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Exhibit 10.2
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT
("Agreement") is made by and between Diamond Offshore Management
Company. ("Company"), and Gary T. Krenek ("Executive"),
and is dated as of December 15, 2006.
WITNESSETH :
WHEREAS , Company desires
to continue the employment of Executive and Executive desires to
remain in the employment of Company on the Effective Date, in each
case on the terms and conditions set forth herein;
NOW, THEREFORE , for and
in consideration of the mutual promises, covenants and obligations
contained herein, Company and Executive agree as follows:
ARTICLE 1: EMPLOYMENT AND DUTIES
1.1 Employment; Effective
Date . Company agrees to continue the employment of
Executive and Executive desires to remain in the employment of
Company beginning on October 1, 2006 (the "Effective Date")
and continuing for the period of time set forth in Article 2
of this Agreement, subject to the terms and conditions of this
Agreement.
1.2 Position .
Company shall employ Executive in the position of Senior Vice
President and Chief Financial Officer ("Job Title"). In such
capacity, Executive will, as reasonably requested by the Board of
Directors/President of Company from time to time, carry out the
functions of his office and furnish his best advice, information,
judgment and knowledge with respect to the business of the Company
and its subsidiaries. During the term of his employment, Executive
shall be furnished with a private office and such other facilities
and services as are commensurate with his position with Company and
adequate for the performance of his duties under this
Agreement.
1.3 Business
Expenses . Executive is authorized to incur reasonable
expenses for the discharge of his duties hereunder and the
promotion of Company’s business, including expenses for
entertainment, travel and related items. Company shall reimburse
Executive for all such expenses upon presentation by Executive from
time to time of itemized accounts of expenditures incurred in
accordance with customary Company policies.
1.4 Exclusivity of
Employment . Executive agrees his position with the Company
will be his sole employment and he will use his best efforts to
discharge his duties and responsibilities in such capacity and to
act subject to the direction of the Chief Executive
Officer/President. Part-time activities that do not interfere with
Executive’s duties and responsibilities pursuant to this
Agreement shall not constitute employment. Participation by
Executive as a member of a board of directors not related to the
Company in any way, or such similar participation, shall require
the consent of the President. During the Term of this Agreement,
Executive shall not, directly or knowingly indirectly, either as an
Executive, officer, director, or in any other individual or
representative capacity, either for his own benefit or the benefit
of any other person or entity solicit, recruit, induce, entice,
encourage or in any way cause any employee of Company (or an
affiliate) to terminate his/her employment with Company (or such
affiliate). This Article is not intended to limit the ability of
Executive to terminate the employment of Company employees in the
course and scope of his position with Company.
ARTICLE 2: TERM AND TERMINATION OF EMPLOYMENT
2.1 Term . Unless
sooner terminated pursuant to other provisions hereof, Company
agrees to employ Executive for a thirty-nine (39) month period
beginning on the Effective Date and concluding on December 31,
2009 ("Term").
2.2 Company’s Right
to Terminate . Notwithstanding the provisions of paragraph
2.1, Company shall have the right to terminate Executive’s
employment under this Agreement at any time for any of the
following reasons:
(a) upon Executive’s death;
(b) upon Executive’s becoming unable to perform his
duties hereunder due to sickness or injury for a period of at least
180 consecutive days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
Executive or Executive’s legal representatives (a
"Disability");
(c) if Executive engages in conduct that constitutes:
(i) a breach of his fiduciary duty to Company or its
shareholders; (ii) in carrying out his duties hereunder
engages in conduct that constitutes acts of fraud; (iii) in
carrying out his duties hereunder engages in conduct that
constitutes gross neglect; (iv) in carrying out his duties
hereunder engages in conduct that constitutes gross misconduct
resulting, in any case, in economic harm to Company; or
(v) upon the conviction of Executive for a felony; and
(d) for any other reason whatsoever, in the sole discretion
of Company.
For purposes of this Agreement, a
termination by Company under clause (c) above shall constitute
a termination by Company for "Cause." Cause, however, shall not
include bad judgment or any act or omission believed by the
Executive in good faith to have been in or not opposed to the
interest of Company (without intent by the Executive to gain,
directly or indirectly, a profit to which he was not legally
entitled).
2.3 Executive’s Right
to Terminate . Notwithstanding the provisions of
Article 2.1, Executive shall have the right to terminate his
employment under this Agreement at any time for any of the
following reasons:
(a) without Executive’s consent, a substantial and
material diminishment of Executive’s duties, responsibilities
and status with the Company as described in Article 1.2,
above;
(b) a reduction in Executive’s Base Salary and/or Job
Title;
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(c) the Company’s requiring Executive to relocate
anywhere other than Houston, Texas, except in the event
Executive’s office is moved no more than 50 miles from its
present location, or, in the event Executive consents to such
relocation out of Houston, Texas, the failure by Company to pay or
reimburse Executive for all reasonable moving expenses incurred by
Executive relating to a change of Executive’s principal
residence in connection with such relocation and to indemnify
Executive against any loss (defined as the difference between the
actual bona fide sale price of such residence and the fair market
value of such residence as determined by a member of the Society of
Real Estate Appraisers designated by Executive and satisfactory to
Company) realized in the sale of Executive’s principal
residence in connection with any such change of residence; and
(d) for any other reason whatsoever, in the sole discretion
of Executive.
For purposes of this Agreement:
(i) a termination of employment by Executive under clauses (a)
through (c) above shall constitute a termination of employment
by Executive for "Good Reason;" and (ii) a termination of
employment by Executive under clause (d) above shall
constitute a termination of employment by Executive "without Good
Reason".
2.4 Notice of
Termination . Notwithstanding the provisions in
Article 2.1 herein relating to the Term of this Agreement, if
Company or Executive desires to terminate Executive’s
employment hereunder at any time prior to expiration of the Term of
employment as provided in Article 2.1, it or he shall do so by
giving a minimum of fifteen (15) days written notice to the
other party that it or he has elected to terminate
Executive’s employment hereunder and stating the effective
date and reason for such termination, provided that no such action
shall alter or amend any other provisions hereof or rights arising
hereunder. Executive must provide fifteen (15) days notice of
separation to be eligible for the benefits described in
Article 4.1.
2.5 Extension of
Agreement . Following expiration of the Term of this
Agreement, the Term will be automatically extended for successive
terms of one (1) year commencing on the anniversary of the
Effective Date.
ARTICLE 3: COMPENSATION AND BENEFITS
3.1 Base Salary .
During the Term, Executive shall receive an annual base salary
equal to $320,000 ("Base Salary"), subject to increases as the
Chief Executive Officer/President of the Company may, in their sole
discretion, from time to time determine. Executive’s Base
Salary shall be paid in equal installments in accordance with
Company’s standard practices and pay dates regarding payment
of compensation to executives and shall be subject to applicable
withholding and deductions.
3.2 Executive Health and
Welfare Benefits . Executive shall be entitled to
participate in Company’s insurance plans (medical, dental,
life and disability), during the term of this Agreement. Upon
termination of Executive’s employment under Articles 2.2(a),
2.2(b), 2.2(d),
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2.3(a), 2.3(b) or 2.3(c) and for the remaining Term under this
Agreement but not less than two (2) years thereafter, Company shall
continue to provide Executive with insurance benefits (medical,
dental, life and disability) which Executive was receiving or
entitled to receive at the time of his termination of employment,
with all costs paid by Company. Company, shall, however, issue
Executive a COBRA notice upon the termination of his employment.
Such insurance benefits shall be discontinued to the extent
Executive is eligible to receive comparable coverage from a
subsequent employer and/or except to the extent that the subsequent
employer’s plan does not cover the preexisting medical
conditions of the Executive or a previously covered member of the
Executive’s family.
3.3 Other
Benefits/Compensation . During the term of this Agreement,
Executive shall be entitled to participate in such employee benefit
and compensation programs, plans and policies as are maintained by
Company and as may be established for employees of Company from
time to time on the same basis as other executive employees are
entitled thereto. These include plans or policies relating to
funded and unfunded executive benefits, such as bonus compensation,
vacation time, leave time, retirement plans and stock plans. It is
understood that the establishment, termination or change in any
such executive employee benefit program, plan or policy may be made
by the Company in the exercise of its sole discretion, from time to
time, and any such termination or change in such program, plan or
policy will not constitute a modification to this Agreement so long
as Executive is permitted to participate in such program, plan or
policy, as the case may be, as is available to other executives.
Upon termination of employment, without regard to the manner in
which the termination was brought about, Executive’s rights
in such employee benefit and compensation programs, plans or
policies shall be governed solely by the terms of the program, plan
or policy itself unless otherwise stated to the contrary
herein.
3.4 Management
Performance Bonus Program . Unless sooner terminated by
operation of this Agreement, the provisions of this article 3.4
shall apply during the initial-three year term of this Agreement
and terminate on S
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