Exhibit 10.2

 

EMPLOYMENT AGREEMENT

 

STEVEN A. MANZ

 

This Employment Agreement (this “Agreement”), dated effective as of January 10, 2005 (the “Effective Date”), is by and between Hercules Offshore, LLC, a Delaware limited liability company (the “Company”), with its principal place of business at 2929 Briarpark Drive, Suite 435, Houston, Texas 77042 and Steven A. Manz, (“Executive”).

 

RECITALS

 

WHEREAS, the Company is a Houston-based offshore oil services contractor; and

 

WHEREAS, the Company desires to employ Executive as an officer of the Company, and Executive desires to accept such employment upon the conditions and terms set forth hereinafter set forth;

 

NOW, THEREFORE, in consideration of the mutual promises, terms, covenants and conditions set forth herein and the performance of each, it is hereby agreed as follows:

 

AGREEMENTS

 

1. EMPLOYMENT AND DUTIES.

 

(a) The Company hereby employs Executive as its Chief Financial Officer. As such, Executive shall have responsibilities, duties and authority commensurate with such position and shall perform such responsibilities and duties, and shall be based at, the Company’s principal offices in Harris County, Texas. Executive will report to the President and Chief Executive Officer of the Company (the “Managers”). Additional or different duties, titles or executive positions may, however, be assigned to Executive from time to time, provided that any such changes are consistent and compatible with Executive’s experience, background and managerial skills. Executive hereby accepts this employment upon the terms and conditions herein contained and agrees to devote his full business time, energy, attention, skills, and best efforts to promote and further the business of the Company.

 

(b) Executive shall faithfully adhere to, execute and fulfill all lawful policies established by the Company.

 

(c) Executive shall not, during the term of Executive’s employment hereunder, be engaged in any business activity other than on behalf of the Company; provided, however, that the foregoing limitation shall not be construed as prohibiting Executive from making personal passive investments in any business in which Executive does not, directly or indirectly, provide services or participate in the management thereof, provided such investments do not violate the terms of Section 4 of this Agreement. The foregoing shall not apply to de minimis participation in family owned or related businesses provided that it does not violate Section 4 of this Agreement.

 

---

(d) The Company shall provide Executive with an office in Houston, Texas or at such location as shall be designated by the Managers, which location shall be reasonably acceptable to the Executive.

 

2. COMPENSATION. For all services rendered by Executive, the Company shall compensate Executive as follows:

 

(a) Base Salary. Beginning on the date of this Agreement and through the end of the Term (as hereinafter defined), the base salary payable to Executive shall be One Hundred Eighty Thousand Dollars ($180,000.00) per annum, payable in accordance with the Company’s standard payroll procedures. During the term, the Base Salary may be increased, but not decreased, from time to time by the Managers.

 

(b) Perquisites, Benefits and Other Compensation. Executive shall be entitled to receive additional benefits and compensation from the Company in such form and to such extent as specified below:

 

(i)

An annual bonus of up to 100% of base salary (target of 50%) depending upon meeting predetermined goals agreed upon with the Managers related to HSE, operations and financial results., During the Term, the annual bonus as a percentage of base salary, may be increased, but not decreased, from time to time by the Managers.

 

(ii)

The Company shall reimburse Executive in accordance with the Company’s policies for all reasonable business travel and other out-of-pocket expenses reasonably incurred by Executive in the performance of his services pursuant to this Agreement. All reimbursable expenses shall be appropriately documented in reasonable detail by Executive upon submission of any request for reimbursement, and in a format and manner consistent with the Company’s expense reporting policy.

 

(iii)

The Company shall provide Executive four weeks of paid vacation per year or such greater amount as may be afforded senior officers in accordance with Company’s policies in effect from time to time.

 

(iv)

The Company shall provide Executive with other executive perquisites as may be available to or deemed appropriate for Executive by the Managers, participation in all other Company-wide Executive benefits as may be adopted from time to time by the Company, and participation in any other insurance and Executive benefits or plans that includes all the executive officers of Company, including any pension, profit-sharing, bonus or stock option plan, life insurance, health, medical, hospitalization, or surgical insurance plan or policy, whether now existing or hereinafter established.

 

(v)

Hercules Offshore LLC shall issue options to Executive to acquire $300,000 of Hercules Offshore LLC common stock, subject to the vesting

 

-2-

---

provisions of the company’s option plan. Such options shall be exercisable at any time prior to December 31, 2014 at an exercise price of $1,000 per share.

 

3. TERM; TERMINATION; RIGHTS ON TERMINATION. The term of this Agreement shall begin on the Effective Date and continue for two (2) years (the “Term”). This Agreement and Executive’s employment may be terminated in any one of the following ways:

 

(a) Death. The death of the Executive shall immediately terminate this Agreement. However, the Executive (or his estate or legal representative, as the case may be) shall be entitled to:

 

(i) Base Salary through the Date of Termination;

 

(ii) any unpaid bonus earned with respect to any year preceding the Date of Termination and payable when bonuses for such year are paid to other company executives;

 

(iii) any amounts earned, accrued or owing to the Executive but not yet paid for reimbursement of business expenses, other expenses, perquisites, or vacation;

 

(iv) any other payment and benefit in accordance with applicable plans or programs of the company.

 

(b) Disability. If, as a result of incapacity due to physical or mental illness or injury, Executive shall have been absent from full-time duties hereunder for four (4) consecutive months, then thirty (30) calendar days after receiving written notice (which notice may occur before or after the end of such four-month period, but which shall not be effective earlier than the last day of such four-month period), the Company may terminate Executive’s employment hereunder provided Executive is unable to resume full-time duties at the conclusion of such notice period. Also, Executive may terminate his employment hereunder if his health should become impaired to an extent that makes the continued performance of his duties hereunder hazardous to his physical or mental health or Executive’s life, provided that Executive shall have furnished the Company with a written statement from a qualified doctor to such effect and provided, further, that, at the Company’s request made within thirty (30) days of the date of such written statement, Executive shall submit to an examination by a doctor selected by the Company who is reasonably acceptable to Executive or Executive’s doctor and such doctor shall have concurred in the conclusion of Executive’s doctor. If this Agreement is terminated during the Term as a result of Executive’s disability, Executive shall receive from the Company, in a lump-sum payment due within ten (10) days of the effective date of termination, a severance payment equal to three (3) times his monthly base salary at the rate then in effect, and any unpaid bonus earned with respect to any year preceding the date of termination will be payable when bonuses for such year are paid to other company executives.

 

(c) For Cause. The Company may terminate this Agreement ten (10) calendar days after written notice to Executive for cause, which shall be: (i) Executive’s material and irreparable breach of this Agreement; (ii) Executive’s gross negligence in the

 

-3-

---

performance or intentional nonperformance (continuing for ten (10) days after receipt of written notice of need to cure) of any of Executive’s duties and responsibilities hereunder or reasonable instructions of the Managers within the scope of his employment by the Company; (iii) Executive’s dishonesty, fraud or misconduct with respect to the business or affairs of the Company; (iv) Executive’s indictment or conviction of a felony crime or crime involving moral turpitude; or (v) violation of the Company’s drug policy or anti-harassment policy by Executive. In the event of a termination for cause, as enumerated above, Executive shall have no right to any severance compensation.

 

(d) Without Cause. At any time after the commencement of employment, before the expiration of the Term, the Company or Executive may, without cause, terminate this Agreement and Executive’s employment, effective ninety (90) days after written notice is provided to the other party. Should Executive be terminated by the Company without cause effective during the Term, Executive shall receive as severance from the Company, (1) in installment payments (without interest) in accordance with normal payroll practices of the Company, Executive’s monthly base salary at the rate then in effect for the remainder of the Term, but not less than twelve months; (2) an additional sum, payable in monthly installment payments, equal to the annual bonus referred to in Section 2 hereof for the year prior to the year in which Executive is terminated without cause. Also as severance, the Company will continue to provide for and pay to Executive, without exception until the termination date of this Agreement, but not less than twelve months, the medical benefits set forth in Section 2(b) (iv) hereof. Provided, however, that Executive is not entitled to the severance compensation described in this Section 3(d) if on the effective date of the discharge he is engaged in any activities prohibited by Section 4 of this Agreement. Furthermore, if Executive resigns or otherwise terminates his employment without cause pursuant to this Section 3(d), Executive shall receive no severance compensation.

 

In the event that the Company fails to pay any amounts due to the Executive, as set forth in Section 2 of this Agreement, by the end of two months from the date on which such amounts are payable, Executive will notify the Company of such non-payment in writing. After ten (10) days notice in writing by the Executive to the Company of such failure to pay and subsequent failure of Company to remedy such failure, the Executive may terminate this Agreement. In the event of such a termination by the Executive, the Company shall be liable for any amounts unpaid and any amount equal to what would have been due had the termination been without cause as set forth herein.

 

(e) Expiration of Term. Unless sooner terminated pursuant to the terms of this Agreement, this Agreement will terminate effective upon the expiration of the Term. Executive acknowledges that this Agreement may terminate pursuant to this Section 3(e) with or without a corresponding termination of Executive’s employment with the Company. If this Agreement terminates pursuant to this Section 3(e) and Executive remains employed by the Company thereafter, then Executive shall be an “at will” Executive of the Company following such termination. In the event of a termination of Executive’s employment pursuant to this Section 3(e), Executive shall have no right to any severance compensation, except the Executive will be entitled to any unpaid bonus

 

-4-

---

earned with respect to the year preceding the date of expiration of term to be paid when bonuses for such year are paid to other company executives.

 

(f) Effect of Termination.

 

(i)

Upon termination of this Agreement for any reason provided in subsections (a) through (e) above, Executive shall be entitled to receive all compensation earned and all benefits and rei