EMPLOYMENT AGREEMENT by and between GULFMARK OFFSHORE, INC. and JAMES M. MITCHELL
Exhibit 10.1
by and between
GULFMARK OFFSHORE, INC.
and
XXXXX X. XXXXXXXX
THIS EMPLOYMENT AGREEMENT dated as of May 30, 2013 (this “Agreement”), by and between Xxxxx X. Xxxxxxxx (the “Executive”) and GulfMark Offshore, Inc., a Delaware corporation (the “Company”).
WHEREAS, the Company and the Executive desire to enter into an employment agreement (the “Employment Agreement”);
(a) As of the Effective Date, the Executive shall serve as Executive Vice President and Chief Financial Officer in which capacity the Executive shall perform the usual and customary duties of such offices, which shall be those normally inherent in such capacities in companies of similar size and character as the Company and its Affiliates. The Executive agrees and acknowledges that, in connection with his employment relationship with the Company, when reasonably requested by the Chief Executive Officer, the Executive shall also be required to perform the usual and customary duties of any executive with the title of Executive Vice President and Chief Financial Officer with companies of similar size and character as the Company and its Affiliates. The Executive agrees and acknowledges that such duties and/or responsibilities may increase or decrease as required by the Company whether or not such duties are within the scope of the Executive’s duties on the Effective Date. Executive shall report to the highest ranking executive officer of the Company (or if the Company ceases to be the ultimate parent company, the highest ranking executive officer at such ultimate parent company) and any deviation from such reporting structure shall be considered to be a material breach of this Agreement. The Executive agrees and acknowledges that, in connection with his employment relationship with the Company the Executive owes fiduciary duties to the Company and will act accordingly.
(b) During the Employment Period, the Executive agrees to devote substantially his full time, attention and energies to the Company’s business and agrees to faithfully and diligently endeavor to the best of his ability to further the best interests of the Company. The Executive shall not engage in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage. Subject to the covenants of Section 9 herein, this shall not be construed as preventing the Executive from investing his own assets in such form or manner as will not require his services in the daily operations of the affairs of the companies in which such investments are made. Further, subject to Section 9 herein, the Executive may serve as a director of other companies, if such service is approved by the Chief Executive Officer which approval will not be unreasonably withheld so long as such service is not detrimental to the Company, does not interfere with the Executive’s service to the Company and does not present the Executive with a conflict of interest. The Company expressly acknowledges that the Executive has disclosed and the Company, and Chief Executive Officer, has approved Executive’s current and continuing service in two chairman directorship positions.
(c) In keeping with the Executive’s fiduciary duties to the Company, the Executive agrees that he shall not, directly or indirectly, become involved in any conflict of interest, or upon discovery thereof, allow such a conflict to continue. Moreover, the Executive agrees that he shall promptly disclose to the Chief Executive Officer of the Company any facts which might involve any reasonable possibility of a conflict of interest, or be perceived as such.
(d) Circumstances in which a conflict of interest on the part of the Executive would or might arise, and which should be reported immediately by the Executive to the Chief Executive Officer of the Company, include, but are not limited to, the following: (i) ownership of a material interest in, acting in any capacity for, or accepting directly or indirectly any payments, services or loans from a supplier, contractor, subcontractor, customer or other entity with which the Company does business; (ii) misuse of information or facilities to which the Executive has access in a manner which will be detrimental to the Company’s interest; (iii) disclosure or other misuse of Confidential Information (as defined in Section 9); (iv) acquiring or trading in, directly or indirectly, other properties or interests connected with the design, manufacture or marketing of products designed, manufactured or marketed by the Company; (v) the appropriation to the Executive or the diversion to others, directly or indirectly, of any opportunity in which it is known or could reasonably be anticipated that the Company would be interested; and (vi) the ownership, directly or indirectly, of a material interest in an enterprise in competition with the Company or its dealers and distributors or acting as a director, officer, partner, consultant, employee or agent of any enterprise which is in competition with the Company or its dealers or distributors.
(e) Further, the Executive covenants, warrants and represents that he shall:
(i) devote his full and best efforts to the fulfillment of his employment obligations;
(ii) exercise the highest degree of fiduciary loyalty and care and the highest standards and conduct in the performance of his duties; and
(iii) endeavor to prevent any harm, in any way, to the business or reputation of the Company.
(f) For purposes of this Section 2, the determination of whether any matter or transaction constitutes a conflict of interest hereunder shall be made solely by the Board of Directors of the Company (the “Board”) in its reasonable discretion; provided, however, any matter or transaction that is permitted by or otherwise in compliance with the terms and conditions of all applicable ethics, conflict of interest or similar written policies of the Company in effect at the time of such determination shall not be a conflict of interest hereunder. The determination of whether any matter or transaction is permitted by or otherwise in compliance with the terms and conditions of such policies shall be made solely by the Board in its reasonable discretion.
3. Place of Performance. In connection with the Executive’s employment by the Company, the Executive’s principal business address shall be at the Company’s principal executive offices located within 75 miles of the central business district of Houston, Texas (the “Principal Place of Employment”).
4. Compensation and Related Matters.
As the Executive’s initial award, during 2013 the Compensation Committee shall grant to the Executive an award of 16,000 shares of restricted stock, under the GulfMark Offshore, Inc. 2010 Omnibus Equity Incentive Plan (the “LTI Plan”) which shall become 100 percent (100%) vested on the three (3) year anniversary of the Effective Date subject to the Executive’s continued employment with the Company. The terms of such grant, when made, shall be set forth in a written award agreement.
In addition, during the Term, for 2013 and annually thereafter, at the time the Compensation Committee makes annual grants of equity awards to executive officers, the Company may xxxxx xxxx-term incentive compensation award opportunities (such as restricted stock, restricted stock units and/or stock options) under the LTI Plan or a successor plan approved by the stockholders of the Company, having such target grant date value of 200 percent (200%) of the amount of the Executive’s annualized Base Salary then in effect. Such grants shall be subject to such performance and service conditions as the Compensation Committee may determine in its sole discretion. For purposes hereof, the grant date value shall be determined in the same manner as grant date values are determined by the Compensation Committee with respect to long-term incentive awards made to executive officers of the Company generally. If the Company is required to prepare an accounting restatement due to the material noncompliance of the Company with any financial reporting requirement under applicable securities laws, the Executive shall forfeit and must repay to the Company any compensation awarded under the LTI Plan or a successor plan approved by the stockholders of the Company to the extent specified in any of the Company’s recoupment policies established or amended (now or in the future) in compliance with the rules and standards of the Securities and Exchange Commission Committee under or in connection with Section 954 of the Xxxx-Xxxxx Xxxx Street Reform and Consumer Protection Act.
Except for any reimbursements under the applicable group health plan that are subject to a limitation on reimbursements during a specified period, the amount of expenses eligible for reimbursement under this Section 4(e), or in-kind benefits provided, during the Executive’s taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year of the Executive. The Executive’s right to reimbursement or in-kind benefits pursuant to this Section 4(e) shall not be subject to liquidation or exchange for another benefit.
(a) Death. The Executive’s employment hereunder shall terminate upon his death.
(d) Good Reason. The Executive may terminate his employment hereunder for “Good Reason”. “Good Reason” for the Executive’s termination of employment shall mean the occurrence, without the Executive’s prior written consent, of a material breach by the Company of any provision of this Agreement; provided, that the Company shall have thirty (30) business days from the date on which the Company receives the Executive’s Notice of Termination for Good Reason to remedy any such occurrence otherwise constituting Good Reason. Notwithstanding any provision of this Agreement to the contrary, the Executive shall not be treated as having terminated his employment for a Good Reason event if he incurs a Separation From Service more than one year following the initial existence of the particular Good Reason condition or if he has not given the Company written notice of the Good Reason condition within ninety (90) days after the initial existence of the Good Reason condition.
8. Compensation upon Termination or During Disability.
(i) the Accrued Obligation; and
(ii) the Executive’s Base Salary through the Date of Termination for periods following his Separation From Service, to the extent not theretofore paid.
In the event of the termination of the Executive’s employment pursuant to Section 6(a) the Company shall pay the Executive or his estate the Accrued Obligation within thirty (30) days after the date of termination of the Executive’s employment.
In the event of the termination of the Executive’s employment pursuant to Section 6(a) the Company shall pay the Executive’s estate the amounts required pursuant to Section 8(b)(ii) within sixty (60) days after the Date of Termination. For purposes of this Agreement, the term “Separation From Service” shall have the meaning ascribed to such term in Section 409A. The term “Specified Employee” means a person who is a “specified employee” within the meaning of Section 409A, taking into account the elections made and procedures established in resolutions adopted by the Compensation Committee.
Neither the Executive nor his estate shall be permitted to specify the taxable year in which a payment described in this Section 8(b) shall be paid.
In the event of the termination of the Executive’s employment pursuant to Section 6(a) the Company shall pay the Executive the Benefit Obligation at the times specified in and in accordance with the terms of the applicable employee benefit plans and compensation arrangements.
(e) By the Company Without Cause or as a Result of Disability or by the Executive for Good Reason. If during the Term the Executive’s employment is terminated by the Company without Cause or due to the Executive’s Disability, or if the Executive terminates his employment for Good Reason , then, subject to Section 19:
(i) The Company shall pay to the Executive, at the times specified in Section 8(e)(vi) below, the following amounts:
(A) the Accrued Obligation;
(B) the Executive’s Base Salary through the Date of Termination for periods following his Separation From Service, to the extent not theretofore paid;
(C) a lump sum in cash equal to two (2) times the Executive’s Base Salary (at the rate in effect as of the Date of Termination);
(D) a lump sum in cash equal to the undiscounted value of the employer contributions or credits the Company would have made to the GulfMark Offshore, Inc. 401(k) Plan and the GulfMark Offshore, Inc. Deferred Compensation Plan (including but not limited to matching contributions, and not including elective deferrals by the Executive) on behalf of the Executive had the Executive continued in the employ of the Company for a period of one year after the Employment Termination Date, assuming for this purpose that (i) the Executive’s earned compensation per year during that one-year period of time was the Executive’s Base Salary in effect on the Date of Termination; (ii) the Executive had, during such two year period, made the maximum elective deferrals permitted under the GulfMark Offshore, Inc. 401(k) Plan, and the contribution, deferral, credit and accrual percentages made under the GulfMark Offshore, Inc. Deferred Compensation Plan, by and on behalf of the Executive during the one-year period, were the same percentages in effect on the Date of Termination; and (iii) the amounts of any legal limitations on benefits (such as section 401(a)(17) of the Code) are the same amounts as are in effect under the Code on the Date of Termination;
(E) a lump sum in cash equal to the product of (x) the Executive’s Annual Bonus paid for the immediately preceding performance period and (y) a fraction, the numerator of which is the number of days during the Company’s then current fiscal year through the Date of Termination and the denominator of which is 365; and
(F) a lump sum in cash equal to twelve (12) times the monthly premium amount(s) for group medical continuation coverage for the Executive, his spouse and eligible dependents who were covered under group medical plan(s) of the Company immediately prior to the Date of Termination determined by utilizing the applicable COBRA premium rates for such Company group medical plan(s) for the month in which the Date of Termination occurs.
(ii) For a period of six (6) months after the date of the Executive’s Separation From Service, the Company shall promptly reimburse the Executive for reasonable outplacement services incurred by him that are not in excess of $20,000 in the aggregate.
(iii) Any and all then outstanding stock options and restricted stock awards previously granted to the Executive by the Company shall become fully exercisable and vested.
(iv) Payments to the Executive of the amounts under clauses (i)(C), (i)(D), (i)(E) and (i)(F) of this Section 8(e) (other than Accrued Obligations) are contingent upon the Executive’s execution and delivery of a release substantially in the form of Exhibit A hereto by the deadline established by the Company. The Executive will not be paid the remuneration described in clauses (i)(C), (i)(D), (i)(E) and (i)(F) of this Section 8(e), and the Executive shall forfeit any right to such remuneration, unless (I) the Executive has executed and delivered the release, and (II) any statutory revocation period for revoking such release shall have expired (in the case of both clause (I) and clause (II)) on or prior to the payment commencement date for such remuneration specified in clause (vi) of this Section 8(e).
(v) The Executive shall not be permitted to specify the taxable year in which any payment described in this Section 8(e) shall be made to him.
(vi) The Company shall pay the Executive the Benefit Obligation at the times specified in and in accordance with the terms of the applicable employee benefit plans and compensation arrangements. The Company shall pay the Executive the amounts specified in Section 8(e)(i)(A) within thirty (30) days after the Date of Termination. The Company shall pay or provide to the Executive the amounts or benefits specified in Sections 8(e)(i)(B), 8(e)(i)(C), 8(e)(i)(D), 8(e)(i)(E) and 8(e)(i)(F) 30 days following the date of the Executive’s Separation From Service if he is not a Specified Employee or on the date that is six months following the date of his Separation From Service if he is a Specified Employee.
9. Confidential Information; Non-Competition; Non-Solicitation.
(i) is already in Executive’s possession; provided that the information is not known by the Executive to be subject to another confidentiality agreement with, or other obligation of secrecy to, the Company or any of its Affiliates,
(ii) becomes generally available to the public other than as a result of a disclosure by the Executive, or
(iii) becomes available to the Executive on a non-confidential basis from a source other than the Company or any of its Affiliates or any of their respective directors, officers, employees, agents or advisors; provided, that such source is not known by the Executive to be bound by a confidentiality agreement with or other obligation of secrecy to the Company or any of its Affiliates.
The Executive shall not, without the prior written consent of the Company or as may otherwise be required by law or legal process, communicate or divulge any such trade secrets, information, knowledge or data to anyone other than the Company and those designated by the Company. Any termination of the Executive’s employment or of this Agreement shall have no effect on the continuing operation of this Section 9(a). The Executive agrees to return all Confidential Information, including all photocopies, extracts and summaries thereof, and any such information stored electronically on tapes, computer disks or in any other manner to the Company at any time upon request by the Company and upon the termination of his employment hereunder for any reason.
For purposes of this Agreement, “Competition” by the Executive means the Executive’s engaging in, or otherwise directly or indirectly being employed by or acting as a consultant or lender to, or being a director, officer, employee, principal, agent, stockholder, member, owner or partner of, or permitting his name to be used in connection with the activities of any other business or organization which has a material portion of its business that competes directly with the primary business of the Company in a geography where Company is active or reasonably plans to be active in the near term.
(i) solicit from any customer doing business with the Company or any of its Affiliates as of the Date of Termination that is known to Executive, business of the same or of a similar nature to the business of the Company with such customer;
(ii) solicit from any potential customer of the Company or any of its Affiliates that is known to the Executive business of the same or of a similar nature to that which has been the subject of a known written or oral bid, offer or proposal by the Company or any of its Affiliates, or of substantial preparation with a view to making such a bid, proposal or offer, within six (6) months prior to such Date of Termination;
(iii) solicit the employment or services of any person who was known to be employed by or was a known full time consultant to the Company or any of its Affiliates upon the Date of Termination, or within six (6) months prior thereto; provided that the above shall expressly exclude (i) an outside professional service provider such as an attorney, a banker or an accountant and (ii) any person whose employment is terminated by the Company and is not solicited by Executive until after such termination and is not employed for at least 60 days after such termination; or
(iv) otherwise knowingly interfere with the business or accounts of the Company or any of its Affiliates.
The Executive and the Company agree and acknowledge that the Company has a substantial and legitimate interest in protecting the Company’s Confidential Information and goodwill. The Executive and the Company further agree and acknowledge that the provisions of this Section 9 are reasonably necessary to protect the Company’s legitimate business interests and are designed to protect the Company’s Confidential Information and goodwill.
The Executive agrees that the scope of the restrictions as to time, geographic area, and scope of activity in this Section 9 are reasonably necessary for the protection of the Company’s legitimate business interests and are not oppressive or injurious to the public interest. The Executive agrees that in the event of a breach or threatened breach of any of the provisions of this Section 9 the Company shall be entitled to injunctive relief against the Executive’s activities to the extent allowed by law, and the Executive waives any requirement for the posting of any bond by the Company in connection with such action. The Executive further agrees that any breach or threatened breach of any of the provisions of Section 9(a) would cause injury to the Company for which monetary damages alone would not be a sufficient remedy.
11. Successors; Binding Agreement.
If to the Executive:
Xx. Xxxxx X. Xxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
If to the Company:
GulfMark Offshore, Inc.
00000 Xxxxxxxx Xxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Senior Vice President - Human Resources
or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.
(a) First, the parties shall attempt in good faith to resolve any Dispute promptly by negotiations between the Executive and executives or directors of the Company who have authority to settle the Dispute. Either party may give the other disputing party written notice of any Dispute not resolved in the normal course of business. Within five days after the effective date of that notice, the Executive and such executives or directors of the Company shall agree upon a mutually acceptable time and place to meet and shall meet at that time and place, and thereafter as often as they reasonably deem necessary, to exchange relevant information and to attempt to resolve the Dispute. The first of those meetings shall take place within thirty (30) days of the effective date of the disputing party’s notice. If the Dispute has not been resolved within sixty (60) days of the disputing party’s notice, or if the parties fail to agree on a time and place for an initial meeting within five days of that notice, either party may initiate mediation and arbitration of the Dispute as provided hereinafter. If a negotiator intends to be accompanied at a meeting by an attorney, the other negotiators shall be given at least three business days’ notice of that intention and may also be accompanied by an attorney. All negotiations pursuant to this Section 14 shall be treated as compromise and settlement negotiations for the purposes of applicable rules of evidence and procedure.
(b) Second, if the Dispute is not resolved through negotiation as provided in Section 14(a), either disputing party may require the other to submit to non-binding mediation with the assistance of a neutral, unaffiliated mediator. If the parties encounter difficulty in agreeing upon a neutral mediator, they shall seek the assistance of the American Arbitration Association in the selection process.
(c) Any Dispute that has not been resolved by the non-binding procedures provided in Sections 14(a) and 14(b) within ninety (90) days of the initiation of the first of the procedures shall be finally settled by arbitration conducted expeditiously in accordance with the Commercial Arbitration Rules of the American Arbitration Association or of such similar organization as the parties hereto may mutually agree; provided, that if one party has requested the other to participate in a non-binding procedure and the other has failed to participate within thirty (30) days of the written request, the requesting party may initiate arbitration before the expiration of the period. The arbitration shall be conducted by three independent and impartial arbitrators. The Executive shall appoint one arbitrator, the Company shall appoint a second arbitrator, and a third arbitrator not appointed by the parties shall be appointed by the first two arbitrators selected. The arbitration shall be held in Houston, Xxxxxx County, Texas. Judgment may be entered on the arbitrator’s award in any court having jurisdiction. The arbitrators shall award the prevailing party in the arbitration its costs and expenses, including reasonable attorney’s fees, incurred in connection with the Dispute. The arbitrators shall not award any amount to either the Executive or the Company in excess of the compensation, employee benefits and indemnification amounts that the Company paid or should have paid to the Executive pursuant to this Agreement.
(d) Notwithstanding the Dispute resolution provisions of this Section 14, either party may bring an action in a court of competent jurisdiction in an effort to enforce the provisions of this Section 14 and to seek injunctive relief to protect the party’s rights pending resolution of a Dispute pursuant to this Section 14, including, without limitation, the Company’s rights pursuant to Section 9 of this Agreement.
15. Governing Law. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of Texas without regard to its conflicts of law principles.
[Signature Page Follows]
IN WITNESS WHEREOF, the parties have executed this Agreement effective as of May 31, 2013
GULFMARK OFFSHORE, INC. | |
By: /s/ Xxxxxxx Xxxxx | |
Date: May 30, 2013 | |
XXXXX X. XXXXXXXX | |
| |
/s/ X. Xxxxxxxx | |
Date: May 30, 2013 |
EXHIBIT A
The Executive hereby irrevocably and unconditionally releases, acquits and forever discharges the Company (as defined in the Executive’s Employment Agreement) and its affiliated companies and their directors, officers, employees and representatives, (collectively "Releasees"), from any and all claims, liabilities, obligations, damages, causes of action, demands, costs, losses and/or expenses (including attorneys’ fees) of any nature whatsoever, whether known or unknown, including, but not limited to, rights arising out of alleged violations of any contracts, express or implied, any covenant of good faith and fair dealing, express or implied, or any tort, or any legal restrictions on the Company’s right to terminate employees, or any federal, state or other governmental statute, regulation, or ordinance, including, without limitation, Title VII of the Civil Rights Act of 1964, as amended and the Age Discrimination in Employment Act of 1967, as amended, which the Executive claims to have against any of the Releasees (in each case, except as to indemnification provided by (a) the Executive’s Employment Agreement with the Company (as amended or superseded from time to time) and/or (b) by the Company’s bylaws and any indemnification agreement or arrangement permitted by Section 145 of the Delaware General Corporation Law and by directors, officers and other liability insurance coverages to the extent you would have enjoyed such coverages had you remained a director or officer of the Company). In addition, the Executive waives all rights and benefits afforded by any state laws which provide in substance that a general release does not extend to claims which a person does not know or suspect to exist in his favor at the time of executing the release which, if known by him, must have materially affected the Executive’s settlement with the other person. The only exception to the foregoing are claims and rights that may arise after the date of execution of this Release, claims and rights arising under any employee benefit plan (including, but not limited to the GulfMark Offshore, Inc. Deferred Compensation Plan and the GulfMark Offshore, Inc. 401(k) Plan) and claims and rights arising under Section 8 of the Executive’s Employment Agreement.
The Executive understands and agrees that:
A. |
He has a period of 21 days within which to consider whether he desires to execute this Agreement, that no one hurried him into executing this Agreement during that 21-day period, and that no one coerced him into executing this Agreement. |
B. |
He has carefully read and fully understands all of the provisions of this Agreement, and declares that the Agreement is written in a manner that he fully understands. |
C. |
He is, through this Agreement, releasing the Releasees from any and all claims he may have against the Releasees, and that this Agreement constitutes a release and discharge of claims arising under the Age Discrimination in Employment Act of 1967, as amended, 29 U.S.C. §§ 621-634, including the Older Workers’ Benefit Protection Act, 29 U.S.C. § 626(f). |
D. |
He declares that his agreement to all of the terms set forth in this Release is knowing and is voluntary. |
E. |
He knowingly and voluntarily intends to be legally bound by the terms of this Release. |
F. |
He was advised and hereby is advised in writing to consult with an attorney of his choice concerning the legal effect of this Release prior to executing this Release. |
G. |
He understands that rights or claims that may arise after the date this Agreement is executed are not waived. |
H. |
He understands that, in connection with the release of any claim of age discrimination, he has a period of seven days to revoke his acceptance of this Release, and that he may deliver notification of revocation by letter or facsimile addressed to the Senior Vice President - Human Resources of the Company, at 00000 Xxxxxxxx Xxxxxx, Xxxxx 000, Xxxxxxx, XX 00000, or (000) 000-0000. Executive understands that this Agreement will not become effective and binding with respect to a claim of age discrimination until after the expiration of the revocation period. The revocation period commences when Executive executes this Agreement and ends at 11:59 p.m. on the seventh calendar day after execution, not counting the date on which Executive executes this Agreement. Executive understands that if he does not deliver a notice of revocation before the end of the seven-day period described above, that this Agreement will become a final, binding and enforceable release of any claim of age discrimination. This right of revocation shall not affect the release of any claim other than a claim of age discrimination arising under federal law. |
I. |
He understands that nothing in this Agreement shall be construed to prohibit Executive from filing a charge or complaint, including a challenge to the validity of this Agreement, with the Equal Employment Opportunity Commission or participating in any investigation or proceeding conducted by the Equal Employment Opportunity Commission. |
AGREED AND ACCEPTED, on this _____ day of ________________, _______.
|
XXXXX X. XXXXXXXX
______________________________________ |
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