Exhibit 10.6
EMPLOYMENT AGREEMENT
Predictive Systems, Inc.
145 Hudson Street
New York, NY 10013
January 11, 1999
Kevin Holt
119 Retford
Cranford, NJ 07016
Dear Kevin:
We are pleased to offer you the position of Vice President of
Human Resources reporting to Ron Pettengill, Chairman & CEO and Robert Belau,
President. This letter, if accepted, sets forth the terms of your employment
with Predictive Systems, Inc. (the "Company") and, if you accept this offer, it
would take effect as of your hiring date. The terms of your employment would be
as follows:
COMPENSATION AND BENEFITS
You would receive an annual base salary of $130,000 less all
applicable deductions, and would be eligible to participate in the Company's
bonus plan under the terms set forth in your Bonus memo (see attached). In
addition, you would participate in all of the Company's employee benefit
programs for which you are eligible under the terms and conditions of the
applicable plans and/or policies.
TERM OF EMPLOYMENT
You agree to remain employed for a period of two (2) years
after your date of hire. Nevertheless, the Company may terminate your employment
at any time for any reason, with or without cause, by giving you written notice
of such termination.
If the Company terminates your employment "Without Cause" or
if you resign your employment for "Good Cause" prior to two (2) years after your
date of hire, then the Company will continue your base salary as a severance
payment until the earlier of (A) six (6) months after the date of the
termination of your employment, or (B) the date you begin employment with
another employer. You will notify the Company in writing within ten days of your
acceptance of any new employment. The severance set forth herein will be in lieu
of any entitlement you may have to notice of termination, pay in lieu of notice
of termination, or any other severance payment from any other source. All
benefits and future stock and option vesting would terminate as of the date of
termination of your employment. You would, of course, be paid your salary
through your date of termination and for the value of all unused vacation earned
through that date and be allowed to continue your medical coverage at your own
expense to the extent provided for by COBRA, but you would not be entitled to
any additional payments or benefits except as set forth herein. You would be
allowed to exercise your vested options during the time period set forth in and
in accordance with your option agreement and the Predictive Systems Option Plan.
If you were to resign "Without Good Cause" or your employment
were to be terminated for "Cause" within two (2) years after your date of hire,
then you would be paid all salary and benefits, as well as for the value of your
unused vacation through the date of termination of your employment, but nothing
else. A termination for "Cause" shall mean a termination for any of the
following reasons: (i) your failure to perform the duties of your position after
receipt of a written warning; (ii) engaging in misconduct; (iii) being convicted
of a crime; (iv) committing an act of fraud against, or the misappropriation of
property belonging to, the Company; or (v) material breach of this agreement or
any confidentiality or proprietary information agreement between you and the
Company. The Company will provide written notice of the reason for termination
in the case of any termination for "Cause." A termination for any other reason
shall be a termination "Without Cause." A resignation for "Good Cause" will
occur if you resign your employment within thirty (30) days after the occurrence
of any of the following events: (1) any reduction in your base salary as
specified herein, unless such reduction is pursuant to a change in the Company's
compensation policies generally; (2) a requirement by the Company that you
relocate to an office more than a fifty (50) mile radius from your current
office; or (3) a material reduction in the job duties assigned to you upon your
date of hire; provided, however, you must specify in reasonable detail the basis
for such resignation for "Good Cause" and give the Company at least twenty (20)
business days in which to correct the circumstances prompting the resignation
for "Good Cause." A resignation by you in any other circumstances will be
considered a resignation "Without Good Cause."
If your employment with the Company were to continue after two
(2) years beyond your date of hire, then your employment would continue to be on
an "at-will" basis. This means that either you or the Company could terminate
your employment at any time for any reason with or without cause and without the
obligation to pay you, or your right to, any severance payment except as may be
provided at such time under the Company's employee benefit plans for which you
are eligible.
YOUR POSITION
You will initially have the title of Vice President of Human
Resources reporting to Ron Pettengill, Chairman & CEO and Robert Belau,
President. You will have whatever reasonable duties are assigned to you
consistent with your title and position. The Company may change your title and
duties as it sees fit although such change may constitute "Good Cause" for your
resignation.
NON-COMPETITION
You understand and agree that you will be allowed access to
confidential and proprietary information of the Company in the course of your
employment. You further acknowledge that the services that you will provide to
the Company under this agreement are
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unique.
You agree that during your employment with the Company you
will not engage in any other employment, business, or business related activity
unless you receive the Company's prior written approval from the Company's CEO
or President to hold such outside employment or engage in such business or
activity. Such written approval will not be unreasonably withheld if such
outside employment, business or activity would not in any way be competitive
with the business or proposed business of the Company or otherwise conflict with
or adversely affect in any way your performance of your employment obligations
to the Company.
Commencing on the date of your hire and continuing for six (6)
months after the date of termination of your employment with the Company,
regardless of the reasons for the termination, you will not, as an employee,
agent, consultant, advisor, independent contractor, general partner, officer,
director, stockholder, investor, lender or guarantor of any corporation,
partnership or other entity, or in any other capacity directly or indirectly:
1. participate or engage in the design, development,
manufacture, production, marketing, sale or servicing of any product, or the
provision of any service, that directly relates to [INSERT DESCRIPTION OF
BUSINESS] anywhere where the Company conducts business;
2. induce or attempt to induce any person who at the time of
such inducement is an employee of the Company, or was an employee at any time in
the six (6) month period prior to the inducement, to perform work or services
for any other person or entity other than the Company; or
3. permit your name to be used in connection with a business
which is competitive or substantially similar to the business of the Company.
Notwithstanding the foregoing, you may own, directly or
indirectly, solely as an investment, up to one percent (1%) of any class of
"publicly traded securities" of any person or entity which owns a business that
is competitive or substantially similar to the business of the Company. The term
"publicly traded securities" shall mean securities that are traded on a national
securities exchange or listed on the National Association of Securities Dealers
Automated Quotation System.
If any restriction set forth in this non-competition section
is found by a court to be unreasonable, then you agree, and hereby submit, to
the reduction and limitation of such prohibition to such area or period as shall
be deemed reasonable. You acknowledge that irreparable harm will be suffered by
the Company in the event of the breach by you of any of your obligations under
this agreement, and that the Company will be entitled, in addition to its other
rights, to enforce by an injunction or decree of specific performance the
obligations set forth in this agreement. Any claims asserted by you against the
Company shall not constitute a defense in any injunction action brought by the
Company to obtain specific enforcement of said paragraphs.
ARBITRATION
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We each agree that any and all disputes between us which arise
out of your employment, the termination of your employment, or under the terms
of this agreement shall be resolved through final and binding arbitration. This
shall include, without limitation, disputes relating to this agreement, any
disputes regarding your employment by the Company or the termination thereof,
claims for breach of contract or breach of the covenant of good faith and fair
dealing, and any claims of discrimination or other claims under any federal,
state or local law or regulation now in existence or hereinafter enacted and as
amended from time to time concerning in any way the subject of your employment
with the Company or its termination, including the Family and Medical Leave Act.
The only claims not covered by this section are the following: (i) claims for
benefits under the unemployment insurance or workers' compensation laws and (ii)
claims concerning non-competition or non-solicitation obligations or the
validity, infringement or enforceability of any trade secret, patent right,
copyright, trademark or any other intellectual property held or sought by the
Company, or which the Company could otherwise seek; in each of these instances
such disputes or claims shall not be subject to arbitration, but rather, will be
resolved pursuant to applicable law. Binding arbitration will be conducted in
New York, New York in accordance with the rules and regulations of the American
Arbitration Association. If, however, you do not reside within 100 miles of New
York City at the time the dispute arose, then the arbitration may take place in
the largest metropolitan area within fifty miles of your place of residence when
the dispute arose. The parties will split the cost of the arbitration filing and
hearing fees and the cost of the arbitrator; each side will bear its own
attorneys' fees, unless otherwise decided by the arbitrator. You understand and
agree that arbitration shall be instead of any civil litigation, that each side
waives its right to a jury trial, and that the arbitrator's decision shall be
final and binding to the fullest extent permitted by law and enforceable by any
court having jurisdiction thereof.
MISCELLANEOUS PROVISIONS
This agreement and the accompanying Proprietary Information
and Inventions Agreement will be the entire agreement between the Company and
you relating to your employment and the additional matters provided for herein.
You agree that there were no promises or commitments made to you regarding your
employment with the Company except as set forth in this letter. This agreement
supersedes and replaces any prior verbal or written agreements between the
parties relating to the subject matter hereof, including, but not limited to,
any and all prior employment agreements. This agreement may be amended or
altered only in a writing signed by you and the CEO or President. This agreement
shall be construed and interpreted in accordance with the laws of the State of
New York. Each provision of this agreement is severable from the others, and if
any provision hereof shall be to any extent unenforceable, it and the other
provisions shall continue to be enforceable to the full extent allowable, as if
such offending provision had not been a part of this agreement. This offer is
also contingent on you executing the Proprietary Information and Inventions
Agreement, a copy of which is attached hereto and incorporated herein.
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If you have any questions about this offer, please contact me.
If you find this offer acceptable, please sign and date this letter below and
return it to me. This offer will expire on February 15, 1999.
Sincerely,
Predictive Systems, Inc.
/s/ Ronald G. Pettengill
-----------------------------------
Ronald G. Pettengill
Chairman & CEO
I agree to the terms and conditions in this offer.
Date: 1/22/99 /s/ Kevin Holt
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Employee Signature
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BONUS MEMORANDUM
FOR
KEVIN HOLT
I. BONUS COMPENSATION
You will also receive an annual bonus based on you and the Company
attaining specific performance goals. The goals and associated bonus
amounts are as follows:
- - $100,000 if Predictive System achieves the following goals:
The successful hiring and retention for at least 6 months a minimum of
125 new revenue-producing consultants (defined as those consultants who
produce a minimum of 1660 (80% utilization of 2080 hours per annum)
billable hours during calendar year 1999) in the calendar year 1999.
Implementation of processes and practices which will reduce the cost
per hire from a current $7,000 per new employee to a minimum of $4,000
per new employee measured according to mutually agreed upon metrics
established by Niraj Sethi-VP of Finance.
- - $20,000 to be tied to other specific marketing goals to be determined
by the Company on the completion of the Human Resources Strategy and
Implementation Plan. These will include, without limitation:
Implementation of Corporate Orientation & Training Plan;
Central coordination of all recruiting activity; and
Implementation of International Human Resources activities for
Predictive subsidiaries in Europe.
Bonus Progress status meetings between you and the CEO or President will be
held quarterly in order to assess bonus progress. Predictive will provide
you with an performance assessment at the conclusion of each of these
meetings. Your 1999 bonus will be paid on or before February 15, 2000. You
must be employed by Predictive on the date of the bonus payment in order to
be eligible for the bonus.
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II. EQUITY PARTICIPATION
We believe strongly in equity participation for key members of staff.
At the same time, equity is not given lightly, and is targeted as an exceptional
reward for exceptional performance. We are confident that you will become an
integral member of the Predictive team, and as such, are eligible for the
following stock options under the terms and conditions specified in the
Predictive Systems Option Plan and your Stock Option Agreement:
- - 130,000 options to purchase common stock at $2.50/share vesting on the
following schedule:
- - 32,500 options vest on February 1, 2000.
- - 32,500 options vest on February 1, 2001.
- - 32,500 options vest on February 1, 2002.
- - 32,500 options vest on February 1, 2003.
In the event of an acquisition of the company or initial public offering,
vesting would follow the guidelines as set forth in the Predictive Systems
Option Plan.
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