Exhibit 10.5
TORCH OFFSHORE, INC.
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective as of August,
2003 (the "Effective Date"), and is entered into between Torch Offshore, Inc., a
Delaware corporation (the "Corporation"), and Xxxxxxx Xxxxxx, a person of the
full age of majority (the "Employee").
1. Employment and Duties.
(a) The Corporation agrees to employ the Employee as Vice President,
International Business Development, as of the effective date of this
Agreement for the period set forth in paragraph 1(c) below, unless
employment is terminated sooner as provided herein.
(b) The Employee accepts employment and agrees to devote his full time
and attention to the performance of his duties as determined, from time to
time, by the Chief Executive Officer or the Board of Directors of the
Corporation.
(c) The Employee shall commence his duties as of September 22, 2003
(or other agreeable date) (the "Hire Date"), and shall continue to serve in
the employ of the Corporation until September 22, 2005 (the "Initial
Term"), except as provided herein. Upon the expiration of the Initial Term,
this Agreement shall be automatically renewed for successive one-year terms
unless terminated by either party at least sixty (60) days prior to the end
of the then current term (each successive year is the "Renewal Term").
(d) Compensation. The Corporation shall pay to the Employee the
following amounts, subject to the terms and conditions set forth in this
Agreement:
(e) An annual salary of $200,000.00, such amount shall be prorated and
paid in accordance with the Corporation's customary payroll practices.
(f) The Employee shall be eligible to participate in the Corporation's
Incentive Bonus Plan, as determined by the Compensation Committee of the
Board of Directors of the Corporation, in its sole discretion, during the
fiscal year commencing January 1, 2004 and ending December 31, 2004, based
on the financial results of such fiscal year and subject to the terms and
conditions of such bonus plan. The Employee's eligibility to participate in
such bonus plan during subsequent fiscal year time periods shall be
determined by the Compensation Committee of the Board of Directors of the
Corporation, in its sole discretion.
(g) If the Corporation terminates the employment of the Employee for
any reason other than Cause (as defined herein), then the Corporation shall
pay to the Employee severance payments of six (6) month's of salary at his
then current rate, to be paid in accordance with the Corporation's standard
payroll practices.
Any amount(s) payable under this Agreement shall be subject to the
withholding of such income and employment taxes as may be required by law to be
withheld.
2. Payment or Reimbursement of Expenses. Subject to compliance by the
Employee with such policies regarding expenses and expense reimbursements as may
be adopted, from time to time, by the Corporation, the Employee shall be paid or
reimbursed for reasonable expenses actually incurred in
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connection with the performance of his duties hereunder and in the furtherance
of the business and affairs of the Corporation. Any such reimbursement shall be
made within a reasonable period after presentation by the Employee of an
itemized account of such expenses, accompanied by appropriate receipts
satisfactory to the Corporation. In no event shall any expense be paid or
reimbursed, unless properly accounted for to the extent necessary to
substantiate the Corporation's Federal income tax deduction under the applicable
provisions of the Internal Revenue Code of 1986, as amended (the "Code"), and
the regulations promulgated thereunder or any similar state or federal law or
regulation.
3. Relocation Expenses. The Employee shall be paid a one-time lump sum
of $35,000.00 to cover expenses incurred in connection with the Employee's
relocation. The Employee shall be entitled to a monthly miscellaneous living
allowance of $1,500.00 (the "Living Allowance") during the three (3)-month
period immediately following the Hire Date pursuant to the Company's normal
payroll practices.
4. Additional Benefits.
(a) The Employee shall be eligible to participate in such qualified
employee benefit plans and other welfare or fringe benefits as may be
maintained by the Corporation for the benefit of employees, from time to
time. Such participation shall be determined in accordance with the terms
and conditions of each such separate plan or program.
(b) The Employee expressly acknowledges and agrees that,
notwithstanding any provision of this Agreement to the contrary, the
Employee shall not be eligible to receive from the Corporation any form of
severance pay or other form of termination benefit, except as expressly
provided herein (other than coverage under COBRA or other form of legally
mandated benefit available after the termination of employment).
(c) The Employee shall be entitled to twenty (20) business days of
paid vacation during the Initial Term and each Renewal Term thereafter, if
any.
(d) The Employee shall be entitled to receive a monthly car allowance
of $500.00 for use of an automobile for business purposes and shall be
reimbursed for business mileage (non-commuting and non-personal) at $0.11
per mile, subject to approval by the Chief Financial Officer of the
Corporation. The Employee shall document any such business mileage in a log
book in the form and manner established by the Chief Financial Officer of
the Corporation and shall use the data in such log book to seek
reimbursement for business mileage.
(e) The Employee shall be granted an award of 15,000 option shares
pursuant to the Corporation's 2001 Long Term Incentive Plan at a strike
price to be determined on the Hire Date.
5. Termination.
(a) Either party may terminate this Agreement by providing the other
party with sixty (60) days advance written notice.
(b) If the Employee dies or becomes totally disabled (as determined by
the Board of Directors or the Chief Executive Officer of the Corporation),
this Agreement and the Employee's rights hereunder shall automatically
terminate as of the date of such death or disability.
(c) The Corporation may terminate this Agreement and the Employee's
rights hereunder at any time for Cause, which shall mean (i) any willful
breach of duty by the Employee in the course of the performance of his
duties hereunder or for the habitual neglect by the Employee of such
duties, each as determined by the Board of Directors of the Corporation,
which
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continues after written notice to the Employee; (ii) the conviction of any
felony or plea of "no contest" to any charge that the Employee has
committed any felony; (iii) arrest or formal charge with having committed
any felony which involves embezzlement, theft, bribery, or other
business-related crimes or any aggravated crime against a person; (iv)
arrest or otherwise formal charge with a felony or any crime involving
moral turpitude or any other criminal activity or unethical conduct which,
in the opinion of the Board of Directors of the Corporation, would
materially impair the Employee's ability to perform his duties hereunder or
would impair the business reputation of the Corporation; (v) failure or
refusal to comply with the policies, standards and regulations of the
Corporation after written notice to the Employee; or (vi) breach of the
provisions of paragraph 8 hereof.
6. Noncompetition and Nonsolicitation. For a period of six (6) months
following any termination of the Employee's employment by the Corporation, the
Employee agrees that, with respect to (a) the parishes within the State of
Louisiana set forth on Schedule A attached hereto, (b) the counties within the
States of Texas, Alabama, Florida, and Mississippi set forth on Schedule A
attached hereto, including the territorial waters of the United States located
offshore of such areas, (c) France, (d) Italy, (e) Athens, (f) United Arab
Emirates and (g) Norway, each of which the Employee stipulates and agrees that
the Corporation carries on or intends to carry on a like business, the Employee
shall not, directly or indirectly, for his own benefit or to the detriment of
the Corporation or its subsidiaries or affiliates:
(a) Own, manage, operate, control, or participate in the ownership,
management, operation, or control of a business (however structured) that
carries on or engages in any manner (excluding stock in a publicly held
corporation), in the Pipelay and Subsea Construction Business. For this
purpose, the term "Pipelay and Subsea Construction Business" shall refer to
the installation, laying, and/or burying of transmission lines, trunk
lines, and flowlines, laying of all rigid, flexible, reeled, or coiled
tubing and installing, laying, and/or burying of control, power umbilicals
and subsea communication or power cables, and pipeline tie-ins, pipeline
burial, riser installation and survey, inspection, maintenance, and repair
services in connection with oil and gas pipelines;
(b) Perform any services similar to the primary services he performed
while employed by the Corporation or any of its subsidiaries or affiliates
for any person, partnership, corporation, association, group, or other
entity engaged in the Pipelay and Subsea Construction Business (as defined
above), whether as an employee, independent contractor, or otherwise; or
(c) Directly or indirectly, (i) induce, entice, recruit or solicit or
attempt to induce, entice, recruit or solicit any employee of the
Corporation or any of its subsidiaries or affiliates for any purpose or in
any manner detrimental to the Corporation or its business or operations,
(ii) employ any employee of the Corporation or any of its subsidiaries or
affiliates or (iii) contact, communicate with, solicit or attempt to
solicit the business of any customer or acquisition prospect of the
Corporation or any of its subsidiaries or affiliates.
The Employee acknowledges that these foregoing prohibitions, for
which he received consideration from the Corporation as provided in paragraph
2(c) hereof, are ancillary to otherwise enforceable provisions of this
Agreement. The Employee further acknowledges that he will derive significant
value from the Corporation's agreement in paragraph 8 hereof to provide the
Employee with that Confidential Information to enable the Employee to optimize
the performance of the Employee's duties to the Corporation or any of its
subsidiaries or affiliates. The Employee further acknowledges that his
fulfillment of the obligations contained in this Agreement, including, but not
limited to, the Employee's obligation neither to disclose nor to use the
Corporation's Confidential Information other than for the Corporation's
exclusive benefit and the Employee's obligations not to compete and not to
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solicit contained in this paragraph 7 above, are necessary to protect the
Corporation's Confidential Information and, consequently, to preserve the value
and goodwill of the Corporation.
The Employee acknowledges that the time, geographic area and scope
limitations of the Employee's obligations under this paragraph 7 above are
reasonable and do not impose a greater restraint than is necessary to protect
the good will or other business interests of the Company, such as the
Corporation's need to protect its Confidential Information. The Employee further
acknowledges that he will not be precluded from gainful employment if the
Employee is obligated not to compete with the Corporation during the period and
within the geographic areas as described above.
The parties hereto agree that each of the foregoing prohibitions in this
paragraph 7 is intended to constitute a separate restriction, one for each city,
county, parish, state and country in the restricted geographic area. In the
event that the prohibitions in this paragraph 7 are deemed to exceed the time,
geographic area or scope limitations permitted by the governing law, then such
provisions shall be reformed to the maximum time, geographic area or scope
limitations, as the case may be, then permitted by such law. Further, should any
such prohibition be declared invalid or unenforceable and unable to be reformed
as described above, such prohibition shall be deemed severable from and shall
not affect the remainder thereof.
7. Confidential Information.
(a) The Corporation agrees that it will provide the Employee with
Confidential Information, as defined below, that will enable the Employee
to optimize the performance of the Employee's duties to the Corporation. In
exchange, the Employee agrees to use such Confidential Information solely
for the Corporation's benefit. The Corporation and the Employee agree and
acknowledge that its provision of such Confidential Information is not
contingent on the Employee's continued employment with the Corporation or
any of its subsidiaries or affiliates. Notwithstanding the preceding
sentence, upon the termination of the Employee's employment for any reason,
the Corporation shall have no obligation to provide the Employee with its
Confidential Information. "Confidential Information" means any proprietary
information, technical data, trade secrets or know-how of the Corporation
or any of its subsidiaries or affiliates, including, but not limited to,
research, product plans, products services, customer lists and customers
(including, but not limited to, customers of the Corporation on whom the
Employee called or with whom the Employee became acquainted during the term
of the Employee's employment), markets, software, developments, inventions,
processes, formulas, technology, designs, drawings, engineering, hardware
configuration information, marketing finances or other business information
disclosed to the Employee by the Corporation either directly or indirectly
in writing, orally or by drawings or observation of parts or equipment.
Confidential Information does not include any of the foregoing items which
has become publicly known and made generally available through no wrongful
act of the Employee or of others who were under confidentiality obligations
as to the item or items involved or improvements or new versions.
(b) The Employee further agrees not to disclose, either while employed
by the Corporation or any of its subsidiaries or affiliates or at any time
thereafter, to any person not employed by the Corporation or not engaged by
the Corporation to render services to the Corporation, without prior
written authorization of the Corporation, any Confidential Information.
This paragraph 8 shall not preclude the Employee from disclosure of
Confidential Information required by law or court order. The Employee
further agrees that, upon the expiration or termination of this Agreement
for any reason, he will not take with him, without the prior written
authorization of the Corporation, any document, magnetic or other storage
media, or any other books, records, files, or confidential or proprietary
information of the Corporation or any of its subsidiaries or affiliates.
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(c) Upon the expiration or termination of the term of this Agreement
or upon the request of the Corporation or any subsidiary or affiliate, the
Employee shall promptly deliver to the Corporation (and shall not keep in
the Employee's possession) all Confidential Information, all written
materials, records, and documents made by the Employee or in the possession
of the Employee during or after the term of this Agreement concerning the
business or affairs of the Corporation or any of its subsidiaries or
affiliates, and any other items or property held by or for the Employee,
but owned or used by the Corporation or such subsidiary or affiliate, as
the case may be.
8. Notices. All notices, requests, demands, and other communications
provided for by this Agreement shall be in writing and shall be deemed to have
been duly given when delivered in person or mailed by United States certified
mail, return receipt required, postage prepaid, addressed as follows:
If to the Employee: If to the Corporation:
Xxxxxxx Xxxxxx Torch Offshore, Inc.
__________________________ 000 Xxxxxxx Xxxxxx, Xxxxx 000
__________________________ Xxxxxx, Xxxxxxxxx 00000
__________________________ Attention: Xxxx Xxxxxxxxxx, CEO
or to such other address as any party may have furnished to the other in writing
in accordance herewith, except that notices of change of address shall be
effective only upon receipt.
9. Governing Law. The provisions of this Agreement shall be construed in
accordance with the substantive local law of the State of Louisiana, without
consideration of the conflicts of law provisions thereof.
10. Successors. This Agreement shall be assignable by the Corporation,
with the prior written consent of the Employee. The Employee's obligation to
provide services hereunder, being personal to the Employee, may not be assigned
by the Employee.
11. Remedies. Each party acknowledges that the other party will have no
adequate remedy at law if the first party violates certain of the terms of this
Agreement, and that the other party shall have the right, to the extent
permitted by applicable law, in addition to any other rights or remedies it may
have, to obtain from any court of competent jurisdiction, injunctive relief to
restrain any breach or threatened breach hereof or otherwise to specifically
enforce the provisions hereof.
12. Waiver. No waiver of any obligation, right or remedy under this
Agreement shall be effective, unless such waiver is made in writing, specifying
the terms of this Agreement subject to waiver and executed by the party to be
charged with such waiver. A waiver by either party of any of his or its rights
or remedies hereunder on any occasion shall not be a bar to the exercise of the
same right or remedy on any subsequent occasion or of the exercise of any other
right or remedy at any time.
13. Integration and Amendments. This Agreement constitutes the entire
agreement and understanding between the parties with respect to the subject
matter hereof and supersedes any prior agreement or understanding, whether
written or oral, relating to such subject matter. No modification or amendment
to this Agreement shall be effective or binding unless in writing, specifying
such modification or amendment, executed by both of the parties hereto.
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14. Headings. The headings contained in this Agreement are for reference
purposes only and shall not affect the construction or interpretation of this
Agreement.
15. Severability. Should any section, provision, or portion of this
Agreement be declared invalid or unenforceable in any jurisdiction, then such
section, provision, or portion shall be deemed to be (a) severable from this
Agreement as to such jurisdiction (but not elsewhere) and shall not affect the
remainder hereof and (b) amended to the extent, and only to the extent,
necessary to permit such section, provision, or portion, as the case may be, to
be valid and enforceable in such jurisdiction (but not elsewhere).
16. Survival of Certain Provisions. The rights and obligations of the
Employee under paragraphs 7 and 8 hereof shall survive the expiration or
termination of this Agreement.
THIS AGREEMENT was executed in multiple counterparts, each of which
shall be deemed an original, as of the dates set forth below, but to be
effective as of the Effective Date.
EMPLOYEE: TORCH OFFSHORE, INC.
/s/ XXXXXXX XXXXXX By: /s/ XXXXXX XXXXXXXX
------------------ -------------------
Xxxxxxx Xxxxxx Title: Chief Operating Officer
Date: September 22, 2003 Date: September 22, 2003
Schedule A - Counties and Parishes in which Competition is Prohibited
I. TEXAS
Xxxxxxxxx Xxxxxxxx Xxxxxx
Galveston Brazoria
Xxxxxxx Aransas
Nueces Xxxxxxx
XX. LOUISIANA
Cameron Vermilion Lafayette
Iberia St. Xxxx Orleans
Terrebonne Lafourche
Jefferson Plaquemines
III. MISSISSIPPI
Xxxxxxx Xxxxxxxx
Xxxxxxx
XX. ALABAMA
Mobile
V. FLORIDA
Escambia Santa Xxxx
Pinnellas Hillsborough
Manatee Brevard
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