EXHIBIT 10.5
EMPLOYMENT AND NON-COMPETITION AGREEMENT
This Employment Agreement (this "Agreement") between Horizon Offshore,
Inc., a Delaware corporation ("Company"), and Xxxx X. Xxx ("Employee") is dated
as of January 1, 1998.
The Company and the Employee agree as follows:
1. Employment. The Company has hired the Employee and the Employee
agreed to be employed upon the terms and conditions hereinafter set forth.
2. Term. (a) Subject to the provisions for termination as hereinafter
provided, Employee's employment pursuant to the terms of this Agreement shall be
for the period expiring on the earlier to occur of (i) December 31, 2001 or (ii)
three years from the date that the Company's common stock commences trading on
the Nasdaq National Market or another securities market or exchange. Such
period of employment is referred to herein as the "Employment Term."
(b) If Employee continues to serve as an employee of the Company after the
Employment Term, such continued employment shall be subject to the terms of this
Agreement but shall be terminable at will by either the Company or Employee.
(c) Following Employee ceasing for whatever reason to be an employee of the
Company, each party shall have the right to enforce all rights, and shall be
bound by all obligations, of such party that are continuing rights and
obligations under the terms of this Agreement.
3. Duties. The Employee shall perform such duties, consistent with the
Employee's job title, as may be prescribed from time to time by the Board of
Directors of the Company (the "Board") or officers to whom such authority has
been delegated.
4. Compensation and Benefits. The Company will provide or will cause to
be provided to Employee a minimum annual base salary of $200,000. The Employee
shall be entitled to all benefits and perquisites provided to similarly situated
employees of the Company.
5. Termination of Employment.
(a) During the Employment Term, the Employee's status as an employee will
terminate immediately and automatically upon the earliest to occur of:
(i) the death or "Disability" (as defined below) of the Employee;
(ii) the discharge of the Employee by the Company "For Cause" (as
defined below);
(iii) the expiration of the Employment Term.
The Employee hereby accepts such employment subject to the terms and conditions
hereof.
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(b) As used herein, "For Cause" shall mean any one or more of the
following:
(i) material or repeated violations by the Employee (after notice
thereof from the Company) of the terms of this Agreement or the Employee's
material or repeated failure (after notice thereof from the Company) to
perform the Employee's duties in a manner consistent with the Employee's
position;
(ii) excessive absenteeism on the part of the Employee not related to
illness or disability;
(iii) the Employee's indictment for a felony;
(iv) the Employee's commission of fraud, embezzlement, theft or other
acts involving dishonesty, or crimes constituting moral turpitude, in any
case whether or not involving the Company, that, in the opinion of the
Board, renders the Employee's continued employment harmful to the Company;
(v) substance abuse on the part of the Employee; or
(vi) the Employee acting in bad faith relative to the Company's
business interests.
Anything in this Agreement to the contrary notwithstanding, the Employee's
employment may not be terminated "For Cause" unless and until there shall have
been delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the entire membership of the
Board (without giving effect to the Employee's status as a director or any vote
of the Employee) at a meeting of the Board called and held for the purpose
(after reasonable notice to the Employee and an opportunity for the Employee to
be heard before the Board), finding that in the good faith opinion of the Board
the Employee was guilty of any of the conduct set forth in clauses (i) through
(vi) of this subparagraph (b) and specifying the particulars thereof in detail.
(c) As used herein, "Disability" shall mean a physical or mental incapacity
of the Employee that, in the good faith determination of the Board has prevented
the Employee from performing the duties assigned the Employee by the Company for
60 consecutive days or for a period of more than 90 days in the aggregate in any
12-month period and that, in the determination of the Company after consultation
with a medical doctor appointed by the Company, may be expected to prevent the
Employee for any period of time thereafter from devoting the Employee's full
time and energies (or such lesser time and energies as may be acceptable to the
Company in its sole discretion) to the Employee's duties as provided hereunder.
The Employee's employment hereunder, except as otherwise agreed to in writing
between the Company and the Employee, shall cease as of the date of such
determination. The Employee agrees to submit to medical examinations, at the
Company's sole cost and expense, to determine whether a Disability exists
pursuant to reasonable requests that the Company may make from time to time.
During the period of any such physical or mental incapacity as provided above,
the salary otherwise payable to the Employee may, in the absolute discretion of
the Company, be reduced by the amount of any disability benefits or payments
received
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by the Employee from the Company or any disability or health plan funded in
whole or in part by the Company (excluding health insurance benefits or other
reimbursement of medical expenses attributable to insurance policies that have
not been funded in any part by the Company).
6. Trade Secrets, Etc. The Employee shall hold, both during the
Employment Term and thereafter, in a fiduciary capacity for the benefit of the
Company all secret or confidential information, knowledge or data relating to
the Company or any of its subsidiaries or corporate affiliates and their
respective businesses and operations, which shall have been obtained by the
Employee during the Employee's employment (whether prior to or after the date
hereof) and which shall not have become public knowledge (other than by acts of
the Employee or his representatives in violation of this Agreement). The
Employee agrees (i) that, without the prior written consent of the Company or as
may be otherwise required by law or legal process, he will not communicate or
divulge any such information, knowledge or data to any party other than the
Company and (ii) to deliver promptly to the Company upon its written request any
confidential information, knowledge or data in his possession, whether produced
by the Company or any of its subsidiaries and corporate affiliates or by the
Employee, that relates to the business of the Company or any of its subsidiaries
and joint ventures or any past, current or prospective activity of the Company
or any of its subsidiaries and joint ventures. The Employee shall be permitted
to retain copies of such data as are necessary in order to enable the Employee
to assert any rights under this Agreement, provided that such data shall be used
solely for such purpose.
7. Limited Covenant Not to Compete. (a) While Employee is employed by
the Company and for a period of one year following the termination of Employee's
employment with the Company the Employee will not, directly or indirectly, own,
manage, operate, control, be employed by, participate in, or be connected in any
manner with the ownership, management, operation or control of any company or
other business enterprise engaged in a line or lines of business similar to that
of the Company or any of its subsidiaries or joint ventures, within the State of
Texas, Louisiana, Mississippi, Alabama or Florida (including any area offshore
in the Gulf of Mexico or any such state) or any other jurisdiction, whether
within or outside the United States in which the business of the Company or any
of its subsidiaries or joint ventures is carried on, so long as the Company or
any of its subsidiaries or joint ventures carries on a like line of business
therein; provided, however, that nothing contained herein shall prohibit the
Employee from making investments in any publicly held company which do not
exceed in the aggregate two percent of the equity interest of such company.
(b) As part of the consideration for the compensation and benefits to
be paid to the Employee hereunder; to protect the trade secrets and confidential
information of Company and its affiliates that have been and will in the future
be disclosed or entrusted to the Employee, the business good will of the Company
and its affiliates that has been and will in the future be developed in the
Employee, or the business opportunities that have been and will in the future be
disclosed or entrusted to the Employee by the Company and its affiliates; and,
as an additional incentive for the Company to enter in this Agreement, the
Company and the Employee agree to the non-competition obligations hereunder.
The obligations of the Employee set forth in this Section 7 shall apply during
the term of this Agreement and shall survive termination of this Agreement
and/or the termination of the Employee's services under this Agreement
regardless of the reason for such termination.
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8. No Tampering. While Employee is employed by the Company and for one
year following the termination of Employee's employment with the Company, the
Employee shall not (a) request, induce or attempt to influence any supplier of
goods or services to the Company curtail or cancel any business they may
transact with the Company; (b) request, induce or attempt to influence any
customers of the Company that have done business with or potential customers
which have been in contact with the Company to curtail or cancel any business
they may transact with the Company; or (c) request, induce or attempt to
influence any employee of the Company to terminate his or her employment with
the Company.
9. Statements Concerning the Company. The Employee shall refrain, both
during the Employment Term and following the termination of Employee's
employment by the Company for any reason, from publishing any oral or written
statements about the Company, any of its affiliates, or any of such entities'
officers, employees, agents or representatives that are slanderous, libelous, or
defamatory; or that disclose private or confidential information about the
Company, any of its affiliates, or any of such entities' business affairs,
officers, employees, agents or representatives; or that constitute an intrusion
into the seclusion or private lives of the Company, any of its affiliates, or
any of such entities' officers, employees, agents or representatives or that
give rise to unreasonable publicity about the private lives of the Company, any
of its affiliates, or any of such entities' officers, employees, agents or
representatives; or that place the Company, any of its affiliates, or any of
such entities' officers, employee, agents or representatives in a false light
before the public; or that constitute a misappropriation of the name or likeness
of the Company, any of its affiliates, or any of such entities; officers,
employees, agents or representatives. A violation or threatened violation of
this prohibition may be enjoined by the courts. The rights afforded the Company
and its affiliates under this provision are in addition to any and all rights
and remedies otherwise afforded by law.
10. Injunctive Relief. In the event of a breach or threatened breach by
the Employee of the provisions of Sections 6, 7, 8 or 9 of this Agreement during
or after the term of this Agreement, the Company shall be entitled to injunctive
relief restraining the Employee from violation of such paragraph. Nothing
herein shall be construed as prohibiting the Company from pursuing any other
remedy at law or in equity it may have in the event of breach or threatened
breach of this Agreement by the Employee.
11. Binding Effect.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company and any of its successors or assigns.
(b) This Agreement is personal to the Employee and shall not be
assignable by the Employee without the consent of the Company (there being no
obligation to give such consent) other than such rights or benefits as are
transferred by will or the laws of descent and distribution.
(c) The Company will require any successor or assign (whether direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the assets or businesses of the Company (i) to assume
unconditionally and expressly this Agreement and (ii) to agree to perform all of
the obligations under this Agreement in the same manner and to the same extent
as
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would have been required of the Company had no assignment or succession
occurred, such assumption to be set forth in a writing reasonably satisfactory
to the Employee. In the event of any such assignment or succession, the term
"Company" as used in this Agreement shall refer also to such successor or
assign.
12. Notices. Any notice or other communication required under this
Agreement shall be in writing, shall be deemed to have been given and received
when delivered in person, or, if mailed, shall be deemed to have been given when
deposited in the United States mail, first class, registered or certified,
return receipt requested, with proper postage prepaid, and shall be deemed to
have been received on the third business day thereafter, and shall be addressed
as follows:
If to the Company, addressed to:
Horizon Offshore, Inc.
0000 Xxxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
If to the Employee, addressed to:
Xxxx X. Xxx
c/o Horizon Offshore, Inc.
0000 Xxxx Xxxx Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
or such other address as to which any party hereto may have notified the other
in writing.
13. Governing Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Texas.
14. Entire Agreement. This Agreement and the documents referred to
herein, contain or refer to the entire arrangement or understanding between the
Employee and the Company relating to the employment of the Employee by the
Company. No provision of the Agreement, may be modified or amended except by an
instrument in writing signed by or for both parties hereto.
15. Severability. If any term or provision of this Agreement, or the
application thereof to any person or circumstance, shall at any time or to any
extent be invalid or unenforceable, the remainder of this Agreement, or the
application of such term or provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby and each term and provision of this Agreement shall be valid and
enforced to the fullest extent permitted by law.
16. Waiver of Breach. The waiver by either party of a breach of any
provision of this Agreement shall not operate or be construed as a waiver of any
subsequent breach thereof.
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17. Remedies Not Exclusive. No remedy specified herein shall be deemed to
be such party's exclusive remedy, and accordingly, in addition to all of the
rights and remedies provided for in this Agreement, the parties shall have all
other rights and remedies provided to them by applicable law, rule or
regulation.
18. Beneficiaries. Whenever this Agreement provides for any payment to be
made to the Employee or his estate, such payment may be made instead to such
beneficiary or beneficiaries as the Employee may have designated in writing and
filed with the Company. The Employee shall have the right to revoke any such
designation from time to time and to redesignate any beneficiary or
beneficiaries by written notice to the Company.
19. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
just above written.
HORIZON OFFSHORE, INC.
By: /s/ XXXXX X. XXXXX
-----------------------------------
Xxxxx X. Xxxxx
Executive Vice President
EMPLOYEE:
/s/ XXXX X. XXX
--------------------------------------
Xxxx X. Xxx
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