EXHIBIT 10.4
EXECUTION COPY
AGREEMENT
This Agreement is made and entered into as of the 20th day of August, 2001,
by and between Conrad Industries, Inc., a Delaware corporation (the "Company"),
and Cecil A. Hernandez ("Executive").
W I T N E S S E T H:
WHEREAS, Executive and the Company entered into a stock option agreement
dated November 3, 1998 for the grant of a nonqualified stock option to purchase
69,601 shares of the common stock of Conrad ("Common Stock"), and a stock option
agreement dated November 3, 1998 for the grant of incentive stock options to
purchase 44,442 shares of Common Stock (collectively, "Executive's Stock
Options"), all pursuant to the Conrad Industries, Inc. 1998 Stock Plan, as
amended and restated (the "Stock Plan"); and
WHEREAS, the Executive has executed a promissory note payable to the
Company in the principal amount of $139,277, due September 4, 2001 and bearing
interest at an annual rate of nine percent (the "Promissory Note").
NOW, THEREFORE, in consideration of the mutual promises and respective
covenants herein contained, and intending to be legally bound hereby, the
parties agree as follows:
1. Share Issuance and Bonus; Cancellation of Promissory Note.
As consideration for Executive's past services rendered to the Company,
Executive's entering into this Agreement, Executive's surrender of Executive's
Stock Options as described below, and for other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged:
(a) The Company grants and delivers to Executive, effective as of
the date hereof, 44,261 shares of Common Stock pursuant to the Stock Plan.
(b) Executive shall receive from the Company a cash bonus of
$248,000 on February 28, 2002. Such bonus shall be offset by the principal
amount of the Withholding Note described in subparagraph 1(c). If such
bonus (net of the principal amount of the Withholding Note) is not paid by
the Company on February 28, 2002, it shall accrue interest thereafter at
the rate of seven percent per year until paid, and Executive shall be
reimbursed for any and all reasonable attorneys' fees incurred by him in
collecting any such overdue payment.
(c) Executive shall satisfy his withholding tax obligation
relating to subparagraph 1(a) as follows: the Company shall remit the
appropriate withholding payment in cash to the appropriate taxing
authorities, and the Executive shall execute a non-interest bearing
promissory note with a principal amount equal to such withholding
payment, payable to the Company at the time the bonus payable to Executive
pursuant to subparagraph 1(b) is due to Executive (the "Withholding Note").
(d) In order to assist Executive in meeting his income tax
obligations arising from subparagraphs 1(a) and 1(b) above, the Company
agrees to purchase on the date hereof 5,612 shares of Common Stock from the
Executive at a purchase price of $6.47 per share in cash.
(e) On the date hereof, the Promissory Note, including accrued
interest, shall be deemed paid in full and shall be cancelled.
(f) The Company and Executive agree and acknowledge that
Executive shall be responsible for the income tax consequences to him of
this Agreement, and the Company shall not owe any amounts to Executive
except as expressly set forth in this Agreement, whether relating to his
income tax obligations or otherwise.
2. Cancellation of Stock Options. Executive's Stock Options shall be
cancelled as of the date hereof. Executive and the Company agree that
Executive's Stock Options constitute all stock options granted by the Company to
Executive prior to the date of this Agreement.
3. Entire Agreement. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof, and no
statements, oral or written from any source, will alter or vary the provisions
contained herein.
4. Binding Effect.
(a) This Agreement shall be binding upon and inure to the benefit of the
Company and its successors or assigns, and shall be binding upon and inure to
the benefit of Executive and his heirs. The obligation of the Company to make
the payments required by paragraph 1 hereof shall not be affected by Executive's
death, disability, or incapacity nor conditioned upon his continued employment
by the Company.
(b) The Company shall require any assignee or acquiror of all or
substantially all of the assets or businesses of the Company (by means of
merger, acquisition of assets or otherwise) (i) to assume unconditionally and
expressly this Agreement and (ii) to agree to perform all of the obligations
under this Agreement in the same manner and to the same extent as would have
been required of the Company had no assignment or acquisition occurred. In the
event of any such assignment, succession or acquisition, the term "Company" as
used in this Agreement shall refer also to such assign, successor or acquiror.
5. Governing Law. The validity of this Agreement, the construction of its
terms and the determination of the rights and duties of the parties hereto shall
be construed in accordance with the laws of the State of Louisiana, without
regard to its conflicts of law provision.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first above written.
CONRAD INDUSTRIES, INC.
By: /s/ John P. Conrad, Jr.
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John P. Conrad, Jr.
Co-Chairman of the Board
EXECUTIVE
/s/ Cecil A. Hernandez
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Cecil A. Hernandez
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