Exhibit 10.31
January 25, 1999
Xx. Xxxx X. Latioliss
0000 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxx 00
Xxxxxx, Xxxxxx 00000
Dear Xxxx:
This will confirm the agreement between the undersigned, FM
Services Company (the "Company"), and you with respect to
the provision by you of certain consulting services to the
Company and its subsidiaries and corporate affiliates (which
includes client companies for which services are provided).
1. From January 1, 1999 through December 31, 1999 (the
"Consulting Term"), you agree to serve as a consultant
to the Company. In your capacity as a consultant, you
will provide to the Company, subject to the instruction
and direction of its executive officers, consulting
advice related to the businesses, operations and
prospects of the Company and its subsidiaries and
corporate affiliates. You agree to devote such of your
time, skill, labor and attention to the performance of
any consulting services requested by the Company
hereunder as may be necessary for you to render the
prompt and effective performance thereof, provided that
it is generally understood that you shall only be
required to devote yourself to the performance of such
duties to the extent contemplated by paragraph 2(vi) of
this letter.
2. It is understood and agreed with respect to your
undertaking to provide the consulting Services
described herein, that:
(i) you will perform such consulting services as an
independent contractor to, and not as an agent
(except in any capacity as an elected officer
or director) or employee of the Company or any
of its subsidiaries or affiliates, and that, as
an independent contractor, you shall have the
sole and exclusive right to control and direct
details incident to any consulting services
required to be provided hereby;
(ii) this agreement shall not be deemed or construed
to create a partnership, a joint venture, a
Xx. Xxxx X. Xxxxxxxxx
January 25, 1999
Page 2
principal and agent relationship, or any other
relationship between you and the Company that
would create liability for the Company for your
actions;
(iii)nothing herein contained shall be construed as
giving you any right to be elected or appointed
an officer or director of the Company or any of
its subsidiaries or corporate affiliates or to
retain any such position during the Consulting
Term or any extension thereof;
(iv) except as otherwise authorized in writing by
the Chairman of the Board of the Company or his
specific designees, you will not (A) represent
or hold yourself out to others that you are an
employee or agent of the Company or any of its
subsidiaries or corporate affiliates, or (B)
have any authority to negotiate or execute any
agreements, contracts and commitments on behalf
of, or otherwise binding upon, the Company or
such subsidiary or corporate affiliate other
than such authority which derives from your
occupying the position of an elected officer or
director of the Company or any of its
subsidiaries or corporate affiliates;
(v) the executive officers of the Company or the
subsidiary or corporate affiliate seeking your
consulting services will, insofar as it is
reasonably practicable, consider your
convenience in the timing of their requests,
and your failure or inability, by reason of
temporary illness or other cause beyond your
control or because of absence for reasonable
periods, to respond to such requests during any
such temporary period shall not be deemed to
constitute a default on your part in the
performance hereunder of such services;
(vi) subject to the provisions of the foregoing
clause (v), during the Consulting Term you will
make yourself available for the performance of
services hereunder for one-third of your time,
it being understood that this shall constitute,
on the average, seven (7) days per month during
the Consulting Term.
3. As an independent contractor of the Company, you
acknowledge and agree that, except as otherwise
specifically provided herein,
Xx. Xxxx X. Xxxxxxxxx
January 25, 1999
Page 3
(i) you will not be entitled to any insurance,
pension, vacation or other benefits customarily
afforded to employees of the Company;
(ii) you will not be treated by the Company as an
employee for purposes of any federal or state
law regarding income tax withholding or for
purposes of contributions required by any
unemployment insurance or compensatory program;
and
(iii)you will be solely responsible for the payment
of any taxes or assessments imposed on you on
account of the payment of the consulting fee
to, or performance of consulting services by
you pursuant to this agreement.
4. During the term hereof, you agree that you will not,
without the prior written consent of the Company, (i)
render any services, whether or not for compensation, to
other individuals, firms, corporations or entities in
connection with any matters that may involve interests
adverse to the Company or any of its subsidiaries or
affiliates, or (ii) engage in any business or activity
detrimental to the business or interests of the Company
or any of its subsidiaries or affiliates.
5. You acknowledge and agree that any inventions or
discoveries, whether or not patentable, which you may
make (either alone or in conjunction with others) as a
result of performing services hereunder shall be the sole
and exclusive property of the Company. You agree to
communicate to the Company or its representatives all
facts known to you concerning such matters, and to
execute any documents or instruments necessary to
transfer to the Company any inventions or discoveries to
which the Company may become entitled under this
agreement and should the Company decide to become
entitled under this agreement, and should the Company
decide to patent any such invention or discovery, you
will assist in the preparation of patent applications and
execute and assign such patent applications, and execute
such other documents, as may be necessary.
6. You acknowledge and agree to comply with the
confidentiality and other provisions set forth in
Appendix A to this Agreement, the terms of which are
incorporated by reference into, and made a part of this
Agreement.
7. In the event of a breach or threatened breach by you of
Sections 5 or 6 of this agreement during or after the
Xx. Xxxx X. Xxxxxxxxx
January 25, 1999
Page 4
term hereof, the Company shall be entitled to injunctive
relief restraining you from violating such paragraphs.
Nothing herein shall be construed as prohibiting the
Company from pursuing any other remedy at law or inequity
it may have in the event of your breach or threatened
breach of this agreement.
8. For the consulting service provided by you hereunder
during the Consulting Term, the Company agrees:
(i) to pay to you an annual consulting fee of
$330,000, such fee to be payable monthly in
arrears in $27,000.00 amounts. It is understood
by you that the amounts payable to you pursuant
to this Consultint Agreement shall be in full
satisfaction of any compensation to which you
would otherwise b entitled as a director of
the Company or any of its subsidiaries or
affiliates, with you hereby relinquishing any
claim to such amounts;
(ii) that additional compensation potential in the
form of options in McMoRan Exploration Company
stock will be considered by the senior
executives of that company from time to time;
(iii)that the use of corporate aircraft from time to
time will be made available to you for business
purposes subject to availability, urgency, cost
considerations and overall efficiency of
business travel;
(iv) to reimburse you for, or advance to you, all
reasonable out-of-pocket travel and other
expenses incurred by you at the request of the
Company in connection with your performance of
services hereunder. Such expenses will be
reimbursed or advanced promptly after your
submission to the company of expense statements
in such reasonable detail as the Company may
require;
(v) to make available to you secretarial
assistance, the use of a portable phone and
laptop computer, and a suitable office at the
Company's headquarters, for which you will pay
to the Company a monthly amount of $2,500, such
amount to be paid no later than the last day of
each month;
(vi) to make available to you, at no additional
charge, an annual physical, a parking space,
Xx. Xxxx X. Xxxxxxxxx
January 25, 1999
Page 5
access to the executive dining room and fitness
center, participation in the Company's
financial tax return preparation and financial
counseling program, and membership privileges
at English Turn Country Club for business
entertainment purposes. Any expenses incurred
at these clubs that are not business related
will be borne by you personally.
9. Nothing in this agreement shall affect in any way any of
your previously accrued and vested pension or other
rights or benefits under any of the plans or agreements
of the Company or any of its subsidiaries of affiliates.
10. (i) The term of this agreement shall be the Consulting
Term, subject to any earlier termination of your status
as a consultant pursuant to the terms of subparagraph
(ii) of this paragraph. This agreement shall be
automatically continued for like Consulting Terms of one
year unless and until canceled by either party upon
thirty (30) days written notice prior to the end of any
Consulting Term. Following the termination of this
agreement, each party shall have the right to enforce all
rights and obligations under the terms of this agreement.
(ii) This agreement may be terminated, upon notice given
in the manner provided in paragraph 12 hereof, prior to
the expiration of the Consulting Term:
(A)by the mutual written consent of the Company and
you;
(B)by the Company, upon your death, or your physical
or mental incapacity;
(C)by the Company in the event of your (1) willful
failure to perform substantially the consulting
services contemplated hereby, (2) breach of any of
the other covenants of this agreement, or (3)
engaging in gross misconduct detrimental to the
Company; or
(D)by the Company for any other reason.
If this agreement is terminated by the Company prior to
the expiration of the Consulting Term for any reason
other than those set forth in subparagraphs 10 (ii)(A),
(B) or (C) above, then the company shall pay in a lump
sum in cash within 30 days of such termination, the
aggregate amount of previously unpaid consulting fees
that you would have earned had you served as a consultant
through the expiration of the Consulting Term.
Xx. Xxxx X. Xxxxxxxxx
January 25, 1999
Page 6
11. It is hereby understood and agreed that the Company
shall indemnify you for serving at the request of the
Company as an elected officer or director of any of its
subsidiaries or affiliates to the fullest extent
permitted by applicable law, and the determination as to
whether you have met the standard required for
indemnification shall be made in accordance with the
articles and bylaws of the applicable entity and with
applicable law. It is further understood and agreed that
while serving in such capacity you will be covered by the
Company's directors and officers insurance policy.
12. Any notice or other communication required hereunder
shall be in writing, shall be deemed to have been given
and received when delivered in person, or, if mailed,
shall be deemed to have been given when deposited in the
United States mail, first class, registered or certified,
return receipt required, with proper postage prepaid, and
shall be deemed to have been received on the third
business day hereafter, and shall be addressed as
follows:
If to the Company, addressed to:
Xx. Xxxxxxx X. Xxxxxxxx
Chairman of the Board
FM Services Company
0000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
If to you:
Xx. Xxxx X. Xxxxxxxxx
0000 Xxxxxx Xxxxx Xxxx.
Xxxxx 00
Xxxxxx, Xxxxx 00000
or such other address to which either party shall have
notified the other in writing.
13. This agreement is personal to you and the Company and
its subsidiaries and shall not be assignable to either
party without the prior written consent of the other.
This agreement shall be governed by and construed in
accordance with the laws of the State of Louisiana. This
agreement contains the entire understanding between the
Company and you with respect to the subject matter
hereof. Further, Consultant confirms that he has not
relied upon any representations or statements by the
Company as a basis for entering into this agreement that
are not contained herein. This agreement may not be
amended, modified or extended otherwise than by a
written agreement executed by the parties thereto.
Xx. Xxxx X. Xxxxxxxxx
January 25, 1999
Page 7
Please confirm that the foregoing correctly sets forth the
agreement between the Company and you by signing and
returning to the Company one of the enclosed copies of this
letter.
Very truly yours,
/s/ Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
President
FM Services Company
I hereby confirm that the foregoing correctly sets forth the
agreement between FM Services Company and myself.
/s/ Xxxx X. Xxxxxxxxx
_______________________________
Xxxx X. Xxxxxxxxx
January 28, 1999
_______________________________
Date
