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Exhibit 10.5
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement"), dated as of June 18,
1998, is by and between Marine Transport Corporation, a Delaware corporation
(the "Company") and Xxxxx X. Xxxxx ("Executive").
W I T N E S S E T H
WHEREAS, the Company desires to employ the Executive; and
WHEREAS, the Executive is willing to be employed by the Company, as
Vice President, Secretary and General Counsel of the Company, for the period and
upon the terms and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants and
conditions contained herein, the Company and the Executive hereby agree as
follows:
1. Employment. The Company shall employ the Executive, and the
Executive accepts employment by the Company, as Vice President, Secretary and
General Counsel of the Company upon the terms and conditions herein, for the
period commencing as of June 17, 1998, and ending on June 16, 1999, subject to
termination as hereinafter provided (the period from June 17, 1998 through June
16, 1999, as such period may be extended as described in this paragraph, being
herein referred to as the "Employment Period"). The initial term of employment
shall be automatically extended for an additional period of one year unless 90
days written notice of termination is given by either party, and for additional
periods of one year thereafter unless 90 days written notice of termination is
given by either party.
2. Duties. (a) Throughout the Employment Period, the Executive shall
be Vice President, Secretary and General Counsel of the Company and shall report
to the Chief Executive Officer (the "CEO") of the Company, or other senior
officer of the Company as the CEO may direct. The Executive shall at all times
comply with Company policies and guidelines as in effect from time to time and
with the lawful and responsible instructions of the CEO.
(b) During the Employment Period, the Executive shall devote his
full-time working hours to his duties hereunder, except during vacation time,
any periods of illness and authorized leaves of absence. The Executive shall
have such responsibilities and authorities consistent with the status, title and
reporting requirements set forth herein as are appropriate to said position,
subject to change (other than diminution in position, authority, duties or
responsibilities) from time to time by the CEO.
(c) Throughout the Employment Period, the Executive shall faithfully
and diligently perform his duties under this Agreement and shall use his best
efforts to promote the interests of the Company.
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3. Compensation. During the Employment Period, as full compensation
to the Executive for his performance of the services hereunder and for his
acceptance of the responsibilities described herein, the Company agrees to pay
the Executive, and the Executive agrees to accept, the following salary and
other benefits:
(a) Salary
The Company shall pay the Executive a salary (the "Base Salary") at
the annual rate of $175,000. The Compensation Committee of the Board of
Directors of the Company (the "Compensation Committee") shall review such Base
Salary on an annual basis and may increase it, from time to time, in its sole
discretion. The Base Salary due the Executive hereunder shall be payable in
equal monthly installments less any amounts required to be withheld by the
Company from such Base Salary pursuant to the benefit plans of Section 3(d) and
applicable laws and regulations described under Section 10(e).
(b) Bonus
The Executive shall be eligible to receive bonuses (each a "Bonus")
at the discretion of, and in the amounts and at the times determined by, the
Compensation Committee.
(c) Long Term Incentives
The Executive shall be entitled to receive grants of restricted
stock, stock options and other stock awards and/or other stock and cash awards
granted pursuant to any other long term incentive plans implemented by the
Company for the benefit of senior executives of the Company at the discretion
of, and in the amounts and at the times determined by, the Compensation
Committee.
(d) Other Benefit Plans
Subject to all eligibility requirements, and to the extent permitted
by law, the Executive shall be entitled to participate in any and all employee
benefit plans (including, but not limited to, retirement, life insurance,
medical, dental, disability, and savings plans) established or maintained by the
Company from time to time for the benefit of its employees (or its executives)
in general.
(e) Further Benefits
The Executive shall be entitled to a minimum of four weeks per annum
paid vacation.
(f) Deferred Compensation
Notwithstanding any other provision of the Agreement, the Executive
shall have the right to request any lawful means (including, without limitation,
any deferred compensation arrangement requested by the Executive) by which he
wishes to receive any portion of his Base
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Salary, Bonus, or other payments, and the Company shall reasonably cooperate
with the Executive to grant such request, provided that the granting of such
request does not represent inequitable treatment as concerns other senior
employees or executives (in the Company's sole judgment), and does not impose
additional costs on the Company other than insignificant administrative costs.
4. Reasonable Expenses. The Company will reimburse the Executive for
all reasonable business expenses, including travel and lodging, which are
properly incurred by him in the performance of his duties hereunder, upon
presentation of proper vouchers therefor and in accordance with written policies
established from time to time by the Company for such reimbursements.
5. Executive Covenants. The Executive acknowledges that as a result
of the services to be rendered to the Company hereunder, the Executive will be
brought into close contact with many confidential affairs of the Company, its
subsidiaries and affiliates, not readily available to the public. The Executive
further acknowledges that the services to be performed under this Agreement are
of a special, unique, unusual, extraordinary and intellectual character; that
the business of the Company is international in scope; that its services are
marketed throughout the world; and that the Company competes with other
organizations that are or could be located in nearly any part of the United
States or elsewhere. In recognition of the foregoing:
(a) Except with the consent of or as directed by the Company, or
except if compelled by judicial or legal authorities, the Executive will keep
confidential and not divulge to any other person, during the Employment Period
or thereafter, any Confidential Information and Trade Secrets regarding the
Company, its subsidiaries and affiliates, except for information which is or
becomes publicly available other than as a result of disclosure by the
Executive. For the purposes of this Agreement "Confidential Information and
Trade Secrets" means information which is confidential and secret to the
Company, its subsidiaries and affiliates. It may include, but is not limited to,
information relating to new and future concepts and business of the Company, its
subsidiaries and affiliates, in the form of memoranda, reports, computer
software and data banks, customer lists, employee lists, books, records,
financial statements, manuals, papers, contracts and strategic plans. As a
guide, the Executive is to consider information originated, owned, controlled or
possessed by the Company, its subsidiaries or affiliates which is not disclosed
in printed publications stated to be available for distribution outside the
Company, its subsidiaries and affiliates as being secret and confidential. In
instances where doubt does or should reasonably be understood to exist in the
Executive's mind as to whether information is secret and confidential to the
Company, its subsidiaries and affiliates, the Executive agrees to request an
opinion, in writing, from the Company.
(b) All papers, books and records of every kind and description
relating to the business and affairs of the Company, its subsidiaries and
affiliates, whether or not prepared by the Executive, and all property owned by
the Company, its subsidiaries and affiliates shall
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be the sole and exclusive property of the Company, and the Executive shall
surrender them to the Company, at any time upon request, during or after the
Employment Period.
(c) During the Employment Period and for one year following
termination of this Agreement pursuant to Sections 6(a) or 6(c), the Executive
will not, without the prior written consent of the Company, compete, directly or
indirectly, with the Company, its subsidiaries and affiliates or participate as
a director, officer, employee, agent, representative, stockholder or partner, or
have any direct or indirect financial interest, in any business which directly
or indirectly competes with the Company, its subsidiaries and affiliates;
provided, however, that this paragraph (c) shall not restrict the Executive from
holding up to 5% of the publicly traded securities of any entity.
(d) During the Employment Period and for one year following
termination of this Agreement pursuant to Sections 6(a) or 6(c), the Executive
shall not either for his or her own account or for any person, firm or company
(i) solicit any customers of the Company, its subsidiaries and affiliates or
(ii) solicit or endeavor to cause any employee of the Company, its subsidiaries
and affiliates to leave his employment or induce or attempt to induce any such
employee to breach any employment agreement with the Company, its subsidiaries
and affiliates, or otherwise interfere with the employment of any employee by
the Company, its subsidiaries and affiliates.
(e) Without limiting any other provision of this Agreement, the
Executive hereby agrees to be bound by and to comply with any obligations known
to the Executive and imposed on the Company, its subsidiaries and affiliates, by
law, rule, regulation, ordinance, order, decree, instrument, agreement,
understanding or other restriction of any kind.
(f) The Executive hereby agrees to provide reasonable cooperation to
the Company, its subsidiaries and affiliates during the Employment Period and
thereafter in any litigation between the Company, its subsidiaries and
affiliates, and third parties.
(g) The parties agree that the Company shall, in addition to other
remedies provided by law, have the right and remedy to have the provisions of
this Section 5 specifically enforced by any court having equity jurisdiction, it
being acknowledged and agreed that any breach or threatened breach of the
provisions of this Section 5 will cause irreparable injury to the Company and
that money damages will not provide an adequate remedy to the Company. Nothing
contained herein shall be construed as prohibiting the Company from pursuing any
other remedies available to it for such breach or threatened breach, including
the recovery of damages from the Executive.
(i) Although the restrictions contained in Sections 5(a), (b), (c)
and (d) above are considered by the parties hereto to be fair and reasonable in
the circumstances, it is recognized that restrictions of such nature may fail
for technical reasons, and accordingly it is hereby agreed that if any of such
restrictions shall be adjudged to be void or unenforceable for whatever reason,
but would be valid if part of the wording thereof were deleted, or the period
thereof reduced or the area dealt with thereby reduced in scope, the
restrictions contained in Sections 5(a), (b), (c) and (d) shall be enforced to
the maximum extent permitted by law, and
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the parties consent and agree that such scope or wording may be accordingly
judicially modified in any proceeding brought to enforce such restrictions.
(ii) Notwithstanding that the Executive's employment hereunder may
expire or be terminated as provided in Section 1 or Section 6 hereof, this
Agreement shall continue in full force and effect insofar as is necessary to
enforce the covenants and agreements of the Executive contained in this Section
5.
6. Termination of Employment Period and Severance.
(a) Termination by the Company without Cause. If for any reason
other than the provisions of Section 6(d) hereof, the Company wishes to
terminate the Employment Period and the Executive's employment hereunder or
fails to extend the Employment Period for additional one year periods as
provided in Section 1, the Company shall give a written notice to the Executive
of such termination upon termination and shall pay to Executive an amount equal
to the Base Salary then in effect. Upon receipt of such notice by the Executive
or upon expiration of the employment period that is not extended, the Employment
Period shall terminate (and the Executive shall have no further duties under
Section 2 hereof). The Executive agrees that the payment described in this
Section 6(a) shall be full and adequate compensation to the Executive for all
damages the Executive may suffer as a result of the termination of his
employment pursuant to this Section 6(a), and hereby waives and releases the
Company from any and all obligations or liabilities to the Executive arising
from or in connection with the Executive's employment with the Company or the
termination and claims the Executive may have under federal, state or local
statutes, regulations or ordinances or under any common law principles or breach
of contract or the covenant of good faith and fair dealing, defamation, wrongful
discharge, intentional infliction of emotional distress or promissory estoppel;
provided, however, that any rights and benefits the Executive may have under the
employee benefit plans and programs of the Company in which the Executive is a
participant, shall be determined in accordance with the terms and provisions of
such plans and programs.
(b) Death. If the Executive dies during the Employment Period, the
Employment Period shall automatically terminate and the obligations of the
parties shall terminate effective the date of death.
(c) Disability. If the Executive becomes Disabled (as hereinafter
defined) during the Employment Period, the Company shall be entitled to
terminate his or her employment and the Employment Period upon written notice to
the Executive from the Company. In the event of such termination, the Executive
shall be released from any duties hereunder and the Company shall pay to
Executive an amount equal to the Base Salary then in effect. For purposes of
this Agreement, "Disabled" shall mean mental or physical impairment or
incapacity rendering the Executive substantially unable to perform his duties
under this Agreement for a period of longer than 90 days out of any 360-day
period during the Employment Period. A determination of whether the Executive is
Disabled shall be made by
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the Company in its sole discretion upon its own initiative or upon request of
the Executive or a person acting on his behalf.
(d) Termination by the Company for Cause. The Company by written
notice to the Executive, shall have the right to terminate the Employment Period
in the event of any of the following (which shall constitute "Cause"):
(i) The Executive's breach in respect of his duties under this
Agreement, such breach continuing unremedied for 10 days after
written notice thereof from the Company to the Executive
specifying the acts constituting the breach and requesting
that they be remedied;
(ii) Any misconduct, dishonesty, breach of fiduciary duty,
insubordination or other act by the Executive which other act
is materially detrimental to the assets, business or goodwill
of the Company, or materially damaging to the Company's, its
subsidiaries' and/or affiliates' relationships with their
customers or employees, including, without limitation, the
Executive having been indicted for or convicted of (including
entry of a no contest plea) in respect of a felony or of any
crime involving moral turpitude or fraud during the Employment
Period, provided such indictment or conviction has resulted or
is likely to result in substantial detriment to the Company,
its subsidiaries and/or affiliates;
(iii) misappropriation (or attempted misappropriation) of any
of the Company's funds or property or of a business
opportunity of the Company, including attempting to secure or
securing any personal profit in connection with any
transaction entered into on behalf of the Company;
(iv) Executive's gross negligence in connection with the
performance of Executive's obligations hereunder; or
(v) Executive's excessive alcohol abuse or abuse of any
controlled substance.
Any termination under this Section 6(d) shall be without damages or
liability to the Company for compensation and other benefits which would have
accrued to the Executive hereunder after termination, but all compensation,
benefits and reimbursements accrued through the date of termination shall be
paid to the Executive at the times normally paid by the Company. In this event,
there shall be no severance period.
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(e) Voluntary Termination by the Executive. In the event of
voluntary termination of employment by the Executive, the terms of the last
paragraph of Section 6(d) shall apply, except in the event that Executive
terminates for Good Reason. Good Reason shall mean voluntary termination by
Executive that occurs within ninety days of (i) a relocation of the Company's
offices (or the location of the performance of work by the Executive) beyond a
fifty mile radius of New York City, (ii) a material diminution of the
Executive's position, authority, duties or responsibilities as provided in
Section 2, including, without limitation, termination of his position as Vice
President, Secretary and General Counsel of the Company or (iii) a reduction in
Base Salary. If Executive terminates for Good Reason, the provisions of Section
6(a) shall apply and Executive will be bound by the provisions of Section 5,
including, without limitation, Sections 5(c) and 5(d).
(f) Termination Following a Change in Control. (i) Subject to
Section 6(f)(ii), should the Executive's employment hereunder be terminated by
the Company without Cause (other than for reason of the Executive becoming
Disabled) or by Executive for Good Reason within two years of a Change in
Control (as defined below), the Company shall pay and the Executive shall
receive in cash an amount equal to 300% of (A) Executive's then current Base
Salary plus (B) the average of the last three annual bonuses received by
Executive, and any options held by Executive to purchase Company securities
shall immediately vest, notwithstanding anything to the contrary in any other
agreement between Executive and the Company. Upon termination under this
paragraph (f), the Executive shall no longer be bound by the provisions of
Section 5 of this Agreement.
(ii) In the event that any payment received or to be received by the
Executive in connection with a Change in Control or the termination of the
Executive's employment (whether payable pursuant to the terms of this Agreement
or any other plan, arrangement or agreement with the Company, any person whose
actions result in a Change in Control or any person affiliated with the Company
or such person (together with the payment pursuant to Section 6(f)(i), the
"Total Payments")) would not be deductible by the Company (in whole or in part)
as a result of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), the payment pursuant to Section 6(f)(i) shall be reduced until no
portion of the Total Payments are not deductible as a result of Section 280G of
the Code, or the payment pursuant to Section 6(f)(i) is reduced to zero. For
purposes of this limitation (A) no portion of the Total Payments the receipt or
enjoyment of which the Executive shall have effectively waived in writing prior
to the date of payment of the payment pursuant to Section 6(f)(i) shall be taken
into account, (B) no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel selected by the Company's independent
auditors and acceptable to the Executive, does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code, and (C) the value
of any non-cash benefit or any deferred payment or benefit included in the Total
Payments shall be determined or benefit included in the Total Payments shall be
determined by the Company's independent auditors servicing the Company
immediately prior to the time of a Change in Control in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
(iii) For purposes of this Section 6(f) the following definitions
shall apply:
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"Change in Control" shall mean a change in control with respect to
the Company that would be required to be reported in response to Item 1(a) of
the Current Report on Form 8-K, as in effect on the date hereof, pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); provided that, without limitation, such a Change in Control
shall be deemed to have occurred at such time as any Person is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly of 35% or more of the outstanding securities of the Company
ordinarily having the right to vote at an election of directors. A change in
control shall be deemed to have occurred if individuals who constitute the
Incumbent Board cease for any reason to constitute at least a majority of the
Board of Directors of the Company (the "Board").
Notwithstanding anything aforesaid to the contrary, a Change in
Control shall not be deemed to have occurred if prior to the time the Change in
Control would have otherwise occurred, the Board shall have approved the event
or transaction that would otherwise result in a Change in Control for purposes
of this Agreement.
"Incumbent Board" shall mean those individuals who constitute the
Board on the date hereof, or any successor or additional individual who becomes
a member of the Board and whose election, or nomination for election, by the
members of the Board was approved by a vote of at least two-thirds of the
members of the Board comprising the Incumbent Board (either by a specific vote
or by approval of the proxy statement of the Company in which such individual
was named as nominee for member of the Board without objection to such
nomination).
"Person" shall mean and include any individual, corporation,
partnership, group, association or other "person", as such term is used in
Section 14(d) of the Exchange Act, other than the Company or any subsidiary or
any employee benefit plan sponsored by the Company or any subsidiary.
7. Conflicting Agreements. The Executive hereby represents and
warrants to the Company that his entering into this Agreement, and the
obligations and duties undertaken by him hereunder, will not conflict with,
constitute a breach of, or otherwise violate the terms of any other employment
of other agreement to which he is a party.
8. Assignment.
(a) By the Executive. This Agreement, any part thereof and any
rights (including compensation) or obligation hereunder shall not be assigned,
pledged, alienated, sold, attached, charged, encumbered or transferred in any
way by the Executive and any attempt to do so shall be void except that (i) the
Executive may designate any of his beneficiaries to receive (and such
beneficiaries shall receive) any compensation, payments or other benefits
payable hereunder upon his death, (ii) any assignment by will or by laws of
descent and distribution or following the occurrence of the Executive's legal
incompetence is permitted and (iii) the Executive's executors, administrators or
other legal representatives may assign any rights hereunder to the person or
persons entitled thereto.
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(b) By the Company. Provided the substance of the Executive's duties
set forth in Section 2 shall not change, and provided that the Executive's
compensation as set forth in Section 3 shall not be adversely affected, the
Company may assign or otherwise transfer this Agreement to any succeeding entity
without limitation, which entity shall assume all rights and obligations
hereunder.
9. Notices. All notices, requests, demands and other communications
hereunder must be in writing and shall be deemed to have been duly given if
delivered by hand or mailed within the continental United States by first class,
registered mail, return receipt requested, or sent by overnight mail, such as
Federal Express, postage and registry fees prepaid, to the applicable party and
addressed as follows:
If to the Company:
Board of Directors
Marine Transport Corporation
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
With a copy (which will constitute notice to the Company) to:
Cadwalader, Xxxxxxxxxx & Xxxx
000 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxxxx, Esq.
If to Executive:
Xxxxx X. Xxxxx
Marine Transport Corporation
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000
Addresses may be changed by notice in writing signed by the addressee.
10. Miscellaneous.
(a) If any provision or portion of this Agreement shall, for any
reason, be adjudged by any court of competent jurisdiction to be invalid or
unenforceable, such judgment shall not affect, impair or invalidate the
remainder of this Agreement but shall be confined in its operation to the
jurisdiction in which made and to the provisions of this Agreement directly
involved in the controversy in which such judgment shall have been rendered.
(b) No course of dealing and no delay on the part of any party
hereto in exercising any right, power or remedy under or relating to this
Agreement shall operate as a
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waiver thereof or otherwise prejudice such party's rights, powers and remedies.
No single or partial exercise of any rights, powers or remedies under or
relating to this Agreement shall preclude any other or further exercise thereof
or the exercise of any other right, power or remedy.
(c) This Agreement may be executed by the parties hereto in
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument, and all
signatures need not appear on any one counterpart.
(d) (i) Any other agreement, rule or regulation to the contrary,
notwithstanding, the parties hereby agree that any action or proceeding relating
to this Agreement or its subject matter shall be brought in a state or federal
court situated in the County of New York, State of New York and such court shall
have exclusive jurisdiction thereof; provided, however, any court with
jurisdiction over the parties may, at the election of Company, have jurisdiction
over any action brought with regard to or any action brought to enforce any
violation or claimed violation of Section 5. The parties each hereby
specifically submit to the jurisdiction of such court and further agree that
service of process may be made within or without the State of New York by giving
notice in the manner provided in Section 9. Each party further agrees to waive
and hereby waives any right to a trial by jury, and to any objection it or he
may have in any such action, based on lack of personal jurisdiction or venue, or
inconvenient forum.
(ii) In any such action or proceeding, the prevailing party shall be
entitled to recover from the other party reasonable costs, including attorneys'
fees and expenses. In any action or proceeding before a court or other tribunal
relating to this Agreement with respect to which damages are an adequate remedy,
the parties agree that no damages other than compensatory damages shall be
sought or claimed by either party and each party waives any claim, right or
entitlement to punitive, exemplary or consequential damages, or any statutory
damages, or any other damages of any kind or nature in excess of compensatory
damages, and any court or arbitration tribunal is specifically divested of any
power to award any damages in the nature of punitive, exemplary, or
consequential damages, or any statutory damages, or any other damages of any
kind or nature in excess of compensatory damages.
(e) All payments required to be made by the Company hereunder to the
Executive or his beneficiaries, including his estate, shall be subject to
withholding and deductions as the Company may reasonably determine it should
withhold or deduct pursuant to any applicable law or regulation. In lieu of
withholding or deducting such amounts in whole or in part, the Company may, in
its sole discretion, accept other provision for payment as permitted by law,
provided it is satisfied in its sole discretion that all requirements of law
affecting its responsibilities to withhold such taxes have been satisfied.
(f) This Agreement embodies the entire understanding, and supersedes
all other oral or written agreements or understandings, between the parties
regarding the subject matter hereof. No change, alteration or modification
hereof may be made except in writing
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signed by both parties hereto. The headings in this Agreement are for
convenience of reference only and shall not be considered part of this Agreement
or limit or otherwise affect the meaning hereof. This Agreement and the rights
and obligations of the parties hereunder shall be construed in accordance with
and governed by the laws of the State of New York (disregarding any choice of
law rules which might look to the laws of any other jurisdiction).
(g) The Executive acknowledges that the terms of this Agreement have
been fully explained to him, that the Executive understands the nature and
extent of the rights and obligations provided under this Agreement, and that the
Executive has been given the opportunity to be represented by legal counsel in
the negotiation and preparation of this Agreement.
(h) Nothing herein contained shall be construed to prevent or limit
any acquisition, consolidation or merger of the Company.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the day and year first above written.
MARINE TRANSPORT CORPORATION
By:
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Name:
Title:
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Xxxxx X. Xxxxx
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