Exhibit 10.1
SEPARATION AGREEMENT AND RELEASE
This
Separation Agreement and Release (“Separation
Agreement”) is entered into as of June 20, 2008, by and
between Randall D. Stilley (“Executive” or
“you”) and Hercules Offshore, Inc. (the
“Company”), and confirms the agreement that has been
reached with you in connection with your resignation from the
Company.
1. Termination of
Employment . You agree to resign from the Company and to cease
to be employed by the Company in any capacity and to resign from
all executive positions you then hold with the Company and its
subsidiaries, in each case effective as of June 20, 2008 (the
“Separation Date”). You also agree to resign as a
member of the Board of Directors of the Company (and as a director
of any of the Company’s subsidiaries) effective immediately.
You further agree to execute any additional documents necessary to
effectuate the foregoing.
2. Separation Pay and
Benefits . In consideration of your execution of this
Separation Agreement and your compliance with its terms and
conditions, the Company agrees to pay or provide you (subject to
the terms and conditions set forth in this Separation Agreement)
with the benefits described in this paragraph 2 and to adhere to
the nondisparagement restrictions set forth in paragraph 4b below.
The benefits below shall be in full satisfaction of the
Company’s obligations under the terms of the Executive
Employment Agreement dated as of November 6, 2006, as amended
(the “Employment Agreement”), by and between you and
the Company, and all applicable cash or equity incentive
compensation plans and agreements under which you have any rights
or benefits, and in consideration of your additional agreements in
this Agreement. In addition, you acknowledge and agree that, except
as provided herein, you are no longer eligible to participate in
and shall not receive any further payments or benefits under any
stock option, bonus, incentive compensation, employment contract,
or medical, dental, life insurance, retirement, perquisite and
other compensation or benefit agreements, plans or arrangements of
the Company.
a. The
Company shall continue to pay you at your current rate of base
salary and benefits through the Separation Date, in accordance with
the Company’s payroll practices.
b. The
Company shall pay you an aggregate of $2,058,878 (the
“Separation Amount”), which you acknowledge equals two
times the sum of (i) your current annual base salary
($700,000) and (ii) the bonus paid to you in respect of the
Company’s 2007 fiscal year ($329,439). The Separation Amount
shall be paid to you on December 23, 2008. There shall be
deducted from the payment of the Separation Amount all applicable
federal, state and local withholding taxes and other appropriate
deductions.
c.
Beginning on the Separation Date and continuing until
February 28, 2010 (the “Benefit Continuation
Period”), the Company shall provide you and your dependents
with continued coverage under the Company’s welfare benefit
plans hereto at the cost in effect at the Separation Date; provided
that, to the extent you become eligible for medical insurance from
a subsequent employer, the Company’s medical insurance shall
become secondary to such subsequent employer’s medical
insurance; and provided, further, however, that with respect to
health and medical benefits, to the extent such coverage cannot be
extended or provided, the Company will pay during the period
described above the applicable premium under the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”), associated with such benefits. In addition,
to the extent that health and medical benefits are provided to you
through COBRA and the Benefit Continuation Period extends beyond
the period in which you are eligible for health and welfare
benefits under COBRA (generally eighteen months following the
Separation Date), the Company shall provide you with a lump sum
amount equal to the then current cost of the employer-provided
health and medical benefits (other than group health plans)
provided to you and your dependents, as of the Separation Date,
calculated for the period from the date on which you are no longer
eligible for health and medical benefits under COBRA until the
expiration of the Benefit Continuation Period. Such amount shall be
paid to you on January 2, 2009.
d. The
parties acknowledge and agree that you are party to Stock Option
Agreements (the “Option Agreements”) under which you
have been granted stock options to purchase shares of common stock
of the Company (the “Options”) pursuant to the terms of
the Hercules Offshore 2004 Long-Term Incentive Plan (the
“2004 LTIP”), as follows:
| |
|
|
|
|
|
|
|
|
| |
|
|
|
Unvested |
|
|
|
|
| |
|
Vested Options |
|
Options as |
|
Exercise |
|
Remaining Vesting |
|
Grant Date |
|
as of 6/20/2008 |
|
of 6/20/2008 |
|
Price |
|
Dates (out of 4) |
| 11/1/2005 |
|
285,000 |
|
95,000 |
|
$20.00 |
|
11/1/2008 |
| 2/12/2007 |
|
33,333 |
|
66,667 |
|
$25.34 |
|
2/12/2009;
2/12/2010 |
| 2/14/2008 |
|
0 |
|
110,000 |
|
$25.64 |
|
2/14/2009;
2/14/2010;
2/14/2011 |
In
accordance with, and subject to, the terms and conditions of the
Option Agreements, all unvested options as of June 20, 2008
will vest on the Separation Date and you shall be entitled to
exercise all vested Options held by you as of the Separation Date
until the earlier to occur of the third anniversary of the
Separation Date or the original expiration date of the Options as
set forth in the 2004 LTIP or applicable Option Agreements.
e. The
Company also agrees that, notwithstanding the terms of the
Restricted Stock Agreements between you and the Company, dated
February 12, 2007 and February 14, 2008, as of the
Separation Date all restrictions shall lapse with respect to the
20,000 shares of restricted stock originally granted to you
pursuant to the terms of the Restricted Stock Agreement dated
February 12, 2007 (the “Vested Shares”). You
2
acknowledge and agree, however, that in accordance with the terms
of the Restricted Stock Agreement between you and the Company,
dated February 12, 2007 and February 14, 2008, as of the
Separation Date you shall have no further rights with respect to
the 49,000 shares of restricted stock granted under the Restricted
Stock Agreement dated February 14, 2008.
3. Accrued Benefits .
You will be paid for any accrued but unused vacation days, and for
unreimbursed business expenses (in accordance with usual Company
policies and practices, and in no event later than the calendar
year following the year in which the expenses are incurred), to the
extent not theretofore paid. In addition, following the Separation
Date, you will be entitled to receive vested amounts payable to you
under the Company’s 401(k) plan and other retirement and
deferred compensation plans in accordance with the terms of such
plans and applicable law. Except as specifically set forth herein,
your participation in all Company plans shall remain subject to the
terms and conditions of such plans as in effect from time to time
and you agree that such terms and conditions are binding on you and
the Company.
4. Return of Company
Property . You agree that, on or before the Separation Date,
you will have returned to the Company any physical or personal
property that is the property of the Company, its subsidiaries and
its affiliates that you have in your possession, custody or
control, including without limitation all Company files, memoranda,
records and other documents in whatever form, and all copies
thereof, and all Company badges, keys and credit cards.
5. Nondisparagement
.
a. You
agree that you will not, with intent to damage, disparage or
encourage or induce others to disparage any of the Company, its
subsidiaries and affiliates, together with all of their respective
past and present directors and officers, as well as their
respective past and present managers, officers, shareholders,
partners, employees, agents, attorneys, servants and customers and
each of their predecessors, successors and assigns (collectively,
the “Company Entities and Persons”).
b. The
Company agrees that neither the Company formally nor any director
or officer, with intent to damage you, will disparage you or
encourage or induce others to disparage you.
c. For
the purposes of this Separation Agreement, the term
“disparage” includes, without limitation, comments or
statements adversely affecting in any manner (i) the conduct
of the business of the Company Entities and Persons or of your
business or (ii) the business reputation of the Company
Entities and Persons or of you. Nothing in this Separation
Agreement is intended to, or shall, prevent either party from
providing truthful testimony in response to a valid subpoena, court
order, regulatory request or other judicial, administrative or
legal process or otherwise as required by law.
3
6. Cooperation .
a. The
parties agree that they will reasonably cooperate with each other,
and their respective counsel, in connection with any investigation,
inquiry, administrative proceeding or litigation relating to any
matter in which you were involved or of which you have knowledge as
a result of your service with the Company by providing truthful
information, provided that in your case, such cooperation does not
unreasonably interfere with your then current professional and
personal commitments. The Company agrees to promptly reimburse you
for reasonable out-of-pocket expenses reasonably incurred by you in
connection with your cooperation pursuant to this paragraph.
b. You
agree that, in the event you are subpoenaed or otherwise required
by any person or entity (including, but not limited to, any
government agency) to give testimony or produce documents (in a
deposition, court proceeding or otherwise) wh
|
