EXHIBIT 10.8
AMENDED AND RESTATED SEVERANCE
BENEFITS AGREEMENT OF XXXXXX X. XXXXX
THIS AMENDED AND RESTATED SEVERANCE BENEFITS AGREEMENT OF XXXXXX X.
XXXXX (this "Agreement") is entered and effective this 1st day of July, 2002,
between XXXXXX OFFSHORE INC., a Delaware corporation (the "Company"), and Xxxxxx
X. Xxxxx, a resident of Jacksonville, Texas ("Employee").
I.
RECITALS
Employee is currently employed by the Company as Vice President -
Operations and Engineering.
Employee entered into a Severance Benefits Agreement (the "Original
Agreement") with Xxxxxx Offshore LLC, the predecessor-in-interest to the Company
dated June 12, 2000, setting out the terms and conditions for the severance
benefits of Employee.
ENSCO International Incorporated, a Delaware corporation ("ENSCO"), and
the Company have entered into that certain Merger Agreement dated May 14, 2002
(the "Merger Agreement") by and among ENSCO, Chore Acquisition, Inc. (the
"Merger Sub"), a wholly-owned subsidiary of ENSCO, and the Company.
If the merger of the Company with and into the Merger Sub described in
the Merger Agreement becomes effective (the "Merger"), the Company and Employee
desire to amend and restate the Original Agreement and provide for the
employment of Employee by the Company, on the terms and conditions of this
Agreement, and from and after the effective date of the Merger (the "Effective
Date") all references in this Agreement to "the Company" shall mean ENSCO.
II. AGREEMENT
NOW, THEREFORE, in consideration of the mutual covenants contained
herein and other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Employment of Employee
The Company hereby agrees to employ Employee commencing on the
Effective Date to provide services and assistance in connection with the
integration of the business of Xxxxxx Offshore Inc. into ENSCO, subject to the
terms set forth herein. Notwithstanding the foregoing, this Agreement shall be
effective upon execution by the Company and Employee. The extent of the services
provided by Employee shall be subject to the mutual agreement from time to time
of Employee and the Company; provided, however, that the extent of such services
shall be not less than seven (7) days per month on average during the Term, or
otherwise as mutually agreed from time to time by Employee and the Company. The
Company and Employee acknowledge and
agree that such services shall not require Employee's full time and may be
performed from Employee's residence, to the extent desired by Employee. Employee
hereby agrees to serve in such capacity and to perform and discharge such duties
as may be agreed from time to time by the Company and Employee.
2. Term of Employment
The Company agrees to employ Employee and Employee agrees to serve the
Company for a term of one (1) year beginning on the Effective Date (the "Term"),
unless extended by mutual agreement of the Company and Employee. Employee's
employment by the Company pursuant to this Agreement may be terminated as
provided in Section 4 hereof. Notwithstanding the termination of Employee's
employment by the Company pursuant to this Agreement, the terms and provisions
of this Agreement shall remain binding upon the Company and Employee, including,
without limitation, the terms and provisions of Sections 3 through 7 hereof.
3. Compensation of Employee
3.1. The Company shall pay to Employee an annual salary at a rate of
One Hundred Seventy Thousand Dollars ($170,000) per year (the "Annual Salary")
during the Term. The Annual Salary shall be payable in accordance with the
payroll policies of the Company as from time to time in effect, but in no event
less frequently than once each month, less such deductions as shall be required
to be withheld by applicable law and regulations.
3.2. The Company shall pay or reimburse Employee for all expenses
reasonably and necessarily incurred by Employee during the Term in the
performance of Employee's services under this Agreement. Such payments shall be
made upon presentation of such documentation as the Company customarily requires
of its employees prior to making such payments or reimbursements.
3.3. On the Effective Date, the Company shall pay to Employee a
performance bonus in the amount of Three Hundred Thousand Dollars ($300,000)
(the "Performance Bonus").
3.4. All deferred bonuses and interest thereon payable by the Company
to Employee, which are set forth on the attached Schedule 3.3 ("Deferred
Bonuses"), shall vest immediately and shall be paid by the Company to Employee
on the Effective Date.
3.5. Upon the Effective Date, all stock options of Employee granted
under the Company Stock Option Plan (as defined in the Merger Agreement) (the
"Xxxxxx Options") shall vest immediately and be treated in the manner provided
in Section 1.8 of the Merger Agreement, except as provided in this Section 3.5.
The remaining term of Employee's Xxxxxx Options shall remain unchanged as a
result of the Merger. If Employee is terminated without Cause (as hereinafter
defined) prior to the expiration of the Term, Employee shall have two years from
the date of such termination within which to exercise Employee's Xxxxxx Options,
such period not to exceed the remaining term of the applicable Xxxxxx Option. If
Employee is terminated with Cause or voluntarily terminates Employee's
employment, Employee shall have a period of one year from the Effective Date if
such termination occurs within nine (9) months after the Effective
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Date, and a period of three (3) months after such termination if such
termination occurs more than nine (9) months after the Effective Date, in which
to exercise Employee's Xxxxxx Options. If Employee's employment terminates due
to his death or disability, the execution period for his Xxxxxx Options shall be
the applicable period specified in the Company Stock Option Plan. As used in
this Agreement, the term "Cause" shall mean and include (i) chronic alcoholism
or controlled substance abuse as determined by a doctor of medicine selected by
the Company that is authorized to practice medicine by the State of Texas and
whose practice is located in Tyler, Texas (or such other location as reasonably
agreed by the Company and Employee), (ii) an act of proven fraud or dishonesty
on the part of Employee, (iii) knowing and material failure by Employee to
comply with material applicable laws and regulations relating to the business of
the Company or its subsidiaries, or (iv) conviction of a crime involving moral
turpitude or a felony. Any restricted stock of the Company awarded to Employee
shall automatically become unrestricted on the Effective Date.
3.6. During the Term, the Company shall provide to Employee group life,
hospitalization and disability insurance and other health and medical benefit on
the same basis and terms as such benefits are provided to other employees of the
Company on terms no less favorable to Employee than the terms offered to such
other employees, which in any event shall be at least comparable to the benefits
Employee received from the Company as of the date hereof. Employee shall receive
full credit for his time and service to the Company (including its predecessors)
in determining his rights under such benefit plans.
4. Termination
4.1. Employee's employment by the Company pursuant to this Agreement
shall automatically terminate upon the death or disability of Employee. If
Employee dies or becomes disabled prior to or during the first year after the
Effective Date, subject to the Merger becoming effective, the Company shall pay
to Employee (or Employee's estate in the case of Employee's death) within thirty
(30) days after such death or disability (i) the Performance Bonus (if not
already paid to Employee), all Deferred Bonuses (if not already paid to
Employee), any portion of Employee's annual salary, any bonuses or other
compensation that shall have been earned by Employee prior to the termination
but not yet paid, a severance payment in an amount equal to $14,166.67 per month
(or pro rata for any portion of a month) for the time remaining in the original
one-year Term at the time of such termination, and a lump sum payment in an
amount equal to $300,000 (the "Non-Compete Payment"), (ii) any Company benefits
that have vested in Employee at the time of such termination as a result of
Employee's participation in any of the Company's benefit plans (which shall be
paid in accordance with the provisions of such plan), and (iii) reimbursement
for any expenses with respect to which Employee is entitled to reimbursement
pursuant to Section 3.2 hereof. Upon the death of Employee after the expiration
of the Term but during the Non-Compete Period (as hereinafter defined), in
addition to the payment of all amounts payable to Employee hereunder for the
period prior to the expiration of the Term (to the extent not already paid by
the Company to Employee), the Company shall pay to Employee's estate an amount
equal to the Non-Compete Payment, less all pro rata payments of the Non-Compete
Payment already paid to Employee pursuant to Section 5.2 hereof. Such payment
shall be made by the Company to Employee's estate within thirty (30) days after
Employee's death. For purposes of this Agreement, Employee shall be deemed to be
disabled if
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a competent physician licensed to practice medicine in the State of Texas who is
mutually acceptable to the Company and Employee, or his closest relative if he
is not able to make such choice, determines in writing that Employee is
physically or mentally disabled, whether totally or partially, such that he is
not able to perform his services hereunder for (i) a period of two consecutive
months, or (ii) for shorter periods aggregating 60 days during any 12-month
period.
4.2. Employee may terminate his employment by the Company pursuant to
this Agreement at any time by providing written notice of such termination to
the Company specifying the effective date of such termination. Upon any such
termination by Employee, the Company shall be entitled to discontinue payment of
all Annual Salary and benefits not earned and payable prior to the date of such
termination. Notwithstanding the foregoing or anything herein to the contrary,
upon any such termination of this Agreement by Employee, the Company shall pay
to Employee (i) the Performance Bonus and the Deferred Bonuses (if not already
paid to Employee), within thirty (30) days following such termination by
Employee, (ii) a severance payment in an amount equal to $14,166.67 per month
(or pro rata for any portion of a month) for the time remaining in the original
one-year Term at the time of such termination, within thirty (30) days following
such termination by Employee, and (iii) the Non-Compete Payment pro rata in
equal monthly payments for the Non-Compete Period, beginning thirty (30) days
after the date of such termination by Employee.
5. Noncompetition by Employee
Employee acknowledges that (i) the Company is engaged in the Company's
Business (as hereinafter defined), (ii) in connection with Employee's work, the
Company will give Employee access to confidential information concerning the
Company, and (iii) the agreements and covenants contained in this Agreement are
essential to protect the Company's interest in such confidential information.
Accordingly, Employee covenants and agrees as follows:
5.1. As an independent covenant, and in consideration for and in order
to enforce the terms and provisions of this Agreement, including, without
limitation, the provisions of Section 6 hereof, during the Term and for a period
of two (2) years (the "Non-Compete Period") after the termination of Employee's
employment by the Company pursuant to this Agreement for any reason, Employee
agrees that he shall not within a fifty (50) mile radius of the Company's
principal office as of the Effective Date, which is 0000 Xxxx Xxxxxx, Xxxxx
0000, Xxxxxx, Xxxxx 00000, directly or indirectly (except in Employee's capacity
as an employee of the Company), (i) engage or participate in any engineering or
operations activities relating to the Company Business, or (ii) render
engineering or operations services, whether through employment or in any other
capacity, to any person engaged in the Company Business.
5.2. In consideration for the agreements of Employee pursuant to this
Section 5, upon the termination of Employee's employment by the Company pursuant
to this Agreement for any reason (other than the death or disability of
Employee, which shall be governed by the terms of Section 4.1 hereof), the
Company shall pay to Employee the Non-Compete Payment in pro rata, monthly
installments of Twelve Thousand Five Hundred Dollars ($12,500) during the
Non-Compete Period, beginning thirty (30) days after the termination of
Employee's employment by the Company pursuant to this Agreement.
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5.3. Employee agrees that the remedy at law for any breach of any
provision of this Section 5 will be inadequate and that the Company will be
entitled to injunctive relief for any such breach.
5.4. Employee has carefully read and considered the provisions of this
Section 5 and, having done so, agrees that the restrictions set forth herein,
including the time period, scope of activity to be restrained, and the
geographical scope, are fair and reasonable and are reasonably required for the
protection of the interests of the Company and its owners.
5.5. In the event that, notwithstanding the foregoing, any of the
provisions of this Section 5 shall be held to be invalid or unenforceable, the
remaining provisions thereof shall nevertheless continue to be valid and
enforceable as though the invalid or unenforceable parts had not been included
therein. In the event that any provision of Section 5.1 relating to the time
period, scope and/or the areas of restriction shall be declared by a court of
competent jurisdiction to exceed the maximum time period, scope or areas such
court deems reasonable and enforceable, the maximum time period, scope and/or
areas deemed reasonable by the court shall become and thereafter be the maximum
time period and/or areas under this Agreement.
5.6. As used herein, the "Company's Business" shall mean the business
of constructing, owning, managing and operating offshore drilling rigs and
hiring and managing crews to operate such rigs, which equipment and crews are
contracted or hired by third parties for the purpose of drilling oil and gas
xxxxx offshore.
6. Confidential Information.
In connection with Employee's employment hereunder, the Company shall
provide Employee with access to confidential information pertaining to the
business of the Company ("Confidential Information") as may be necessary for the
performance of Employee's duties hereunder. Employee recognizes and agrees that
(i) this Agreement creates a relationship of confidence and trust between
Employee and the Company with respect to Confidential Information, (ii) such
Confidential Information is valuable, special and unique, and (iii) Confidential
Information shall include, without limitation, the Company's books, records,
business and marketing plans and strategies, pricing policies, financial
information, policy, training and procedure manuals, and all other proprietary
information of the Company. Employee shall not, during or after the term of this
Agreement, in whole or in part, directly or indirectly, in any manner or by any
means use, disseminate, disclose or divulge Confidential Information to any
person, firm, corporation, limited liability company, partnership, association
or other entity for any reason or purpose whatsoever, nor shall Employee make
use of any such Confidential Information for Employee's own purposes or for the
purposes of others, except in connection with Employee providing services to the
Company pursuant to this Agreement.
7. Miscellaneous
7.1. Notice. All notices and other communications required or permitted
under this Agreement shall be in writing and shall be sufficiently delivered if
delivered by hand, by courier
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service, or sent by registered or certified mail, postage prepaid, to the
parties at their respective addresses listed below:
If to the Company: Xxxxxx Offshore Inc.
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxx Xxxxxxxxx
Fax No. (000) 000-0000
If to Employee: Xxxxxx X. Xxxxx
0000 Xxxxxxxx
Xxxxxxxxxxxx, Xxxxx 00000
Any party hereto may at any time by giving written notice to the other party
hereto, designate any other address in substitution of the foregoing address.
7.2. Assignment. This Agreement is personal to Employee, and Employee
shall not assign any of Employee's rights or delegate any Employee's duties
hereunder without the prior written consent of the Company.
7.3. Governing Law. This Agreement shall be governed by, and construed
and enforced in accordance with, the laws of the State of Texas, excluding any
conflicts of law rule or principal that might otherwise refer to the substantive
law of another jurisdiction.
7.4. Successors. Subject to Section 7.2. hereof, this Agreement shall
be binding upon, and shall inure to the benefit of, the parties hereto and their
respective heirs, legal representatives, successors and permitted assigns.
7.5. Entire Agreement. Subject to the occurrence of the Merger, on the
Effective Date this Agreement constitutes the entire agreement between the
Company and Employee with respect to the terms of Employee's severance benefits
and employment of Employee by the Company and supersedes all prior agreements
and understandings, whether written or oral, between them concerning such terms
of employment, including, without limitation, the Original Agreement.
Notwithstanding the foregoing, Employee shall remain a third party beneficiary
of the applicable provisions of the Merger Agreement. In the event of a conflict
between the terms of this Agreement and the Merger Agreement, the terms of this
Agreement shall control. On the Effective Date, the Original Agreement shall
terminate. If the Merger does not become effective, the Original Agreement shall
remain in effect and this Agreement shall be of no force or effect.
7.6. Waiver and Amendment. This Agreement may be amended, modified or
supplemented, and any obligation hereunder may be waived, only by a written
instrument executed by the parties hereto. The waiver by either party of a
breach of any provision of this Agreement shall not operate as a waiver of any
subsequent breach. No failure on the part of any party to exercise, and no delay
in exercising, any right or remedy hereunder shall operate as a
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waiver thereof, nor shall any single or partial exercise of any such right or
remedy by such party preclude any other or further exercises thereof or the
exercise of any other right or remedy.
7.7. Cumulative Rights and Remedies. All rights and remedies hereunder
are cumulative and are in addition to all other rights and remedies provided by
law, agreement or otherwise.
7.8. Severability. In the event that any provision or provisions of
this Agreement is held to be invalid or unenforceable by any court of law or
otherwise, the remaining provisions of this Agreement shall nevertheless
continue to be valid and enforceable as though the invalid or unenforceable
parts had not been included herein.
7.9. No Tax Gross-Up. Under no circumstances will the Company have any
obligation or liability to Employee for the reimbursement or gross-up of income,
excise or other taxes resulting from any payments, stock options or other
benefits under this Agreement.
IN WITNESS WHEREOF, the Company and Employee have executed this
Agreement as of the date first written above.
XXXXXX OFFSHORE INC.
By: /s/ Xxxx Xxxxxxxxx
------------------------------------------
Name: Xxxx Xxxxxxxxx
----------------------------------------
Title: Senior Vice President, Chief
Financial Officer and Secretary
-------------------------------------
THE COMPANY
/s/ Xxxxxx X. Xxxxx
---------------------------------------------
XXXXXX X. XXXXX
EMPLOYEE
ENSCO hereby adopts this Agreement for purposes of acknowledging and agreeing to
assume the obligations of the Company pursuant to the terms of this Agreement on
the Effective Date if the Merger becomes effective.
ENSCO INTERNATIONAL INCORPORATED
By: /s/ C. Xxxxxxxxxxx Xxxx
-------------------------------------------
Name: C. Xxxxxxxxxxx Xxxx
-----------------------------------------
Title: Senior Vice President
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SCHEDULE 3.3
DEFERRED BONUSES
1. $11,000 plus 10% interest accruing from and after January 15, 2001.
2. $30,000 plus 5.375% interest accruing from and after February 15, 2002.
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