EXHIBIT 10.10
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This Employment and Non-competition Agreement (the "Agreement"), effective
as of July 7, 1997, is by and between Xxxxxx Xxxxxxx International Inc., a
Delaware corporation (the "Company"), and Xxxxxxx X. Xxxxxx ("Employee").
RECITALS
WHEREAS, the Company desires to engage Employee as the Company's Chief
Operating Officer, and Employee desires to accept such engagement.
Therefore, in consideration of the mutual promises, terms, covenants and
conditions set forth herein and the performance of each, the Company and
Employee hereby agree as follows:
AGREEMENTS
1. Employment and Duties.
---------------------
(a) The Company hereby employs Employee as Chief Operating officer.
Initially, Employee's responsibilities shall be to provide assistance in
the design of the Company's new Greenwood Island Shipyard (the "New Yard"),
negotiate all contracts for the construction of the New Yard and oversee
such construction to insure that the New Yard will have the capacity to
construct new offshore oil and gas drilling units beginning in the first
quarter of 1998. Thereafter, Employee shall be responsible for managing
the business development of the New Yard to insure the production of
sufficient revenue and backlog to justify the Company's investment therein,
and for instituting proper accounting controls and bidding calculation and
review procedures to insure efficient, cost effective operations in each of
the Company's subsidiary corporations. In addition, Employee shall assist
in the planning and negotiation of the acquisition of such additional
businesses and facilities as the Company shall deem necessary for its
future growth and expansion. Employee shall have the authority to hire a
controller who shall report directly to Employee. Employee shall have such
other responsibilities, duties and authority as may be assigned to him by
the Company from time to time during the term of this Agreement. Employee
will report to the President of Company. Employee hereby accepts this
employment upon the terms and conditions herein contained and agrees to
devote his time, attention and best efforts to promote and further the
business of the Company.
(b) Employee shall faithfully adhere to, execute and fulfill all
policies established by the Company.
(c) Employee shall not, during the term of his employment hereunder,
be engaged in any other business activity pursued for gain, profit or other
pecuniary advantage if such activity interferes with Employee's duties and
responsibilities hereunder. However, the foregoing limitations shall not
be construed as prohibiting Employee from making personal investments in
such form or manner as will neither require his services in the operation
or affairs of the enterprises in which such investments are made nor
violate the terms of paragraph 3 hereof.
2. Compensation. For all services rendered by Employee, the Company
shall compensate Employee as follows:
(a) Base Salary. Beginning on the date of this Agreement, the base
salary payable to Employee shall be $150,000.00 per year, payable on a
regular basis in accordance with the Company's standard payroll procedures.
On at least an annual basis, the Compensation Committee of the Board of
Directors of the Company (the "Committee") will review Employee's
performance and may recommend an increase to such base salary, or the
payment of a bonus, if, in the Committee's discretion, any such salary
increase or bonus payment is warranted.
(b) Stock Options. In connection with, and immediately prior to, the
contemplated initial public offering of the Company's common stock, the
Company shall cause to be granted to Employee stock options for 100,000
shares of the Company's common stock at an option price of $2.50 per share.
The stock options shall be exercisable by Employee according to the
following schedule:
===================================================
EXERCISE DATE NUMBER OF SHARES EXERCISE PRICE
PER SHARE
===================================================
On or after 10,000 $2.50
January 1, 1998
---------------------------------------------------
On or after 10,000 $2.50
July 1, 1998
---------------------------------------------------
On or after 20,000 $2.50
July 1, 1999
---------------------------------------------------
On or after 20,000 $2.50
July 1, 2000
---------------------------------------------------
On or after 20,000 $2.50
July 1, 2001
---------------------------------------------------
On or after 20,000 $2.50
July 1, 2002
---------------------------------------------------
TOTAL 100,000
===================================================
-2-
In the event Employee's employment with the Company is terminated by the
Company on or before January 1, 1998, without cause, then the initial stock
option to purchase 10,000 shares of the Company's common stock which is
otherwise exercisable by Employee on or after January 1, 1998, shall
immediately become exercisable by Employee and shall remain exercisable
until 5:00 p.m. central standard time on the effective date of the
termination of Employee's employment. In all other events all stock
options to be granted to Employee shall expire upon the earlier of the
termination of Employee's employment with the Company or December 31, 2006,
unless sooner exercised by Employee.
The representation of the Company to Employee that the Company will
grant options to purchase shares of its common stock to Employee in the
event of his continued employment with the Company is not to be construed
as a guaranty by the Company of the continued employment of Employee, nor
is it to be construed that Employee has any rights in or to any unissued
shares of the Company's common stock. Except as otherwise set forth above
in this subparagraph, upon the termination of Employee's employment, for
any reason, by the Company or voluntarily by Employee, Employee shall have
no rights in or to any shares of the common stock of the Company remaining
unissued to Employee pursuant to options to be granted under this
subparagraph 2(b).
For purposes of this subparagraph 2(b) the term "cause" shall be
defined as (1) Employee's material breach of this Agreement; (2) Employee's
gross negligence in the performance or intentional nonperformance
(continuing for ten (10) days after receipt of written notice of need to
cure) of any of Employee's 'material duties and responsibilities hereunder;
(3) Employee's dishonesty, fraud or misconduct with respect to the business
or affairs of the Company or its subsidiaries which materially and
adversely affects the operations or reputation of the Company; (4)
Employee's conviction of a felony crime; or (5) chronic alcohol abuse or
illegal drug abuse by Employee.
(c) Executive Perquisites, Benefits and other Compensation. Employee
shall be entitled to receive additional benefits and compensation from the
Company in such form and to such extent as specified below.
(1) A leased automobile of Employee's choice so long as the lease
payments do not exceed $450.00 per month.
(2) Reimbursement for all business travel and other out-of-pocket
expenses (including those costs to maintain any professional
certifications held or obtained by Employee) reasonably incurred by
Employee in the performance of his services pursuant to this
Agreement. All reimbursable expenses shall be appropriately
documented in reasonable detail by Employee upon submission of any
request for reimbursement and in a format and manner consistent with
the Company's expense reporting policy.
-3-
(3) Two (2) weeks of paid vacation or such greater amount as may
be afforded officers and key employees at similar levels under the
Company's policies in effect from time to time.
(4) The Company shall provide Employee with other executive
perquisites as may be available to or deemed appropriate for Employee
by the Board of Directors or the Committee and participation in all
other Company wide employee benefits as may be adopted from time to
time by the Company.
3. Non-competition Agreement.
(a) Employee recognizes that the willingness of the Company to enter
into this Agreement is based in material part on Employee's agreement to
the provisions of this paragraph 3, and that Employee's breach of the
provisions of this paragraph could materially damage the Company and its
subsidiaries (the Company and its subsidiaries are hereinafter collectively
referred to as the "Affiliates" and individually as an "Affiliate").
Therefore, in consideration of the benefits to be received by Employee as a
result of his employment with the Company, Employee agrees that Employee
shall not, for a period of two (2) years immediately following the
termination of this Agreement, for any reason whatsoever, directly or
indirectly, for himself or on behalf of or in conjunction with any other
person, persons, company, partnership, corporation or business of whatever
nature:
(1) contact any customer of any Affiliate or other person for the
purpose of inducing or attempting to induce such customer or other
person to cease doing business with any Affiliate;
(2) induce or attempt to induce any agent or employee of any
Affiliate to terminate employment with an Affiliate or to commence
work with any competitor of any Affiliate;
(3) call on, solicit, attempt to obtain, accept, or in any way
secure business from any of the customers of any Affiliate, nor,
directly or indirectly, aid or assist any other person, firm or
corporation in the solicitation of such customer; and
(4) engage, as an officer, director, shareholder, owner, partner,
joint venturer, or in a managerial capacity, whether as an employee,
independent contractor, consultant or advisor, or as a sales
representative, in any business selling any products or services in
direct competition with any Affiliate within the United States or
Canada.
(b) Because of the difficulty of measuring economic losses to the
Affiliates as a result of a breach of the foregoing covenant, and because
of the immediate and irreparable
-4-
damage that could be caused to the Affiliates for which they would have no
other adequate remedy, Employee agrees that the foregoing covenant may be
enforced by the Affiliates, or any of them, in the event of breach by him,
by injunctions and restraining orders without the necessity of posting any
bond or other security therefor.
(c) The covenants in this paragraph 3 are severable and separate, and
the unenforceability 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 any restrictions set forth in
this paragraph 3 are unreasonable, then it is the intention of the parties
that such restrictions be enforced to the fullest extent which the court
deems reasonable, and this Agreement shall thereby be reformed.
(d) Each of the covenants in this paragraph 3 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 Employee against the Company
or any Affiliate, whether predicated on this Agreement or otherwise, shall
not constitute a defense to the enforcement by the Company or any Affiliate
of such covenants.
4. Term; Termination; Rights on Termination. The term of this Agreement
shall begin on the date hereof and continue until terminated by either party.
At any time after the commencement of employment, the Company or Employee may,
without cause, terminate this Agreement and Employee's employment, effective
thirty (30) days after written notice is provided to the other party. Upon
termination of this Agreement for any reason, Employee shall be entitled to
receive all compensation earned - and all benefits and reimbursements due
through the effective date of termination. All other rights and obligations of
the Company and Employee under this Agreement shall cease as of the effective
date of termination, except that Employee's obligations under paragraphs 3, 5,
6, 7 and 8 herein shall survive such termination in accordance with their terms.
5. Return of Company Property. All records, designs, patents, business
plans, financial statements, manuals, memoranda, lists and other property
delivered to or compiled by Employee by or on behalf of the Company or any
Affiliate or the representatives, vendors or customers thereof which pertain to
the business of the Company or any Affiliate shall be and remain the property of
the Company or an Affiliate, as the case may be, and be subject at all times to
the discretion and control thereof. Likewise, all correspondence, reports,
records, charts, advertising materials and other similar data pertaining to the
business, activities or future plans of the Company or of any Affiliate which
are collected by Employee shall be delivered promptly to the Company without
request by it upon termination of Employee's employment.
6. Inventions. Employee shall disclose promptly to the Company any and
all significant conceptions and ideas for inventions, improvements and valuable
discoveries, whether patentable or not, which are conceived or made by Employee,
solely or jointly with another, during the period of employment or within one
(1) year thereafter, and which are directly related to the business or
-5-
activities of the Company or any Affiliate and which Employee conceives as a
result of his employment by the Company. Employee hereby assigns and agrees to
assign all his interests therein to the Company or its nominee. Whenever
requested to do so by the Company, Employee 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.
7. Confidentiality.
(a) Employee acknowledges and agrees that all Confidential Information
(as defined below) of the Company and any Affiliate 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. Employee further acknowledges and agrees that Employee owes
the Company and any Affiliate a fiduciary duty to preserve and protect all
Confidential Information from unauthorized disclosure or unauthorized use;
certain Confidential Information constitutes "trade secrets" under the laws
of the state of Mississippi; and unauthorized disclosure or unauthorized
use of the Company's or any Affiliate's Confidential Information would
irreparably injure the Company and its Affiliates.
(b) Both during the term of Employee's employment and after the
termination of Employee's employment for any reason (including wrongful
termination), Employee 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 Employee.
Employee shall not, at any time (either during or after the term of
Employee's employment), 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 Board of
Directors of the Company, or permit any other person to do so. Employee
shall take reasonable precautions to protect the physical security of all
documents and other material containing Confidential Information
(regardless of the medium on which the Confidential Information is stored).
This Agreement applies to all Confidential Information, whether now known
or later to become known to Employee.
(c) Upon the termination of Employee's employment with the Company for
any reason, and upon request of the Company at any other time, Employee
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.
Within five days of any such request, Employee shall certify to the Company
in writing that all such materials have been returned.
-6-
(d) As used in this Agreement, the term "Confidential Information"
shall mean any information or material known to or used by or for the
Company or any Affiliate (whether or not owned or developed by the Company
or any Affiliate and whether or not developed by Employee) that is not
generally known to the public. Confidential Information includes, but is
not limited to, the following: all trade secrets of the Company or any
Affiliate; all information that the Company or any Affiliate has marked as
confidential or has otherwise described to Employee (either in writing or
orally) as confidential; all nonpublic information concerning the Company's
or any Affiliate's 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 Company and Affiliate business
records and plans; all Company and Affiliate personnel files; all financial
information of or concerning the Company or any Affiliate; 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,
patents, trademarks, servicemarks and other intellectual property; all
technical specifications; any proprietary information belonging to the
Company or to any Affiliate; all computer hardware or software manual; all
training or instruction manuals; all data and all computer system passwords
and user codes.
8. No Prior Agreements. Employee hereby represents and warrants to the
Company that the execution of this Agreement by Employee and his employment by
the Company and the performance of his duties hereunder will not violate or be a
breach of any agreement with a former employer, client or any other person or
entity. Further, Employee agrees to indemnify the Company for any claim,
including, but not limited to, attorneys' fees and expenses of investigation, by
any such third party that such third party may now have or may hereafter come to
have against the Company based upon or arising out of any noncompetition
agreement, invention or secrecy agreement between Employee and such third party
which was in existence as of the date of this Agreement.
9. Assignment; Binding Effect. Employee understands that he has been
selected for employment by the Company on the basis of his personal
qualifications, experience and skills. Employee agrees, therefore, he cannot
assign all or any portion of his performance under this Agreement. Subject to
the preceding two (2) sentences and the express provisions of paragraph 10
below, this Agreement shall be binding upon, inure to the benefit of and be
enforceable by the parties hereto and their respective heirs, legal
representatives, successors and assigns.
10. Complete Agreement. Except as expressly provided herein, this
Agreement is not a promise of future employment. Employee has no oral
understandings or agreements with the Company or any of its officers, directors
or representatives covering the same subject matter as this Agreement. This
written Agreement is the final, complete and exclusive statement and expression
of the agreement between the Company and Employee and of all the terms of this
Agreement, and it cannot be varied, contradicted or supplemented by evidence of
any prior or contemporaneous oral
-7-
or written agreements. This written Agreement may not be later modified except
by a further writing signed by a duly authorized officer of the Company and
Employee, and no term of this Agreement may be waived except by writing signed
by the party waiving the benefit of such term.
11. Notices. All notices or other documents required to be delivered
under this Agreement shall be given in writing and shall be personally
delivered, delivered by United States certified mail, return-receipt requested,
or by facsimile to the parties at the addresses listed below. Such notices shall
be effective as of the time of delivery if personally delivered, as of the date
of receipt as referenced by the official receipt of the United States Postal
Service if delivered by certified mail, or as of the date and time of receipt as
reflected by facsimile acknowledgement. The addresses of the parties are as
follows:
To the Company: Xxxxxx Xxxxxxx International Inc.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: X. X. Xxxxxxxx
President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To Employee: Xxxxxxx X. Xxxxxx
0000 Xxxxxxx Xxxxx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
12. Severability; Headings. If any portion of this Agreement is held
invalid or inoperative, the other portions of this Agreement shall be deemed
valid and operative and, so far as is reasonable and possible, effect shall be
given to the intent manifested by the portion held invalid or inoperative. The
paragraph headings herein are for reference purposes only and are not intended
in any way to describe, interpret, define or limit the extent or intent of the
Agreement or of any part hereof.
-8-
13. Governing Law. This Agreement shall in all respects be construed
according to the laws of the State of Mississippi.
XXXXXX XXXXXXX INTERNATIONAL INC.
By:
-------------------------------
X. X. Xxxxxxxx
President
EMPLOYEE:
----------------------------------
Xxxxxxx X. Xxxxxx
-9-
