EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") between Southport,
Inc., a Louisiana Corporation ("Company"), and Xxxxxxx X.
Xxxxxx, Xx. ("Employee") is dated as of January 1, 1998 (the
"Agreement Date").
WHEREAS, Employee is currently employed by the Company;
and
WHEREAS, the Company desires to retain the services of
Employee pursuant to the terms of this Agreement and Section
4.6 of that certain Stock Purchase Agreement dated November 12,
1997, by and between Gulf Island Fabrication, Inc. and Xxxxxxx
X. Xxxxxx, Xx., Xxxxxxx X. Xxxxxx, Xx., Xxxxxx X. Xxxxxx, Xxxxx
X. X. Xxxxxx, Xxxxxxx X. Xxxxxx, Xxxx Xxxxxxx, Xxxx Xxxxxx,
and Xxxxxxx Xxxxxx (the "Stock Purchase Agreement").
NOW THEREFORE in consideration of the premises and of the
mutual premises, covenants, and undertakings hereinafter set
forth, the Company and the Employee agree as follows:
1. Employment Capacity and Term.
(a) Capacity and Term. The Employee will serve as
the President and Chief Executive Officer of the Company for
the period beginning on the Agreement Date through the fourth
anniversary of the Agreement Date (the "Employment Term"),
subject to any earlier termination of Employee's status as an
employee pursuant to this Agreement. If Employee continues to
serve as an employee of the Company after such fourth
anniversary, the Employment Term shall continue until the last
day of each month during which his employment continues.
Following the term of this Agreement, each party shall have the
right to enforce all rights, and shall be bound by all
obligations, of such party that are continuing rights and
obligations under the terms of this Agreement.
(b) Duties. As the President and Chief Executive
Officer, the Employee shall perform such duties, consistent
with the Employee's job title, as may be prescribed from time
to time by the Board of Directors of the Company (the "Board")
and shall perform such duties as are described in the Company's
Bylaws. Such duties may include serving as an officer of or in
another capacity with Gulf Island Fabrication, Inc., the
Company's parent corporation, or any of its other direct or
indirect subsidiaries (the "Affiliates").
2. Devotion to Responsibilities.
During the Employment Term, the Employee will devote
all of his business time and attention to the business of the
Company and its Affiliates, and he will not engage in or be
employed by any other business activity or business, whether or
not such business activity or business is for gain, profit or
other pecuniary advantage; provided, however, that this
Agreement shall not prohibit the Employee from: (i) serving as
a member of the board of directors, board of trustees or the
like of any for profit or non-profit entity, or performing
services of any type for any civic or community entity, whether
or not the Employee receives compensation therefor;
(ii) investing his assets in such form or manner as will
require no more than nominal services on the part of the
Employee in the operation of the business of the entity in
which such investment is made; or (iii) serving in various
capacities with, and attending meetings of, industry, trade or
governmental groups and associations, including without
limitation the industry, trade or governmental groups and
associations with which the Employee is currently involved, as
long as the Employee's engaging in activities permitted by
virtue of clauses (i), (ii) and (iii) above does not materially
interfere with the ability of the Employee to perform the
services and discharge the responsibilities required of him
under this Agreement.
3. Compensation and Benefits. The Company will provide
or will cause to be provided to the Employee the compensation
and benefits described below:
(a) Salary. An annual salary during the Employment
Term of $115,000 ("Annual Base Compensation"), payable to the
Employee in installments contemporaneous with payments of
salary to other salaried employees of the Company.
(b) Bonus. Such incentive bonuses as may be
determined by the Company's or Gulf Island's board of
directors.
(c) Other Benefits. During the Employment Term, the
Employee shall be entitled to all benefits and perquisites
provided to executive employees of the Company.
4. Termination of Employment.
(a) Death or Disability (i) The Employee's status
as an employee will terminate immediately and automatically
upon the Employee's death during the Employment Term.
(ii) (A) The Employee's status as an employee
shall terminate if the Employee has a disability that would
entitle him to receive benefits under the Company's long-term
disability insurance policy in effect at the time because he is
totally or partially disabled thereunder. Any such termination
shall become effective on the first day on which the Employee
is eligible to receive payments under such policy (or on the
first day that he would be so eligible, if he had applied
timely for such payments).
(B) If the Company has no long-term
disability plan in effect, if (1) the Employee is rendered
incapable because of physical or mental illness of
satisfactorily discharging his duties and responsibilities
under this Agreement for a period of 90 consecutive days or for
an aggregate of 120 days during any period of 365 days and (2)
a duly qualified physician chosen by the Company and acceptable
to the Employee or his legal representatives so certifies in
writing, the Board shall have the power to determine that the
Employee has become disabled. If the Board makes such a
determination, the Company shall have the continuing right and
option, during the period that such disability continues, and
by notice given in the manner provided in this Agreement, to
terminate the status of Employee as an employee. Any such
termination shall become effective 30 days after such notice of
termination is given, unless within such 30-day period, the
Employee becomes capable of rendering services of the character
contemplated hereby (and a physician chosen by the Company and
acceptable to the Employee or his legal representatives so
certifies in writing) and the Employee in fact resumes such
services.
(C) The term "Disability Effective Date"
shall mean the date on which termination of employment becomes
effective due to Disability.
(iii) The Employee's death or the Employee's
incapacity due to physical or mental illness to discharge the
responsibilities assigned by this Agreement shall not
constitute a breach of this Agreement by the Employee.
(b) Cause. The Company may terminate the Employee's
status as an employee for Cause, pursuant to a resolution
adopted by the Board at a meeting in which Employee shall have
had an opportunity to present his position with respect
thereto. As used herein, termination by the Company of the
Employee's status as an employee for "Cause" shall mean
termination as a result of:
(i) the Employee's breach of this Agreement that
continues for a period of ten days after written notice thereof
is given by the Company to Employee;
(ii) the willful engaging by Employee in
misconduct injurious to the Company;
(iii) the Company's failure to achieve Net
After-Tax Income (as defined in the Stock Purchase Agreement)
of more than $1.8 million for any calendar year ending on
December 31, 1998; December 31, 1999; December 31, 2000; or
December 31, 2001; provided, however, that such failure shall
not result in termination for Cause unless the Company has
notified Employee of an intent to terminate the Employee for
Cause within 14 days of the determination of Net After-Tax
Income pursuant to the Stock Purchase Agreement; or
(iv) Employee's breach of an express, reasonable
resolution of the Board.
(c) Good Reason. The Employee may terminate his
status as an employee for Good Reason. As used herein, the
term "Good Reason" shall mean:
(i) any breach by the Company of its
obligations under Paragraph 3 of this Agreement that continues
for a period of 10 days after written notice thereof is given
by the Employee to the Company; or
(ii) the failure by the Company to obtain the
assumption of its obligations under this Agreement by any
successor or assign as contemplated in Paragraph 11 of the
Agreement.
(d) Notice of Termination. Any purported notice of
termination of the Employee's status as an employee must be
communicated in a writing delivered to the other party as
provided in Paragraph 12 hereof (a notice of termination
complying with this sentence is referred to in this Agreement
as a "Notice of Termination"). Any such Notice of Termination
that purports to terminate Employee's employment for Cause or
for Good Reason shall specify the provision or provisions of
this Agreement relied upon by the party giving such notice and
shall set forth in reasonable detail the facts and
circumstances claimed by such party to provide a basis for
termination of the Employee's employment under the provision(s)
so indicated.
(e) Date of Termination. "Date of Termination"
means: (i) if Employee's employment is terminated by the
Company for Cause, or by Employee for Good Reason, the date of
delivery of the Notice of Termination or any later date
specified therein, as the case may be; (ii) if the Employee's
employment is terminated by the Company other than for Cause or
disability, the Date of Termination shall be the date on which
the Company notifies the Employee of such termination; and
(iii) if Employee's employment is terminated by reason of his
death or disability, the Date of Termination shall be the date
of death of Employee or the Disability Effective Date, as the
case may be.
5. Effects of Termination.
(a) Good Reason, Other than for Cause, Death or
Disability. If (A) the Company terminates the Employee's
status as an employee other than for Cause, death or
disability, or (B) the Employee shall terminate his employment
for Good Reason, then the Company shall pay to the Employee in
a lump sum in cash within 30 days after the Date of Termination
the aggregate of the following amounts:
(1) the sum of (x) the amount of the
Employee's Annual Base Compensation earned through the Date of
Termination, to the extent not theretofore paid and (y) any
compensation previously deferred by the Employee (together with
any accrued interest on earnings thereon) and any accrued
vacation pay, in each case to the extent not previously paid
(the sum of the amounts described in clauses (x) and (y) being
hereinafter referred to as the "Accrued Obligations");
(2) the aggregate amount of the
Employee's Annual Base Compensation for the period beginning on
the Date of Termination and continuing through the last day of
the Employment Term (such amount being referred to herein as
the "Non-Accrued Compensation"); and
(3) to the extent not theretofore
paid or provided, the Company shall timely pay or provide to
the Employee any other amounts required to be paid or provided
or which the Employee is eligible to receive under any plan,
program, policy or practice of the Company (such other amounts
being referred to herein as the "Other Benefits").
(b) Death. If the Employee's status as an employee
is terminated by reason of the Employee's death, this Agreement
shall terminate without further obligations to the Employee's
legal representatives under this Agreement, other than for
payment of Accrued Obligations and the timely payment or
provision of Other Benefits.
(c) Disability. If Employee's status as an employee
is terminated by reason of Employee's disability, this
Agreement will terminate without further obligation to the
Employee, other than the payment of Accrued Obligations and the
timely payment or provision of Other Benefits.
(d) Cause. If Company shall terminate Employee's
status as an employee for Cause, this Agreement shall terminate
without further obligation to the Employee other than for
obligations imposed by law and obligations imposed pursuant to
any employee benefit plan maintained by the Company or its
Affiliates.
(e) Other than Good Reason. If the Employee
terminates his status as an employee for reasons other than
Good Reason, then this Agreement shall terminate without
further obligations to the Employee other than further
obligations imposed by law and obligations imposed pursuant to
any employee benefit plan maintained by the Company or its
Affiliates.
(f) Resignation. If Employees employment hereunder
is terminated for any reason other than death, such termination
shall immediately and with no further action on the part of any
person terminate any position he holds as an officer of the
Company and each of its Affiliates. If Employee is a director
of the Company or of any Affiliate, and his employment is
terminated for any reason other than death, the Employee
shall, if requested by the Company, immediately resign as a
director of the Company and any such Affiliate; if such
resignation is not received when so requested, the Employee
shall forfeit any right to receive any payments pursuant to
this Agreement.
6. Trade Secrets, Etc. The Employee shall hold in a
fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the
Company or any of its Affiliates and their respective
businesses and operations, which shall have been obtained by
the Employee during the Employee's employment (whether prior to
or after the Agreement Date) and which shall not have become
public knowledge (other than by acts of the Employee or any of
his representatives in violation of this Agreement). At the
end of the Employment Term, the Employee agrees (i) not,
without the prior written consent of the Company or as may be
otherwise required by law or legal process, to communicate or
divulge any such information, knowledge or data to any party
other than the Company and (ii) to deliver promptly to the
Company any confidential information, knowledge or data in his
possession, whether produced by the Company or any of its
Affiliates or by the Employee, relating to the business of the
Company or any of its Affiliates and joint ventures or any
past, current or prospective activity of the Company or any of
its Affiliates and joint ventures.
7. Customer Lists. The Employee recognizes and
acknowledges that any written list or lists of the customers of
the Company or any of its Affiliates and joint ventures
("customer lists"), as such customer lists may exist from time
to time, are valuable, special and unique assets of the
Company. The Employee agrees that he will not use for his own
personal benefit or disclose such customer lists to any person,
firm, corporation, association or other entity for any reason
or purpose whatsoever.
8. Limited Covenant Not to Compete. (a) During the
Employment Term and for a period of two years following the
Date of Termination, with respect to each State of the United
States or other jurisdiction, or specified portions thereof, in
which the Employee during the Employment Term regularly: (A)
makes contact with customers of the Company or any of its
Affiliates; (B) conducts the business of designing,
manufacturing and marketing living quarters for offshore
drilling and production platforms (the "Business"); or (C)
supervises the activities of other employees of the Company or
any of its Affiliates, which jurisdictions or portions thereof
are identified in Appendix A attached hereto and forming a part
of this Agreement, and in which the Company or any of its
Affiliates engages in the Business (collectively, the "Subject
Areas"), Employee will restrict his activities as follows:
(i) Employee will not, directly or indirectly,
for himself or others, own, manage, operate, control, be
employed in an executive, managerial or supervisory capacity
by, or otherwise engage or participate in or allow his skill,
knowledge, experience or reputation to be used in connection
with, the ownership, management, operation or control of, any
company or other business enterprise engaged in the Business
within any of the Subject Areas;
(ii) Employee will not call upon any customer of
the Company or its Affiliates for the purpose of soliciting,
diverting or enticing away the business of such person or
entity, or otherwise disrupting any previously established
relationship existing between such person or entity and the
Company or its Affiliates;
(iii) Employee will not solicit, induce,
influence or attempt to influence any supplier, lessor,
licensor, potential acquiree or any other person who has a
business relationship with the Company or its Affiliates, or
who on the Date of Termination is engaged in discussions or
negotiations to enter into a business relationship with the
Company or its Affiliates, to discontinue or reduce the extent
of such relationship with the Company or its Affiliates;
(iv) Employee will not make contact with any of
the employees of the Company or its Affiliates with whom he had
contact during the course of his employment with the Company
for the purpose of soliciting such employee for hire, whether
as an employee or independent contractor, or otherwise
disrupting such employee's relationship with the Company or its
Affiliates; and
(v) Employee will not hire, on behalf of
himself or any company engaged in the Business with which
Employee is associated, any employee of the Company or its
Affiliates as an employee or independent contractor, whether or
not such engagement is solicited by Employee.
(b) Employee agrees that he will from time to time
upon the Company's request promptly execute any supplement,
amendment, restatement or other modification of Appendix A as
may be necessary or appropriate to correctly reflect the
jurisdictions which, at the time of such modification, should
be covered by Appendix A and this Section 8. All references to
Appendix A in this Agreement shall be deemed to refer to
Appendix A as so supplemented, amended, restated or otherwise
modified from time to time.
9. Certain Proprietary Rights. The Employee agrees to
and hereby does assign to the Company all his right, title and
interest in and to all inventions, business plans, work models
or procedures, whether or not patentable, which are made or
conceived solely or jointly by him:
(a) at any time during the term of his employment by
the Company, or
(b) with the use of time or materials of the
Company. The Employee agrees to communicate to the Company or
its representatives all facts known to him concerning such
matters, to sign all necessary instruments, make all necessary
oaths and generally, at the Company's expense, to do everything
reasonably practicable (without expense to the Employee) to aid
the Company in obtaining and enforcing proper legal protection
for all such matters in all countries and in vesting title to
such matters in the Company. At the Company's request (during
or after the term of this Agreement) and expense, the Employee
will promptly execute a specific assignment of title to the
Company, and perform any other acts reasonably necessary to
implement the foregoing assignment.
10. Injunctive Relief. In the event of a breach or
threatened breach by the Employee of the provisions of Sections
6, 7, 8 or 9 of this Agreement during or after the term of this
Agreement, the Company shall be entitled to injunctive relief
restraining the Employee from violation of such paragraph.
Nothing herein shall be construed as prohibiting the Company
from pursuing any other remedy at law or in equity it may have
in the event of breach or threatened breach of this Agreement
by the Employee, including without limitation, the recovery of
damages and/or costs and expenses, such as reasonable
attorneys' fees, incurred by the Company as a result of any
such breach. In addition to the exercise of the foregoing
remedies, the Company shall have the right upon the occurrence
of any such breach to cancel any unpaid salary, bonus,
commissions or reimbursements otherwise outstanding at the Date
of Termination. In the event Employee shall at any time
materially breach any noncompetition or nondisclosure
agreements contained in Section 8, the Company may suspend or
eliminate payments under Section 5 during the period of such
breach. Employee acknowledges that any such suspension or
elimination of payments would be an exercise of the Company's
right to suspend or terminate its performance hereunder upon
Employee's breach of this Agreement; such suspension or
elimination of payments would not constitute, and should not be
characterized as, the imposition of liquidated damages.
11. Binding Effect.
(a) This Agreement shall be binding upon and inure
to the benefit of the Company and any of its successors or
assigns.
(b) This Agreement is personal to the Employee and
shall not be assignable by the Employee without the consent of
the Company (there being no obligation to give such consent)
other than such rights or benefits as are transferred by will
or the laws of descent and distribution.
(c) The Company will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the assets or
businesses of the Company (i) to assume unconditionally and
expressly this Agreement and (ii) to agree to perform all of
the obligations under this Agreement in the same manner and to
the same extent as would have been required of the Company had
no assignment or succession occurred, such assumption to be set
forth in a writing reasonably satisfactory to the Employee. In
the event of any such assignment or succession, the term
"Company" as used in this Agreement shall refer also to such
successor or assign.
12. Notices. Any notice or other communication required
under this Agreement shall be in writing, shall be deemed to
have been given and received when delivered in person, or, if
mailed, shall be deemed to have been given when deposited in
the United States mail, first class, registered or certified,
return receipt requested, with proper postage prepaid, and
shall be deemed to have been received on the third business day
thereafter, and shall be addressed as follows:
If to the Company, addressed to:
Southport, Inc.
c/o Gulf Island Fabrication, Inc.
000 Xxxxxxxx Xxxx
Xxxxx, Xxxxxxxxx 00000
Attn: Xxxxx X. Xxxxxxx
If to the Employee, addressed to:
Xxxxxxx X. Xxxxxx, Xx.
000 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxx 00000
or such other address as to which any party hereto may have
notified the other in writing.
13. Governing Law. This Agreement shall be governed by
and interpreted in accordance with the laws of the State of
Louisiana.
14. Entire Agreement. This Agreement, including Appendix
A, which is incorporated herein by reference and made a part
hereof, and the documents referred to herein, contain or refer
to the entire arrangement or understanding between the Employee
and the Company relating to the employment of the Employee by
the Company. No provision of the Agreement, including the
Appendices, may be modified or amended except by an instrument
in writing signed by or for both parties hereto.
15. Severability. If any term or provision of this
Agreement or the application thereof to any person or
circumstance, shall at any time or to any extent be invalid,
illegal or unenforceable in any respect as written, Employee
and the Company intend for any court construing this Agreement
to modify or limit such provision temporally, geographically or
otherwise so as to render it valid and enforceable to the
fullest extent allowed by law. Any such provision that is not
susceptible of such reformation shall be ignored so as to not
affect any other term or provision hereof, and the remainder of
this Agreement, or the application of such term or provision to
persons or circumstances other than those as to which it is
held invalid, illegal or unenforceable, shall not be affected
thereby and each term and provision of this agreement shall be
valid and enforced to the fullest extent permitted by law.
16. Waiver of Breach. The waiver by either party of a
breach of any provision of this Agreement shall not operate or
be construed as a waiver of any subsequent breach thereof.
17. Remedies Not Exclusive. No remedy specified herein
shall be deemed to be such party's exclusive remedy, and
accordingly, in addition to all of the rights and remedies
provided for in this Agreement, the parties shall have all
other rights and remedies provided to them by applicable law,
rule or regulation.
18. Beneficiaries. Whenever this Agreement provides for
any payment to be made to the Employee or his estate, such
payment may be made instead to such beneficiary or
beneficiaries as the Employee may have designated in writing
and filed with the Company. The Employee shall have the right
to revoke any such designation from time to time and to
redesignate any beneficiary or beneficiaries by written notice
to the Company.
19. Company's Reservation of Rights. Employee
acknowledges and understands that the Employee serves at the
pleasure of the Board of Directors and that the Company has the
right at any time to terminate Employee's status as an employee
of the Company, or to change or diminish his status as
President and Chief Executive Officer during the Employment
Term, subject to the rights of the Employee to claim the
benefits conferred by Section 5(a) hereof if such action
constitutes a termination by the Company without Cause or a
termination by the Employee for Good Reason.
20. Counterparts. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one and the
same instrument.
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IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date just above written.
SOUTHPORT, INC.
By: /s/ Xxxxx X. Xxxxxxx
-------------------------------
Name: Xxxxx X. Xxxxxxx
Title: Chairman of the Board
EMPLOYEE
Name: /s/ Xxxxxxx X. Xxxxxx, Xx.
-----------------------------
Xxxxxxx X. Xxxxxx, Xx.
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APPENDIX A
JURISDICTIONS IN WHICH COMPETITION IS RESTRICTED
AS PROVIDED IN SECTION 8 OF THE EMPLOYMENT AGREEMENT
Xxxxxxxxx Xxxxxx, Louisiana
Lafayette Parish, Louisiana
Orleans Parish, Louisiana
St. Xxxx Xxxxxx, Louisiana
Terrebonne Parish, Louisiana
Xxxxxx County, Texas
Los Angeles County, California
San Francisco County, California
Mexico
France
United Kingdom
Egypt
Trinidad
Brazil
China
Thailand
Australia
Nigeria
India
Russia
Dubai
Qatar
Cameroon
Angola
Venezuela
Bulgaria
Equatorial Guinea
Norway
Newfoundland
Ivory Coast
Malaysia
Singapore
Pakistan
Indonesia
Philippines
Vietnam
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