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EXHIBIT 10.8
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is made as of _______________,
1997, by and between HBH, Inc., a Louisiana corporation (the "Company"), and
H. XXXXXX XXXXXX II, an individual with an address of 0000 Xxxxxx Xxxx.,
Xxxxxxx, Xxxxxxxxx 00000 (the "Employee").
1. Employment. The Company hereby agrees to employ the Employee
and the Employee hereby agrees to work for the Company upon the terms and
conditions set forth herein.
2. Term of Employment. The term of employment pursuant to this
Agreement shall begin on the closing of the IPO (as defined below) (the
"Effective Date") of TransCoastal Marine Services, Inc., a Delaware corporation
("TMS"), shall continue in effect for an initial term of three (3) years from
the Effective Date (the "Initial Term"), unless terminated in accordance with
Section 6 and shall be extended from year to year thereafter, unless terminated
effective as of the end of the initial term or any one-year extension thereafter
(each such additional one year term is a "Renewal Term") by written notice from
the Company to Employee, or by written notice of Employee to the Company,
delivered not less than ninety (90) days prior to the end of the Initial Term,
or the end of such Renewal Term, as applicable. The term "IPO" means any
underwritten public offering of TMS' common stock other than any offering
pursuant to any registration statement (i) relating to any capital stock of TMS
or options, warrants or other rights to acquire any such capital stock issued
or to be issued primarily to directors, officers or employees of TMS, or any of
its subsidiaries (ii) relating to any employee benefit plan or interest
therein, (iii) relating principally to any preferred stock or debt securities
of TMS, or (iv) filed pursuant to Rule 145 under the Securities Act of 1933, as
amended, or any successor or similar provisions.
3. Scope of Duties; Representations and Warranties.
(a) The Employee shall be initially employed by the
Company as its President, reporting only to the Board of Directors, and shall
have supervision and control over, and responsibility for, the general
operations of the Company and shall have such other powers, duties, and
authority as are set forth in the Bylaws of the Company or as may from time to
time be prescribed by the Board of Directors, provided that such powers, duties,
and authority are those that are customarily inherent in such a position. At
all times, the Employee shall serve under the direction of the Board of
Directors of the Company and shall perform such services as the Board of
Directors, in its sole discretion, shall deem appropriate.
(b) So long as he is employed by the Company, the Employee
shall devote his skill, energy and best efforts to the faithful discharge of
his duties as an employee of the Company. The Employee agrees that in the
provision of all services to the Company, he will comply with and follow all
directives, policies, standards and regulations from time to time established
by the Board of Directors of the Company.
(c) The Employee represents and warrants that he is under
no contractual or other restrictions or obligations which will significantly
limit his activities on behalf of the Company or
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which will prohibit or limit the disclosure or use of by the Employee of any
information which directly or indirectly relates to the nature of the Company
or the services to be rendered by the Employee under this Agreement.
(d) To the extent they relate to, or result from, directly
or indirectly, the actual or anticipated operations of the Company, the
Employee hereby agrees that all patents, trademarks, copyrights, trade secrets,
and other intellectual property rights, all inventions, whether or not
patentable and any product, drawing, design, recording, writing, literary work
or other author's work, in any other tangible form developed in whole or in
part by Employee during the term of this Agreement, or otherwise developed,
purchased or acquired by Employer, shall be the exclusive property of the
Employer ("Intellectual Property"), and unless otherwise agreed by Employer, all
right, title and interest therein shall remain in Employer.
(e) The Employee will hold all Intellectual Property
(defined below) in trust for the Company and will deliver all Intellectual
Property in his possession or control to the Company upon request and, in any
event, at the end of his employment with the Company. The Employee will
promptly disclose to the Company any business opportunity related to the current
or planned operations of the Company which comes to his attention during the
term of his employment with the Company. The Employee will not take advantage
of or divert such business opportunity for the benefit of himself or any other
party without the prior written consent of the Company.
(f) The Employee shall assign and does hereby assign to
the Company all property rights that he may now or hereafter have in the
Intellectual Property. The Employee shall take such action, including, but not
limited to, the execution, acknowledgment, delivery and assistance in
preparation of documents, and the giving of testimony, as may be requested by
the Company to evidence, transfer, vest or confirm the Company's right, title
and interest in the Intellectual Property.
(g) The Employee will not contest the validity of any
invention, any copyright, any trademark or any mask work registration owned by
or vesting in the Company under this Agreement.
(h) The terms and conditions of Sections 3(d), (e), (f),
and (g) will survive the termination of this Agreement for any reason
whatsoever.
4. Compensation.
(a) During the first year, the Company shall pay the
Employee a base salary, payable semi-monthly, in equal installments at a rate
equal to $175,000 per year. In each subsequent year of this Agreement, the
Company shall pay to the Employee a salary equal to the greater of (i) his
salary for the immediately preceding year or (ii) if determined otherwise by
the Board of Directors, a salary determined by the Board of Directors following
its annual salary and performance review.
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(b) Employee shall receive an annual cash performance
bonus for the calendar year during the term of this Agreement to be determined
according to the following procedure. The Board of Directors of the Company,
or the Compensation Committee of the Board of Directors, if so authorized,
shall establish specific annual performance goals for the Company and for
Employee with respect to each calendar year during the term of this Agreement
commencing on January 1, 1998. Such goals shall be communicated to Employee
not later than the end of the first quarter of the applicable calendar year.
At the end of each calendar year during the term of this Agreement, or within a
reasonable time thereafter, the Board of Directors of the Company, or the
Compensation Committee of the Board of Directors, if so authorized, shall
review the actual performance of the Company and Employee, giving due
consideration to market and other developments outside of the control or
influence of Employee and the Company, and based upon the extent to which the
applicable annual performance goals have been achieved, shall determine in its
sole and absolute discretion, the amount of performance bonus payable to
Employee with respect to such year. If, during the Initial Term or any Renewal
Term, the Employee's employment with the Company is terminated by the Company
prior to the end of a calendar year for any reason other than a termination by
the Company for Cause (as hereafter defined), the Employee shall participate in
the cash performance bonus on a prorated basis based on the number of days in
the calendar year to the date of termination compared to the number of days in
the calendar year. In the event that the Employee's employment with the
Company terminates prior to the end of a calendar year as a result of the
expiration of the Initial Term or any Renewal Term hereof or as a result of the
Employee's resignation with cause for such resignation, the Employee shall
participate in the cash performance bonus on a prorated basis based on the
number of days in the calendar year to the date of termination compared to the
number of days in the calendar year.
(c) On the Effective Date, Employee shall be granted an
option to purchase a number of shares of TMS common stock, par value $.001 per
share ("Common Stock"), equal to $437,500 divided by the initial public
offering price per share of the Common Stock in the IPO (the "IPO Price"). The
option shall be granted pursuant to and in accordance with all terms and
conditions of the TMS 1997 Incentive Stock Option Plan and shall be exercisable
at the IPO Price. The grant of such option shall be pursuant to an Incentive
Stock Option Agreement substantially in the form attached as Attachment 4(c)
hereto.
(d) All payments of salary and other compensation to the
Employee shall be made after deduction of any taxes which are required to be
withheld with respect thereto under applicable federal and state laws.
5. Fringe Benefits. So long as the Employee is employed by the
Company, the Employee shall participate in all employee benefit plans sponsored
by the Company for its executive employees as approved from time to time by the
Board of Directors of the Company or any compensation committee of the board of
directors, if any. Employee shall be reimbursed by the Company for reasonable
out-of-pocket costs in accordance with Company policy and subject to reasonable
and customary documentation of such expenses. Employee shall be entitled to
health and dental insurance benefits for the Employee and the Employee's
dependents that are no less favorable to Employee than the benefits that are
provided to Employee by the Company prior to the Effective Date. In addition,
Employee shall receive an allowance of $750 per month for automobile expenses.
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6. Termination.
(a) Employee agrees that this Agreement may be terminated
by the Company with or without "Cause" at any time, subject to the terms of
this Section 6. Such termination shall be effective upon delivery of written
notice to Employee of the Company's election to terminate this Agreement under
this Section 6. "Cause" when used in connection with the termination of
employment with the Company, shall mean the termination of the Employee's
employment by the Company by reason of (i) the conviction of the Employee of a
crime involving moral turpitude by a court of competent jurisdiction as to
which no further appeal can be taken; (ii) the proven commission by the
Employee of an act of fraud upon the Company; (iii) the willful and proven
misappropriation of any funds or property of the Company by the Employee; (iv)
the willful, continued and unreasonable failure by the Employee to perform
material duties assigned to him and agreed to by him after reasonable notice
and opportunity to cure such performance; (v) the knowing engagement by the
Employee in any direct, material conflict of interest with the Company without
compliance with the Company's conflict of interest policy, if any, then in
effect; (vi) the knowing engagement by the Employee, without the written
approval of the Board of Directors of the Company, in any activity which
competes with the business of the Company or which would result in a material
injury to the Company; or (vii) the knowing engagement in any activity which
would constitute a material violation of the provisions of the Company's
Xxxxxxx Xxxxxxx Policy, if any, then in effect.
If the Employee's employment terminates, unless the Company
terminates the Employee's employment under this Agreement for Cause or the
Employee resigns without cause for such resignation, the Company shall pay to
the Employee an amount equal to twenty-four (24) months of compensation at his
then current salary, payable semimonthly, and shall continue to provide
benefits in the kind and amounts provided up to the date of termination for
such twenty-four (24) month period including, without limitation, continuation
of any Company-paid benefits as described in Section 5 for the Employee and his
family and the automobile allowance described in Section 5 above.
Notwithstanding anything in this Agreement to the contrary, in the event the
Employee's employment terminates within twelve months after (A) a sale of all
or substantially all of the assets of the Company or TMS, or (B) a merger,
consolidation, liquidation or reorganization of the Company or TMS, in which
the purchaser or the surviving entity (if other than the Company or TMS), as
applicable, fails to adopt the Company's obligations under this Agreement, the
Company shall pay to the Employee, an amount equal to thirty six (36) months
compensation at Employee's then current annual salary, payable semimonthly, and
shall continue to provide benefits in the kind and amounts provided up to the
date of termination for such thirty six (36) month period.
In the event that this Agreement is terminated by Company without
Cause, Employee agrees to accept, in full settlement of any and all claims,
losses, damages and other demands which Employee may have arising out of such
termination as liquidated damages and not as a penalty, the applicable amount
which is set out above. Except as provided in section 7 hereof, under no
circumstances shall Employee be entitled to any compensation or confirmation of
any benefits under this Agreement for any period of time following his date of
termination if his termination is for Cause.
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(b) If at any time during the term of this Agreement,
Employee is unable due to physical or mental disability, to perform effectively
his duties hereunder, the Company shall continue payment of compensation as
provided in Section 4 during the first six (6) month period of such disability
to the extent not covered by the Company's disability insurance policies. Upon
the expiration of such six (6) month period, the Company, at its sole option,
may continue payment of Employee's salary for such additional periods as the
Company elects, or may terminate this Agreement without any further obligations
hereunder. If Employee should die during the term of this Agreement,
Employee's employment and the Company's obligations hereunder shall terminate
as of the end of the month in which Employee's death occurs and there will be
no salary and benefit continuation period pursuant to Section 6(a). Employee
shall be deemed to have incurred a disability if Employee suffers a physical or
mental condition which (i) satisfies the definition of "total disability" in
the Company's disability insurance policies.
7. Covenant Not to Compete.
(a) During the term of this Agreement, Employee will not
compete with the Company or its affiliates, directly or indirectly, either for
himself or as a member of a partnership or as a stockholder (except as a
stockholder of less than two percent (2 %) of the issued and outstanding stock
of a publicly-held company), investor, owner, officer or director of a company
or other entity, or as an employee, agent, associate or consultant of any
person, partnership, corporation or other entity, in any business in
competition with that carried on by the Company or any of its affiliates.
Notwithstanding anything herein to the contrary, Employee's beneficial
ownership interest in and employment as a consultant by Diversified Group, Inc.
shall not constitute a violation of the provisions of this Section 7, so long
as Diversified Group, Inc. does not engage in the marine offshore pipeline
construction business during the term of any covenant not to compete contained
in this agreement.
(b) Employee further agrees that if this Agreement shall
terminate during the Initial Term for any reason other than expiration of the
Initial Term or any Renewal Term without continuation of this Agreement for a
Renewal Term, subject to the provisions contained hereafter, he will neither
represent nor engage in or carry on, directly or indirectly, either for himself
or as a member of a partnership or as a stockholder (other than as a
stockholder of less than two percent (2 %) of the issued and outstanding stock
of a publicly-held company whose gross assets exceed one hundred million
dollars), investor, owner, officer or director of a company or other entity, or
as an employee, agent, associate or consultant of any person, partnership,
corporation or other entity, any business in any State of the United States or
in any other part of the world which directly competes with any services or
products produced, sold, conducted, developed, or in the process of development
by the Company or its affiliates on the date of termination of Employee's
employment. Notwithstanding the foregoing, nothing herein shall prevent
Employee from working in the xxxxx or marine construction and pipe laying
businesses, industrial diving and offshore products fabrication businesses,
other than as an employee of Company or a subsidiary of Company if such
activities are in areas not in direct competition with any services or products
produced, sold, conducted, developed, or in the process of development by the
Company or its affiliates on the date of termination of Employee's employment.
The period for which Employee shall be subject to the forgoing restrictions on
competition shall be a period equal to twenty-four (24) months.
Notwithstanding anything to the contrary contained in this Agreement, the
restrictions on
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competition by Employee shall only be applicable if the Company shall be in
compliance with its obligations to Employee under this Agreement, including,
without limitation, the obligation to pay Employee during the non-competition
period and to continue the Company-paid benefits as provided in Section 7(a)
hereof. Provided further, in the case of an Employee who has been terminated
for Cause or has resigned during an Initial Term or any Renewal Term without
cause for such resignation, the restrictions on competition shall only be
applicable to the Employee if the Company shall, at its option, elect to treat
the Employee as if he had been terminated by the Company without Cause, in
which event the Company shall be obligated to such Employee in accordance with
the terms applicable to an Employee terminated by the Company without Cause,
including, without limitation, the obligation to pay the Employee and to
continue Company-paid benefits as provided in Section 7(a) hereof. In order to
so exercise this option, the Company shall notify Employee in writing within
three days after termination of Employee's employment under this Agreement.
(c) Employee agrees that the limitations set forth herein
on his rights to compete with the Company and its affiliates are reasonable and
necessary for the protection of the Company and its affiliates. In this
regard, Employee specifically agrees that the limitations as to period of time
and geographic area, as well as all other restrictions on his activities
specified herein, are reasonable and necessary for the protection of the
Company and its affiliates. In particular, Employee acknowledges that the
parties anticipate that the Employee will be actively seeking markets for the
Company's products throughout the United States during his employment with the
Company.
(e) Employee agrees that the remedy at law for any breach
by him of this Section 7 will be inadequate and that the Company shall also be
entitled to injunctive relief.
8. Confidential Information and Results of Services. Employee
agrees that during the term of this Agreement, and for two (2) years after his
termination of employment, in the event of termination of employment with Cause
by the Company or the voluntary resignation of Employee without cause for such
resignation, or for the non- competition period set forth in Section 7 above,
in the event of a termination of employment by the Employer without Cause or
the resignation by the Employee with cause for such resignation, he will not
make use of or disclose, without the prior consent of the Company, Confidential
Information (as hereinafter defined) relating to the Company, or any of its
affiliates, and further agrees, that he will return to the Company, at its
written request, all written materials in his possession embodying such
Confidential Information. For purposes of this Agreement, "Confidential
Information" includes information conveyed or assigned to the Company by
Employee or conceived, compiled, created, developed, discovered or obtained by
Employee from and during his employment relationship with the Company, whether
solely by the Employee or jointly with others, which concerns the affairs of
the Company or its affiliates and which the Company could reasonably be
expected to desire be held in confidence, or the disclosure of which would
likely be embarrassing, detrimental or disadvantageous to the Company or its
affiliates and without limiting the generality of the foregoing includes
information relating to inventions, and the trade secrets, technologies,
algorithms, products, services, finances, business plans, marketing plans,
legal affairs, supplier lists, client lists, potential clients, business
prospects, business opportunities, personnel assignments, contracts and assets
of the Company and information made available to the Company by other parties
under a confidential relationship. Confidential Information, however, shall
not include information (a) which is, at the time in question, in the public
domain through no wrongful act of Employee, (b) which is later disclosed to
Employee by
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one not under obligations of confidentiality to the Company or Employee, (c)
which is required by court or governmental order, law or regulation to be
disclosed, or (d) which the Company has expressly given Employee the right to
disclose pursuant to written agreement. Employee agrees that the remedy at law
for any breach by him of this Section 8 will be inadequate and that the Company
shall also be entitled to injunctive relief.
9. Notice. All notices, requests, demands and other
communications required by or permitted under this Agreement shall be in
writing and shall be sufficiently delivered if delivered by hand, by courier
service, or sent by registered or certified mail, postage prepaid, to the
parties at their respective addresses listed below:
(a) If to the Employee, to the address set out in the
beginning of this Agreement;
(b) If to the Company:
TransCoastal Marine Services, Inc.
0000 Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Either party may change such party's address by such notice to
the other parties.
10. Assignment. This Agreement is personal to the Employee, and
he shall not assign any of his rights or delegate any of his duties hereunder
without the prior written consent of the Company. Neither the employee nor his
spouse will have the right to commute, encumber, or otherwise dispose of any
payments under this Agreement. The Company shall have the right to assign this
Agreement to a successor in interest in connection with a merger, sale of
substantially all assets, or the like; provided however, that an assignment of
this Agreement to an entity with operations, products or services outside of
the industries in which the Company is then active shall not be deemed to
expand the scope of Employee's covenant not to compete with such operations,
products or services without Employee's written consent.
11. Survival. The provisions of this Agreement shall survive the
termination of the Employee's employment hereunder in accordance with their
terms.
12. Applicable Law. The substantive laws of the State of
Louisiana, excluding any law, rule or principle which might refer to the
substantive law of another jurisdiction, will govern the interpretation,
validity and effect of this Agreement without regard to the place of execution
or the place for performance thereof. This Agreement is to be negotiated,
executed and performed in Xxxxxxxxx Xxxxxx, Louisiana, and, as such, the
Company and Employee agree that personal jurisdiction and venue shall be proper
with the state or federal courts situated in Xxxxxxxxx Xxxxxx, Louisiana, to
hear such disputes arising under this Agreement.
13. Binding Upon Successors. This Agreement shall be binding
upon, and shall inure to the benefit of, the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
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14. Entire Agreement. This Agreement constitutes the entire
agreement between the Company and the Employee with respect to the terms of
employment of the Employee by the Company and supersedes all prior agreements
and understandings, whether written or oral, between them concerning such terms
of employment.
15. Waiver and Amendments; Cumulative Rights and Remedies.
(a) This Agreement may be amended, modified or
supplemented, and any obligation hereunder may be waived, only by a written
instrument executed by the parties hereto. The waiver by either party of a
breach of any provision of this Agreement shall not operate as a waiver of any
subsequent breach.
(b) No failure on the part of any party to exercise, and
no delay in exercising, any right or remedy hereunder shall operate as a waiver
hereof, nor shall any single or partial exercise of any such right or remedy by
such party preclude any other or further exercise thereof or the exercise of
any other right or remedy. All rights and remedies hereunder are cumulative
and are in addition to all other rights and remedies provided by law, agreement
or otherwise.
(c) The Employee's obligations to the Company and the
Company's rights and remedies hereunder are in addition to all other
obligations of the Employee and rights and remedies of the Company created
pursuant to any other agreement.
16. Construction. Each party to this Agreement has had the
opportunity to review this Agreement with legal counsel. This Agreement shall
not be construed or interpreted against any party on the basis that such party
drafted or authored a particular provision, parts of or the entirety of this
Agreement.
17. Severability. In the event that any provision or provisions
of this Agreement is held to be invalid, illegal or unenforceable by any court
of law or otherwise, the remaining provisions of this Agreement shall
nevertheless continue to be valid, legal and enforceable as though the invalid
or unenforceable parts had not been included therein. In addition, in such
event the parties hereto shall negotiate in good faith to modify this Agreement
so as to effect the original intent of the parties as closely as possible with
respect to those provisions which were held to be invalid, illegal or
unenforceable.
18. Attorney's Fees. In the event that the employment of counsel
by any party becomes necessary to enforce this Agreement, the non-prevailing
party agrees to pay the prevailing party's reasonable attorney's fees, court
costs, and all other reasonable costs and expenses incurred by the prevailing
party as a result of enforcing its rights under this Agreement.
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IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement under seal on the date first above written, to be effective as of the
Effective Date.
EMPLOYER:
HBH, INC.
A LOUISIANA CORPORATION
By:
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Name:
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Title:
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EMPLOYEE:
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H. XXXXXX XXXXXX II
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