EXHIBIT 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into this 19th day of
August, 2002 (the "Effective Date"), between UNIFAB International, Inc., a
Louisiana corporation (the "Company"), and Xxxxxxx X. Xxxxxx, an individual
residing in St. Xxxxxxx Xxxxxx, Louisiana (the "Employee");
WITNESETH:
WHEREAS, the Company desires to retain the benefit of
Employee's experience, knowledge, reputation and contacts to benefit the
Company's business; and
WHEREAS, the Employee is willing to undertake the duties
hereinafter set forth and to be subject to the restrictions hereinafter
specified in exchange for the compensation herein set forth;
NOW, THEREFORE, the Company and the Employee agree as follows:
1. Term. The Company hereby retains the Employee as a
Consultant with respect to all operations of the Company for a term commencing
on the Effective Date and continuing until August 18, 2006 (the "Expiration
Date"), which period of employment may be terminated under the terms and
conditions set forth in paragraph 7 (such period being hereinafter sometimes
called the "Term of this Agreement"). The Employee accepts such employment and
agrees to perform the services specified herein, all upon the terms and
conditions hereinafter stated.
2. Duties as Employee. The Employee shall serve the Company in
the capacity of a Consultant with respect to all operations of the Company and
shall report to, and be subject to the general direction and control of, the
Board of Directors of the Company (the "Board"), the Chief Executive Officer
("CEO") of the Company and the President of the Company.
3. Time and Availability.
a. Initial Period. The Employee shall devote his full
business time and attention to the business of the Company during the period
August 19, 2002 through August 18, 2003 (the "Initial Period"), and, except as
may be specifically permitted by the Company, shall not engage in any other
business activity during the Initial Period. The foregoing shall not be
construed as preventing the Employee from making passive investments in other
businesses or enterprises during the Initial Period, provided, however, that
such investments do not require services on the part of the Employee which would
in any way impair the performance of his duties under this Agreement. Employee
will not be required by the Company to relocate during the Term of this
Agreement.
b. Second Period. After the Initial Period for the
remaining Term of this Agreement ("Second Period"), the Employee shall devote by
telephone such time and attention to the business of the Company as requested by
the Board, CEO and/or President. Employee also shall participate in special
Company projects from time to time as requested by the Board, CEO and/or
President provided employee and the Company can mutually agree upon Employee's
compensation for such participation.
4. Compensation. As regular compensation for all services
rendered by Employee during the Term of this Agreement to the Company, its
subsidiaries and affiliates, and for the agreements of the Employee
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set forth in Section 9 hereof, the Company shall (i) pay to the Employee a
salary of $5,000 per month (the "Salary"), payable on the 1st and 15th of each
calendar month in arrears, and (ii) grant to the Employee pursuant to the
provisions of the Company's Long Term Incentive Plan effective as of September
16, 2002, an option (the "Stock Option") exercisable as set forth hereinafter to
acquire at $0.39 per share, 250,000 shares of the Company's common stock, par
value $.01 per share. The Stock Option grant shall be unrestricted and fully
vested upon grant and shall be subject to the resale rules promulgated under
federal securities laws.
5. Benefits. During the Term of this Agreement, the Employee
shall be entitled to participate in all employee benefit plans and arrangements
in the same manner as executive officers of the Company.
6. Expenses. During the Term of this Agreement, the Company
shall pay or reimburse the Employee, upon submission by him of an appropriate
statement documenting such expenses as required by the Internal Revenue Code,
for all out-of-pocket expenses for entertainment, travel, meals, hotel
accommodations and the like incurred by him in the interest of the business of
the Company and in accordance with such procedures established by the Board of
Directors.
7. Termination.
(a) Death. Employee's employment hereunder shall terminate
upon the death of Employee. If Employee's employment is terminated because of
his death, the Company shall pay to Employee's wife, Xxxx Xxxxxxx Xxxxxxx
Xxxxxx, any unpaid portion of Employee's monthly compensation pursuant to the
same payment schedule that it would have been paid to Employee except for his
death.
(b) Disability. Employee's employment hereunder shall
terminate upon the disability of Employee which, for purposes of this Agreement,
shall be the physical or mental inability of Employee to carry out the normal
and usual duties of his employment for an entire period of six (6) contiguous
months together with the reasonable likelihood as determined by the Board that
Employee, upon the advice of a qualified physician, will be unable to carry out
the normal and usual duties of his employment for the following continuous
period of six (6) months, and within 30 days after Notice of Termination is
given, Employee shall not have returned to the performance of his normal and
usual duties.
(i) During any period that the Employee fails to perform his
duties hereunder as a result of incapacity due to physical or mental
illness (the "Disability Period"), the Employee shall continue to
receive his Salary until the date of termination, provided that
payments so made to the Employee during the Disability Period shall not
be reduced by the sum of the amounts, if any, payable to the Employee
to or prior to the time of any such payment under disability benefit
plans of the Company.
(ii) If the Employee's employment is terminated because of
his disability, the Company shall pay to the Employee, commencing on
the next succeeding day which is the fifteenth day or the last day of
the month, as the case may be, and semimonthly thereafter on the
fifteenth and last days of each month, an amount on each payment date
equal to the semi-monthly installment of the Salary payment payable to
the Employee pursuant to Paragraph 4 hereof at the time of disability
for the remaining Term of this Agreement. Employee shall also be paid
(i) the vested portion of any incentive compensation plan to which
Employee is entitled and (ii) a pro rata portion of any incentive
compensation to which Employee is entitled for the full fiscal year in
which Employee's employment is terminated based on a 365 day year and
the number of days elapsed prior to the date of termination. All
payments made to the Employee
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pursuant to this subparagraph (b)(ii) shall not be reduced by the sum
of the amount, if any, payable to the Employee to or prior to the time
of any such payment under disability benefit plans of the Employer.
(c) Termination by Employee. The Employee may terminate his
employment hereunder for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean (i) a significant change in the scope, nature or status of
Employee's responsibilities or employment prerogatives; (ii) a Change in Control
(as hereinafter defined); (iii) Employee's relocation by the Company to any
place, except for a relocation consented to by Employee; and (iv) any purported
termination of Employee's employment with the Company which is not effected
pursuant to a Notice of Termination satisfying the requirements of Paragraph
7(g) hereof (and for purposes of this Agreement, no such purported termination
shall be effective). Other than following a Change in Control (as hereinafter
defined), if Employee shall terminate his employment for Good Reason, then the
Company shall continue to pay the Employee his Salary through August 18, 2006.
(d) Discharge for Cause. Notwithstanding any other
provision of this Agreement, if prior to the expiration of the Initial Period of
this Agreement the Employee shall be discharged by the Company for cause, then
this Agreement shall automatically terminate (except for the provisions of
Section 9 which shall continue in effect), and upon such termination, the
Company shall have no further obligation to the Employee except that the Company
shall pay to the Employee (i) an amount equal to the Employee's accrued and
unpaid Salary to the date of such termination, and (ii) that proportion of the
Salary to be paid for the Second Period calculated by multiplying $180,000 by a
ratio equal to the total number of days Employee was employed during the Initial
Period divided by 365. As used herein "for cause" shall mean any of the
following events: (i) willful misconduct or intentional and continual neglect of
duties which in the business judgment of the Board (excluding Employee) has
materially adversely affected the Company; provided, however, that Employee
shall have first received written notice from such Board advising of the acts or
omissions that constitute the misconduct or neglect of duties, and such
misconduct or neglect of duties continues after Employee shall have had a
reasonable opportunity to correct the same; (ii) theft or conviction of a felony
or any crime involving dishonesty or moral turpitude; or (iii) willful and
continual failure or refusal to substantially perform employment duties (other
than any such failure resulting from Employee's incapacity due to physical or
mental illness); provided, however, that Employee shall have first received
written notice from the Board advising of the acts or omissions that constitute
the failure or refusal to substantially perform duties, and such failure or
refusal continues after Employee shall have had a reasonable opportunity to
correct the same.
For purposes of this paragraph, no act, or failure to act,
on Employee's part shall be considered "willful" unless done, or omitted to be
done, by him not in good faith and without reasonable belief that his action or
omission was in the best interest of the Company. Notwithstanding the foregoing,
Employee shall not be deemed to have been terminated for cause without (i)
reasonable notice to Employee setting forth the reasons for the Company's
intention to terminate for cause, (ii) an opportunity for Employee, together
with his counsel, to be heard before the Board, and (iii) delivery to Employee
of a Notice of Termination from the Board finding that in the good faith opinion
of the Board, Employee was guilty of conduct set forth above in clause (i),
(ii), or (iii) of the preceding paragraph, and specifying the particulars
thereof in detail.
(e) Breach By Company. If, other than in connection with a
Change in Control or a termination for Good Reason, (i) Employee terminates his
employment hereunder upon the failure by the Company to comply with any material
provision of this Agreement which has not been cured within ten (10) days after
notice of such noncompliance has been given by Employee to the Company; or (ii)
in breach of this Agreement, the Company shall terminate the Employee's
employment, the Company shall continue to pay to the Employee, the Salary on the
basis set forth in numbered paragraph 4 hereof through August 18, 2006 and
Employee shall have the option exercisable by giving notice to the Company to
receive a lump sum payment in lieu of the balance of such payments together with
an additional sum sufficient to pay any increase in state and federal income
taxes to be paid by Employee resulting from an increase in the rate(s) payable
by virtue of the payment of such additional sum, all of which shall be payable
by the Company to Employee within 30 days after the receipt of such notice.
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(f) Participation in Benefits. Unless Employee is
terminated for cause or pursuant to Paragraphs 7(a), (b) or (c) (ii), the
Company shall maintain in full force and effect, for the continued benefit of
Employee until the Expiration Date all employee benefit plans and programs in
which the Employee was entitled to participate immediately prior to the date of
termination provided that the Employee's continued participation is possible
under the general terms and provision of such plans and programs. In the event
that the Employee's participation in any such plan or program is barred, the
Company shall arrange to provide the Employee with benefits substantially
similar to those which the Employee would otherwise have been entitled to
receive under such plans and programs from which his continued participation is
barred. Unless Employee is terminated for cause, pursuant to Paragraph 7(c)(ii)
or upon a Change in Control, the Company, at its expense, shall maintain in full
force and effect until the earlier of (A) the Expiration Date, or (B) Employee's
commencement of full-time employment with a new employer (if applicable), for
the continued benefit of Employee and/or his spouse, all life, disability,
medical, dental, accident and health insurance coverage to which they were
entitled immediately prior to the date of termination. In the event that such
participation in any such coverage is barred under the general terms and
provisions of the plans and programs under which such coverage is provided, or
any such coverage is discontinued or the benefits thereunder materially reduced,
the Company shall provide or arrange to provide benefits substantially similar
to those which Employee and/or his spouse and dependent children were entitled
to receive under such coverage immediately prior to the Notice of Termination.
Unless Employee is terminated pursuant to Paragraph 7(a), at the end of the
period of coverage hereinabove provided for, Employee shall have the option to
have assigned to Employee at no cost and with no apportionment of prepaid
premiums, any assignable insurance owned by the Company and relating
specifically to Employee and Employee shall be entitled to all health and
similar benefits that are or would have been made available to Employee under
law.
(g) Notice of Termination. Any termination of the
Employee's employment by the Company or by the Employee (other than termination
pursuant to subparagraph 7(a) above) shall be communicated by written Notice of
Termination to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision in this Agreement relied upon and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Employee's employment under the provision so indicated.
8. Compensation After Change in Control. The following
provisions shall be applicable in the event of a Change in Control:
(a) Change in Control. For purposes of this Agreement, a
"Change in Control" shall have occurred only if any person or group of persons
acting in concert (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934) shall have become the beneficial owner of a majority of
the outstanding common stock of the Company other than Midland Fabricators and
Process Systems, L.L.C. and/or Xxxxxxx X. Xxxxx and his family.
(b) Compensation Option. If a Change in Control of the
Company shall have occurred, Employee shall have the option to either (i)
receive compensation pursuant to paragraph 4 hereof during the Term of this
Agreement or (ii) accelerate the remaining payments to be made pursuant to
paragraph 4 and receive a lump sum payment thereof. Employee must exercise this
option within sixty (60) days of such Change of Control by giving written notice
thereof to the Company, or it shall be conclusively presumed that Employee has
elected to receive a lump sum payment together with an additional sum to pay any
increase in state and federal income taxes to be paid by Employee resulting from
an increase in the rate(s) payable by virtue of such lump sum payment, the
payment of which shall be made within thirty (30) days of the exercise of such
option.
(c) Mitigation. The Employee shall not be required to
mitigate the amount of any payment provided in this Paragraph 8 by seeking or
accepting other employment or otherwise.
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(d) Additional Benefits. Upon a Change of Control, Employee
shall be relieved of any further duties as an Employee and also shall be
entitled to the following additional benefits:
(i) The Company, at its expense, shall maintain in full
force and effect for Employee's continued benefit until the
earlier of (A) the Expiration Date or (B) Employee's
commencement of full-time employment with a new employer, all
life, disability, medical, dental, accident and health
insurance coverage to which Employee was entitled immediately
prior to the Change of Control. In the event that Employee's
participation in any such coverage is barred under the general
terms and provisions of the plans and programs under which
such coverage is provided, or any such coverage is
discontinued or the benefits thereunder materially reduced,
the Company shall provide or arrange to provide Employee with
benefits substantially similar to those which Employee was
entitled to receive under such coverage immediately prior to
the Notice of Termination. At the end of the period of
coverage hereinabove provided for, Employee shall have the
option to have assigned to Employee at no cost and with no
apportionment of prepaid premiums, any assignable insurance
owned by the Company and relating specifically to Employee and
Employee shall be entitled to all health and similar benefits
that are or would have been made available to Employee under
law.
9. Restrictive Covenant. In partial consideration of the
Company's agreement to enter into this Agreement, the Employee agrees that
during the Initial Period of this Agreement, without the prior written consent
of the Company, the Employee shall not engage, as principal, agent, trustee or
through the agency of any corporation, partnership, association, agent, agency
or other entity, in any business similar to or competitive with the businesses
conducted by the Company, and the Employee shall not be the owner of more than
5% of the outstanding capital stock of any corporation, or a member or
consultant of any partnership or an owner or consultant of any other business
which conducts a business in competition with the business of the Company.
10. Vacations. The Employee shall be entitled each year to a
vacation of four (4) weeks, during which time his compensation shall be paid in
full. Each vacation shall be taken during a period of time to be mutually agreed
upon by the parties.
11. Intellectual Property. The Employee hereby agrees that any
and all copyrights, patents, trademarks, patent or trademark applications,
copyrights, franchises, licenses, permits, rights (including, without
limitation, rights to software and rights to trade secrets and proprietary
Information, processes and know-how) and other authorizations (collectively, the
"Rights") which he develops either alone or in collaboration with employees of
the Company during the Term of this Agreement shall belong exclusively to the
Company and, if requested, he will execute any deeds, bills of sale,
assignments, assurances, or any other actions or things are necessary or
desirable to vest, perfect, or confirm of record or otherwise in the Company its
right, title, or interest in, to, or under any of the Rights.
12. Notices. All notices, requests, consents and other
communications under this Agreement shall be in writing and shall be deemed to
have been delivered on the date personally delivered or on the date mailed,
postage prepaid, by certified mail, return receipt requested, if addressed to
the respective parties as follows:
If to Employee: Xxxxxxx X. Xxxxxx
000 Xxxxxxx Xxxxx
Xxxxxx, XX 00000
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If to the Company: UNIFAB International, Inc.
X.X. Xxx 00000
0000 Xxxx Xxxx
Xxx Xxxxxx, XX 00000
ATTENTION: Xxxxxx X. Xxxx, Esq.
Either party hereto may designate a different address by providing written
notice of such new address to the other party hereto.
13. Severability. In case any term, phrase, clause, paragraph,
section, restriction, covenant or agreement contained in this Agreement shall be
held to be invalid or unenforceable, the same shall be deemed, and it is hereby
agreed that the same are meant to be several, and shall not defeat or impair the
remaining provisions hereof.
14. Waiver. The waiver by the Company of a breach of any
provision of this Agreement by the Employee shall not operate or be construed as
a waiver of any subsequent or continuing breach of this Agreement by the
Employee.
15. Assignment. Neither this Agreement nor any of the rights
or obligations hereunder may be assigned by any party without the prior written
consent of the other parties. This Agreement is binding upon and inures to the
benefit of Employee, the Company and their respective heirs, personal
representatives and permitted successors and assigns.
16. Entire Agreement. This Agreement embodies the entire
agreement and understanding between the parties hereto with respect to the
matters covered hereby.
17. Amendment. This Agreement may be amended only by an
instrument in writing executed by the parties hereto.
18. Governing Law. This Agreement shall be construed and
enforced in accordance with and governed by the law of the State of Louisiana.
19. Survival. The provisions of Section 9 shall survive until
the termination of this Agreement, regardless of the fact that the Company will
no longer be obligated to continue to make payments to the Employee hereunder.
20. Intervenor. AND NOW INTERVENES Midland Fabricators and
Process Systems, L.L.C. for the sole purpose of guaranteeing performance of the
provisions of paragraph 8 hereof in the event that the Company fails to do so
for a period of forty-five (45) days after a Change in Control.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date and year first above written.
COMPANY:
UNIFAB INTERNATIONAL, INC.
By: /s/ Xxxxx X. Xxxxxx, Xx.
------------------------
Name: Xxxxx X. Portrer, Jr.
---------------------
Title: President
---------
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EMPLOYEE:
/s/ Xxxxxxx X. Xxxxxx
---------------------
XXXXXXX X. XXXXXX
INTERVENOR:
MIDLAND FABRICATORS AND PROCESS
SYSTEMS, L.L.C.
By: /s/ Xxxxx X. Xxxxxxxxx, Xx.
---------------------------
Name: Xxxxx X. Xxxxxxxxx, Xx.
Title: Secretary - Treasurer
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