during the term
hereof or thereafter and regardless of the reason therefore, 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, (a)
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; (b) induce or attempt to induce any such
customer to reduce such customer's purchases from the Company; (c) 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 (d) 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 Company terminated. The foregoing restrictions shall not prevent the
Executive from hiring or otherwise engaging any professional firm.
-6-
7
8. CONFIDENTIAL AND PROPRIETARY INFORMATION.
(a) The Executive acknowledges that the Company will
continually develop Confidential Information and Proprietary Information (as
defined below), that the Executive may develop Confidential Information and
Proprietary Information for the Company and that the Executive may learn of
Confidential Information and Proprietary 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 or Proprietary Information. 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 and
Proprietary 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 or Proprietary 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.
(c) The Executive agrees that at all times hereafter he will
take all action and sign and deliver all instruments the Company may require to
vest or perfect in the Company all right, title and interest in and to the
Proprietary Information of the Company or to assist the Company in filing or
prosecuting any application, in the Executive's name or any other name, in any
country, for any patent, trademark, service xxxx, copyright or other right
therein, or any modification, reissue, division, continuation, revival or
extension thereof, or in conducting any legal or administrative proceedings for
securing, protecting or enforcing any of the foregoing.
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
-7-
8
he may be 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 Board.
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, writings, communications, research, engineering
methods, practices, processes, systems, formulae, designs, concepts, products,
projects, improvements and developments that relate to the business of the
Company and are not generally known by others that relate in any respect to the
business of the Company, including but not limited to (i) products and services,
technical data, methods and processes, (ii) marketing activities and strategic
plans, (iii) financial information and 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 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 in
whatever form published the content of which, in whole or in part, relates in
any material respect to the business of the Company.
(b) "Person" means an individual, a corporation, an
association, a partnership, an estate, a trust and any other entity or
organization.
(c) "Proprietary Information" means any and all intellectual
property subject to protection under applicable copyright, trademark or patent
laws if such property relates in any respect to the business of the Company.
13. WITHHOLDING. All payments made under this Agreement shall be
reduced by any tax or other amounts required to be withheld under applicable
law.
-8-
9
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, consolidation with, or merger into, any other
Person or transfer all or substantially all of its properties or assets to any
other Person. 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
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 Secretary,
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.
-9-
10
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.
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.
/s/ Xxxxxx Xxxxxxxx By: /s/ Xxxxxx X. Xxxxxxx
Xxxxxx Xxxxxxxx Name: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
-10-
