EXHIBIT 10.3
EXECUTION COPY
TRANSITION AGREEMENT
This Transition Agreement (the "Agreement") is made and entered into this
20th day of August, 2001 by and among Xxxxxx Industries, Inc., a Delaware
corporation ("Xxxxxx") and Xxxxxx Shipyard, L.L.C., a Louisiana limited
liability company (together, the "Company"), on the one hand, and Xxxxxxx X.
Xxxxxxx ("Executive") on the other hand.
W I T N E S S E T H:
WHEREAS, Executive and the Company entered into an employment agreement
(the "Employment Agreement") dated as of March 31, 1998, and amended as of March
31, 2001;
WHEREAS, the Company and Executive deem it to be in their mutual best
interests for Executive to resign from his position with the Company as Chief
Executive Officer and President and as a Director of the Company;
WHEREAS, the Company desires that Executive continue in his position with
the Company as Chief Executive Officer and President until the Resignation Date
(as defined below) and that his resignation as a Director of the Company be
effective as of the date hereof;
WHEREAS, the Company wishes to accept Executive's resignation as Chief
Executive Officer and President effective at 11:59 p.m. on August 26, 2001 (the
"Resignation Date"), and to engage Executive's services as an employee with the
title of Special Advisor to the Chief Executive Officer ("Special Advisor") from
August 27, 2001 until October 31, 2001 (the "Employment Termination Date") to
provide for an orderly transfer of his responsibilities;
WHEREAS, the Company and Executive may decide that after the Employment
Termination Date it would be mutually advantageous for Executive to serve as a
consultant to the Company for up to a four-month period, to perform such duties
and provide such counsel and assistance to the Company as the Chief Executive
Officer may request from time to time and as may be agreed to by Executive;
WHEREAS, Executive and the Company entered into a stock option agreement
dated November 3, 1998 for the grant of a nonqualified stock option to purchase
205,518 shares of the common stock of Xxxxxx ("Common Stock"), and stock option
agreements dated November 3, 1998 and May 26, 1999 for the grant of incentive
stock options to purchase 44,442 shares and 35,997 shares, respectively of
Common Stock (collectively "Executive's Stock Options"), all pursuant to the
Xxxxxx Industries, Inc. 1998 Stock Plan, as amended and restated (the "Stock
Plan");
WHEREAS, the Executive has executed a promissory note payable to the
Company in the principal amount of $233,327, due September 4, 2001 and bearing
interest at an annual rate of nine percent (the "Promissory Note");
WHEREAS, Executive and the Company believe it is in their mutual best
interests to terminate the Employment Agreement and enter into this Agreement.
NOW, THEREFORE, in consideration of the mutual promises and respective
covenants herein contained, and intending to be legally bound hereby, the
parties agree as follows:
1. Termination of Executive's Employment and Directorship.
(a) Executive's employment by the Company as Chief Executive Officer and
President of the Company shall continue until 11:59 p.m. on the Resignation
Date, at which time it shall terminate. During the period from August 27, 2001
until the Employment Termination Date, Executive shall remain employed by the
Company full time as Special Advisor. Executive's employment with the Company as
Special Advisor, and in any other capacity, shall terminate as of the close of
business on the Employment Termination Date. The services to be provided by
Executive in such capacities are described in paragraph 8.
(b) Executive's resignation from the Board of Directors of the Company and
termination of the Employment Agreement are effective on the date hereof.
(c) Executive and the Company's new Chief Executive Officer may mutually
agree in writing to terminate Executive's employment as Special Advisor prior to
October 31, 2001, and in the event of such agreement, the date of such
termination of employment shall be the "Employment Termination Date."
2. Consulting Agreement. Prior to the Employment Termination Date, the
Company and Executive may mutually agree that Executive shall be engaged as a
consultant to the Company for up to a four-month period ending February 28,
2002. The agreement may be made on a month-to-month basis or for some other
period not to extend later than February 28, 2002. As a consultant, Executive
shall not be an employee or agent of the Company but shall be an independent
contractor.
3. Compensation. Executive shall continue to draw his current annual
salary of $195,290 from the date hereof until the Employment Termination Date,
in the amounts and at the times as currently provided. In addition, the Company
shall make the following payments to Executive, which shall be net of any
applicable withholding required by law:
(a) If the Company and Executive mutually agree to enter into the
consulting arrangement described above, the Company shall pay Executive a
mutually agreed upon consulting fee.
(b) On February 28, 2002, Executive shall receive to a lump sum
severance payment equal to his current annual salary as of the date hereof, of
$195,290, subject to paragraph 9(h) hereof. Executive (or his heirs, legatees,
estate or representative) shall receive such payment in the event of Executive's
death, disability or incapacity prior to February 28, 2002. If such severance
payment is not made by the Company on February 28, 2002, it shall
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accrue interest thereafter at the rate of seven percent per year until paid, and
Executive shall be reimbursed for any and all reasonable attorneys' fees
incurred by him in collecting any such overdue payment.
(c) As further consideration for past services rendered, Executive's
entering into this Agreement, including but not limited to the noncompetition
and release provisions hereof, Executive's services to the Company before the
date hereof in assisting with an orderly transition, Executive's surrender of
Executive's Stock Options as described below, and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged:
(i) The Company grants and delivers to Executive, effective as
of the date hereof, 132,820 shares of Common Stock pursuant to the Stock
Plan.
(ii) Executive shall receive from the Company a cash bonus of
$622,500 on February 28, 2002. Such bonus shall be offset by the principal
amount of the Withholding Note described in clause (c)(iii). If such bonus
(net of the principal amount of the Withholding Note) is not paid by the
Company on February 28, 2002, it shall accrue interest thereafter at the
rate of seven percent per year until paid, and Executive shall be
reimbursed for any and all reasonable attorneys' fees incurred by him in
collecting any such overdue payment.
(iii) Executive shall satisfy his withholding tax obligation
relating to clause (c)(i) as follows: the Company shall remit the
appropriate withholding payment in cash to the appropriate taxing
authorities, and the Executive shall execute a non-interest bearing
promissory note with a principal amount equal to such withholding payment,
payable to the Company at the time the bonus payable to Executive pursuant
to clause (c)(ii) is due to Executive (the "Withholding Note").
(iv) In order to assist Executive in meeting his income tax
obligations arising from clauses (i) and (ii) above, the Company agrees to
purchase on the date hereof 14,071 shares of Common Stock from the
Executive at a purchase price of $6.47 per share in cash.
(v) On the date hereof the Promissory Note, including accrued
interest, shall be deemed paid in full and shall be cancelled.
(vi) The Company and Executive agree and acknowledge that
Executive shall be responsible for the income tax consequences to him of
this Agreement, and the Company shall not owe any amounts to Executive
except as expressly set forth in this Agreement, whether relating to his
income tax obligations or otherwise.
4. Other Benefits. (a) Through the Employment Termination Date,
Executive shall continue to participate in the Company's employee benefit plans
and programs on the same basis as currently provided by the Company.
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(b) Executive shall be entitled to participate in the Company's medical
insurance plan until age 65, and his spouse shall be entitled to participate in
the Company's medical insurance plan until age 65, regardless of whether
Executive is eligible for Medicare or is deceased; provided, however, that
Executive and his spouse shall pay the Company the premiums related to such
insurance. Notwithstanding the foregoing, the Company shall not be obligated to
provide such medical benefits if (i) it discontinues providing medical insurance
to its employees, or (ii) it is unable to obtain insurance or reinsurance
relating thereto, either at all or at premiums that do not increase by more than
10 percent the Company's overall insurance or reinsurance premiums above the
premiums the Company would be required to pay if such medical benefits were not
provided to Executive and/or his spouse.
(c) On October 31, 2001, the Company shall transfer to Executive full
ownership of and title to the 2000 model Chevrolet Suburban automobile, bearing
Vehicle Identification Number 0XXXX00X0XX000000, free and clear of any and all
liens or encumbrances.
5. Stock Options. Executive's Stock Options shall be cancelled as of the
date hereof. Executive and the Company agree that such stock options constitute
all stock options granted by the Company to Executive prior to the date of this
Agreement.
6. Satisfaction of the Company's Obligations under the Employment
Agreement. Executive agrees, acknowledges and affirmatively represents that
upon execution and delivery of this Agreement, the Company shall have fully
completed, satisfied and discharged any and all obligations it has, had or may
be claimed to have, under the Employment Agreement.
7. Satisfaction of Executive's Obligations under the Employment
Agreement. The Company agrees, acknowledges and affirmatively represents that
upon execution and delivery of this Agreement, Executive shall have fully
completed, satisfied and discharged any and all obligations he has, had or may
be claimed to have, under the Employment Agreement.
8. Services to be Provided by Executive. During the period from the date
hereof until the Resignation Date, Executive shall continue to perform the
duties of Chief Executive Officer and President of the Company as directed by
the Board of Directors. During that period, Executive agrees to assist with an
orderly transfer of his responsibilities. Executive's continued employment by
the Company as Special Advisor shall begin on the first day following the
Resignation Date and shall terminate on the Employment Termination Date. During
his employment as Special Advisor, Executive shall devote his full time and
attention during normal business hours to such duties as the Chief Executive
Officer of the Company may assign to him from time to time; provided, that those
duties shall not be of a nature that would not be assigned to a member of the
Company's management and shall not be more burdensome in scope or nature,
including but not limited to required travel, if any, than those duties formerly
performed by Executive for the Company. As Special Advisor, Executive shall be
an officer and employee of the Company, but shall not be authorized to bind the
Company to any agreement without the express authorization of the Chief
Executive Officer.
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9. Noncompetition.
(a) Executive recognizes that the Company's willingness to enter into this
Agreement is based in material part on Executive's agreement to the provisions
of this paragraph 9 and that Executive's breach of the provisions of this
paragraph 9 could materially damage the Company. Executive will not, during the
remaining term of his employment with the Company and for a period of one year
after the Employment Termination Date:
(i) carry on or engage in any business in direct competition with the
construction, conversion or repair of marine vessels or the fabrication of
modular components for offshore drilling rigs or floating production,
storage and offloading vessels (collectively, the "Businesses") of the
Company or any direct or indirect subsidiary of Xxxxxx (collectively, the
"Companies") in any State of the United States or other jurisdiction, or
specified portions thereof, in which the Executive regularly (a) makes
contact with customers of the Company or any of its subsidiaries, (b)
conducts the business of the Company or any of its subsidiaries or (c)
supervises the activities of other employees of the Company or its
subsidiaries, as identified in Appendix "A" attached hereto and forming a
part of this Agreement, so long as the Company or any of its subsidiaries
carries on any of the Businesses therein (collectively the "Territory");
(ii) call upon any person who is, at that time, an employee of any of
the Companies for the purpose or with the intent of enticing such employee
away from or out of the employ of any of the Companies (provided, that this
clause (ii) shall not apply with respect to Executive's son who is
currently employed by the Company);
(iii) call upon any customer of any of the Companies within the
Territory for the purpose of soliciting or selling products or services in
direct competition with any of the Companies within the Territory;
(iv) call upon any prospective acquisition candidate, on Executive's own
behalf or on behalf of any competitor, which candidate was, to Executive's
knowledge after due inquiry, either called upon by any of the Companies or
for which any of the Companies made an acquisition analysis, for the
purpose of acquiring such entity; or
(v) disclose customers, whether in existence or proposed, of any of the
Companies to any person, firm, partnership, corporation or business for any
reason or purpose whatsoever except to the extent that any of the Companies
has in the past disclosed such information to the public for valid business
reasons.
Notwithstanding the above, the foregoing covenant shall not be deemed
to prohibit Executive from acquiring as an investment (i) not more than 1% of
the capital stock of a competing business, whose stock is traded on a national
securities exchange, the Nasdaq Stock Market or similar market or (ii) not more
than 5% of the capital stock of a competing business whose stock is not publicly
traded unless the Board consents to such acquisition.
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Furthermore, notwithstanding the above, the foregoing covenant shall not
prohibit Executive from carrying on or engaging in the construction of aluminum
marine vessels, as long as such activity is not conducted in association in any
manner with any company with which the Company has had acquisition discussions
within the past two years.
(b) Because of the difficulty of measuring economic losses to the Company
as a result of a breach of the foregoing covenant, and because of the immediate
and irreparable damage that could be caused to the Company for which it would
have no other adequate remedy, Executive agrees that the foregoing covenant may
be enforced by the Company, in the event of breach by him, by injunctions and
restraining orders. Executive further agrees to waive any requirement for the
Company's securing or posting of any bond in connection with such remedies.
(c) The parties hereto agree that the foregoing covenants in this paragraph
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business of the Companies on the date of the execution of this Agreement and the
current plans of the Companies.
(d) It is further agreed by the parties hereto that in the event that after
the Employment Termination Date Executive enters into a business or pursues
other activities not in competition with the Businesses of the Companies or
similar activities or businesses in locations the operation of which, under such
circumstances, does not violate clause (a)(i) of this paragraph 9, and in any
event such new business, activities or location are not in violation of this
paragraph 9 or of Executive's obligations under this paragraph 9, if any,
Executive shall not be chargeable with a violation of this paragraph 9 if the
Companies shall thereafter enter the same, similar or a competitive (i)
business, (ii) course of activities or (iii) location, as applicable.
(e) The covenants in this paragraph 9 are severable and separate, and the
enforceability of any specific covenant shall not affect the provisions of any
other covenant. Moreover, in the event any court of competent jurisdiction shall
determine that the scope, time or territorial restrictions set forth are
unenforceable, then it is the intention of the parties that such restrictions be
enforced to the fullest extent permitted by law, and the Agreement shall thereby
be reformed.
(f) All of the covenants in this paragraph 9 shall be construed as an
agreement independent of any other provision in this Agreement, and the
existence of any claim or cause of action of Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of such covenants.
(g) The Company and Executive hereby agree that this covenant is a material
and substantial part of this Agreement.
(h) Executive acknowledges that the severance payment provided under
paragraph 3(b) is conditioned upon Executive's fulfilling the noncompetition and
nondisclosure provisions of this Agreement as set forth in this paragraph 9 and
paragraph 10 below. In addition, such payment is conditioned upon Executive's
refraining, for a one year period
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following the Employment Termination Date, from carrying on or engaging in, as
an employee, officer, director, shareholder, owner, partner, joint venturer, or
in a managerial capacity, whether as an executive, independent contractor,
consultant or advisor, or as a sales representative or otherwise, any business
in direct competition with the Businesses of the Companies in the Territory
(except as provided in paragraph 9(a) with respect to construction of aluminum
marine vessels), to the extent such activity is not prohibited by paragraph
9(a). In the event Executive shall at any time materially breach any
noncompetition or nondisclosure agreements contained in this Agreement,
including the agreements in this paragraph 9(h), the Executive shall forfeit to
the Company, and promptly repay to the Company, a pro rata portion of the
severance payment corresponding to the period of such breach (i.e., $195,290
times the quotient of the number of days during which the breach occurs divided
by 365). Executive acknowledges that any such forfeiture of payments would be an
exercise of the Company's right to terminate its performance hereunder upon
Executive's breach of this Agreement and would not constitute and shall not be
characterized as the imposition of liquidated damages. It is specifically
understood by the parties that the provisions of paragraph 13 of this Agreement
apply to this paragraph 9.
(i) Any dispute regarding the reasonableness of the covenants and
agreements set forth in this paragraph 9 or the territorial scope or
duration thereof or the remedies available to the Company upon any breach
of such covenants and agreements, shall be governed by and interpreted in
accordance with the laws of the State of United States or other
jurisdiction in which the alleged prohibited competing activity or
disclosure occurs, and with respect to each such dispute, the Company and
Executive each hereby irrevocably consent to the exclusive jurisdiction of
the state and federal courts sitting in the relevant State (or, in the case
of any jurisdiction outside the United States, the relevant courts of such
jurisdiction) for resolution of such dispute, and agree to be irrevocably
bound by any judgment rendered thereby in connection with such dispute, and
further agree that service of process may be made upon him or it in any
legal proceeding related to this paragraph 9 and/or Appendix "A" by any
means allowed under the laws of such jurisdiction. Each party irrevocably
waives any objection he or it may have as to the venue of such suit, action
or proceeding brought in such a court or that such a court is an
inconvenient forum. The parties agree that it is their intent and desire
that the provisions of this Agreement be enforced to the fullest extent
permitted under applicable law, whether now or hereafter in effect, and
therefore, to the extent permitted by applicable law, the parties hereto
waive any provision of applicable law that would render any provision of
this paragraph 9 invalid or unenforceable.
10. Company Property, Trade Secrets and Confidentiality.
(a) All records, designs, patents, business plans, financial
statements, manuals, memoranda, lists, and other property delivered to or
compiled by Executive by or on behalf of the Company or any of the Companies or
their representatives, vendors or customers which pertain to the business of the
Company or any of the Companies, are, shall be and remain the property of the
Company or the Companies, as the case may be, and those, along with all
correspondence, reports, records, charts, advertising materials, and other
similar data pertaining to the Businesses, activities or future plans of the
Company or the Companies which have been collected by Executive, shall be
delivered promptly to the Company without request by it on the Employment
Termination Date.
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(b) Executive shall disclose promptly to the Company any and all
significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, (i) that are conceived or made by
Executive, solely or jointly with another, during the remaining term of his
employment or within one year after the Employment Termination Date, (ii) that
are directly related to the business or activities of the Companies and (iii)
that Executive conceives as a result of his employment by the Company.
Executive hereby assigns and agrees to assign all his interests therein to the
Company or its nominee. Whenever requested to do so by the Company, Executive
shall execute any and all applications, assignments or other instruments that
the Company shall deem necessary to apply for and obtain Letters Patent of the
United States or any foreign country or to otherwise protect the Company's
interest therein. Any action to enforce this paragraph 10(b) must be brought
within five years after the date of this Agreement.
(c) Executive agrees that he will not, during the remaining term of
his employment or after the Employment Termination Date, disclose the specific
terms of the Company's relationships or agreements with its significant vendors
or customers or any other significant and material trade secret of the Company,
whether in existence or proposed, to any person, firm, partnership, corporation
or business for any reason or purpose whatsoever.
(d) (i) Executive acknowledges and agrees that all Confidential
Information (as defined below) of the Company is confidential and a
valuable, special and unique asset of the Company that gives the Company an
advantage over its actual and potential, current and future competitors.
Executive agrees that he will preserve and protect all Confidential
Information from unauthorized disclosure or unauthorized use and that
certain Confidential Information constitutes "trade secrets" under
applicable laws.
(ii) During the remaining term of Executive's employment,
Executive shall hold all Confidential Information in strict confidence, and
shall not use any Confidential Information except for the benefit of the
Company, in accordance with the duties assigned to Executive, including
duties assigned to him as Special Advisor. Executive shall not, at any
time (either during the remaining term of his employment or after the
Employment Termination Date), disclose any Confidential Information to any
person or entity (except other employees of the Company who have a need to
know the information in connection with the performance of their employment
duties), or copy, reproduce, modify, decompile or reverse engineer any
Confidential Information, or remove any Confidential Information from the
Company's premises, without the prior written consent of the Chief
Executive Officer of the Company, or permit any other person to do so.
(iii) At the Employment Termination Date, and upon request of
the Company at any other time, Executive shall promptly surrender and
deliver to the Company all documents and other written material of any
nature containing or pertaining to any Confidential Information and shall
not retain any such document or other material.
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Within five days of any such request, Executive shall certify to the
Company in writing that all such materials have been returned.
(iv) As used in this Agreement, the term "Confidential
Information" shall mean any information or material known to or used by or
for the Companies (whether or not owned or developed by the Companies and
whether or not developed by Executive) that is not generally known to
persons in the Business. Confidential Information includes, but is not
limited to, the following: all trade secrets of the Companies; all
information that the Companies have marked as confidential or have
otherwise described to Executive (either in writing or orally) as
confidential; all nonpublic information concerning the Companies' products,
services, prospective products or services, research, product designs,
prices, discounts, costs, marketing plans, marketing techniques, market
studies, test data, customers, customer lists and records, suppliers and
contracts; all business records and plans; all personnel files; all
financial information of or concerning the Companies; all information
relating to operating system software, application software, software and
system methodology, hardware platforms, technical information, inventions,
computer programs and listings, source codes, object codes, copyrights and
other intellectual property; all technical specifications; any proprietary
information belonging to the Companies; all computer hardware or software
manuals; all training or instruction manuals; and all data and all computer
system passwords and user codes.
11. Release. (a) Executive hereby and forever, irrevocably and
unconditionally, waives and releases any and all rights, claims and causes of
action against the Company and its subsidiaries of whatever kind or nature,
known or unknown, asserted or unasserted, that may have arisen prior to or that
may exist as of the date of this Agreement, if such rights, claims or causes of
action relate to facts of which Executive has actual knowledge as of the date of
this Agreement. It is understood and agreed, that by this Agreement, Executive
waives any such claims he may have against the Company and its subsidiaries,
including but not limited to those based on any theory of liability, statutory
or non-statutory, in contract or in tort, including, but not limited to, claims
for wrongful or constructive discharge, breach of any express or implied
employment contract or agreement, breach of any covenant of good faith and fair
dealing, fraud, defamation, or any personal or emotional injury. It is further
understood and agreed that the parties covered by the Executive's release
include the Company's subsidiaries and present and former shareholders,
officers, directors, employees, agents, insurers, assigns, predecessors, and
successors, and that any reference to the Company in this paragraph 11 is
understood to include all of the foregoing persons or entities.
(b) The Company hereby and forever, irrevocably and unconditionally, waives
and releases any and all rights, claims and causes of action against Executive
of whatever kind or nature, known or unknown, asserted or unasserted, that may
have arisen prior to or that may exist as of the date of this Agreement, if such
rights, claims or causes of action relate to facts of which any of the Company's
executive officers or directors (other than Executive) has actual knowledge as
of the date of this Agreement. It is understood and agreed, that by this
Agreement, the Company waives any such claims it may have against Executive,
including but not limited to those based on any theory of liability, statutory
or non-statutory, in contract or in tort.
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12. Nondisparagement. Executive agrees to refrain from making any
statements and from taking any actions that disparage or could reasonably be
expected to harm the reputation of the Companies or any of its directors,
officers or employees, and agrees that he will not voluntarily assist or
otherwise participate in any action or proceeding undertaken by any other person
that disparage or could reasonably be expected to materially harm the reputation
of the Companies or any of its directors, officers or employees. The Company
and its directors and officers agree to refrain from making any statements and
from taking any actions that disparage or could reasonably be expected to harm
the reputation of Executive or his family, and agrees that it will not
voluntarily assist or otherwise participate in any action or proceeding
undertaken by any other person that disparage or could reasonably be expected to
materially harm the reputation of Executive or his family.
13. Breach. No remedy specified herein shall be deemed to be an exclusive
remedy, and accordingly, in addition to the rights and remedies provided herein,
the parties shall have all other rights and remedies provided to them by
applicable law, rule or regulation; provided that the Company may not withhold
payments due under paragraphs 3(b) or 3(c)(ii) hereof on account of an alleged
breach by Executive of the provisions of this Agreement, unless Executive is
found by a court of competent jurisdiction to have committed such breach and
orders such remedy in connection therewith.
14. Indemnification and Insurance.
(a) For so long as the Company shall maintain in effect a directors' and
officers' liability insurance policy covering claims arising from or relating to
facts, events, actions or omissions relating to a director's or officer's
current or former service as a director or officer of the Company, the Company
shall include Executive as an insured party under such policy.
(b) In the event Executive is made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by the Company against Executive), by
reason of the fact that he is or was a director or officer of the Company,
including but not limited to actions or omissions in connection with entering
into this Agreement, then the Company shall engage competent legal
representation to defend Executive and shall indemnify Executive against all
expenses (including attorneys' fees), judgments, fines and amounts paid in
settlement, as actually and reasonably incurred by Executive in connection
therewith. In the event that both Executive and the Company are made a party to
the same third-party action, complaint, suit or proceeding, the Company agrees
to engage competent legal representation, and Executive agrees to use the same
representation, provided that if counsel selected by the Company shall have a
conflict of interest that prevents such counsel from representing Executive,
Executive may engage separate counsel and the Company shall pay all reasonable
attorneys' fees and reasonable expenses of such separate counsel. Further,
while Executive is expected at all times to use his best efforts to faithfully
discharge his duties under this Agreement, Executive cannot be held liable to
the Company for errors or omissions made in good faith where Executive has not
exhibited gross,
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willful and wanton negligence and misconduct nor performed criminal and
fraudulent acts which materially damage the business of the Company.
15. Confidentiality. Unless otherwise required by law or deemed
necessary or advisable by the Company in order to comply with securities laws,
each party shall keep the terms and conditions of this Agreement confidential;
provided, however, that Executive may disclose the terms and conditions of this
Agreement (a) to his spouse and advisors to obtain their counsel with respect
thereto, but only if his spouse and advisors agree to keep the terms and
conditions of this Agreement confidential in accordance with this paragraph 15,
and (b) to other persons to the extent disclosed by the Company.
16. Entire Agreement. This Agreement constitutes the entire agreement
between the parties and no statements, oral or written from any source, will
alter or vary the provisions contained herein.
17. Binding Effect.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company and its successors or assigns, and shall be binding upon and inure
to the benefit of Executive and his heirs. The obligation of the Company to
make the payments required by paragraphs 3(b) and 3(c) hereof shall not be
affected by Executive's death, disability, or incapacity.
(b) The Company shall require any assignee or acquiror of all or
substantially all of the assets or businesses of the Company (by means of
merger, acquisition of assets or otherwise) (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 acquisition occurred. In the
event of any such assignment, succession or acquisition, the term "Company" as
used in this Agreement shall refer also to such assign, successor or acquiror.
18. Enforceability and Severability. This Agreement shall be
enforced to the fullest extent permissible under the laws and public policies
applied in any jurisdiction in which enforcement is sought. To the extent that
any covenant hereunder shall be adjudicated to be invalid, illegal or
unenforceable in any one jurisdiction, this Agreement shall be deemed to be
amended to delete therefrom or reform the portion thus adjudicated to be
invalid, illegal or unenforceable, such deletion or reformation to apply only
with respect to the operation of this Section within the particular jurisdiction
in which such adjudication is made. In the event that any one or more of the
provisions contained in the Agreement cannot for any reason be so reformed, the
same shall not affect the validity or enforceability of any other provision of
this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein; provided,
however, that no provision shall be severed if it is clearly apparent under the
circumstances that the parties hereto would not have entered into the Agreement
without such provision.
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19. Governing Law. Except as provided in paragraph 9(i), the validity of
this Agreement, the construction of its terms and the determination of the
rights and duties of the parties hereto shall be construed in accordance with
the laws of the State of Louisiana, without regard to its conflicts of law
provision.
20. Attorneys' Fees. Each party hereto agrees to pay the other party's
reasonable attorneys' fees and attorneys' expenses relating to any matter or
issue on which the other party prevails in litigation commenced by any party to
enforce or interpret this Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed as of the day and year first above written.
XXXXXX INDUSTRIES, INC.
By: /s/ Xxxx X. Xxxxxx, Xx.
---------------------------------
Xxxx X. Xxxxxx, Xx.
Co-Chairman of the Board
XXXXXX SHIPYARD, L.L.C.
By: /s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Xxxxx X. Xxxxxxxxx
Secretary/Treasurer
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxx
13
