EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") dated as of July 15, 1997
between OMI Corp., a Delaware corporation (the "Company") and Xxxxx Xxxxxxxxx
(the "Executive").
W I T N E S S E T H
WHEREAS, the Company desires to continue to employ the Executive; and
WHEREAS, the Executive is willing to continue to be employed by the
Company, as a senior executive of the Company, for the period and upon the terms
and conditions hereinafter set forth;
NOW THEREFORE, in consideration of the mutual covenants and conditions
contained herein, the Company and the Executive hereby agree as follows:
1. EMPLOYMENT
The Company shall employ the Executive, and the Executive accepts
employment by the Company, at the discretion of the Company, as Senior Vice
President of Technical upon the terms and conditions hereof (the "Commencement
Date") and terminating December 31, 1998 (such period, as such period may be
extended as described in this paragraph, being herein referred to as the
"Employment Period"). If, upon expiration of this Agreement, the Company desires
to continue to employ the Executive and the Executive desires to continue in the
employ of the Company, such employment shall be continued on terms and
conditions which the Company and the Executive find mutually satisfactory and
which are consistent with the employment policies of the Company.
2. DUTIES
(a) Throughout the Employment Period, the Executive shall be Senior Vice
President of the Company and shall report to the person or position designated
by the Chief Executive Officer of the Company. The Executive shall at all times
comply with Company policies as established by the Chief Executive Officer.
(b) During the Employment Period, the Executive shall devote his full-time
working hours to his duties hereunder, except during vacation time, any periods
of illness and authorized leaves of absence. The Executive shall have such
responsibilities and authorities consistent with the status, title and reporting
requirements set forth herein as are appropriate to said position, subject to
change (other than diminution in position, authority, duties or
responsibilities) from time to time by the Chief Executive Officer.
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(c) Throughout the Employment Period, the Executive shall faithfully and
diligently perform his duties under this Agreement and shall use his best
efforts to promote the interests of the Company.
3. COMPENSATION
During the Employment Period, as full compensation to the Executive for his
performance of the services hereunder and for his acceptance of the
responsibilities described herein, the Company agrees to pay the Executive, and
the Executive agrees to accept, the following salary and other benefits:
(a) Salary
The Company shall pay the Executive a salary of $235,000 per year, which
may be increased by the Board of Directors at its discretion (the "Base
Salary"). The Base Salary due the Executive hereunder shall be payable in equal
installments at the times other executives are paid less any amounts required to
be withheld by the Company from such Base Salary pursuant to the benefit plans
of Section 3(d) and applicable laws and regulations described under Section
10(e).
(b) Bonus
The Executive shall be eligible to receive bonuses (each a "Bonus") at the
discretion, in the amount and at the times determined by the Board of Directors
of the Company; except that in the event of a Change in Control (as hereinafter
defined), the Executive shall immediately receive a cash payment in an amount
equal to the aggregate bonuses paid during the twelve-month period ending on the
date of Change in Control.
(c) Long Term Incentives
The Executive shall be entitled to receive grants of restricted stock,
stock options and other stock awards at the discretion of the Compensation
Committee of the Board of Directors of the Company and/or other stock and cash
awards granted pursuant to any other long term incentive plans implemented by
the Company for the benefit of senior executives of the Company.
(d) Other Benefit Plans
Subject to all eligibility requirements, and to the extent permitted by
law, the Executive shall be entitled to participate in any and all employee
welfare and benefit plans (including, but not limited to, retirement security,
life insurance, medical, dental, disability, and savings plans) established by
the Company from time to time for the general and overall benefit of executives
of the Company.
(e) Further Benefits
The Executive shall be entitled to a minimum of four weeks per annum paid
vacation.
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(f) Deferred Compensation
Notwithstanding any other provision of the Agreement, the Executive shall
have the right to request any lawful means (including, without limitation, any
deferred compensation arrangement requested by the Executive) by which he wishes
to receive any portion of his or her Base Salary, Bonus, or other payments, and
the Company shall reasonably cooperate with the Executive to grant such request,
provided that the granting of such request does not represent inequitable
treatment as concerns other senior employees or executives (in the Company's
sole judgment), and does not impose additional costs on the Company other than
insignificant administrative costs.
4. REASONABLE EXPENSES
The Company will reimburse the Executive for all reasonable business
expenses, including travel and lodging, which are properly incurred by him in
the performance of his duties hereunder, upon presentation of proper vouchers
therefor and in accordance with written policies established from time to time
by the Company for such reimbursements.
5. EXECUTIVE COVENANTS
The Executive acknowledges that as a result of the services to be rendered
to the Company hereunder, the Executive will be brought into close contact with
many confidential affairs of the Company, its subsidiaries and affiliates, not
readily available to the public. The Executive further acknowledges that the
services to be performed under this Agreement are of a special, unique, unusual,
extraordinary and intellectual character; that the business of the Company is
international in scope; that its goods and services are marketed throughout the
world; and that the Company competes with other organizations that are or could
be located in nearly any part of the United States or elsewhere. In recognition
of the foregoing:
(a) Except with the consent of or as directed by the Company, or except if
compelled by judicial or legal authorities, the Executive will keep confidential
and not divulge to any other person, during the Employment Period or thereafter,
any Confidential Information and Trade Secrets regarding the Company, its
subsidiaries and affiliates, except for information which is or becomes publicly
available other than as a result of disclosure by the Executive. For the
purposes of this Agreement "Confidential Information and Trade Secrets" means
information which is secret to the Company, its subsidiaries and affiliates. It
may include, but is not limited to, information relating to new and future
concepts and business of the Company, its subsidiaries and affiliates, in the
form of memoranda, reports, computer software and data banks, customer lists,
employee lists, books,
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records, financial statements, manuals, papers, contracts and strategic plans.
As a guide, the Executive is to consider information originated, owned,
controlled or possessed by the Company, its subsidiaries or affiliates which is
not disclosed in printed publications stated to be available for distribution
outside the Company, its subsidiaries and affiliates as being secret and
confidential. In instances where doubt does or should reasonably be understood
to exist in the Executive's mind as to whether information is secret and
confidential to the Company, its subsidiaries and affiliates, the Executive
agrees to request an opinion, in writing, from the Company.
(b) All papers, books and records of every kind and description relating to
the business and affairs of the Company, its subsidiaries and affiliates,
whether or not prepared by the Executive, and all property owned by the Company,
its subsidiaries and affiliates shall be the sole and exclusive property of the
Company, and the Executive shall surrender them to the Company, at any time upon
request, during or after the Employment Period.
(c) During the Employment Period and during any Severance Period (as
hereinafter defined), the Executive will not, without the prior written consent
of the Company, compete, directly or indirectly, with the Company, its
subsidiaries and affiliates or participate as a director, officer, employee,
agent, representative, stockholder, or partner, or have any direct or indirect
financial interest as a creditor, in any business which directly or indirectly
competes with the Company its subsidiaries and affiliates; provided, however,
that this paragraph (c) shall not restrict the Executive from holding up to 5%
of the publicly traded securities of any entity.
(d) During the Employment Period and during any Severance Period (as
hereinafter defined), the Executive shall not either for his own account or for
any person, firm or company (i) solicit any customers of the Company, its
subsidiaries and affiliates or (ii) solicit or endeavor to cause any employee of
the Company, its subsidiaries and affiliates to leave his employment or induce
or attempt to induce any such employee to breach any employment agreement with
the Company, its subsidiaries and affiliates, or otherwise interfere with the
employment of any employee by the Company, its subsidiaries and affiliates.
(e) Without limiting any other provision of this Agreement, the Executive
hereby agrees to be bound by and to comply with any obligations known to the
Executive and imposed on the Company, its subsidiaries and affiliates, by law,
rule, regulation, ordinance, order, decree, instrument, agreement, understanding
or other restriction of any kind.
(f) The Executive hereby agrees to provide reasonable cooperation to the
Company, its subsidiaries and affiliates during the Employment Period and any
Severance Period (as hereinafter defined) in any litigation between the Company,
its subsidiaries and affiliates, and third parties.
(g) The parties agree that the Company shall, in addition to other remedies
provided by law, have the right and remedy to have the provisions of this
Section 5 specifically enforced by any
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court having equity jurisdiction, it being acknowledged and agreed that any
breach or threatened breach of the provisions of this Section 5 will cause
irreparable injury to the Company and that money damages will not provide an
adequate remedy to the Company. Nothing contained herein shall be construed as
prohibiting the Company from pursuing any other remedies available to it for
such breach or threatened breach, including the recovery of damages from the
Executive.
(i) although the restrictions contained in Sections 5(a), (b), (c) and (d)
above are considered by the parties hereto to be fair and reasonable
in the circumstances, it is recognized that restrictions of such
nature may fail for technical reasons, and accordingly it is hereby
agreed that if any of such restrictions shall be adjudged to be void
or unenforceable for whatever reason, but would be valid if part of
the wording thereof were deleted, or the period thereof reduced or the
area dealt with thereby reduced in scope, the restrictions contained
in Sections 5(a), (b), (c) and (d) shall be enforced to the maximum
extent permitted by law, and the parties consent and agree that such
scope or wording may be accordingly judicially modified in any
proceeding brought to enforce such restrictions.
(ii) Notwithstanding that the Executive's employment hereunder may expire
or be terminated as provided in Section 1 or Section 6 hereof, this
Agreement shall continue in full force and effect insofar as is
necessary to enforce the covenants and agreements of the Executive
contained in this Section 5.
6. TERMINATION OF EMPLOYMENT PERIOD AND SEVERANCE
(a) Termination by the Company without Cause. If for any reason other than
the provisions of Section 6(d) hereof, the Company wishes to terminate the
Employment Period and the Executive's employment hereunder, the Company shall
give a written notice to the Executive of such termination stating that a
severance period (the "Severance Period") will commence upon receipt of such
notice by the Executive. The Severance Period shall be for the balance of the
then current term of this Agreement or, unless the Executive shall have given
the notice described in Section 1, twelve months, whichever is greater. Upon
receipt of such notice by the Executive, the Employment Period shall terminate
(and the Executive shall have no further duties under Section 2 hereof). During
the entire Severance Period, the Executive shall continue to receive all salary,
compensation, payments and benefits under Sections 3(a) and 3(d) of this
Agreement (including, to the extent allowable under applicable law, the accrual
of additional service credits or Company contributions under pension and thrift
plans, and any benefits under the Company's long term disability and life
insurance plans) available upon the date of the commencement of the Severance
Period as if the Employment Period continued throughout the Severance Period.
The Executive agrees that the payments described in this Section 6(a) shall be
full and adequate compensation to the Executive for all damages the Executive
may suffer as a result of the termination of his employment pursuant to this
Section 6(a), and hereby waives and releases the Company from any and all
obligations or liabilities to the Executive arising from or in connection with
the Executive's employment with the Company or the termination and claims the
Executive may have under federal, state or local statutes, regulations or
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ordinances or under any common law principles or breach of contract or the
covenant of good faith and fair dealing, defamation, wrongful discharge,
intentional infliction of emotional distress or promissory estoppel; provided,
however, that any rights and benefits the Executive may have under the employee
benefit plans and programs of the Company in which the Executive is a
participant, shall be determined in accordance with the terms and provisions of
such plans and programs.
(b) Death. If the Executive dies during the Employment Period, the
Severance Period or during the period when payments are being made pursuant to
Section 6(c), the Employment Period shall automatically terminate and the
obligations of the parties shall terminate effective the date of death.
(c) Disability. If the Executive becomes Disabled (as hereinafter defined)
during the Employment Period, the Company shall be entitled to terminate his
employment and the Employment Period upon written notice to the Executive from
the Company. In the event of such termination, the Executive shall be released
from any duties hereunder, and the Severance Period described in Section 6(a)
hereof shall immediately commence. The duties, rights, benefits and other
matters during the Severance Period shall be as set forth in Section 6(a), and
the Executive (and his or her heirs, beneficiaries and estate) shall be entitled
to all compensation, payments and benefits during the Severance Period without
any offset or reduction except by such amounts, if any, as are paid to the
Executive in lieu of compensation for services under any applicable insurance
policies of the Company (or by the Company under any self insurance plan). For
purposes of this Agreement, "Disabled" shall mean mental or physical impairment
or incapacity rendering the Executive substantially unable to perform his duties
under this Agreement for a period of longer than 180 days out of any 360-day
period during the Employment Period. A determination of whether the Executive is
Disabled shall be made by the Company in its sole discretion upon its own
initiative or upon request of the Executive or a person acting on his behalf. If
the Executive becomes Disabled during a Severance Period, he shall continue to
receive the compensation, payments and benefits of this Agreement during the
entire Severance Period without any offset or reduction, except by such amounts,
if any, as are paid to the Executive in lieu of compensation for services under
any applicable insurance policies of the Company (or by the Company under any
self insurance plan).
(d) Termination by the Company for Cause. The Company by written notice to
the Executive, shall have the right to terminate the Employment Period in the
event of any of the following (which shall constitute "Cause"):
(i) The Executive's breach in respect of his duties under this
Agreement, such breach continuing unremedied for thirty days
after written notice thereof from the Company to the Executive
specifying the acts constituting the breach and requesting that
they be remedied; or
(ii) Any misconduct, dishonesty, insubordination or other act by the
Executive materially detrimental to the goodwill of the Company,
or materially damaging to the Company's, its subsidiaries' and/or
affiliates' relationships with their customers or employees,
including without limitation, the Executive having
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been convicted of a felony during the Employment Period, provided
such conviction has resulted or is likely to result in
substantial detriment to the Company, its subsidiaries and/or
affiliates.
Any termination under this Section 6(d) shall be without damages or
liability to the Company for compensation and other benefits which would have
accrued to the Executive hereunder after termination, but all compensation,
benefits and reimbursements accrued through the date of termination shall be
paid to the Executive at the times normally paid by the Company. In this event,
there shall be no Severance Period.
(e) Voluntary Termination by the Executive. In the event of voluntary
termination of employment by the Executive, the terms of the last paragraph of
Section 6(d) shall apply, except in the event that such voluntary termination
occurs within ninety days of (i) a relocation of the Company's offices (or the
location of the performance of work by the Executive) beyond a fifty mile radius
of New York City except to the greater Houston, Texas area, (ii) a material
diminution of the Executive's duties and responsibilities as provided in Section
2, or (iii) a reduction in Base Salary in which cases the provisions of Section
6(a) shall apply.
(f) Termination Following a Change in Control.
(i) For purposes of this paragraph (f), the term "Change in Control"
shall mean a Change in Control as defined in Section 3 of the OMI Corp.
Separation Allowance Program, as amended from time (the "Program") to time.
Should the Executive's employment hereunder be terminated by the Company without
Cause (other than for reason of the Executive becoming Disabled) within two
years of a Change in Control, the Company shall pay and the Executive shall
receive in cash an amount equal to three times the sum of the Executive's then
current Base Salary and the amount paid to the Executive pursuant to the
exception in Section 3(b). The Executive shall also be eligible to receive any
and all other benefits as provided in the Program (excepting the severance
benefits of Paragraph 5(iii)B of the Program). For purposes other than with
respect to Paragraph 5(iii)B of the Program, wherever a Measuring Period (as
defined in the Program) is called for, the Measuring Period for the Executive
shall be twenty four. Upon termination under this paragraph (f), the Executive
shall no longer be bound by the provisions of Section 5 of this Agreement.
(ii) In the event that any payment received or to be received by the
Executive in connection with a Change in Control or the termination of the
Executive's employment (whether payable pursuant to the terms of this Agreement
or any other plan, arrangement or agreement with the Company, any person whose
actions result in a Change in Control or any person affiliated with the Company
or such person (together with the payment pursuant to Section 6(f)(i), the
"Total Payments")) would not be deductible by the Company (in whole or in part)
as a result of Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"), the payment pursuant to Section 6(f)(i) shall be reduced until no
portion or the Total Payments is not deductible as a result of Section 280G of
the Code, or the payment pursuant to Section 6(f)(i) is reduced to zero. For
purposes of this limitation (A) no portion of the Total Payments the receipt or
enjoyment of which the Executive shall have effectively waived in writing prior
to the date of payment of the payment pursuant to Section 6(f)(i) shall be taken
into account, (B) no portion of the Total Payments shall be taken into account
which, in the opinion of tax counsel selected by the Company's independent
auditors and acceptable to the Executive, does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code, and (C) the value
of any non-cash benefit or any deferred payment or benefit included in the Total
Payments shall be determined or benefit included in the Total Payments shall be
determined by the Company's independent auditors servicing the Company
immediately prior to the time of a Change in Control in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
7. CONFLICTING AGREEMENTS
The Executive hereby represents and warrants to the Company that he is
entering into this Agreement, and the obligations and duties undertaken by him
hereunder, will not conflict with, constitute a breach of, or otherwise violate
the terms of any other employment of other agreement to which he is a party.
8. ASSIGNMENT
(a) By the Executive. This Agreement, any part thereof and any rights
(including compensation) or obligation hereunder shall not be assigned, pledged,
alienated, sold, attached, charged, encumbered or transferred in any way by the
Executive and any attempt to do so shall be void except that (i) the Executive
may designate any of his beneficiaries to receive (and such beneficiaries shall
receive) any compensation, payments or other benefits payable hereunder upon his
death, (ii) any assignment by will or by laws of descent and distribution or
following the
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occurrence of the Executive's legal incompetence is permitted and (iii) the
Executive's executors, administrators or other legal representatives may assign
any rights hereunder to the person or persons entitled thereto.
(b) By the Company. Provided the substance of the Executive's duties set
forth in Section 2 shall not change, and provided that the Executive's
compensation as set forth in Section 3 shall not be adversely affected, the
Company may assign or otherwise transfer this Agreement to any succeeding entity
without limitation, which entity shall assume all rights and obligations
hereunder.
9. NOTICES
All notices, requests, demands and other communications hereunder must be
in writing and shall be deemed to have been duly given if delivered by hand or
mailed within the continental United States by first class, registered mail,
return receipt requested, or sent by overnight mail, such as Federal Express,
postage and registry fees prepaid, to the applicable party and addressed as
follows:
(a) if to the Company:
OMI Corp.
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
(b) if to the Executive:
0000 X. Xxxxxxxxx
#000
Xxxxxxx, XX 00000
Addresses may be changed by notice in writing signed by the addressee.
10. MISCELLANEOUS
(a) If any provision or portion of this Agreement shall, for any reason, be
adjudged by any court of competent jurisdiction to be invalid or unenforceable,
such judgment shall not affect, impair or invalidate the remainder of this
Agreement but shall be confined in its operation to the jurisdiction in which
made and to the provisions of this Agreement directly involved in the
controversy in which such judgment shall have been rendered.
(b) No course of dealing and no delay on the part of any party hereto in
exercising any right, power or remedy under or relating to this Agreement shall
operate as a waiver thereof or otherwise prejudice such party's rights, powers
and remedies. No single or partial exercise of any rights, powers or remedies
under or relating to this Agreement shall preclude any other or further exercise
thereof or the exercise of any other right, power or remedy.
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(c) This Agreement may be executed by the parties hereto in counterparts,
each of which shall be deemed to be an original, but all such counterparts shall
together constitute one and the same instrument, and all signatures need not
appear on any one counterpart.
(d) (i) Any other agreement, rule or regulation to the contrary,
notwithstanding, the parties hereby agree that any action or proceeding relating
to this Agreement or its subject matter shall be brought in a state or federal
court situated in the County of New York, State of New York and such court shall
have exclusive jurisdiction thereof; provided, however, any court with
jurisdiction over the parties may, at the election of Company, have jurisdiction
over any action brought with regard to or any action brought to enforce any
violation or claimed violation of Section 5. The parties each hereby
specifically submit to the jurisdiction of such court and further agree that
service of process may be made within or without the State of New York by giving
notice in the manner provided in Section 9. Each party further agrees to waive
and hereby waives any right to a trial by jury, and to any objection it or he
may have in any such action, based on lack of personal jurisdiction or venue, or
inconvenient forum.
(ii) In any such action or proceeding, the prevailing party shall be
entitled to recover from the other party reasonable costs, including attorney's
fees and expenses. In any action or proceeding before a court or other tribunal
relating to this Agreement with respect to which damages are an adequate remedy,
the parties agree that no damages other than compensatory damages shall be
sought or claimed by either party and each party waives any claim, right or
entitlement to punitive, exemplary, or consequential damages, or any statutory
damages, or any other damages of any kind or nature in excess of compensatory
damages, and any court or arbitration tribunal is specifically divested of any
power to award any damages in the nature of punitive, exemplary, or
consequential damages, or any statutory damages, or any other damages of any
kind or nature in excess of compensatory damages.
(e) All payments required to be made by the Company hereunder to the
Executive or his beneficiaries, including his estate, shall be subject to
withholding and deductions as the Company may reasonably determine it should
withhold or deduct pursuant to any applicable law or regulation. In lieu of
withholding or deducting such amounts in whole or in part, the Company may, in
its sole discretion, accept other provision for payment as permitted by law,
provided it is satisfied in its sole discretion that all requirements of law
affecting its responsibilities to withhold such taxes have been satisfied.
(f) This Agreement embodies the entire understanding, and supersedes all
other oral or written agreements or understandings, between the parties
regarding the subject matter hereof. No change, alteration or modification
hereof may be made except in writing signed by both parties hereto. The headings
in this Agreement are for convenience of reference only and shall not be
considered part of this Agreement or limit or otherwise affect the meaning
hereof. This Agreement and the rights and obligations of the parties hereunder
shall be construed in accordance with and governed by the laws of the State of
New York (disregarding any choice of law rules which might look to the laws of
any other jurisdiction).
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(g) The Executive acknowledges that the terms of this Agreement have been
fully explained to him, that the Executive understands the nature and extent of
the rights and obligations provided under this Agreement, and that the Executive
has been given the opportunity to be represented by legal counsel in the
negotiation and preparation of this Agreement.
(h) Nothing herein contained shall be construed to prevent or limit any
acquisition, consolidation or merger of the Company.
11. CONDITION PRECEDENT
In the event that the Company does not acquire Marine Transport Lines, Inc.
on or before December 31, 1998, this Agreement shall be null and void and
neither party shall have any rights hereunder.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the day and year first above written.
By
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Xxxxx Xxxxxxxxx
OMI CORP.
By
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