Exhibit 10.19
FM FM Services
Affiliate of Freeport-McMoRan &
Freeport-McMoRan Copper & Gold
FM Services Company
Telephone: (504) 582-4000
1615 Poydras Street
New Orleans, LA 70112
P.O. Box 61119
New Orleans, LA 70161
December 22, 1997
Mr. Rene L. Latiolais
2305 Barton Creek Blvd.
Villa 42
Austin, TX 78735
Dear Rene:
This will confirm the agreement between the
undersigned, FM Services Company (the "Company"), and you
with respect to the provision by you of certain consulting
services to the Company and its subsidiaries and corporate
affiliates (which includes client companies for which
services are provided).
1. From January 1, 1998 through December 31, 1998 (the
"Consulting Term"), you agree to serve as a
consultant to the Company. In your capacity as a
consultant, you will provide to the Company, subject
to the instruction and direction of its executive
officers, consulting advice related to the
businesses, operations and prospects of the Company
and its subsidiaries and corporate affiliates. You
agree to devote such of your time, skill, labor and
attention to the performance of any consulting
services requested by the Company hereunder as may
be necessary for you to render the prompt and
effective performance thereof, provided that it is
generally understood that you shall only be required
to devote yourself to the performance of such duties
to the extent contemplated by paragraph 2(vi) of
this letter.
2. It is understood and agreed with respect to your
undertaking to provide the consulting services
described herein, that:
(i) you will perform such consulting services as
an independent contractor to, and not as an
agent (except in any capacity as an elected
officer or director) or employee of the
Company or any of its subsidiaries or
affiliates, and that, as an independent
contractor, you shall have the sole and
exclusive right to control and direct details
incident to any consulting services required to
be provided hereby;
(ii) this agreement shall not be deemed or
construed to create a partnership, a joint
venture, a principal and agent relationship, or
any other relationship between you and the
Company that would create liability for the
Company for your actions;
(iii) nothing herein contained shall be construed
as giving you any right to be elected or
appointed an officer or director of the Company
or any of its subsidiaries or corporate
affiliates or to retain any such position
during the Consulting Term or any extension
thereof;
(iv) except as otherwise authorized in writing by
the Chairman of the Board of the Company, you
will not (A) represent or hold yourself out to
others that you are an employee or agent of the
Company or any of its subsidiaries or corporate
affiliates, or (B) have any authority to
negotiate or execute any agreements, contracts
commitments on behalf of, or otherwise binding
upon, the Company or such subsidiary or
corporate affiliate other than such authority
which derives from your occupying the position
of an elected officer or director of the
Company or any of its subsidiaries or corporate
affiliates;
(v) the executive officers of the Company or the
subsidiary or corporate affiliate seeking your
consulting services will, insofar as it is
reasonably practicable, consider your
convenience in the timing of their requests,
and your failure or inability, by reason of
temporary illness or other cause beyond your
control or because of absence for reasonable
periods, to respond to such requests during any
such temporary period shall not be deemed to
constitute a default on your part in the
performance hereunder of such services;
(vi) subject to the provisions of the foregoing
clause (v), during the Consulting Term you will
make yourself available for the performance of
services hereunder for fifteen (15) percent of
your time, it being understood that this shall
constitute, on the average, three (3) days per
month during the Consulting Term.
3. As an independent contractor of the Company, you
acknowledge and agree that, except as otherwise
specifically provided herein,
(i) you will not be entitled to any insurance,
pension, vacation or other benefits customarily
afforded to employees of the Company;
(ii) you will not be treated by the Company as an
employee for purposes of any federal or state
law regarding income tax withholding or for
purposes of contributions required by any
unemployment, insurance or compensatory
program; and
(iii) you will be solely responsible for the
payment of any taxes or assessments imposed on
you on account of the payment of the consulting
fee to, or performance of consulting services
by you pursuant to this agreement.
4. During the term hereof, you agree that you will not,
without the prior written consent of the Company,
(i) render any services, whether or not for
compensation, to other individuals, firms,
corporations or entities in connection with any
matters that may involve interests adverse to the
Company or any of its subsidiaries or affiliates, or
(ii) engage in any business or activity detrimental
to the business or interests of the Company or any
of its subsidiaries or affiliates.
5. You acknowledge and agree that any inventions or
discoveries, whether or not patentable, which you
may make (either alone or in conjunction with
others) as a result of performing services hereunder
shall be the sole and exclusive property of the
Company. You agree to communicate to the Company or
its representatives all facts known to you
concerning such matters, and to execute any
documents or instruments necessary to transfer to
the Company any inventions or discoveries to which
the Company may become entitled under this
agreement, and should the Company decide to patent
any such invention or discovery, you will assist in
the preparation of patent applications and execute
and assign such patent applications, and execute
such other documents, as may be necessary.
6. You acknowledge and agree to comply with the
confidentiality and other provisions set for in
Appendix A to this Agreement, the terms of which are
incorporated by reference into, and made a part of,
this Agreement.
7. In the event of a breach or threatened breach by you
of Sections 5 or 6 of this agreement during or after
the term hereof, the Company shall be entitled to
injunctive relief restraining you from violating
such paragraphs. Nothing herein shall be construed
as prohibiting the Company from pursuing any other
remedy at law or in equity it may have in the event
of your breach or threatened breach of this
agreement.
8. For the consulting services provided by you
hereunder during the Consulting Term, the Company
agrees:
(i)to pay to you an annual consulting fee of
$230,000, such fee to be payable monthly in
arrears in $19,166.66 amounts, it being
understood by you that the amounts payable to
you pursuant to this Consulting Agreement shall
be in full satisfaction of any compensation to
which you would otherwise be entitled as a
director of the Company or any of its
subsidiaries or affiliates, with you hereby
relinquishing any claim to such amounts;
(ii)to reimburse you for, or advance to you, all
reasonable out-of-pocket travel and other
expenses incurred by you at the request of the
Company in connection with your performance of
services hereunder. Such expenses will be
reimbursed or advanced promptly after your
submission to the Company of expense statements
in such reasonable detail as the Company may
require;
(iii)to make available to you secretarial
assistance, the use of a portable phone and
laptop computer, and a suitable office at the
Company's headquarters, for which you will pay
to the Company a monthly amount of $2,500, such
amount to be paid no later than the last day of
each month;
(iv)to make available to you, at no additional
charge, an annual physical, a parking space,
access to the executive dining room and fitness
center, and membership privileges at the City
Energy Club and English Turn Country Club for
business entertainment purposes. Any expenses
incurred at these clubs that are not business
related will be borne by you personally.
9. Nothing in this agreement shall affect in any way
any of your previously accrued and vested pension or
other rights or benefits under any of the plans or
agreements of the Company or any of its subsidiaries
or affiliates.
10.(i) The term of this agreement shall be the
Consulting Term, subject to any earlier termination
of your status as a consultant pursuant to the terms
of subparagraph (ii) of this paragraph. This
agreement shall be automatically continued for like
Consulting Terms of one year unless and until
canceled by either party upon thirty (30) days
written notice prior to the end of any Consulting
Term. Following the termination of this agreement,
each party shall have the right to enforce all
rights, and shall be bound by all obligations of
each party that are continuing rights and
obligations under the terms of this agreement.
(ii) This agreement may be terminated, upon notice
given in the manner provided in paragraph 12 hereof,
prior to the expiration of the Consulting Term:
(A) by the mutual written consent of the Company
and you;
(B) by the Company, upon your death, or your
physical or mental incapacity;
(C) by the Company in the event of your (1)
willful failure to perform substantially the
consulting services contemplated hereby, (2)
breach of any of the other covenants of this
agreement, or (3) engaging in gross misconduct
detrimental to the Company.
(D) by the Company for any other reason.
If this agreement is terminated by the Company prior to the
expiration of the Consulting Term for any reason other than
those set forth in subparagraphs 9(ii)(A), (B) or (C) above,
then the Company shall pay in a lump sum in cash within 30
days of such termination, the aggregate amount of previously
unpaid consulting fees that you would have earned had you
served as a consultant through the expiration of the
Consulting Term.
11.It is hereby understood and agreed that the Company
shall indemnify you for serving at the request of
the Company as an elected officer or director of any
of its subsidiaries or affiliates to the fullest
extent permitted by applicable law, and the
determination as to whether you have met the
standard required for indemnification shall be made
in accordance with the articles and bylaws of the
applicable entity and with applicable law. It is
further understood and agreed that while serving in
such capacity you will be covered by the Company's
directors and officers insurance policy.
12.Any notice or other communication required
hereunder shall be in writing, shall be deemed to
have been given and received when delivered in
person, or, if mailed, shall be deemed to have been
given when deposited in the United States mail,
first class, registered or certified, return receipt
requested, with proper postage prepaid, and shall be
deemed to have been received on the third business
day hereafter, and shall be addressed as follows:
If to the Company, addressed to:
Mr. Richard C. Adkerson
Chairman of the Board
FM Services Company
1615 Poydras Street
New Orleans, Louisiana 70112
If to you:
Mr. Rene L. Latiolais
2305 Barton Creek Blvd.
Villa 42
Austin, Texas 78735
or such other address to which either party shall
have notified the other in writing.
13.This agreement is personal to you and the Company
and its subsidiaries and shall not be assignable by
either party without the prior written consent of
the other. This agreement shall be governed by and
construed in accordance with the laws of the State
of Louisiana. This agreement contains the entire
understanding between the Company and you with
respect to the subject matter hereof. Further,
Consultant confirms that he has not relied upon any
representations or statements by the Company as a
basis for entering into this agreement that are not
contained herein. This agreement may not be amended,
modified or extended otherwise than by a written
agreement executed by the parties thereto.
Please confirm that the foregoing correctly sets forth the
agreement between the Company and you by signing and
returning to the Company one of the enclosed copies of this
letter.
Very truly yours,
/S/ Michael J. Arnold
Michael J. Arnold
President
FM Services Company
I hereby confirm that the foregoing correctly sets forth the
agreement between FM Services Company and myself.
/S/ Rene L. Latiolais
Rene L. Latiolais
December 25 1997
APPENDIX A
CONFIDENTIALITY TERMS
This Appendix A to the Consulting Agreement (the
"Agreement") by and between FM Services Company (the
"Company") and Rene' L. Latiolais (the "Consultant") sets
forth the parties' mutual understanding and agreement with
respect to the obligations of the Consultant to maintain the
confidentiality of certain information related to the
Company and its Affiliates (as defined below). Any terms
not otherwise defined in this Appendix A shall have the
meaning normally ascribed to them but in the context
necessary to fulfill the purpose of this Agreement.
1. Definitions
(A) "Affiliate" shall mean, with respect to any
person or entity, (i) any other person or
entity directly or indirectly controlling,
controlled by or under common control with such
person or entity, or (ii) any employee of such
person or entity or any independent contractor
contracted by such person or entity to perform
work for the Company. For the purposes of this
definition, "control" (including the
correlative meanings, the terms "controlling",
"controlled by" and "under common control
with") as used with respect to any person or
entity, shall mean the possession, directly or
indirectly, of the power to direct or cause the
direction of the management and policies of
such person entity, whether through the
ownership of voting securities, by contract or
otherwise; and, for the purposes of this
agreement this term shall be interpreted to
include client companies to which services are
provided to by the Company or Company
Personnel.
(B) "Company Personnel" means, collectively (i)
any Affiliate or joint venture partner of the
Company, (ii) any consultant or independent
contractor employed by the Company, (iii) any
entity in which the Company or any Affiliate of
the Company has an investment interest and (iv)
any employee, independent contractor or
consultant employed by any of the entities
described in subparts (i)-(iii) of this
definition.
(C) "Confidential Information" means any and all
information and Know-How (i)(A) which is
proprietary to the Company or any Company
Personnel, or (B) which is or has been
disclosed to the Consultant by the Company or
any Company Personnel with the understanding
that it is confidential and is to remain so,
and (ii) which the Consultant has obtained or
about which he has become aware during his
prior employment by the Company or any of its
Affiliates or during the Consulting Term.
Confidential Information includes, without
limitation: business plans; environmental
reports and plans; information contained in
internal and external memoranda and
correspondence by or to the Company or any
Company Personnel, together with the memoranda
and correspondence themselves; information
contained in bulletins and newsletters created
by the Company or an Company Personnel,
together with the bulletins and newsletters
themselves; information learned and notes taken
in connection with meetings or teleconferences
conducted during the period of prior employment
of the Consultant or during the Consultant Term
with the Company or any of its Affiliates or
consultants; information and other data
recorded in the databases, files, diskettes,
directories, magnetic tape and other storage
media of the Company's computer systems or any
computer systems on which information or data
of the Company is stored or processed; any
information relating to decisions or actions
taken by the Company or the reasons for such
decisions or actions; financial information;
trade secrets of the Company; and information
relating to the Company's Know-How, products,
operations, technology, computer programs,
source codes, data bases, schematics, other
original Works of Authorship, research and
development, engineering, design, construction,
manufacturing, purchasing, finance, marketing,
product development, business acquisitions,
personnel, promotion, distribution and selling
activities.
(D) "Intellectual Property" means any and all
Know-How, Works of Authorship, patents,
trademarks, and copyrights which (i) relate
directly to the business of the Company or its
Affiliates or to the actual or demonstratively
anticipate research or development of the
Company or its Affiliates, (ii) any of the
Company's Know-How, equipment, supplies,
facilities or trade secret information is used
to develop or improve, or (iii) are not
developed entirely on the Consultant's own
time, including, in each case, any such Know-
How, Works of Authorship, patents, trademarks
and copyrights developed by the Consultant.
(E) "Know-How" means any designs, formulas,
developmental or experimental work, new ideas,
inventions, know-how, innovations, new
applications, techniques, data, devices,
computer and other programs, products,
processes, concepts, discoveries, patterns,
methods, information, improvements or creative
work, whether or not any of them are reduced to
writing or reduced to practice and whether or
not they are patentable. The term "Know-How"
shall include any written manifestations of any
of the intangible information described in the
first sentence of this definition, including,
without limitation, related drawings, charts,
blueprints, manuals and formulae.
(F) "Works of Authorship" mean those works fixed
in any tangible medium of expression from which
they can be perceived, reproduced or otherwise
communicated, either directly or with the aid
of a machine or device, whether or not they are
copyrightable.
2. Confidentiality. The Consultant hereby acknowledges
that during the term of his employment by the
Company and/or any of its Affiliates, and during the
Consulting Term, the Consultant has been and will be
exposed to certain Confidential Information. The
Consultant agrees during the Consulting Term and
thereafter, without limitation as to time, to hold
such Confidential Information in strictest
confidence, and not to use, except for the benefit
of the Company or to disclose, transfer or reveal,
directly or indirectly to any person or entity, any
Confidential Information without the prior written
authorization of the Chairman of the Board of the
Company. All Confidential Information is and shall
remain the sole and exclusive property of the
Company, subject to its sole discretion as to use.
The Consultant agrees not to use (and not to permit
any of his Affiliates to use) any Confidential
Information for his own benefit or for the benefit
of any person or entity other than the Company.
Without limiting the generality of the foregoing,
the Consultant shall presume that all information
and Know-How related in any manner to the Company or
Affiliates which he has obtained or of which he has
become aware during the course of his prior
employment by the Company and/or any of its
Affiliates, or which he obtains or of which he
becomes aware during the Consulting Term, is
Confidential Information, whether such information
or Know-How was or is developed by the Consultant or
by other people associated with the Company and
notwithstanding that such information or Know-How
may be otherwise available to the public.
3. Third Party Information The Consultant acknowledges
that the Company has received, and in
the future will receive confidential or proprietary
information from third parties, subject to a duty on
the Company's part to maintain the confidentiality
of such information and to use it only for certain
limited purposes. The Consultant agrees to hold all
such confidential or proprietary information in the
strictest confidence and not to disclose it to any
person or entity (except as necessary in performing
Consultant's obligations under the Agreement
consistent with the Company's agreement with such
third party) or to use (or permit his Affiliates to
use) it for the benefit of anyone other than for the
Company or such third party (consistent with the
Company's agreement with such third party) without
the express written authorization of the Chairman of
the Board of the Company.
4. No Additional Consideration. The Consultant agrees
that no additional compensation in addition to that
provided in the Consulting Agreement shall be due
him from the Company in consideration of the
obligations required of the Consultant by this
Appendix A.
5. Return of Materials. At the request of the Company
or on the termination of the Consultant's
association with or employment by the Company, the
Consultant agrees to immediately deliver to the
Consultant's primary contact at the Company all
papers, notes, data, reference materials, sketches,
drawings, memoranda, documentation, software, tools,
apparatus and any other materials furnished to the
Consultant by the Company or prepared or made, in
whole or part, by the Consultant at any time during
the Consultant's association with the Company.
4. Notice. The Consultant authorizes the Company to
notify others, including any person to whom the
Consultant has disclosed Confidential Information in
violation of this Agreement of the terms of this
Agreement and his obligations hereunder.