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EXHIBIT 10.14
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into effective as of
by and among Star Acquisition Corp., a Delaware corporation (subject to Section
12(b) below, the "Company"), A. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ of (the
"Executive"), and, with respect to Section 23 hereof, Provant, Inc., a Delaware
corporation ("Provant").
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 [the Effective Time] (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
President and 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
Affiliates 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, shall have all powers and duties consistent
with his position as the senior-most 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 senior-most
executive officer of a publicly-held business), subject to the direction
and control of the Company's Board of Directors (the "Board") and the
Chief Executive Officer of Provant or its or his designees, and shall
perform such other duties and responsibilities on behalf of the Company
and its Affiliates as may reasonably be designated from time to time by
the Board and the Chief Executive Officer of Provant or its or his
designees consistent with the Executive's office as set forth above.
(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
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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 twenty (20) 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. During the term hereof, the Company shall pay the
Executive a base salary at the rate of One Hundred Seventy Five Thousand
Dollars ($175,000) per annum, payable in accordance with the payroll
practices of the Company for its executives 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. 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 pursuant to which Executive may receive a bonus of up to
forty percent (40%) of his then Base Salary. Such plan shall provide, with
respect to the Executive, that beginning with the 1999 fiscal year the
Executive shall receive the maximum bonus (i.e., 40% of Base Salary) if
(i) he is employed hereunder as of the last day of the Company's fiscal
year (or if the Executive's employment is terminated by the Company
without cause during such fiscal year other than on account of the
expiration of the term hereof, provided that the foregoing shall not be
construed to give the Company a contractual right to so terminate the
Executive's employment prior to the expiration of the term) and (ii) the
Company achieves or exceeds a targeted level of earnings before interest
and taxes (after accounting for all bonuses) ("EBIT") fixed in good faith
by the Board at or before the beginning of such year. The foregoing
determination shall be made after the end of each fiscal year during the
term hereof and the bonus, if any, with respect to such fiscal year shall
be paid within ninety (90) days following the end of such fiscal year.
Notwithstanding the foregoing, if this Agreement shall expire prior to the
end of the then-
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current fiscal year or the Executive's employment hereunder shall be
terminated on account of his death or disability prior to the end of the
then-current fiscal year, the Executive shall be entitled to receive a pro
rata portion of the bonus, if any, he would have received based on the
Company's EBIT for the full fiscal year had he been employed hereunder as
of the last day of such year (based on the fraction of the year that he
was employed hereunder), determined and paid following the end of such
fiscal year.
(c) VACATIONS. During the term hereof, the Executive shall be
entitled to four 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. The Executive shall be entitled to retain the
benefits set forth on Schedule 2 hereto during the term of this Agreement.
In addition to the foregoing, 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 the extent such plans are in a category of benefit (including
without limitation bonus compensation and severance compensation)
otherwise provided to the Executive. Except with respect to the benefits
set forth on Schedule 2, 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.
(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. In addition (whether or not consistent with the foregoing),
the Company shall permit the Executive to incur, and shall pay or
reimburse, expenses in connection with those items set forth in Section
3.13(d) of the Company Disclosure Schedule attached to the Agreement and
Plan of Merger between Provant, the Company, the Company's corporate
predecessor and certain other persons, in amounts consistent with the
amounts so incurred by such corporate predecessor of the Company.
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 under the following circumstances:
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(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(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 (other than a felony arising out of the
operation of a motor
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vehicle) 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 or its Affiliates, (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 any of
its Affiliates, 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) SEVERANCE PAYMENTS UPON EXPIRATION. If the Executive shall cease
to be employed by the Company (or any of its Affiliates) 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, Provant and their respective
officers, directors and Affiliates, excepting only (i) the right to any
Base Salary and/or reimbursable expenses then accrued and unpaid under
Section 4 of this Agreement, and (ii) the right to receive any Additional
Shares to which the Executive then is entitled or may thereafter be
entitled under that certain Agreement and Plan of Merger among Provant,
the corporate predecessor of the Company, the Executive and certain other
Persons, 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 executive 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) 23 hereof.
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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 from 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. Further, notwithstanding the
foregoing, the Executive may own and manage ▇▇▇▇▇ Corporation (or any corporate
successor thereto) [define parameters of non-competitive activity]
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.
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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 and its Affiliates
is their 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 or
any of its Affiliates, as the case may be, 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 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 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, and (ii) with respect to any criminal action or
proceeding, had reasonable cause to believe that the Executive's conduct was
unlawful. Provant shall purchase and maintain in force directors' and officers'
liability insurance having policy limits and other terms reasonably determined
by the Provant 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:
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(a) "Affiliates" means all persons and entities directly or
indirectly controlling, controlled by or under common control with the
Company, where control may be by either management authority or equity
interest , including without limitation Provant.
(b) "Company" means, for purposes of Sections 7, 8, and 12(c) only,
the Company or any of its Affiliates; and means the corporation named in
the preamble for purposes of all other Sections.
(c) "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
their respective businesses, 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 or an Affiliate not to disclose the
same), 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 or any
Affiliate has or plans to have business relationships and those
relationships. Confidential Information also includes such information
that the Company or any Affiliate may receive or has received belonging to
customers or others who do business with the Company or any Affiliate 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 or any Affiliate
(including as such products or services could reasonably be expected to
evolve or be extended in the foreseeable future).
(c) "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
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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, 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 Provant's principal place of business, to the attention of Chief Executive
Officer, 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 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.
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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 State of Virginia, without
regard to the conflict of laws principles thereof.
23. GUARANTY BY PROVANT. Provant hereby unconditionally and irrevocably
guarantees all of the Company's obligations to the Executive provided in this
Agreement. Provant's guaranty is of the full payment and performance of all of
the Company's covenants, agreements, duties and obligations under this
Agreement, and not a guaranty of collection. This is a continuing guaranty for
all future amounts. Provant waives all rights of subrogation it may have against
the Company until all amounts due or to become due hereunder have been paid to
the Executive, and Provant waives all other defenses and remedies available to
guarantors at law or in equity with respect to the guaranty hereby provided.
IN WITNESS WHEREOF, this Agreement has been executed as a sealed
instrument by the Executive and by the Company and Provant, by their respective
duly authorized representatives, as of the date first above written.
Executive: STAR ACQUISITION CORP.
By:
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A. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ Name:
Title:
As to paragraph 23:
PROVANT, INC.
By:
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Name:
Title:
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SCHEDULE 2
TO
EMPLOYMENT AGREEMENT OF
A. ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇
1. Life insurance policies:
CIGNA Policy # 5076706 (approx. annual premium: $15,000)
Prudential Policy # 77691 (approx. annual premium: $4,000)
Hartford Policy # ▇▇▇▇▇▇▇▇▇ (approx. annual premium: $50,000)
2. Company car (approx. annual cost: $8,400)
3. Deferred Compensation Plan (approx. annual accrual: $19,000)
4. Hunting expenses of up to approximately $25,000 annually
