EXECUTIVE EMPLOYMENT AGREEMENT
Exhibit 10.2
This EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of the
20th day of June, 2008 (the “Effective Date”) by and between HERCULES OFFSHORE, INC., a
Delaware corporation (the “Company”) and Xxxx X. Xxxx (the “Executive”).
WHEREAS, the Company desires to employ the Executive in the role of Chief Executive Officer of
the Company, and the Executive is willing to accept such role, all upon the terms and conditions
set forth herein;
WHEREAS, the Board of Directors of the Company (the “Board”), upon the recommendation of the
Compensation Committee of the Board (the “Compensation Committee”) , has determined that it is
advisable and in the best interests of the Company and its stockholders to assure that the Company
will have the continued dedication of the Executive, and to provide the Executive with compensation
and benefits arrangements which are competitive with those of other similarly situated
corporations;
WHEREAS, the Board also believes it is imperative to diminish the inevitable distraction of
the Executive by virtue of the personal uncertainties and risks created by a pending or threatened
Change of Control (hereinafter defined) and to encourage the Executive’s full attention and
dedication to the Company currently and in the event of any threatened or pending Change of
Control;
WHEREAS, each of the Company and the Executive desire that this Agreement shall supersede the
Executive Employment Agreement between Company and the Executive dated as of November 3, 2006 and
any amendments thereto and extensions thereof;
NOW, THEREFORE, in consideration of the premises, the terms and provisions set forth herein,
the mutual benefits to be gained by the performance thereof and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be
legally bound hereby, the parties hereto agree as follows:
1. Certain Definitions.
(a) “Affiliate” shall have the meaning ascribed to such term under Rule 12(b)-2 under the
Securities Exchange Act of 1934 (the “Exchange Act”).
(b) “Associate” shall mean, with reference to any Person, (i) any corporation, firm,
partnership, association, unincorporated organization or other entity (other than the Company or a
subsidiary of the Company) of which such Person is an officer or general partner (or officer or
general partner of a general partner) or is, directly or indirectly, the beneficial owner of 10% or
more of any class of equity securities, (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or in a similar
fiduciary capacity and (iii) any relative or spouse of such Person, or any relative of such spouse,
who has the same home as such Person.
(c) The “Employment Period” shall mean the period commencing on the Effective Date and ending
on February 28, 2011, unless extended pursuant to this paragraph. If neither party shall provide
written notice of termination at least one year prior to the scheduled expiration of the then
current term of this Agreement (each such date by which such notice must be provided, a “Renewal
Date”), the Employment Period shall automatically be extended for two additional years so as to
expire three years from such Renewal Date. Upon a Change of Control the Employment Period shall be
automatically extended to the third anniversary of the Change of Control.
(d) The term “group” is used as it is defined for purposes of the Exchange Act.
(e) “Person” means an individual, entity or group.
(f) “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and
the regulations and guidance promulgated thereunder.
(g) “Subsidiary” shall mean (i) in the case of a corporation, any corporation of which the
Company directly or indirectly owns shares representing 50% or more of the combined voting power of
the shares of all classes or series of capital stock of such corporation that have the right to
vote generally on matters submitted to a vote of the stockholders of such corporation and (ii) in
the case of a partnership or other business entity not organized as a corporation, any such
business entity of which the Company directly or indirectly owns 50% or more of the voting, capital
or profits interests (whether in the form of partnership interests, membership interests or
otherwise).
2. Change of Control. For the purpose of this Agreement, a “Change of Control” shall mean (i) the
consummation of a reorganization, merger, consolidation or other transaction, in any case, with
respect to which Persons who were stockholders (or members) of the Company immediately prior to
such reorganization, merger or consolidation do not, immediately thereafter, own equity interests
representing at least 51% of the total combined voting power of the Company or the resulting
reorganized, merged or consolidated entity, as applicable, (ii) the sale, lease, transfer or other
disposition of all or substantially all of the assets of the Company and its Subsidiaries, taken as
a whole (other than to one or more Subsidiaries of the Company), or (iii) the occurrence of (A) the
consummation of a transaction or series of related transactions in which the Company issues, as
consideration for the acquisition (through a merger, reorganization, stock purchase, asset purchase
or otherwise) of the assets or capital stock of an unaffiliated third party, equity in the Company
representing more than 35% of the outstanding equity of the Company calculated as of the
consummation of such transaction or transactions, in conjunction with (B) a change in the
composition of the Board, as a result of which fewer than 50% of the incumbent directors are
directors who had been directors of the Company at the time of the approval by the Board of the
issuance of such equity in the Company.
3. Employment Agreement. The Company hereby agrees to continue the Executive in its employ, and
Executive agrees to remain in the employ of the Company in accordance with the terms and conditions
of this Agreement, for the Employment Period.
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4. Terms of Employment.
(a) Position and Duties.
(i) During the Employment Period, the Executive shall serve as Chief Executive Officer
of the Company and the Executive shall have the authority, duties and responsibilities
customarily associated with such position. Upon and after a Change of Control, the
Executive’s position shall be at least commensurate in all respects (disregarding any change
or changes that are in the aggregate de minimis) with the most significant of those held,
exercised and assigned as of immediately preceding the Applicable Date. During the
Employment Period, the Executive’s services shall be performed at the location where the
Executive was employed immediately preceding the Applicable Date or any office which is the
headquarters of the Company and is less than 50 miles from such location. For purposes of
this Agreement, “Applicable Date” shall mean, at any time of determination, the latest to
have occurred of the Effective Date, the most recent Renewal Date, or any date on which a
Change of Control has occurred.
(ii) During the Employment Period, and excluding any periods of vacation and sick leave
to which the Executive is entitled, the Executive agrees to devote his full attention and
time during normal business hours to the business and affairs of the Company. During the
Employment Period it shall not be a violation of this Agreement for the Executive to (A)
serve on corporate, civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions or (C) manage personal
investments, in each such case, so long as such activities do not significantly interfere
with the performance of the Executive’s responsibilities as an employee of the Company in
accordance with this Agreement; provided, however, the Executive may not serve on the board
of a publicly traded for profit corporation or similar body of a publicly traded for profit
business organized in other than corporate form without the consent of the Compensation
Committee. It is expressly understood and agreed that to the extent that any such activities
have been conducted by the Executive prior to the Applicable Date, the continued conduct of
such activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Applicable Date shall not thereafter be deemed to interfere with the
performance of the Executive’s responsibilities to the Company.
(b) Compensation.
(i) Base Salary. During the Employment Period, the Executive shall receive an annual
base salary (“Annual Base Salary”), which shall be paid on a monthly basis, at least equal
to twelve times the highest monthly base salary paid or payable to the Executive by the
Company and its affiliated companies in respect of the twelve-month period immediately
preceding the month in which the Applicable Date occurs; provided, further, that, in no
event shall the Annual Base Salary be less than $700,000 (such amount to be pro-rated in
respect of the year ending December 31, 2008). During the Employment Period, the Annual
Base Salary shall be reviewed at least once in any fiscal year of the Company (but, unless
otherwise determined by the Company, not prior to January 1, 2010) and may be increased at
any time and from time to time as shall be
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substantially consistent with increases in base salary generally awarded in the
ordinary course of business to other executives of the Company and its affiliated companies.
As used in this Agreement, the term “affiliated companies” shall include any company
controlled by, controlling or under common control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, after the year ending December
31, 2008, the Executive shall be awarded for any fiscal year ending during the Employment
Period, a bonus of up to 200% of Annual Base Salary (target of 100%) depending upon meeting
goals agreed upon with the Board. During the Employment Period, the annual target bonus as
a percentage of Annual Base Salary may be increased, but not decreased, from time to time by
the Board.
(iii) Incentive, Savings and Retirement Plans. During the Employment Period, the
Executive shall be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs applicable generally to other executives of the Company and
its affiliated companies. Such plans, practices, policies and programs shall provide the
Executive with incentive opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction is applicable),
savings opportunities and retirement benefit opportunities, in each case, equal to such
plans, practices, policies and programs provided by the Company and its affiliated companies
for similarly situated senior executives of the Company and its affiliated companies.
(iv) Welfare Benefit Plans. During the Employment Period, the Executive and/or the
Executive’s dependents, as the case may be, shall be eligible for participation in and shall
receive all benefits under welfare benefit plans, practices, policies and programs provided
by the Company and its affiliated companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group life, accidental
death and travel accident insurance plans and programs) to the extent applicable generally
to similarly situated senior executives of the Company and its affiliated companies. Such
plans, practices, policies and programs shall provide the Executive with benefits which are
equal, in the aggregate, to such plans, practices, policies and programs provided by the
Company and its affiliated companies for similarly situated senior executives of the Company
and its affiliate companies.
(v) Expenses. During the Employment Period, the Executive shall be entitled to receive
prompt reimbursement for all reasonable and documented expenses incurred by the Executive in
accordance with the policies, practices and procedures of the Company and its affiliated
companies in effect for similarly situated senior executives of the Company and its
affiliated companies. All reimbursable expenses shall be appropriately documented in
reasonable detail by the Executive upon submission of any request for reimbursement and in a
format and manner consistent with the Company’s expense reporting policy.
(vi) Fringe Benefits. During the Employment Period, the Executive shall be entitled to
fringe benefits in accordance with the plans, practices, programs and
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policies of the Company and its affiliated companies in effect for similarly situated
senior executives of the Company and its affiliated companies.
(vii) Vacation. During the Employment Period, the Executive shall be entitled to five
weeks paid vacation per year, or such greater amount as is afforded to similarly situated
senior executives of the Company or its affiliated companies.
(viii) Equity Awards. In addition to Annual Base Salary and annual bonus, the Executive
may be awarded an equity award at the discretion of the Company for any fiscal year ending
during the Employment Period.
5. Termination of Employment.
(a) Death or Disability. The Executive’s employment shall terminate automatically upon
the Executive’s death during the Employment Period. If the Company determines in good faith that
the Disability of the Executive has occurred during the Employment Period (pursuant to the
definition of Disability set forth below), it may give to the Executive written notice in
accordance with Section 17(c) of this Agreement of its intention to terminate the Executive’s
employment. In such event, the Executive’s employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Executive (the “Disability Effective Date”),
provided that, within the 30 days after such receipt, the Executive shall not have returned to
full-time performance of the Executive’s duties. For purposes of this Agreement, “Disability”
shall mean (x) the absence of the Executive from the Executive’s duties with the Company on a
full-time basis for 120 consecutive calendar days, (y) the Executive (i) is unable to engage in any
substantial gainful activity on behalf of the Company by reason of any medically determinable
physical or mental impairment which can be expected to result in death or can be expected to last
for a continuous period of not less than 12 months or (ii) is, by reason of any medically
determinable physical or mental impairment which can be expected to result in death or can be
expected to last for a continuous period of not less than 12 months, and (z) the Executive is
receiving income replacement benefits for a period of not less than 3 months under an accident and
health plan covering employees of the Company. All determinations to be made with respect to
clauses (i) and (ii) above shall be made by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive’s legal representative (such agreement as to
acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Executive’s employment during the Employment
Period for Cause. For purposes of this Agreement, “Cause” shall mean (i) a material violation by
the Executive of the Executive’s obligations under Section 4(a) of this Agreement (other than as a
result of incapacity due to physical or mental illness) which is either willful and deliberate on
the Executive’s part or is committed in bad faith or without reasonable belief that such violation
is in the best interests of the Company (ii) the Executive’s gross negligence in performance, or
intentional non-performance (continuing for 10 days after receipt of written notice of need to cure
from the Company), of any of the Executive’s duties and responsibilities under this Agreement, or
reasonable instructions of the Board or the officer(s) of the Company to whom the Executive reports
within the scope of the Executive’s employment by the Company, (iii) the Executive’s dishonesty,
fraud or misconduct with respect to the business or affairs of the Company, (iv) the Executive’s
violation of the Company’s drug policy or anti-
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harassment policy (v) the Executive’s violation of the Company’s ethics policy which is
willful or deliberate on the Executive’s part or is committed in bad faith or (vi) the final and
non-appealable conviction by a court of competent jurisdiction of the Executive of a felony
involving moral turpitude or the entering of a guilty plea or a plea of nolo contendere to such
crime by the Executive.
(c) Good Reason; Other Terminations. The Executive’s employment may be terminated by
the Executive (i) during the Employment Period for Good Reason, or (ii) during the Employment
Period other than for Good Reason.
For purposes of this Agreement, “Good Reason” shall mean:
(i) the assignment to the Executive of any duties inconsistent with the Executive’s
position (including status, offices, titles and reporting requirements), authority, duties
or responsibilities as contemplated by Section 4(a) of this Agreement, or any other action
by the Company which results in a diminution in such position, authority, duties or
responsibilities excluding for this purpose an immaterial, insubstantial or inadvertent
action which is remedied by the Company within 30 days after receipt of notice thereof given
by the Executive;
(ii) any failure by the Company to comply with any of the provisions of Section 4(b) of
this Agreement, other than an immaterial, insubstantial or inadvertent failure which is
remedied by the Company within 30 days after receipt of notice thereof given by the
Executive;
(iii) the Company’s requiring the Executive to be based at any office or location other
than that described in Section 4(a)(i)(B) hereof, other than a relocation that does not
increase the Executive’s one-way commute by more than 50 miles;
(iv) any failure by the Company to comply with and satisfy Section 16(c) of this
Agreement; or
(v) within a 24 month period following a Change of Control, any failure to allow
Executive to participate in any material bonus (in cash and/or property) and equity
compensation programs at a level at least equal to the participation levels of similarly
situated senior executives of the Company and its affiliated companies.
Notwithstanding anything herein to the contrary, the interim assignment of Executive’s
position, authority, duties, or responsibilities to any Person while Executive is absent from his
duties during any of the 120 business days set forth under the definition of Disability in Section
5(a) shall not constitute a Good Reason for Executive to terminate his employment with the Company.
An extension of the Employment Period pursuant to Section 1(c) will not, in itself, impair or
render invalid or defective a Notice of Termination given in connection with termination of
employment for Good Reason based on whole or in part on facts or circumstances occurring prior to
the extension.
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Notwithstanding anything to the contrary above, the Executive’s termination of employment
shall not constitute Good Reason unless Executive notifies the Company of the condition or event
constituting Good Reason within ninety days (90) days of the condition’s occurrence and the Company
fails to cure the conditions, to the extent curable, specified in the notice within thirty (30)
days following such notification.
(d) Notice of Termination. Any termination by the Company for Cause, or by the
Executive for any reason (including without limitation Good Reason), shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section 17(c) of this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which
(i) indicates the specific termination provision in this Agreement relied upon, (ii) to the extent
applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive’s employment under the provision so indicated and (iii) if the
Date of Termination (as defined below) is other than the date of receipt of such notice, specifies
the termination date (which date shall be not more than thirty days after the giving of such
notice). The failure by the Executive or the Company to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company hereunder or preclude the Executive or the Company from
asserting such fact or circumstance in enforcing the Executive’s or the Company’s right hereunder.
(e) Date of Termination. “Date of Termination” means (i) if the Executive’s
employment is terminated by the Company for Cause, or by the Executive for Good Reason, the date of
receipt of the Notice of Termination or any later date specified therein, as the case may be, (ii)
if the Executive’s employment is terminated by the Company other than for Cause, the Date of
Termination shall be the date on which the Company notifies the Executive of such termination,
(iii) if the Executive’s employment is terminated by reason of death or Disability, the Date of
Termination shall be the date of death of the Executive or the Disability Effective Date, as the
case may be, (iv) if the Executive’s employment is terminated by the Executive other than for Good
Reason, the date of the receipt of the Notice of Termination or any later date specified therein,
and (v) if the Executive’s employment is terminated on account of the death of the Executive or
Executive’s Disability, the Date of Termination shall be the date of such death or the Disability
Effective Date, respectively.
6. Obligations of the Company upon Termination and Upon Change of Control.
(a) Prior to a Change of Control: Good Reason or Other than for Cause. If, during the
Employment Period and prior to a Change of Control, the Company shall terminate the Executive’s
employment other than for Cause, or the Executive shall terminate employment for Good Reason:
(i) the Company shall pay to the Executive, in a lump-sum in cash within 30 days after
the Date of Termination (unless other payment terms are specified in this Section 6(a)(i)
and unless otherwise set forth in Section 15), the aggregate of the following amounts. In
order to be eligible for the amounts set forth in Sections 6(a)(i)(B) or Section 6(a)(ii)
below, the Executive must execute a full release of all claims substantially in the form
attached as Exhibit A hereto within 45 days following the Date
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of Termination (the date on which the release becomes non-revocable, the “Release
Date”):
A. the sum of (1) the Executive’s Annual Base Salary through the Date of
Termination to the extent not theretofore paid, (2) any compensation previously
deferred by the Executive, to the extent permitted by the plan under which such
deferral was made (together with any accrued interest or earnings thereon), and any
accrued vacation pay, in each case to the extent not theretofore paid (the sum of
the amounts described in clauses (1) and (2) shall be hereinafter referred to as the
“Accrued Obligations”); and
B. the amount (such amount shall be hereinafter referred to as the “Severance
Amount”) equal to the sum of:
(1) two times the amount of the Executive’s Annual Base Salary, and
(2) two times the bonus (as a percentage of Annual Base Salary)
described in Section 4(b)(ii) paid or payable in respect of the most
recently completed fiscal year of the Company or, if no such bonus has been
paid or is payable in respect of such year, any bonus described in Section
4(b)(ii) paid or payable in respect of the next preceding fiscal year.
The Severance Amount shall be payable within 10 days following the
Release Date. The Severance Amount shall be reduced by the present value
(determined as provided in Section 280G(d)(4) of the Internal Revenue Code of
1986, as amended (the “Code”)) of any other amount of severance relating to
salary or bonus continuation to be received by the Executive upon termination
of employment of the Executive under any severance plan, severance policy or
severance arrangement of the Company; and
C. a separate sum equal to the amount of any earned but unpaid bonus awarded to
the Executive;
(ii) subject to the provisions of Section 15, for a period of the longer of 18 months
from the Date of Termination or the remaining term of the Employment Period, or such longer
period as any plan, program, practice or policy may provide, the Company shall continue
benefits to the Executive and/or the Executive’s dependents at least equal to those which
would have been provided to them in accordance with the plans, programs, practices and
policies described in Section 4(b)(iv) of this Agreement if the Executive’s employment had
not been terminated in accordance with the most favorable plans, practices, programs or
policies of the Company and its affiliated companies as in effect and applicable generally
to other executives and their dependents during the 90-day period immediately preceding the
Applicable Date, provided, however, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits under another employer
provided plan, the medical and other welfare benefits described herein shall be secondary to
those provided
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under such other plan during such applicable period of eligibility; and provided
further, however, that with respect to health and medical benefits, to the extent such
coverage cannot be extended or provided, the Company will pay during the period described
above the applicable premium under the Consolidated Omnibus Budget Reconciliation Act of
1985, as amended associated with such benefits (such continuation of such benefits for the
applicable period herein set forth shall be hereinafter referred to as “Welfare Benefit
Continuation”); and
(iii) subject to the provisions of Section 15, to the extent not theretofore paid or
provided, the Company shall timely pay or provide to the Executive and/or the Executive’s
dependents any other amounts or benefits required to be paid or provided or which the
Executive and/or the Executive’s dependents is eligible to receive pursuant to this
Agreement and under any plan, program, policy or practice or contract or agreement of the
Company and its affiliated companies as in effect and applicable generally to other
executives and their dependents during the 90-day period immediately preceding the
Applicable Date (such other amounts and benefits shall be hereinafter referred to as the
“Other Benefits”).
(b) Following a Change of Control: Good Reason or Other than for Cause. If, during the
Employment Period, the Company shall terminate the Executive’s employment other than for Cause
following a Change of Control, or the Executive shall terminate employment for Good Reason
following a Change of Control, then the Company shall pay or provide to the Executive all the
amounts and benefits set forth in Section 6(a) above; provided however, that:
(i) instead of the Severance Amount calculated pursuant to Section 6(a)(i)(B) above, a
Severance Amount equal to the product of:
(1) three and
(2) the sum of
(x) the Executive’s Annual Base Salary,
(y) the highest bonus (as a percentage of Annual Base
Salary) described in Section 4(b)(ii) paid or payable in
respect of any of the two most recently completed fiscal
years of the Company. The Severance Amount calculated under
this Section shall be reduced (if applicable) and paid as set
forth in Section 6(a)(i)(b); and
(ii) if the Date of Termination occurs within 24 months following a Change of Control,
then effective as of the Date of Termination, each and every stock option, restricted stock
award, restricted stock unit award and other equity-based award and performance award that
is outstanding as of the Date of Termination shall immediately vest and/or become
exercisable and any contractual restrictions on sale or transfer of any such award (other
than any such restriction arising by operation of law) shall immediately terminate.
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(c) Death. If the Executive’s employment is terminated by reason of the Executive’s
death during the Employment Period, this Agreement shall terminate without further obligations to
the Executive’s legal representatives under this Agreement, other than for (i) payment of Accrued
Obligations (which shall be paid to the Executive’s estate or beneficiary, as applicable, in a
lump-sum in cash within 30 days of the Date of Termination) and the timely payment or provision of
the Welfare Benefit Continuation and Other Benefits and (ii) payment to the Executive’s estate or
beneficiary, as applicable, in a lump-sum in cash within 30 days of the Date of Termination of an
amount equal to the Severance Amount payable under Section 6(a)(i)(B).
(d) Disability. If the Executive’s employment is terminated by reason of the
Executive’s Disability during the Employment Period, this Agreement shall terminate without further
obligations to the Executive, other than for (i) payment of Accrued Obligations (which shall be
paid to the Executive in a lump-sum in cash within 30 days of the Date of Termination) and the
timely payment or provision of the Welfare Benefit Continuation and Other Benefits (excluding, in
each case, Disability Benefits (as defined below)), and (ii) payment to the Executive in a lump-sum
in cash within 30 days of the Date of Termination of an amount equal to the greater of (A) the
Severance Amount under Section 6(a)(i)(B) and (B) the present value (determined as provided in
Section 280G(d)(4) of the Code) of any cash amount to be received by the Executive as a disability
benefit pursuant to the terms of any long term disability plan, policy or arrangement of the
Company and its affiliated companies (“Disability Benefits”), but not including any proceeds of
disability insurance covering the Executive to the extent paid for on a contributory basis by the
Executive (which shall be paid in any event as an Other Benefit).
(e) Cause; By the Executive Other than for Good Reason. If the Executive’s employment
shall be terminated for Cause during the Employment Period or if the Executive terminates
employment during the Employment Period, excluding a termination for Good Reason, this Agreement
shall terminate without further obligations to the Executive other than the obligation (i) to pay
to the Executive his Annual Base Salary through the Date of Termination plus the amount of any
compensation previously deferred by the Executive, in each case to the extent theretofore unpaid
and (ii) provide any benefits required by applicable law. Any deferred compensation payable
pursuant to the terms of this Section 6(e) shall be paid in accordance with the terms and
conditions, if any, of the plan or arrangement under which such deferred compensation is due and,
if the plan or arrangement does not specify a date for payment, then on the first business day
after the six month anniversary of the Date of Termination.
(f) Change of Control Benefit. Upon the occurrence of a Change of Control, each and
every stock option, restricted stock award, restricted stock unit award and other equity-based
award and performance award that is outstanding as of the date of the occurrence of a Change of
Control shall immediately vest and/or become exercisable and any contractual restrictions on sale
or transfer of any such award (other than any such restriction arising by operation of law) shall
immediately terminate.
7. Non-exclusivity of Rights. Except as provided in Section 6(a)(ii), 6(b)(iii), 6(c) and 6(d) of
this Agreement, nothing in this Agreement shall prevent or limit the Executive’s continuing or
future participation in any plan, program, policy or practice provided by the Company or any of its
affiliated companies and for which the Executive may qualify, nor shall
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anything herein limit or otherwise affect such rights as the Executive may have under any contract
or agreement with the Company or any of its affiliated companies. Amounts which are vested benefits
or which the Executive is otherwise entitled to receive under any plan, policy, practice or program
of or any contract or agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with such plan, policy,
practice or program or contract or agreement except as explicitly modified by this Agreement.
8. Full Settlement; Resolution of Disputes.
(a) Except where the Executive’s employment is terminated by the Company for Cause or is
terminated by the Executive other than for Good Reason, the Company’s obligation to make payments
provided for in this Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against the Executive or others. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the amounts payable to
the Executive under any of the provisions of this Agreement and, except as provided in Section
6(a)(ii), 6(b)(iii), 6(c) and 6(d) of this Agreement, such amounts shall not be reduced whether or
not the Executive obtains other employment.
(b) If there shall be any dispute between the Company and the Executive (i) in the event of
any termination of the Executive’s employment by the Company, whether such termination was for
Cause, or (ii) in the event of any termination of employment by the Executive, whether Good Reason
existed, then, unless and until there is a final, nonappealable judgment by a court of competent
jurisdiction declaring that such termination was for Cause or that Good Reason did not exist, the
Company shall pay all amounts, and provide all benefits, to the Executive and/or the Executive’s
family or other beneficiaries, as the case may be, that the Company would be required to pay or
provide pursuant to Section 6(a) or 6(b) hereof as though such termination were by the Company
without Cause or by the Executive with Good Reason; provided, however, that the Company shall not
be required to pay any disputed amounts pursuant to this paragraph except upon receipt of an
undertaking (which need not be secured) by or on behalf of the Executive to repay all such amounts
to which the Executive is ultimately adjudged by such court not to be entitled.
9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by the Company to or for the benefit of the Executive
(whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise (including, without limitation, payments or distributions made pursuant to any deferred
compensation or supplemental retirement plan), but determined without regard to any additional
payments required under this Section 9) (a “Payment”) would be subject to the excise tax imposed
by Section 4999 of the Code (or any successor provision thereto), by reason of being considered
“contingent on a change in ownership or control” of the Company, within the meaning of Section 280G
of the Code (or any successor provision thereto), or any interest or penalties are incurred by the
Executive with respect to such excise tax (such tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then
11
the Executive shall be entitled to receive an additional payment (a “Gross-Up Payment”) in an
amount such that after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income taxes (and any
interest and penalties imposed with respect thereto) and Excise Tax imposed upon the Gross-Up
Payment, the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax imposed
upon the Payments, it being understood and agreed, anything in this Agreement to the contrary
notwithstanding, that in no event shall the Executive be entitled to any payment pursuant to this
Section 9 other than in respect of payments made pursuant to Section 6(b).
(b) Subject to the provisions of Section 9(c), all determinations required to be made under
this Section 9, including whether and when any Gross-Up Payment is required and the amount of such
Gross-Up Payment and the assumptions to be utilized in arriving at such determination, shall be
made by the Company’s then current independent public accountants (the “Accounting Firm”) which
shall provide detailed supporting calculations both to the Company and the Executive within 15
business days of the receipt of notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change of Control, the
Executive shall appoint another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the Accounting Firm
hereunder). All fees and expenses of the Accounting Firm shall be borne solely by the Company. Any
Gross-Up Payment, as determined pursuant to this Section 9, shall be paid by the Company to the
Executive within five days of the receipt of the Accounting Firm’s determination; provided,
however, in no event shall the Gross-Up Payment be paid later than the end of the taxable year
following the taxable year in which the Excise Tax is remitted to the Internal Revenue Service. The
Accounting Firm shall furnish the Executive with a written opinion that reporting the Excise Tax,
or the failure to report the Excise Tax, as applicable, on the Executive’s applicable federal
income tax return in accordance with the determination made by the Accounting Firm pursuant to this
Section 9(b) should not result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made (“Underpayment”), consistent with the
calculations required to be made hereunder. In the event that the Company exhausts its remedies
pursuant to Section 9(c) and the Executive thereafter is required to make a payment of any Excise
Tax, the Accounting Firm shall determine the amount of the Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the benefit of the Executive.
(c) The Executive shall notify the Company in writing of any claims by the Internal Revenue
Service that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten business days after the
Executive is informed in writing of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid. The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which it gives such notice
to the Company (or such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in
12
writing prior to the expiration of such period that it desires to contest such claim, the
Executive shall:
(i) give the Company any information reasonably requested by the Company relating to
such claim,
(ii) take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney reasonably selected by the
Company and reasonably acceptable to the Executive,
(iii) cooperate with the Company in good faith in order effectively to contest such
claim, and
(iv) permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses. Without limitation on the foregoing provisions of this Section
9(c), the Company shall control all proceedings taken in connection with such contest and, at its
sole option, may pursue or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such contest to a determination before
any administrative tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or penalties
with respect thereto) imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect to which such
contested amount is claimed to be due is limited solely to such contested amount. Furthermore, the
Company’s control of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled to settle or contest, as the
case may be, any other issue raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by the Company pursuant to
Section 9(c), the Executive becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements of Section 9(c)) promptly
pay to the Company the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), a determination
13
is made that the Executive shall not be
entitled to any refund with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall be offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
10. Confidential Information.
The Executive shall hold 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 affiliated companies, and their respective businesses, which shall have been obtained by
the Executive during the Executive’s employment by the Company or any of its affiliated companies
and which shall not be or become public knowledge (other than by acts by the Executive or
representatives of the Executive in violation of this Agreement). After termination of the
Executive’s employment with the Company, the Executive shall not, without the prior written consent
of the Company or as may otherwise be required by law or legal process, communicate or divulge any
such information, knowledge or data to anyone other than the Company and those designated by it. In
no event shall an asserted violation of the provisions of this Section 10 constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under this Agreement.
11. Non-Competition; No Solicitation.
(a) The Executive recognizes that the Company’s willingness to enter into this Agreement is
based in material part on the Executive’s agreement to the provisions of this Section 11, and that
the Executive’s breach of the provisions of this Section could materially damage the Company. The
Company shall provide confidential and trade secret information to the Executive immediately upon
execution of this Agreement and thereafter, and the Executive agrees not to disclose or use such
information for any reason other than the Executive’s employment with Company without the express,
prior, written consent of Company. Therefore, in consideration of the Company’s promise to provide
the Executive with its confidential information and trade secrets, the Executive agrees that he
will not, during the period of the Executive’s employment by or with the Company, and for a period
of one year immediately following the termination of the Executive’s employment with the Company
under this Agreement for any reason other than termination by the Executive for Good Reason (the
“Non-Compete Period”), for any reason whatsoever, directly or indirectly, for himself or on behalf
of or in conjunction with any other person, persons, company, partnership, corporation, limited
liability company or business of whatever nature accept employment with, serve as an officer,
director, member, manager, agent or joint venturer of, be an owner, controlling stockholder or
partner of, act as a consultant to or contractor for, or otherwise actively participate or assist
any person, or compete against the Company or any of its subsidiaries or affiliates, directly or
indirectly, with or without compensation, in the offshore drilling or liftboat businesses (or any
other business in which the Company or any of its
subsidiaries or affiliates is then engaged) in those states of the United States (including the
state or federal waters offshore such states), or in those countries in the world (and the
territorial waters thereof), where the business of the Company is engaged.
(b) The Executive agrees that he shall not during the Non-Compete Period, for any reason
whatsoever, directly or indirectly, for himself or on behalf of or in conjunction with
14
any other
person, persons, company, partnership, corporation, limited liability company or business of
whatever nature induce or encourage any employee of the Company to terminate employment with the
Company or hire or offer employment to, or procure the making of an offer of employment to, any
employee of the Company or any of its subsidiaries or affiliates who was so employed at any time
during the 12 months prior to the date of termination of the Executives’ employment with the
Company.
(c) The Executive agrees that he shall not during the Non-Compete Period, for any reason
whatsoever, directly or indirectly, (i) team or join with other employees of the Company who were
employees of the Company or any of its subsidiaries or affiliates during the 12 months prior to the
date of termination of the Executive’s employment with the Company in any business like or related
to the offshore drilling business or liftboat business (or any other business in which the Company
or any of its subsidiaries or affiliates is then engaged) or (ii) cause, induce or encourage any
customer of the Company or any of its subsidiaries or affiliates to terminate or change adversely
any business relationship with the Company or any of its subsidiaries or affiliates.
(d) Because of the difficulty of measuring economic losses to the Company as a result of a
breach of the foregoing covenants, and because of the immediate and irreparable damage that could
be caused to the Company for which it would have no other adequate remedy, the Executive agrees
that the foregoing covenants may be enforced by the Company by injunctions, restraining orders and
other equitable actions, without showing any actual damage or that monetary damages would not
provide an adequate remedy and without any bond or other security being required.
(e) Executive agrees that the limitations set forth in this Section 11 on his rights to
compete with the Company and its subsidiaries and affiliates are reasonable and necessary in order
to protect the goodwill, confidential information and trade secrets, and other legitimate interests
of the Company, its subsidiaries and affiliates during the Non-Compete Period. Executive
specifically agrees that, in view of the nature of the current and proposed business of the
Company, the limitations as to period of time and geographic area, as well as all other
restrictions on his activities specified in Section 11, are reasonable and necessary for the
protection of the Company and its subsidiaries and affiliates.
(f) The covenants in this Section 11 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 the scope, time or territorial
restrictions set forth in this Section 11 are unreasonable and therefore unenforceable, 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.
(g) The Executive hereby agrees that the period during which the agreements and covenants of
the Executive made in this Section 11 shall be effective shall be computed by excluding from such
computation any time during which the Executive is in violation of any provision of this Section
11.
15
12. Non-Disparagement.
The Executive covenants that during and following the Employment Period,
the Executive will not disparage or encourage or induce others to disparage the Company or its
subsidiaries, together with all of their respective past and present directors and officers, as
well as their respective past and present managers, officers, shareholders, partners, employees,
agents, attorneys, servants and customers and each of their predecessors, successors and assigns
(collectively, the “Company Entities and Persons”); provided that such limitation shall extend to
past and present managers, officers, shareholders, partners, employees, agents, attorneys, servants
and customers only in their capacities as such or in respect of their relationship with the Company
and its subsidiaries. The term “disparage” includes, without limitation, comments or statements
adversely affecting in any manner (i) the conduct of the business of the Company Entities and
Persons, or (ii) the business reputation of the Company Entities and Persons. Nothing in this
Agreement is intended to or shall prevent the Executive from providing, or limiting testimony in
response to a valid subpoena, court order, regulatory request or other judicial, administrative or
legal process or otherwise as required by law.
13. Return of Company Property.
All records, designs, patents, business plans, financial
statements, manuals, memoranda, lists and other property delivered to or compiled by the Executive
by or on behalf of the Company, or any of its affiliated companies or the representatives, vendors
or customers thereof that pertain to the business of the Company or any of its affiliated companies
shall be and remain the property of the Company or any such affiliated company, 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 its affiliated companies that are collected or held by
the Executive shall be delivered promptly to the Company or its affiliated companies, as the case
may be, without request by such party, upon termination of the Executive’s employment, without
regard to the cause or reasons for such termination.
14. Inventions.
The Executive 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 (a) conceived or made by the Executive, solely or jointly with another, during the
period of employment or within one year thereafter, (b) directly related to the business or
activities of the Company or its affiliated companies, and (c) conceived by the Executive as a
result of the Executive’s employment by the Company. Executive hereby assigns and agrees to assign
all the Executive’s interests in any such invention, improvement or valuable discovery to the
Company or its nominee. Whenever requested to do so by the Company, the Executive 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’ interest in any such invention, improvement or valuable discovery.
15. Conditions to Payment and Acceleration; Section 409A.
Notwithstanding anything contained
herein to the contrary, Executive shall not be considered to have terminated employment with
Hercules Offshore, Inc. for purposes of this Agreement and no payments shall be due to Executive
under this Agreement or any policy or plan of Hercules Offshore, Inc. as in effect from time to
time, providing for payment of amounts on termination of employment, unless Executive would be
considered to have incurred a “separation from service” from
16
Hercules Offshore, Inc. within the
meaning of Section 409A. To the extent required in order to avoid accelerated taxation and/or tax
penalties under Section 409A, amounts that would otherwise be payable and benefits that would
otherwise be provided pursuant to this Agreement during the six-month period immediately following
Executive’s termination of employment shall instead be paid on the first business day after the
date that is six months following Executive’s termination of employment (or upon Executive’s death,
if earlier). Notwithstanding anything in this Agreement to the contrary, if the Board determines,
upon advice of counsel, that any provision of this Agreement does not, in whole or in part, satisfy
the requirements of Section 409A, the Board, in its sole discretion, may unilaterally modify this
Agreement in such manner as it deems appropriate to comply with Section 409A; provided, that in
making any such modifications, the Board shall seek to minimize any adverse economic consequences
to the Executive.
16. Successors.
(a) This Agreement is personal to the Executive and without the prior written consent of the
Company shall not be assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by the Executive’s
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.
(c) The Company will require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business and/or assets of the
Company to assume expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession had taken place. As
used in this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor
to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise. If a Business Combination is consummated that would have resulted
in a Change of Control but for the satisfaction of the conditions specified in clauses (i), (ii)
and (iii) of Section 2(c) and if the parent corporation resulting from the Business Combination is
other than the Company (hereinafter a “New Parent”), then, as a condition to consummation of this
Business Combination, the New Parent shall be considered a successor for purposes of this Section
16.
17. Miscellaneous.
(a) Unfunded Obligation. This Agreement shall be an unfunded obligation of the
Company.
(b) Governing Law; Headings; Amendments. This Agreement shall be governed by and
construed in accordance with the laws of the State of Texas, without reference to principles of
conflict of laws. The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified otherwise than by (i) a
written agreement executed by the parties hereto or their respective successors and legal
representatives, or (ii) as otherwise specified in Section 15.
17
(c) Notices. All notices and other communications hereunder shall be in writing and
shall be given by hand delivery to the other party or by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If to the Executive:
|
Xxxx X. Xxxx | |
00000 Xxxxxxxxx Xxxxx | ||
Xxxxxxx, Xxxxx 00000 | ||
If to the Company:
|
Hercules Offshore, Inc. | |
Attn: General Counsel | ||
0 Xxxxxxxx Xxxxx, Xxxxx 0000 | ||
Xxxxxxx, Xxxxx 00000 |
or to such other address as either party shall have furnished to the other in writing in accordance
herewith. Notice and communications shall be effective when actually received by the addressee.
(d) Severability. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision of this Agreement.
(e) Withholding. The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be withheld pursuant to any
applicable law or regulation.
(f) Waivers. The Executive’s or the Company’s failure to insist upon strict compliance
with any provision hereof or any other provision of this Agreement or the failure to assert any
right the Executive or the Company may have hereunder, including, without limitation, the right of
the Executive to terminate employment for Good Reason pursuant to Section 5(c)(i)-(vi) of this
Agreement, shall not be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement.
(g) Entire Agreement. This Agreement embodies the entire agreement and understanding
of the parties hereto, and supersedes all prior agreements or understandings (whether written or
oral) with respect to the subject matter hereof. Without limiting the generality of the foregoing,
this Agreement supersedes the Executive Employment Agreement between Company and the Executive
dated as of November 3, 2006 and any amendments thereto and extensions thereof, which shall no
longer be of any force or effect.
(h) No Third Party Beneficiaries. Except as otherwise provided herein, nothing
contained herein shall confer upon any Person, or any representative or beneficiary thereof, any
rights or remedies under this Agreement.
18
IN WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and, pursuant to the
authorization from its Board, the Company has caused these presents to be executed in its name on
its behalf, all as of the day and year first above written.
EXECUTIVE |
||||
/s/ Xxxx X. Xxxx | ||||
Xxxx X. Xxxx | ||||
HERCULES OFFSHORE, INC. |
||||
By: | /s/ Xxxx X. Xxxxxxxx | |||
Name: | Xxxx X. Xxxxxxxx | |||
Title: | Chairman | |||
19
EXHIBIT A
FORM OF RELEASE
THIS RELEASE AGREEMENT (the “Release”) is made as of this day of ,
,
by and between [ ] (“Employee”) and [ ] (the “Company”). This is
the Release referred to in that certain Employment Agreement dated as of , 2008 by and
between the Company and Employee (the “Employment Agreement”), with respect to which the
Release is an integral part.
FOR AND IN CONSIDERATION of the payments and benefits provided in the Employment Agreement,
Employee, for himself, his successors and assigns, executors and administrators, now and forever
hereby releases and discharges the Company, together with all of its past and present parents,
subsidiaries, affiliates and funds, together with each of their officers, directors, stockholders,
partners, employees, agents, representatives and attorneys, and each of their subsidiaries,
affiliates, estates, predecessors, successors, and assigns (hereinafter collectively referred to as
the “Releasees”) from any and all rights, claims, charges, actions, causes of action,
complaints, sums of money, suits, debts, covenants, contracts, agreements, promises, obligations,
damages, demands or liabilities of every kind whatsoever, in law or in equity, whether known or
unknown, suspected or unsuspected, which Employee or Employee’s executors, administrators,
successors or assigns ever had, now has or may hereafter claim to have by reason of any matter,
cause or thing whatsoever; arising from the beginning of time up to the date of the Release: (i)
relating in any way to Employee’s employment relationship with the Company or any of the Releasees,
or the termination of Employee’s employment relationship with the Company or any of the Releasees
or relating to his status as a holder of the Capital Interest; (ii) arising under any federal,
local or state statute or regulation, including, without limitation, [If Employee is age 40 or
over: the Age Discrimination in Employment Act of 1967, as amended by the Older Workers Benefit
Protection Act,] Title VII of the Civil Rights Act of 1964, the Americans with Disabilities Act of
1990, the Employee Retirement Income Security Act of 1974, and the Texas Labor Code, Chapters 21
and 22, each as amended, or any other federal, state or local law, regulation, ordinance, or common
law; (iii) relating to wrongful employment termination or breach of contract; or (iv) arising under
or relating to any policy, agreement, understanding or promise, written or oral, formal or
informal, between the Company and any of the Releasees and Employee; provided,
however, that notwithstanding the foregoing, nothing contained in the Release shall in any
way diminish or impair: (a) any rights Employee may have, from and after the date the Release is
executed, under the Employment Agreement, (b) any rights to indemnification that may exist from
time to time under the Company’s certificate of incorporation or bylaws, or Delaware law; (c) any
rights Employee may have to vested benefits under employee benefit plans of the Company; or (d)
Employee’s ability to bring appropriate proceedings to enforce the Release (collectively, the
“Excluded Claims”). Employee further acknowledges and agrees that, except with respect to
Excluded Claims, the Company and the Releasees have fully satisfied any and all obligations
whatsoever owed to Employee arising out of his employment with the Company or any of the Releasees,
including, but not limited to,
A-1
any
obligations under the Employment Agreement, and that no further payments or benefits are owed to
Employee by the Company or any of the Releasees.
Employee understands and agrees that, except for the Excluded Claims, he has knowingly
relinquished, waived and forever released any and all rights to any personal recovery in any action
or proceeding that may be commenced on Employee’s behalf arising out of the aforesaid employment
relationship or the termination thereof, including, without limitation, claims for backpay, front
pay, liquidated damages, compensatory damages, general damages, special damages, punitive damages,
exemplary damages, costs, expenses and attorneys’ fees.
Employee acknowledges and agrees that Employee has been advised to consult with an attorney of
Employee’s choosing prior to signing the Release. Employee understands and agrees that Employee
has the right and has been given the opportunity to review the Release with an attorney of
Employee’s choice should Employee so desire. Employee also agrees that Employee has entered into
the Release freely and voluntarily. [If Employee is age 40 or older: Employee further acknowledges
and agrees that Employee has had at least twenty-one (21) calendar days to consider the Release,
although Employee may sign it sooner if Employee wishes.] In addition, once Employee has signed
the Release, Employee shall have seven (7) additional days from the date of execution to revoke
Employee’s consent and may do so by writing to: . The Release shall not be effective,
and no payments shall be due hereunder, until the eighth (8th) day after Employee shall have
executed the Release and returned it to the Company, assuming that Employee had not revoked
Employee’s consent to the Release prior to such date.
Employee agrees never to seek reemployment or future employment with the Company or any of the
other Releasees.
Employee agrees to keep the terms of the Release and the Employment Agreement confidential and
not to disclose the Release, the Employment Agreement or their terms to any person or entity,
except: to Employee’s immediate family; as may be required for obtaining legal or tax advice; as
may be required by law; or in any proceeding to enforce the Release or any of the Excluded Claims.
It is understood and agreed by Employee that the payment made to him is not to be construed as
an admission of any liability whatsoever on the part of the Company or any of the other Releasees,
by whom liability is expressly denied.
The Release is executed by Employee voluntarily and is not based upon any representations or
statements of any kind made by the Company or any of the other Releasees as to the merits, legal
liabilities or value of his claims. Employee further acknowledges that he has had a full and
reasonable opportunity to consider the Release and that he has not been pressured or in any way
coerced into executing the Release.
A-2
The exclusive venue for any disputes arising hereunder shall be the state or federal courts
located in the State of Texas, and each of the parties hereto irrevocably waives, to the fullest
extent permitted by law, any objection which it may now or hereafter have to the laying of the
venue of any such proceeding brought in such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum. Each of the parties hereto also agrees
that any final and unappealable judgment against a party hereto in connection with any action, suit
or other proceeding may be enforced in any court of competent jurisdiction, either within or
outside of the United States. A certified or exemplified copy of such award or judgment shall be
conclusive evidence of the fact and amount of such award or judgment.
The Release and the rights and obligations of the parties hereto shall be governed and
construed in accordance with the laws of the State of Texas. If any provision hereof is
unenforceable or is held to be unenforceable, such provision shall be fully severable, and this
document and its terms shall be construed and enforced as if such unenforceable provision had never
comprised a part hereof, the remaining provisions hereof shall remain in full force and effect, and
the court construing the provisions shall add as a part hereof a provision as similar in terms and
effect to such unenforceable provision as may be enforceable, in lieu of the unenforceable
provision.
This document contains all terms of the Release and supersedes and invalidates any previous
agreements or contracts of the parties with respect to the subject matter hereof and supercedes all
prior discussions, negotiations, agreements, arrangements and understandings between Employee and
the Company or any of the Releasees. No representations, inducements, promises or agreements, oral
or otherwise, which are not embodied herein shall be of any force or effect; provided,
however, that Employee shall continue to be bound by the obligations of the Restrictive
Covenant Agreement.
The Release shall inure to the benefit of and be binding upon the Company and its successors
and assigns. The terms of the Release are personal to Employee and may not be assigned by
Employee.
IN WITNESS WHEREOF, Employee and the Company have executed the Release as of the date and year
first written above.
[Company] |
A-3