EXHIBIT 10.5
EMPLOYMENT AGREEMENT
This Agreement is made this 11th day of April, 1997, between Cal Dive
International, Inc., a Minnesota corporation (the "Company"), and Xxxx Xxxxx
(Employee) an individual residing at 0000 Xxxxxxxx Xxxxxx, Xx Xxxxx, Xxxxx
00000.
WHEREAS, Employee has extensive executive management skills and experience
in the oil service industry, including valuable marketing, financial, technical
and other experience, knowledge and ability and has been acting as President for
the Company; and
WHEREAS, the Company wishes to continue to employ Employee as President
and Chief Operating Officer and Employee is willing to accept such employment
upon the terms and conditions set forth in this Agreement;
WHEREAS, the execution and delivery of this Agreement by the Company and
Employee is a condition to the purchase of shares of the Company's Common Stock
by Coflexip (the "Purchaser") from the Company and certain shareholders of the
Company, including, among others, Employee, pursuant to a Purchase Agreement
dated as of the date hereof among the Company, the Purchaser and such
shareholders;
NOW, THEREFORE, in consideration of the premises and mutual covenants and
agreements set forth herein, the parties hereto agree as follows:
SECTION 1. TERM OF EMPLOYMENT AND EMPLOYMENT DUTIES.
(a) Employee agrees to be employed by the Company on the terms and
conditions contained herein, for a period commencing on the date hereof and
terminating on April 30, 1999 (the "Employment Term") subject to earlier
termination pursuant to the provisions of Section 7 hereof. During the
Employment Term, Employee shall devote all of his time, energy and skill during
regular business hours to the affairs of the Company and any of its affiliated
business entities and to the promotion of their interests.
(b) During the employment term, Employee's duties shall include acting as
President and Chief Operating Officer of the Company with all responsibilities
assigned to that office from time to time by the Board of Directors of the
Company (the "Board") and shall have the normal duties, responsibilities and
authority of such positions as consistent with the Company's Amended and
Restated By-Laws, subject to the power of the Board to expand or limit such
duties. Employee shall also serve in various senior executive positions with
subsidiaries of the Company as requested by the Board from time to time.
(c) During the Employment Term, (i) Employee services shall be rendered on
a full time basis, (ii) Employee shall have no other employment and no
substantial outside business activities and (iii) the headquarters for the
performance of Employee's services shall be the principal executive or operating
offices of the Company, subject to travel for such reasonable lengths of time as
the performance of his duties in the business of the Company may require.
SECTION 2. COMPENSATION.
(a) SALARY. During the Employment Term, as compensation for his services
and covenants and agreements hereunder, the Company agrees to pay Employee an
initial salary for the period from the date hereof to April 30, 1999 at the rate
of One Hundred Sixty-Three Thousand Two Hundred Dollars ($163,200) per annum,
payable in equal semi-monthly installments in accordance with the Company's
regular payroll practices for its
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principal executives, prorated for any partial employment and subject to normal
increases as approved by the Board.
(b) INCENTIVE BONUS. During the Employment Term, in addition to the annual
salary payable to Employee pursuant to paragraph (a) above, Employee shall be
entitled to an annual incentive bonus (the "Incentive Bonus"), payable not later
than three months after the close of each fiscal year of the Company, commencing
with the fiscal year ending December 31, 1997, as established annually or from
time to time by the Board.
(c) REIMBURSEMENT OF EXPENSES. During the Employment Term, Employee will
be reimbursed by the Company for his reasonable business expenses incurred in
connection with the performance of his duties hereunder, including, without
limitation, a home fax line, car mileage, cell phone and business calls and
other expenses consistent with Company policy from time to time.
(d) STOCK OPTIONS. The Company hereby agrees to grant to Employee a total
of 250,000 stock options, each of which shall entitle Employee to purchase one
share of Common Stock of the Company (the "Common Stock") at an exercise price
of $9.46 per share (the "Options"). Subject to Employee's continued employment
with the Company, one fifth of the Options shall vest and become exercisable on
the first anniversary of the date of his Agreement and on each of the four
succeeding anniversaries of such date. In addition, the Options shall be subject
to such further terms and conditions as may be contained in any stock option
plan hereafter adopted by the Board for the benefit of employees and/or
directors of the Company.
SECTION 3. BENEFITS.
During the Employment Term, Employee shall be entitled to participate in
any medical/dental, life insurance, accidental death, long term disability
insurance plan and 401(k) or other insurance and retirement plans which has been
or which may be adopted by the Company (as long as such plan is not
discontinued) for the general and overall benefit of executive employees of the
Company, according to the participation or eligibility requirements of each such
plan. During the Employment Term, Employee shall enjoy such vacation, holiday
and similar rights and privileges as are enjoyed generally by the Company's
principal executives.
SECTION 4. NONDISCLOSURE AND NONUSE OF CONFIDENTIAL INFORMATION
(a) During the period commencing with the date of this Agreement and
ending on (i) the fifth anniversary of the date of the termination of Employee's
employment with the Company if such termination arises as a result of voluntary
termination or retirement by the Employee or termination by the Company for
"Cause" (as defined in Section 7 (a) hereof) and (ii) the date which is 18
months following the date of termination of Employee's employment with the
Company if such termination arises for any reason other than as provided in
subparagraph 4 (a) (i) above, Employee covenants and agrees with the Company
that Employee shall not disclose or use any Confidential Information (as defined
below) of which Employee is or becomes aware, whether or not such information is
developed by him, except to the extent that such disclosure or use is directly
related to and required by Employee's performance of duties assigned to Employee
by the Company. Employee shall take all appropriate steps to safeguard
Confidential Information and to protect it against disclosure, misuse,
espionage, loss and theft.
(b) As used in this Agreement, the term "Confidential Information" means
information that is not generally known to the public and that is or has been
used, developed or obtained, either prior to or following the date of this
Agreement, by the Company in connection with its businesses, including but not
limited to (i) products or services, (ii) fees, costs and pricing structures,
(iii) designs, (iv) analysis, (v) drawings, photographs and reports, (vi)
computer software, including operating systems, applications and program
listings, (vii) flow charts, manuals and documentation, (viii) data bases, (ix)
accounting and business methods, (x) inventions, devices, new developments,
methods and processes, whether patentable or unpatentable and whether or not
reduced to practice,
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(xi) customers and clients and customer or client lists, (xii) other
copyrightable works, (xiii) all technology and trade secrets, and (xiv) all
similar and related information in whatever form. Confidential Information shall
not include any information that has been published in a form generally
available to the public prior to the date Employee proposes to disclose or use
such information other than as a result of disclosure by Employee in violation
of this Agreement. Information shall not be deemed to have been published merely
because individual portions of the information have been separately published,
but only if all material features comprising such information have been
published in combination.
SECTION 5. NON-COMPETITION, NON-SOLICITATION AND TERMINATION OF PRIOR
AGREEMENTS.
(a) Employee acknowledges and agrees with the Company that his services to
the Company are unique in nature and that the Company would be irreparably
damaged if Employee were to provide similar services to any person or entity
competing with the Company or engaged in a similar business. Employee
accordingly covenants and agrees with the Company that during the period
commencing with the date of this Agreement and ending on the later to occur of:
(i) April 30, 2002 and (ii) (A) the second anniversary of the date of the
termination of Employee's employment with the Company if such termination
arises as a result of voluntary termination or retirement by the Employee
or termination by the Company for "Cause", or (B) the first anniversary of
the date of termination of the Employee's employment with the Company if
such termination arises for any reason other than as provided in the
preceding subparagraph 5(a) (ii) (A).
Employee shall not, directly or indirectly, either for himself or for any other
individual, corporation, partnership, joint venture of other entity, participate
in any business (including without limitation any division, group or franchise
of a larger organization) which engages or which proposes to engage in the
business of providing diving services in the Gulf of Mexico or any other
business actively engaged in by the Company on the date of termination of
Employee's employment in the area or areas where the Company is conducting such
business; PROVIDED that until such time as the Company waives in writing any
rights it may have to enforce the terms of this Section 5 (the "Waiver), during
the period commencing on the date of the termination of the Employee's
employment with the Company and ending on the date on which either the
noncompetition provisions contained in this Section 5 terminate or the Waiver is
delivered to Employee, whichever is earlier, the Company will pay to Employee an
amount equal to Employee's base salary as of the date his employment was
terminated (which will be paid over time in accordance with the salary payment
schedule in effect from time to time for senior executives of the Company) and
during such time period executive shall be entitled to all insurance benefits
received by other senior executives of the Company. For purposes of this
Agreement, the term "participate in" shall include without limitation having any
direct or indirect interest in any corporation, partnership, joint venture or
other entity, whether as a sole proprietor, owner, stockholder, partner, joint
venturer, creditor or otherwise, or rendering any direct or indirect service or
assistance to any individual, corporation, partnership, joint venture and other
business entity (whether as a director, officer, manager, supervisor, employee,
agent, consultant or otherwise) but not ownership of 2% or less of the capital
stock of a public company.
(b) Employee covenants and agrees with the Company that during the period
commencing with the date of this Agreement and ending on the later to occur of
(i) April 30, 2002 and (ii) (A) the second anniversary of the date of
termination of Employee's employment with the Company if such termination arises
as a result of voluntary termination by the Company or for "Cause", or (B) the
date which is 18 months following the termination of Employee's employment with
the Company if such termination arises for any reason other than as provided in
the preceding subparagraph 5(b) (ii) (A) above, Employee shall not, directly or
indirectly, for himself or for any other individual, corporation, partnership,
joint venture or other entity, (x) make any offer of employment, solicit or hire
any supervisor, employee of the Company or its affiliates or induce or attempt
to induce any employee of the Company or its affiliates to leave their employ or
in any way interfere with the relationship between the Company or its affiliates
and any of their employees or (y) induce or attempt to induce any supplier,
licensee, licensor,
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franchisee, or other business relation of the Company or its affiliates to cease
doing business with them or in any way interfere with the relationship between
the Company or its affiliates and any customer or business relation.
(c) Each of (i) Employee's Confidentiality and Noncompete Agreement with
the Company dated July 27, 1990, as amended by Amendment No. 1 dated January 12,
1995 and Amendment No. 2 dated January 25, 1995, (ii) Employee's Side Agreement
dated as of January 12, 1995 (the "Side Agreement") with the Company, the Funds,
the Executives (each as defined in the Purchase Agreement) and certain other
employee shareholders of the Company, and (iii) Employee's Stock Purchase
Warrant dated January 12, 1995 granted to Employee by the Company and consented
to by the Funds pursuant to and in accordance with paragraph 2 of the Side
Agreement is hereby canceled and of no further force and effect and replaced in
its entirety by this Agreement.
SECTION 6. COMPANY'S OWNERSHIP OF INTELLECTUAL PROPERTY.
(a) In the event that Employee as part of his activities on behalf
of the Company generates, authors or contributes to any invention, design, new
development, device, product, method or process (whether or not patentable or
reduced to practice or comprising Confidential Information), any copyrightable
work (whether or not comprising Confidential Information) or any other form of
Confidential Information relating directly or indirectly to the Company's
business as prior hereto, now or hereinafter conducted (collectively,
"Intellectual Property"), Employee acknowledges that such Intellectual Property
is the exclusive property of the Company and hereby assigns all right, title and
interest in and to such Intellectual Property to the Company. Any copyrightable
work prepared in whole or in part by Employee shall be deemed "a work made for
hire" under Section 201(b) of the 1976 Copyright Act, and the Company shall own
all of the rights comprised in the copyright therein. Employee shall promptly
and fully disclose all Intellectual Property to the Company and shall cooperate
with the Company to protect the Company's interest in and rights to such
Intellectual Property, including without limitation providing reasonable
assistance in securing patent protection and copyright registrations and
executing all documents as reasonably requested by the Company, whether such
requests occur prior to or after termination of Employee's employment with the
Company.
(b) In accordance with Minnesota Statutes, Chapter 181, Section
181.78, Employee is hereby advised that no provision of this Agreement is
intended to assign any of Employee's rights in an invention for which no
equipment, supplies, facility or trade secret information of the Company was
used and which was developed entirely on the Employee's own time, and which does
not relate directly to the business of the Company or to the Company's actual or
demonstrably anticipated research or development, or which does not result from
any work performed by the Employee for the Company.
(c) As requested by the Company from time to time and upon the
termination of Employee's employment with the Company for any reason, Employee
shall promptly deliver to the Company all copies and embodiments, in whatever
form, of all Confidential Information or Intellectual Property in Employee's
possession or within his control (including, but not limited to, written
records, notes, photographs, manuals, notebooks, documentation, program
listings, flow charts, magnetic media, disks, diskettes, tapes and all other
materials containing any Confidential Information or Intellectual Property)
irrespective of the location or form of such material and, if requested by the
Company, shall provide the Company with written confirmation that all such
materials have been delivered to the Company.
SECTION 7. TERMINATION OF AGREEMENT.
(a) TERMINATION FOR "CAUSE". This Agreement may be terminated by the
Company at any time during the Employment Term for "Cause", in which event
Employee shall have no further rights under this Agreement. For purposes of the
preceding sentence, "Cause" shall mean: (i) any breach or threatened breach by
Employee of any of his agreements contained in Section 4, 5 or 6 hereof; (ii)
repeated or willful neglect by
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Employee in performing any duty or carrying out any responsibility assigned or
delegated to him pursuant to Section 1(b) hereof, which neglect shall not have
permanently ceased within ten (10) business days after written notice to
Employee thereof; or (iii) the commission by Employee of any criminal act
involving moral turpitude or a felony which results in an arrest or indictment,
or the commission by Employee, based on reasonable proof, of any act of fraud or
embezzlement involving the Company or its customers or suppliers. In the event
that the Company elects to terminate this Agreement for Cause, it will give
Employee written notice of such termination, and, at the Company's discretion,
Employee's employment will terminate sixty (60) days thereafter.
(b) TERMINATION UPON DEATH. This Agreement shall terminate automatically
upon the death of Employee during the Employment Term. In such event, the
Company shall be obligated to pay to Employee's estate, or to such person or
persons as he may designate in writing to the Company, (i) through the last day
of the fiscal year in which Employee's death shall have occurred, the salary
(payable in the same manner as described in Section 2(a) hereof) to which
Employee would have been entitled under Section 2(a) hereof had such death not
occurred, and (ii) as soon as reasonably practicable after Employee's death, any
accrued but, as of the date of such death, unpaid Incentive Bonus (or, if such
death shall have occurred after the first three (3) months of the Company's
fiscal year, any prorated portion thereof).
(c) TERMINATION UPON DISABILITY. This Agreement may be terminated by the
Company at any time during the Employment Term in the event that Employee shall
have been unable, because of "Disability" (as hereinafter defined), to perform
his principal duties for the Company for a cumulative period of six (6) months
within any eighteen (18) month period. Prior to Employee's termination for
Disability as provided herein, he shall remain eligible to receive the
compensation and benefits set forth in Section 2 and Section 3 hereof. Upon such
termination, Employee shall be entitled to receive as soon as reasonably
practicable thereafter, any accrued, but as of the date of such termination,
unpaid Incentive Bonus (or, if such termination shall have occurred after the
first three (3) months of the Company's fiscal year, any prorated portion
thereof). For purposes of this Section 7(c), "Disability" shall mean any
physical or mental condition of Employee which shall substantially impair his
ability to perform his principal duties hereunder. In the event that the Company
elects to terminate this Agreement by reason of Disability under this Section
7(c), it will give written notice of such termination, and, at the Company's
discretion, Employee's employment will terminate sixty (60) days thereafter.
(d) EFFECT OF TERMINATION. In the event that this Employee is terminated
pursuant to any paragraph of this Section 7, Employee shall thereafter have no
further rights under this Agreement, except for those explicitly set forth in
the particular paragraph of this Section 7 which served as the Company's basis
for such termination. In the event that during the Employment Term Employee (i)
is terminated by the Company without "Cause" or (ii) voluntary resigns from his
employment with the Company and as a director of the Company, the Company shall
be obligated to purchase as promptly as reasonably practicable after such
termination or resignation date, as applicable, up to a number of shares of
Common Stock owned by Employee having an aggregate fair market value (based on
the average daily trading price of the Common Stock over the thirty (30) day
period immediately preceding such termination or resignation date, as
applicable, if the initial public offering of the Company under the Securities
Act of 1993, as amended, shall then have been completed or, if such initial
public offering shall not then have been completed, based on a valuation of the
Common Stock by Xxxxxxx & Co. International) equal to $2.3 million.
Notwithstanding any termination of Employee's employment with the Company, the
covenants and agreements of Employee contained in Sections 4, 5 (a) (so long as
payments under Section 5(a) are continued as therein described), 5 (b) and 6
hereof shall survive and remain in full force and effect.
SECTION 8. 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,
sent to the recipient by reputable express courier service
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(charge prepaid), or mailed by first class, registered mail, return receipt
requested, postage and registry fees prepaid and addressed as follows:
If to the Employee:
At the address set forth on page 1 hereof.
If to the Company :
Cal Dive International, Inc.
00000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxxx, General Counsel
Addresses may be changed by notice in writing signed by the addressee.
SECTION 9. GENERAL PROVISIONS.
(a) COMPANY SUBSIDIARIES. For purposes of this Agreement, the term
"Company" shall include all subsidiaries of the Company.
(b) SEVERABILITY. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability shall not affect
any other provisions of any other jurisdiction, and this Agreement shall be
reformed, construed and enforced in such jurisdictions if such invalid, illegal
or unenforceable provision had never been contained herein. The parties agree
that a court of competent jurisdiction making a determination of the invalidity
or unenforceability of any term or provision of Sections 4, 5 and 6 of this
Agreement shall have the power to reduce the scope, duration or area of any such
term or provision, to delete specific words or phrases or to replace any invalid
or unenforceable term or provision in Sections 4, 5, 6 with a term or provision
that is valid and enforceable and that comes closest to expressing the intention
of the invalid or unenforceable term or provision, and this Agreement shall be
enforceable as so modified.
(d) COMPLETE AGREEMENT. This Agreement, embodies the complete
agreement and understanding among the parties and supersedes and preempts any
prior understandings, agreements or representations by or among the parties,
written or oral, which may have related to the subject matter hereof in any way.
(e) COUNTERPARTS. This Agreement may be executed in separate
counterparts, each of which is deemed to be an original and all of which taken
together constitute one and the same agreement.
(f) SUCCESSORS AND ASSIGNS. Except as otherwise provided herein,
this Agreement shall bind and inure to the benefit of and be enforceable by the
Company and Employee and their respective successors and assigns; provided that
the rights and obligations of Employee under this Agreement shall not be
assignable without the prior written consent of the Company.
(g) GOVERNING LAW. All questions concerning the construction,
validity and interpretation of this Agreement and the exhibits hereto shall be
governed by the internal law, and not the law of conflicts, of the State of
Texas.
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(h) REMEDIES. Each of the parties to this Agreement shall be
entitled to enforce its rights under this Agreement specifically, to recover
damages and costs (including reasonable attorneys fees) caused by any breach of
any provision of this Agreement and to exercise all other rights existing in its
favor. The parties hereto agree and acknowledge that Employee's breach of any
term or provision of this Agreement shall materially and irreparably harm the
Company, that money damages shall accordingly not be an adequate remedy for any
breach of the provisions of this Agreement and that any party in its sole
discretion and in addition to any other remedies it may have at law or in equity
may apply to any court of law or equity of competent jurisdiction (without
posting any bond or deposit) for specific performance and/or other injunctive
relief in order to enforce or prevent any violations of the provisions of this
Agreement.
(i) AMENDMENT AND WAIVER. The provisions of this Agreement may be
amended and waived only with the prior written consent of the Company and
Employee.
IN WITNESS, WHEREOF, the parties hereto have duly executed this Agreement as of
the date first above written.
CAL DIVE INTERNATIONAL, INC. EMPLOYEE
By
Title: Xxxx Xxxxx
0
