EMPLOYMENT AGREEMENT
EXHIBIT 10.2
THIS EMPLOYMENT AGREEMENT (the “Agreement”) is made and entered into effective as of May 21,
2007 by and between FREESEAS INC., a Xxxxxxxx Islands corporation, (the “Company”), and Xxxxxxxx X.
Xxxxxxxxxxxx (the “Executive”).
R E C I T A L S:
A. The Company’s Board of Directors desires to employ the Executive to serve as the
Company’s Chief Financial Officer on the terms and subject to the conditions set forth in this
Agreement.
B. The Executive is willing to make his services available to the Company on the terms
and subject to the conditions set forth in the Agreement.
A G R E E M E N T:
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, the
parties hereby agree as follows:
1. Employment.
1.1 Employment and Term. Effective as of May 21, 2007 (the “Commencement
Date”), the Company shall employ the Executive and the Executive shall serve the Company, on the
terms and conditions set forth herein, for the period (the “Term”) beginning on the Commencement
Date and expiring on the second anniversary of the Commencement Date (the “Expiration Date”),
unless sooner terminated as hereinafter set forth; provided, however, that the Term of this
Agreement shall be extended for additional one-year periods if not less than 90 days prior to the
Expiration Date or any anniversary thereof, the Company delivers to the Executive written notice
that the Term of the Executive’s employment hereunder shall be extended for an additional year.
1.2 Duties of Executive. The Executive shall serve as Chief Financial
Officer of the Company and shall perform the duties of an executive commensurate with such
positions, shall diligently perform all services as may be reasonably assigned to him by the Board
of Directors of the Company and shall exercise such power and authority as may from time to time be
delegated to him by the Board of Directors of the Company. Executive acknowledges and agrees that
Executive may be required, without additional compensation, to perform services for any business
entity controlling, controlled by, or under common control with the Company by virtue of direct or
indirect beneficial ownership of voting securities of or voting interest in the controlled entity
(such business entities hereinafter individually and collectively, “Affiliates”), including, but
not limited to, service as an officer or director of the Company or any Affiliate. During the Term,
and consistent with the foregoing, Executive shall devote his time, attention, skill, and ability
to the faithful and diligent performance of the duties and responsibilities described herein.
2. Compensation.
2.1 Base Salary. The Executive shall receive a base salary at the annual
rate of Euro eighty five thousand two hundred (€ 85,200,00), (the “Base Salary”). The Base Salary
shall
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be payable in 12 equal installments, consistent with the Company’s normal payroll schedule,
net of any withholdings, the first such monthly installment to be effected at the end of May 2007.
The Executive’s Base Salary may be increased in the Board’s discretion, subject to reasonable
performance objectives as established by the Board.
2.2 Additional Cash Compensation. The Executive shall also be entitled to
receive such performance or merit bonuses (collectively, a “Bonus”) as shall be determined from
time to time during the Term by the Board or a designated committee of the Board.
3. Expense Reimbursement and Other Benefits.
3.1 Expense Reimbursement. Upon the submission of supporting documentation
by the Executive, and in accordance with Company policies for its executives, the Company shall
reimburse the Executive for all reasonable expenses actually paid or incurred by the Executive in
the course of and pursuant to the business of the Company.
3.2 Out of base Stipend. The Executive shall be entitled to a daily stipend
of Euro five hundred (€ 500,00) per day of travel or work away from the Athens/Piraeus, Greece area
in the exercise of his duties with a maximum of EUR 11,000 yearly.
3.3 Participation in Benefit Plans. The Executive shall be entitled to
participate in the Company’s insurance plans, deferred compensation plan, stock option plan,
retirement income or pension plan, short- and long-term disability programs, or other present or
future group employee benefit plan or program of the Company for which the Company’s executives
shall become eligible. Nothing contained in this Agreement shall prevent the Board of Directors
from amending, terminating or otherwise altering any such plan, program or
3.4 Vacation. The Executive shall be entitled to reasonable paid vacation
arrangement, during each year of the Term, in accordance with the policies of the Company.
3.5 Stock Options. The Executive shall be entitled from time to time during
the Term, in accordance with the Company’s policies and with performance objectives as may he
established by the Board, to receive grants of options to acquire shares of the Company’s Common
Stock.
4. Termination.
4.1 Termination by the Company for Cause. The Company may terminate this
Agreement, and Executive’s employment, “for cause” at any time. As used herein, “for cause” shall
mean any one of the following: (1) the willful breach or habitual neglect by Executive of his job
duties and responsibilities; (2) material default or other material breach by Executive of
Executive’s obligations hereunder or of any policy of the Company; (3) the commission of any act
constituting or involving dishonesty, fraud, embezzlement; or (4) conviction of any crime,
excluding minor traffic offenses. In the event the Company terminates the Executive’s employment
for cause, the Executive shall be entitled to receive only his Base Salary and earned up until the
date of said terminations otherwise the Executive shall be entitled to receive and the
Company obliged to pay upon termination an amount as provided by Greek law for termination without
cause of employment contracts with specified term.
4.2 Termination by Death or Disability. In the event of the Executive’s
death, this Agreement and the Executive’s salary and compensation shall automatically end. If the
Executive is
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unable to perform his employment duties for a cumulative period of 90 business days in
any six-month period, this Agreement and Executive’s employment will be automatically terminated.
The Company will pay the Executive on the date of termination the Executive’s earned compensation
set forth in this Agreement. Any bonus due under Section 2.2 shall be prorated to the date of
termination.
5. Confidential Information. Executive will, in the course of Executive’s
duties on behalf of the Company, be advised of certain business matters and affairs of the Company.
The duties performed by Executive place Executive in a position of trust and confidence with
respect to certain trade secrets and other proprietary information relating to the business of the
Company and not generally known to the public. This proprietary information includes sales or sales
strategies or prospects, pricing or pricing strategies, advertising or promotional programs,
inventions, developments, or discoveries of the Company, customer lists, finances, including
prices, costs, and revenues, and other business arrangements, plans, procedures and strategies
(collectively, the “Confidential Information”). Both during and after the Term, Executive shall
not, directly or indirectly, divulge, publish, communicate, or make available to any person,
corporation, governmental agency, or other entity (except in performing Executive’s duties
hereunder), or use for Executive’s own or any other person or entity’s purposes or benefit, any
Confidential Information. Executive shall use his best efforts to prevent the publication or
disclosure by any other person or entity of any such Confidential Information. While Executive is
employed by the Company, all documents and Confidential Information compiled, received, held, or
used by Executive in connection with the business of the Company shall remain the Company’s
property. Notwithstanding anything to the contrary contained herein, Confidential Information shall
not include (i) information known to Executive prior to his employment with the Company; (ii)
information otherwise in the public domain, or (iii) information requested pursuant to judicial
process.
6. Books and Records. All books, records, accounts and similar repositories
of Confidential Information of the Company, whether prepared by the Executive or otherwise coming
into the Executive’s possession, shall be the exclusive property of the Company, as the case may
be, and shall be returned immediately to the Company on termination of this Agreement.
7. Non-Compete. As a condition of employment with the Company, Executive
agrees that, so long as Executive is employed by the Company and for a period of three months
thereafter, Executive shall not, directly or indirectly, whether or not for compensation, be
engaged in or have any financial interest in any business competing with the business of the
Company as conducted or as may be conducted in the future. For purposes of this Agreement, the
definition of “engaged in” or “have financial interest in” a business shall include being employed,
or being a partner in an entity which is engaged in a business competing with that of the Company
or having an equity or other financial interest in an entity engaged in a business competing with
that of the Company. Notwithstanding the foregoing (i) the ownership of securities of any competing
entity representing less than 20% of any class of securities of any competing entity issued and
outstanding, and (ii) any interest acquired by the laws of descent or distribution shall not be
prohibited hereunder. The performance of services on behalf of and the owning of securities of any
Affiliate shall not be prohibited hereunder.
8. Solicitation of Employees and Clients. As a condition of employment with
the Company, and so long as executive is employed by the Company and for a period of one year
thereafter, Executive shall not directly or indirectly, solicit, interfere with, hire, or entice
away from the Company or any of its Affiliates (i) any person who is or was employed by the Company
or any of its Affiliates, or (ii) any client or customer of the Company or any potential client or
customer of the Company with which the Company was actively engaged in sales or promotional
efforts.
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9. Injunction and Equitable Relief. It is recognized and hereby
acknowledged by the parties hereto that a breach by the Executive of any of the covenants contained
in this Agreement will cause irreparable harm and damage to the Company, the monetary amount of
which may be virtually impossible to ascertain. As a result, the Executive recognizes and hereby
acknowledges that the Company shall be entitled to an injunction from any court of competent
jurisdiction enjoining and restraining any violation of any or all of the covenants contained in
this Agreement by the Executive or any of his affiliates, associates, partners or agents, either
directly or indirectly, together with all other appropriate equitable relief, and that such right
to injunction and equitable relief shall be cumulative and in addition to whatever other remedies
the Company may possess.
10. Binding Effect. This Agreement shall inure to the benefit of and shall
be binding upon the parties hereto, their personal representatives, successors, heirs and assigns.
11. Severability. Invalidity or unenforceability of any provision hereof
shall in no way affect the validity or enforceability of any other provisions.
12. Terminology. All personal pronouns used in this Agreement, whether used
in the masculine, feminine or neuter gender, shall include all other genders; the singular shall
include the plural and vice versa. Titles of paragraphs are for convenience only, and shall neither
limit nor amplify the provisions of the Agreement itself.
13. Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the Hellenic Republic and any dispute hereunder shall be exclusively
resolved by arbitration in Athens or Piraeus, Greece in accordance with Greek civil procedures
code.
14. Entire Agreement, This Agreement contains the entire understanding
between the parties and may not be changed or modified except by an agreement in writing signed by
all the parties.
15. Notices. Any notice required or permitted to be delivered hereunder
shall be deemed to be delivered when deposited in the official mail, postage prepaid, registered or
certified mail, return receipt requested, addressed to the Company at its principal executive
offices and addressed to the Executive at his address of residence as set forth in the Company’s
records, or to such other address as either party hereto shall from time to time designate to the
other party by notice in writing as provided herein.
16. Attorney’s Fees. In the event that any action is filed or arbitration
is conducted regarding this Agreement, the unsuccessful party shall pay to the prevailing party, in
addition to all other sums that either party may be called on to pay, a reasonable sum for
attorney’s fees, including fees incurred in negotiation, preparation for trial or arbitration, and
all appeals and enforcement proceedings.
17. Counterparts. This Agreement may be executed in any number of
counterparts and each such counterpart shall for all purposes be deemed an original.
18. Assignability. This Agreement shall not he assigned by either party;
provided, however, this Agreement may be assigned by the Company without the Executive’s consent to
the purchaser in a transaction involving the sale of all or substantially all of the Company’s
assets and Executive may assign the right to receive compensation hereunder to a designee without
the Company’s consent.
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IN WITNESS WHEREOF, this Agreement has been duly signed by the parties hereto on the day and
year first above written.
| COMPANY: FREESEAS INC. |
||||
| By: | /s/ Ion Varouxakis | |||
| Name: | Ion Varouxakis | |||
| Title: | Chairman and CEO | |||
| EXECUTIVE: |
||||
| /s/ Xxxxxxxx X. Xxxxxxxxxxxx | ||||
| Xxxxxxxx X. Xxxxxxxxxxxx | ||||
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