EXHIBIT 10.6
EMPLOYMENT AND STOCK COMPENSATION AGREEMENT
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This Employment and Stock Compensation Agreement (the "Agreement") is
entered into this the 21st day of May, 1997, by and among Xxxxxx Xxxxxxx
International Inc., a Delaware corporation (the "Company"), HAM Marine, Inc. a
Mississippi corporation ("HAM Marine"), and Xxxx X. Xxxxxx, an adult resident
citizen of Jackson, Xxxxx County, Mississippi ("Xxxxxx").
WHEREAS, Xxxxxx has been employed by HAM Marine in various capacities since
October, 1996; and
WHEREAS, effective February 14, 1997, HAM Marine issued to Xxxxxx certain
shares of its no par value common stock in consideration for past services and
certain incentive stock options as encouragement for future services; and
WHEREAS, the Company desires to employ Xxxxxx as the Company's Chief
Financial Officer and Senior Vice President, and Xxxxxx desires to accept such
employment; and
WHEREAS, HAM Marine deems it to be in its best interest that Xxxxxx provide
services to the Company.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and representations set forth herein, the Company, HAM Marine and Xxxxxx hereby
agree as follows:
ARTICLE I - EMPLOYMENT
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1.1 Term of Employment. Xxxxxx'x employment with the Company shall continue
until terminated by the Company or voluntarily by Xxxxxx (the "Term"). Xxxxxx
acknowledges that his employment with the Company is terminable at the will of
the Company and that he has no rights of continued employment with the Company.
1.2 Duties. Xxxxxx shall be employed full-time as Chief Financial Officer
and Senior Vice President of the Company, reporting directly to the President of
the Company. Xxxxxx hereby accepts such employment and undertakes to use his
best efforts to discharge his duties and responsibilities. During the Term of
this Agreement, Xxxxxx shall devote substantially his full time to the discharge
of his duties and responsibilities under this Agreement, except for vacations in
accordance with this Agreement and with the Company's vacation policy applicable
to executive personnel.
1.3 Compensation. During the Term, Xxxxxx shall be entitled to a salary of
$100,000.00 per year payable in equal monthly installments of $8,333.33, as the
same may be increased from time to time by the Board of Directors of the
Company.
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1.4 Compensation-Stock. As of February 14, 1997, and as additional
compensation, HAM Marine transferred to Xxxxxx, free and clear of liens and
encumbrances, 5,000 shares of HAM Marine's 2,000,000 authorized shares of no par
value voting common stock. Also effective February 14, 1997, HAM Marine granted
Xxxxxx incentive stock options for an additional 5,000 shares of HAM Marine's no
par value voting common stock at an option price of $18.33 per share which HAM
Marine and Xxxxxx agree to be the current fair market value of HAM Marine's
common stock on that date. The incentive stock options (i) shall become vested,
with respect to the number of shares specified in the table below, at the dates
indicated in such table in the event Xxxxxx remains employed by the Company
through the date specified with respect to such shares and (ii) shall be
exercisable, in whole or in part, with respect to the number of shares covered
by vested options after the applicable vesting date therefor, by payment of the
applicable exercise price specified in the table below:
EXERCISE
PRICE
VESTING DATE NUMBER OF SHARES PER SHARE
------------ ---------------- ---------
January 1, 1999 1,666 $18.33
January 1, 2000 1,667 $18.33
January 1, 2001 1,667 $18.33
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TOTAL 5,000
All vested incentive stock options granted to Xx. Xxxxxx shall expire on
December 31, 2006, unless sooner exercised by Xx. Xxxxxx. All unvested
incentive stock options shall expire on the date of termination of Xxxxxx'x
employment with the Company. In the event that HAM Marine is merged or enters
into a stock exchange agreement with the Company, such options shall be
converted into the number of options of the Company, in the same ratio as the
then outstanding shares of HAM Marine are converted into shares of the Company.
The exercise price per share shall be adjusted accordingly.
In the event that HAM Marine, or the Company (in the event of a merger or
stock exchange between HAM Marine and the Company) sells all or a substantial
portion of its operating assets, is merged with another entity or experiences a
change of ownership of more than fifty percent (50%) of its equity ownership in
any twelve (12) month period, then the incentive stock options granted to Xxxxxx
shall become exercisable immediately prior to such sale, merger or change of
ownership.
1.5 No Guaranty of Employment. The representation of HAM Marine to Xxxxxx
that HAM Marine will issue additional shares of
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HAM Marine's common stock to Xxxxxx in the event of his continued employment
with the Company is not to be construed as a guaranty by the Company or HAM
Marine of the continued employment of Xxxxxx, nor is it to be construed that
Xxxxxx has any rights in or to any unissued shares of HAM Marine's or the
Company's common stock other than the shares specifically covered by this
Agreement. Notwithstanding the foregoing sentence, upon the termination of
Xxxxxx'x employment, for any reason, by the Company or voluntarily by Xxxxxx,
Xxxxxx shall have no rights in or to any shares of the common stock of HAM
Marine or the Company, as the case may be, or options to purchase shares which
options are not yet vested in Xxxxxx pursuant to Section 1.4 above.
1.6 Expense Reimbursements. The Company shall reimburse Xxxxxx for
business expenses reasonably incurred in connection with his employment in
accordance with the Company's reimbursement practice for executive officers upon
presentation of adequate documentation.
1.7 Benefits.
(a) Xxxxxx shall be entitled to paid vacation and sick leave as
determined in accordance with the
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Company's vacation and sick leave policies applicable to
executive personnel as in effect from time to time; provided,
however, that Xxxxxx shall be entitled to at least two (2) weeks'
paid vacation;
(b) Xxxxxx shall be entitled to receive all employee benefits and to
participate in any employee benefits plans or programs as are
generally offered to or provided for executives of the Company
from time to time, including, without limitation, participation
in the Section 401(k) plan and the payment of full medical and
dental insurance premiums for Xxxxxx.
1.8 Working Facilities. The Company shall furnish Alford with such
office, secretarial and technical facilities and assistance as are suitable for
his position and adequate for the performance of his duties.
ARTICLE II - COVENANTS OF EMPLOYEE
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2.1 Confidentiality. Xxxxxx recognizes the interest of the Company and
its subsidiaries and affiliates in maintaining the
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confidential nature of their proprietary and other business and commercial
information. In consideration thereof, during Xxxxxx'x employment with the
Company and following termination thereof for any reason, Xxxxxx shall not
(except as authorized in writing by the Board of Directors of the Company)
publish, disclose or use for his own benefit or for the benefit of a business or
entity other than the Company or otherwise, any secret, confidential,
proprietary or other information not in the public domain which was acquired by
Xxxxxx during his employment relating to the Company's or any of its
subsidiaries or affiliates' businesses, operations, customers, suppliers,
products, employees, financial affairs, trade or industrial practices, trade
secrets, technology, know-how or intellectual property. All records, files,
data, documents and the like, relating to suppliers, customers, costs, prices,
systems, methods, personnel, technology and other materials relating to the
Company or its subsidiaries or affiliates shall be and remain the sole property
of the Company and such subsidiaries and affiliates.
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ARTICLE III - RESTRICTIONS ON TRANSFER,
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S CORPORATION AND SECURITIES' PROVISIONS
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3.1 Restrictions on Transfer of Stock. Xxxxxx shall not:
(a) sell, assign, transfer, convey, exchange or in any manner dispose
of all or any portion of HAM Marine's or the Company's stock to
be issued hereunder (the "Stock"), or any interest therein,
(hereinafter referred to as a "Transfer") except
upon compliance with the terms and provisions of this Section
3.1;
(b) make a Transfer of the Stock unless, prior to the Transfer, the
Stock is registered with the appropriate federal and state
securities agencies or, alternatively, an opinion of legal
counsel acceptable to the Corporation is provided to the
Corporation as to the exempt nature of the transaction from
registration requirements of federal and state securities laws;
(c) make a Transfer of the Stock if such Transfer would cause the S
Corporation status of the Corporation to terminate. Specifically,
no Transfer may be made to any person who would cause
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the Corporation to have more than the maximum number of
shareholders allowed under the Internal Revenue Code of 1986, as
amended (the "Code"), as then in effect, or to any person or
entity who would not be eligible to be a shareholder of an S
Corporation under the provisions of the Code as in effect at the
time of the purported Transfer; or
(d) pledge, encumber, hypothecate or grant a security interest in the
Stock without the prior written consent of the Corporation, which
consent may be given or withheld in the sole discretion of the
Corporation.
3.2 Waiver of Termination of S Status. In the event that HAM Marine's or
the Company's (as the case may be) status as an S corporation is terminated
inadvertently, and HAM Marine or the Company wishes to obtain a ruling under
Section 1362(f) of the Code, Xxxxxx agrees to make any adjustments required by
the Internal Revenue Service pursuant to Section 1362(f)(4) of the Code and
approved by HAM Marine's or the Company's board of directors, as the case may
be. Xxxxxx'x obligation to make such
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adjustments shall continue after Xxxxxx has ceased to own stock in the Company
and after this Agreement has terminated.
3.3 Representations of Xxxxxx. Xxxxxx understands that the Stock has not
been registered under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder (the "Securities Act"), nor under the
Mississippi Securities Act, as amended, and the rules and regulations thereunder
(the "State Law"), in reliance on certain exemptions from registration/
qualification provided under those laws. Accordingly, Xxxxxx understands that
he will not be able to sell or transfer any of the Stock, or any interest
therein, unless such sale or transfer is registered pursuant to applicable
provisions of the Securities Act, the State Law and any other state securities
laws having applicability thereto, respectively, or an exemption from such
registration or qualification requirements is available. Xxxxxx hereby agrees
not to sell or transfer the Stock unless either of the foregoing conditions
shall have been satisfied.
Xxxxxx hereby represents, warrants and covenants to and with the Company as
follows:
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(a) The Stock is being acquired by Xxxxxx for his own account, for
investment purposes only, without intention of distributing,
selling or otherwise disposing of the Stock, or any interest
therein, to any other person or entity.
(b) By reason of his business experience, Xxxxxx has the capacity to
protect his own financial interest in this transaction and the
offer and sale of the securities has not been accomplished by
publication of any advertisement.
(c) Xxxxxx understands that HAM Marine is relying, to a material
degree, on the representations, warranties, and covenants which
pertain in this Agreement in issuing the Stock and hereby
authorizes HAM Marine to act as it sees fit in full reliance on
this understanding.
(d) Xxxxxx has been intimately involved in the business of HAM Marine
having been
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employed as its financial adviser and as a marketing
representative. As a result, Xxxxxx is familiar with and aware of
the past, present and potential prospects of HAM Marine. Xxxxxx
agrees that (1) he has had the opportunity to ask questions of,
and to receive answers from, representatives of HAM Marine
relating to HAM Marine's past, current and present operations;
(2) Xxxxxx is aware that HAM Marine's business is (i) highly
competitive, and (ii) subject to a number of significant risks of
which HAM Marine has little or no practical control; and (3)
because of HAM Marine's financial condition and such risks and
competitive factors, Xxxxxx may never recoup his investment in
the Stock or otherwise liquidate the Stock, or any portion
thereof even in the event of a personal emergency.
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(e) Xxxxxx has independently evaluated HAM Marine's business and the
value of the Stock, and Xxxxxx hereby agrees that he has not
relied upon any representations of HAM Marine, or that of any
other shareholder, officer or director thereof, with regard to
such value. Xxxxxx further acknowledges that, except as provided
in Section 3.5, HAM Marine is under no obligation to register the
sale, transfer or other distribution of the Stock, or any part of
it, by him or on his behalf or to take any other action necessary
in order to make compliance with exemption from such registration
available.
3.4 Endorsement on Stock Certificates. Upon execution of this Agreement,
the certificates representing the Stock shall be surrendered to HAM Marine and
endorsed as follows:
THE SECURITIES REPRESENTED BY THIS CERTIFICATE WERE ISSUED WITHOUT
REGISTRATION OR QUALIFICATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "33 ACT"), OR THE
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MISSISSIPPI SECURITIES ACT, AS AMENDED (THE "STATE ACT"), AND,
THEREFORE, CONSTITUTE RESTRICTED SECURITIES, AND NO SALE, TRANSFER OR
OTHER DISPOSITION OF SUCH SECURITIES, OR ANY INTEREST THEREIN, MAY BE
MADE WITHOUT SUCH REGISTRATION OR QUALIFICATION UNDER THE 33 ACT AND
STATE ACT, UNLESS AN EXEMPTION THEREFROM IS AVAILABLE.
This certificate is transferrable only upon compliance with the
provisions of that certain Employment and Stock Compensation Agreement
dated May 21, 1997, by and between Xxxxxx Xxxxxxx International Inc.,
HAM Marine, Inc., and Xxxx X. Xxxxxx, a copy of which is on file in
the office of the Secretary of the Corporation.
After endorsement, the certificates shall be returned to Xxxxxx who
shall be entitled to exercise all rights of ownership of the Stock, subject to
the terms of this Agreement. All stock certificates hereafter issued to Xxxxxx
shall bear the same endorsement.
3.5 Piggyback Registration Rights. HAM Marine agrees that if HAM Marine
shall, at any time, propose a public offering of shares of HAM Marine's stock,
to be sold by HAM Marine for cash pursuant to a registration statement under the
Securities Act of 1933, as amended, on Form X-0, X-0, or S-3, HAM Marine shall
give written notice to Xxxxxx at least sixty (60) days prior to the date that
such registration statement is filed with the
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Securities and Exchange Commission. Upon the written request of Xxxxxx received
by HAM Marine, no later than the twentieth (20th) business day after giving of
such notice by HAM Marine, to register, on the same terms and conditions as the
shares of HAM Marine's stock otherwise being sold pursuant to such registration,
all or part of HAM Marine's stock held by such stockholder, HAM Marine shall use
its best efforts to cause such stock (the "Registrable Shares") to be included
in the securities to be covered by the registration statement proposed to be
filed by HAM Marine. Notwithstanding the foregoing, HAM Marine shall not be
obligated to include such Registrable Shares in such offering if HAM Marine is
advised in writing by its managing underwriter or underwriters that such an
offer would in its or their opinion be materially adversely affected by such
inclusion; provided, however, that HAM Marine shall in any case be obligated to
include such number or amount of Registrable Shares in such offering as such
managing underwriter or underwriters shall determine would not adversely affect
such offerings; and provided further, that such number of Registrable Shares
shall not be reduced unless the shares to be included in such offering for the
account of any other shareholder (not including HAM Marine) are
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also reduced on a pro rata basis. HAM Marine may at any time prior to the
effectiveness of such registration statement, in its sole discretion and without
the consent of any shareholder, abandon the offering to be made pursuant to such
registration statement.
If Xxxxxx participates in any such public offering, he shall pay (i)
the underwriting discounts and selling commissions applicable to HAM Marine's
stock sold by him in the offering and (ii) enter into such Agreements with HAM
Marine and with the underwriters with respect to the procedures to be filed in
connection with the registration and the offer and sale of securities,
indemnification, providing for information and other similar matters as HAM
Marine or any underwriter may reasonably request and which are comparable to
similar Agreements, if any, with any other persons (not including HAM Marine)
whose shares are included in the offering. Except as set forth in the first
sentence of this paragraph, all registration and filing fees, Blue Sky expenses,
printing expenses, legal and accounting fees, transfer taxes, transfer agent
fees and other expenses relating to the registration or offering of HAM Marine's
stock shall be
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paid by HAM Marine. The provisions of this Paragraph shall survive the
termination of this Agreement.
3.6 Specific Performance. The Stock cannot be readily purchased or sold
in the open market, therefore, the parties will be irreparably damaged in the
event that this Agreement is not specifically enforced. Should any dispute
arise concerning the Transfer of the Stock, an injunction may be issued
restraining any Transfer pending the determination of such controversy. In the
event of a controversy concerning the right or obligation to Transfer or
purchase any of the Stock, such right or obligation shall be enforceable in a
court of equity by a decree of specific performance. Such remedy shall be
cumulative and not exclusive and shall be in addition to any other remedy which
a party may have.
ARTICLE IV - GENERAL PROVISIONS
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4.1 Withholding of Taxes. The Company may withhold from any amounts
payable under this Agreement, all federal, state, city or other taxes as shall
be required pursuant to any law or government regulation or ruling.
Notwithstanding the foregoing sentence, Xxxxxx shall bear the payment of all
taxes associated
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with the issuance to him of the common stock of the Company as additional
compensation.
4.2 Notices. All notices or other documents required to be delivered
under this Agreement shall be given in writing and shall be personally
delivered, delivered by United States certified mail, return-receipt requested,
or by facsimile to the parties at the addresses listed below. Such notices shall
be effective as of the time of delivery if personally delivered, as of the date
of receipt as referenced by the official receipt of the United States Postal
Service if delivered by certified mail, or as of the date and time of receipt as
reflected by facsimile acknowledgement. The addresses of the parties are as
follows:
IF TO THE COMPANY:
-----------------
Xxxxxx Xxxxxxx International Inc.
000 Xxxx Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: X. X. Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO HAM MARINE:
----------------
HAM Marine, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxx Xxxxxx Xxx 00
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
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Telephone: (000) 000-0000
Facsimile: (000) 000-0000
IF TO EMPLOYEE:
--------------
Xxxx X. Xxxxxx
00 Xxxxxxxxxx Xxxxx, Xxxxxxxxx 00X
Xxxxxxx, Xxxxxxxxxxx 00000
Telephone: (000) 000-0000
Other addresses may be substituted for the foregoing addresses upon the
giving of written notice to the other parties in accordance with the provisions
of this Section.
4.3 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the state of
Mississippi, without giving effect to the principles of conflict of laws of such
State.
4.4 Validity. If any provisions of this Agreement or the application of
any provision hereof to any person or circumstance is held invalid,
unenforceable or otherwise illegal, the remainder of this Agreement and the
application of such provision to any other person or circumstances shall not be
affected, and the provision so held to be invalid, unenforceable or otherwise
illegal shall be reformed to the extent (and only to the extent) necessary to
make it enforceable, valid and legal.
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4.5 Entire Agreement. This Agreement supersedes any other agreement, oral
or written, between the parties with respect to the employment of Xxxxxx by the
Company and the issuance of shares of stock by HAM Marine to Xxxxxx, and
contains all of the agreements and understandings between the parties with
respect to such employment and stock issuance. Any waiver or modification of
any term of this Agreement shall be effective only if it is signed in writing by
all parties.
4.6 Captions. The captions in this Agreement are solely for convenience
of reference and shall not be given any effect in the construction or
interpretation of the Agreement.
4.7 Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing signed by Xxxxxx, the Company and HAM Marine. No waiver by any party
hereto at any time of any breach by any party hereto or compliance with any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or any prior or subsequent time. No agreements or representations, oral
or otherwise, expressed or implied, with respect to the subject matter hereof
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have been made by any party which are not set forth expressly in this Agreement.
4.8 Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered on the date first set forth above.
XXXXXX XXXXXXX INTERNATIONAL INC.
By:___________________________________
X. X. Xxxxxxxx, President
HAM MARINE, INC.
By:___________________________________
Xxxxxx X. Xxxxxxx, President
______________________________________
Xxxx X. Xxxxxx
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